EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT-EARNOUT SHARES
REGISTRATION RIGHTS AGREEMENT, dated as of April 13, 2006, between
INCENTRA SOLUTIONS, INC., a Nevada corporation (the "Company") and Transitional
Management Consultants, Inc., an Illinois corporation ("Shareholder").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the terms of a Stock Purchase Agreement dated as of
April 13, 2006 (the "Purchase Agreement") between the Company and Xxxxxx X.
Xxxxxxxx, the Company has agreed to issue to the Shareholder (which is owned and
controlled by Xxxxxx X. Xxxxxxxx) such number of shares of Common Stock, $.001
par value, of the Company (the "Common Stock") as determined pursuant to the
Purchase Agreement; and
WHEREAS, as a condition precedent to the consummation of the transactions
contemplated by the Purchase Agreement, the Company has agreed to provide
certain registration rights pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS. For purposes of this Agreement, capitalized terms
used herein shall have the meanings set forth in the preambles hereto and in
this Section 1.
1.1 "COMMISSION" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
1.2 "COMMON STOCK" shall mean the common stock, par value $.001
per share, of the Company or, in the case of a conversion, reclassification or
exchange of such shares of such Common Stock, shares of the stock issued or
issuable in respect of such shares of Common Stock, and all provisions of this
Agreement shall be applied appropriately thereto and to any stock resulting
therefrom.
1.3 "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute enacted hereafter, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect from time to time.
1.4 "EXISTING RIGHTS AGREEMENTS" shall mean (i) the
Registration Rights Agreement dated as of October 10, 2000 between the Company
and Equity Pier LLC (ii) the warrant agreement between the Company and Equity
Pier LLC dated February 28, 2001, (iii) the
1
Form SB-2 filed on or about June 29, 2004, (iv) the Registration Rights
Agreement between the Company and former ManagedStorage International, Inc.
shareholders dated August 18, 2004, (v) the Registration Rights Agreement dated
as of February 18, 2005 between the Company and Xxxxxx Xxxxx, (vi) the
Registration Rights Agreement dated as of March 30, 2005 between the Company and
Xxxxx X. Xxxxxxxx and Xxxx X. Xxxxxxxxx, (vii) the Registration Rights Agreement
dated as of March 30, 2005 between the Company and MRA Systems, Inc., dba GE
Access, a Delaware corporation, (viii) the Amended and Restated Registration
Rights Agreement dated as of January 6, 2006, between the Company and Laurus
Master Fund Ltd., (ix) the Registration Rights Agreement dated as of March 31,
2006, by and between the Company and Laurus Master Fund, Ltd., and (x) the
Registration Rights Agreement dated of even date herewith between the Company
and Xxxxxx X. Xxxxxxxx.
1.5 "HOLDER" shall mean any holder of Registrable Securities;
provided, however, that any Person who acquires any of the Registrable
Securities in a distribution pursuant to a registration statement filed by the
Company under the Securities Act or pursuant to a public sale under Rule 144
under the Securities Act or any similar or successor rule shall not be
considered a Holder.
1.6 "INITIATING HOLDERS" shall mean Holders representing (on a
fully diluted basis) at least fifty-one percent (51%) of the total number of
Registrable Securities.
1.7 "PERSON" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind.
1.8 "REGISTER", "REGISTERED" and "REGISTRATION" shall refer to
a registration effected by preparing and filing a registration statement with
the Commission in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement by the Commission.
1.9 "REGISTRABLE SECURITIES" shall mean (A) the shares of
Common Stock issued to the Shareholder pursuant to the Purchase Agreement and
(B) any stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, the shares of Common Stock
referred to in clause (A); PROVIDED, HOWEVER, that such shares of Common Stock
shall only be treated as Registrable Securities hereunder if and so long as they
have not been sold in a registered public offering or have not been sold to the
public pursuant to Rule 144 under the Securities Act or any similar or successor
rule.
1.10 "REGISTRATION EXPENSES" shall mean all expenses incurred by
the Company in compliance herewith, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, the reasonable fees and
expenses (subject to documentation thereof) of one counsel for all Holders and
Other Stockholders that offer securities being sold pursuant to the Existing
Rights Agreements, and the expense of any special audits incident to or required
by any such registration
2
(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company).
1.11 "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
1.12 "SELLING EXPENSES" shall mean all underwriting discounts
and commissions applicable to the sale of Registrable Securities.
2. REQUESTED REGISTRATION.
2.1 REQUEST FOR REGISTRATION. At any time after April 13, 2008
(such date being hereinafter referred to as the "Demand Date"), if the Company
shall receive from Initiating Holders a written request that the Company effect
any registration with respect to Registrable Securities the Company will:
(a) promptly give written notice of the proposed
registration to all other Holders; and
(b) as soon as practicable, use all reasonable efforts
to effect such registration (including, without limitation, the
execution of an undertaking to file post- effective amendments,
appropriate qualification under the blue sky or other state
securities laws requested by Initiating Holders and appropriate
compliance with applicable regulations issued under the Securities
Act) as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written
request given within thirty (30) days after receipt of such
written notice from the Company; provided, that the Company shall
not be obligated to effect, or to take any action to effect, any
such registration pursuant to this Section 2:
(i) in any particular jurisdiction in which the
Company would be required to execute a general consent to
service of process in effecting such registration,
qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may
be required by the Securities Act or applicable rules or
regulations thereunder;
(ii) less than ninety (90) calendar days after the
effective date of any registration declared or ordered
effective other than a registration on Form S-3 or Form
S-8;
3
(iii) if, while a registration request is pending
pursuant to this Section 2, the Company determines, in the
good faith judgment of the Board of Directors of the
Company, with the advice of counsel, that the filing of a
registration statement would require the disclosure of
non-public material information the disclosure of which
would have a material adverse effect on the Company or
would otherwise materially adversely affect a financing,
acquisition, disposition, merger or other significant
transaction, the Company shall deliver a certificate to
such effect signed by its President to the proposed selling
Holders and the Company shall not be required to effect a
registration pursuant to this Section 2 until the earlier
of (A) three (3) days after the date upon which such
material information is disclosed to the public or ceases
to be material or (B) 90 days after the Company makes such
good faith determination; provided, however, that the
Company shall not utilize this right more than once in any
twelve month period; or
(iv) except as set forth in Section 2.5, after the
second such registration pursuant to this Section 2.1 has
been declared or ordered effective.
Subject to the foregoing clauses (i), (ii), (iii) and (iv), the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable after receipt of the request
or requests of the Initiating Holders.
2.2 ADDITIONAL SHARES TO BE INCLUDED. The registration
statement filed pursuant to the request of the Initiating Holders may, subject
to the provisions of Sections 2.4 and 3.3 below, include (a) other securities of
the Company (the "Additional Shares") which are held by (i) officers or
directors of the Company who, by virtue of agreements with the Company, are
entitled to include their securities in any such registration or (ii) other
persons who, by virtue of agreements with the Company, including the Existing
Rights Agreements, are entitled to include their securities in any such
registration (the "Other Stockholders"), and (b) securities of the Company being
sold for the account of the Company.
2.3 UNDERWRITING.
(a) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 2 and the Company shall include such information in the written
notice to other Holders referred to in Section 2.1 above. The right of any
Holder to registration pursuant to this Section 2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein and
subject to the limitations provided herein. A Holder may elect to include in
such underwriting all or a part of the Registrable Securities he holds.
4
(b) The Company shall (together with all Holders, officers,
directors and Other Stockholders proposing to distribute their securities
through such underwriting) negotiate and enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders, which underwriter(s) shall be reasonably acceptable to the Company;
provided that no Holder shall be required to make any representations or
warranties to or agreements (other than a lock-up agreement pursuant to Section
11) with the Company or the underwriters, other than representations, warranties
or agreements regarding the Holder, its Registrable Securities and its intended
method of distribution and any other representation required by law.
2.4 LIMITATIONS ON SHARES TO BE INCLUDED. Notwithstanding any
other provision of this Section 2, if the representative of the underwriters of
a firm commitment underwriting advises the Initiating Holders in writing that
marketing factors require a limitation on the number of shares to be
underwritten, the number of shares of securities that are entitled to be
included in the registration and underwriting shall be allocated as follows:
first, among the Other Stockholders that offer securities being sold pursuant to
the Existing Rights Agreements, in proportion, as nearly as practicable, to the
respective amounts of Additional Shares which they had requested to be included
in such registration pursuant to the Existing Rights Agreements; second, among
the Holders, in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities which they had requested to be included in such
registration; third, to the Company for securities being sold for its own
account; and thereafter, the number of shares that may be included in the
registration statement and underwriting shall be allocated among all officers or
directors or remaining Other Stockholders, in each case in proportion, as nearly
as practicable, to the respective amounts of Additional Shares which they had
requested to be included in such registration at the time of filing the
registration statement. If the Company or any Holder, officer, director or Other
Stockholder who has requested inclusion in such registration as provided above
disapproves of the terms of any such underwriting, such Person may elect to
withdraw such Person's Registrable Securities or Additional Shares therefrom by
written notice to the Company and the underwriter and the Initiating Holders.
Any Registrable Securities or other securities excluded shall also be withdrawn
from such registration. No Registrable Securities or Additional Shares excluded
from such registration by reason of such underwriters' marketing limitation
shall be included in such registration. To facilitate the allocation of shares
in accordance with this Section 2.4, the Company or underwriter or underwriters
selected as provided above may round the number of Registrable Securities of any
Holder which may be included in such registration to the nearest 100 shares.
2.5 ADDITIONAL DEMAND REGISTRATION. If with respect to the last
registration permitted to be exercised by the Holders of Registrable Securities
under Section 2.1, the Holders are unable to register all of their Registrable
Securities because of the operation of Section 2.4 hereof, such Holders shall be
entitled to require the Company to effect additional registrations to afford the
Holders an opportunity to register all such Registrable Securities. Such
additional registrations shall again be subject to the provisions of this
Section 2.
5
3. COMPANY REGISTRATION.
3.1 At any time after April 13, 2008, if the Company shall
determine to register under the Securities Act any of its equity securities or
securities convertible into equity securities either for its own account or the
account of a security holder or holders exercising any demand registration
rights, other than a registration relating solely to employee benefit plans, or
a registration relating solely to a Commission Rule 145 transaction, or a
registration on Form S-4 or S-8, or the Form SB-2 filed on or about June 29,
2004, (or any successor forms thereto), the Company will:
(a) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(b) include in such registration (and, subject to
Section 2.1(b)(i), any related qualification under blue sky laws
or other compliance), and in any underwriting involved therein,
all the Registrable Securities specified in a written request or
request, made by any Holder within thirty (30) days after receipt
of the written notice from the Company described in clause (a)
above, except as set forth in Section 3.3 below. Such written
request may specify all or a part of a Holder's Registrable
Securities.
3.2 UNDERWRITING. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.1(a). The right of any Holder to registration pursuant to
this Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
any officers, directors or Other Stockholders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Company; provided that no Holder shall be required to make any representations
or warranties to or agreements (other than a lock-up agreement pursuant to
Section 11) with the Company or the underwriters, other than representations,
warranties or agreements regarding the Holder, its Registrable Securities and
its intended method of distribution and any other representation required by
law. .
3.3 LIMITATIONS ON SHARES TO BE INCLUDED. Notwithstanding any
other provision of this Section 3, if the representative of the underwriters of
a firm commitment underwriting advises the Company in writing that marketing
factors require a limitation or elimination on the number of shares to be
underwritten, the representative may (subject to the allocation priority set
forth below) limit the number of or eliminate the Registrable Securities to be
included in the registration and underwriting. The Company shall so advise all
Holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated as follows: first, if such underwritten offering
6
shall have been initiated by the Company for the sale of securities for its own
account, to the Company for securities being sold for its own account; second,
among the Other Stockholders that offer securities being sold pursuant to the
Existing Rights Agreements, in proportion, as nearly as practicable, to the
respective amounts of Additional Shares which they had requested to be included
in such registration pursuant to the Existing Rights Agreements; third, among
the Holders, in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities which they had requested to be included in such
registration; fourth, if such underwritten offering shall not have been
initiated by the Company, to the Company for securities being sold for its own
account; and thereafter, the number of shares that may be included in the
registration statement and underwriting shall be allocated among all officers or
directors or remaining Other Stockholders, in each case in proportion, as nearly
as practicable, to the respective amounts of Additional Shares which they had
requested to be included in such registration at the time of filing the
registration statement. If any Holder of Registrable Securities or any officer,
director or Other Stockholder disapproves of the terms of any such underwriting,
he may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall also be withdrawn from such registration.
The Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 3 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in such
registration.
4. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 2, 3 or 4 of this Agreement shall be borne by the Company, except that
Selling Expenses shall be borne pro rata by each Holder in accordance with the
number of shares sold.
5. REGISTRATION PROCEDURES.
5.1 In the case of each registration effected by the Company
pursuant to this Agreement, the Company will keep each Holder advised in writing
as to the initiation of each registration and as to the completion thereof and
will, at its expense:
(a) use all reasonable efforts to keep such registration
effective for a period of 180 days or until the Holder or Holders
have completed the distribution described in the registration
statement relating thereto, whichever first occurs; provided,
however, that the Company will keep such registration effective
for longer than 180 days if the costs and expenses associated with
such extended registration are borne by the selling Holders;
(b) 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 with
respect to the disposition of all securities covered by such
registration statement;
7
(c) Furnish such number of prospectuses and other
documents incident thereto, including any amendment of or
supplement to the prospectus, as a Holder from time to time may
reasonably request;
(d) Notify each seller of Registrable Securities covered
by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities
Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing, and at
the request of any such seller, prepare and furnish to such seller
a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall
not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading or incomplete in the
light of the circumstances then existing;
(e) List all such Registrable Securities registered in
such registration on each securities exchange or automated
quotation system on which the Common Stock of the Company is then
listed;
(f) Provide a transfer agent and registrar for all
Registrable Securities and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such
registration;
(g) Make available for inspection by any seller of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any
attorney or accountant retained by any such seller or underwriter,
all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers and
directors to supply all information reasonably requested by any
such seller, underwriter, attorney or accountant in connection
with such registration statement;
(h) Furnish to each selling Holder upon request a signed
counterpart, addressed to each such selling Holder, of
(i) an opinion of counsel for the Company, dated
the effective date of the registration statement in form
reasonably acceptable to the Company and such counsel, and
(ii) "comfort" letters signed by the Company's
independent public accountants who have examined and
reported on the Company's financial statements included in
the registration statement, to the extent
8
permitted by the standards of the American Institute of
Certified Public Accountants, covering such matters as are
customarily covered in opinions of issuer's counsel and
accountants' "comfort" letters delivered to underwriters in
underwritten public offerings of securities;
(i) Furnish to each selling Holder upon request a copy
of all documents filed with and all correspondence from or to the
Commission in connection with any such offering; and
(j) Make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period
of at least twelve months, but not more than eighteen months,
beginning with the first month after the effective date of the
Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
5.2 It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Agreement that the Holders proposing
to register Registrable Securities shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and their
intended method of distribution of such Registrable Securities as the Company
shall reasonably request and as shall be required in connection with the action
to be taken by the Company; provided that no Holder shall be required to make
any representations or warranties to or agreements (other than a lock-up
agreement pursuant to Section 11) with the Company or the underwriters, other
than representations, warranties or agreements regarding the Holder, its
Registrable Securities and its intended method of distribution and any other
representation required by law.
5.3 In connection with the preparation and filing of each
registration statement under this Agreement, the Company will give the Holders
on whose behalf such Registrable Securities are to be registered and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to review such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or supplement
thereto, and will give each such Holder such access to the Company's books and
records and such opportunities to discuss the business of the Company with its
officers, its counsel and the independent public accountants who have certified
the Company's financial statements, as shall be necessary, in the opinion of
such Holders or such underwriters or their respective counsel, in order to
conduct a reasonable and diligent investigation within the meaning of the
Securities Act.
6. INDEMNIFICATION.
6.1 INDEMNIFICATION BY THE COMPANY. The Company will indemnify
each Holder, each of its officers, directors and partners, and each person
controlling such Holder, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each Person who controls any underwriter, against all claims,
losses, damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a
9
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse each such Holder, each of its officers, directors
and partners, and each Person controlling such Holder, each such underwriter and
each Person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission made in reliance upon and based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein.
6.2 INDEMNIFICATION BY THE HOLDERS. Each Holder will, if
Registrable Securities held by him are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company (other than such Holder) or such underwriter within the
meaning of the Securities Act and the rules and regulations thereunder, each
other such Holder and each of their officers, directors and partners, and each
Person controlling such Holder or other stockholder, against all claims, losses,
damages, expenses and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, each of its directors
and officers, each underwriter or control Person, each other Holder and each of
their officers, directors and partners and each Person controlling such Holder
or other stockholder for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein.
6.3 NOTICES OF CLAIMS, PROCEDURES, ETC. Each party entitled to
indemnification under this Section 6 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at the
10
Indemnified Party's sole expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 6 unless such failure
is prejudicial to the ability of Indemnifying Party to defend such claim or
action. Notwithstanding the foregoing, such Indemnified Party shall have the
right to employ its own counsel in any such litigation, proceeding or other
action if (i) the employment of such counsel has been authorized by the
Indemnifying Party, in its sole and absolute discretion, or (ii) the named
parties in any such claims (including any impleaded parties) include any such
Indemnified Party and the Indemnified Party and the Indemnifying Party shall
have been advised in writing (in suitable detail) by counsel to the Indemnified
Party either (A) that there may be one or more legal defenses available to such
Indemnified Party which are different from or additional to those available to
the Indemnifying Party, or (B) that there is a conflict of interest by virtue of
the Indemnified Party and the Indemnifying Parties having common counsel, in any
of which events, the legal fees and expenses of a single counsel for all
Indemnified Parties with respect to each such claim, defense thereof, or
counterclaims thereto shall be borne by Indemnifying Party. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified Party
shall cooperate to the extent reasonably required and furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
7. INFORMATION BY HOLDER. Each Holder of Registrable
Securities shall furnish to the Company such information regarding such Holder
and the distribution proposed by such Holder as the Company may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement;
provided that no Holder shall be required to make any representations or
warranties to or agreements (other than a lock-up agreement pursuant to Section
11) with the Company or the underwriters, other than representations, warranties
or agreements regarding the Holder, its Registrable Securities and its intended
method of distribution and any other representation required by law.
8. TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register securities granted by the Company under this Agreement
may be transferred or assigned by a Holder to a transferee or assignee of any
Registrable Securities; provided that the Company is given written notice at or
prior to the time of said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided
further that the transferee or assignee of such rights assumes in writing the
obligations of a Holder under this Agreement to the Company and other Holders in
effect at the time of transfer under all effective agreements.
9. EXCHANGE ACT COMPLIANCE. So long as the Company remains subject to
the reporting requirements of the Exchange Act, the Company shall file the
reports required to be
11
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder, and will take all actions
reasonably necessary to enable holders of Registrable Securities to sell such
securities without registration under the Securities Act within the limitation
of the provisions of (a) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, (b) Rule 144A under the Securities Act, as such Rule
may be amended from time to time, if applicable or (c) any similar rules or
regulations hereunder adopted by the Commission. Upon the request of any Holder
of Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements. After any sale
of Registrable Securities pursuant to the provisions of Rule 144 or 144A, the
Company will, to the extent allowed by law, cause any restrictive legends to be
removed and any transfer restrictions to be rescinded with respect to such
Registrable Securities. In order to permit a Holder to sell the same, if it so
desires, pursuant to Rule 144A promulgated by the Commission (or any successor
to such rule), the Company will comply with all rules and regulations of the
Commission applicable in connection with use of Rule 144A (or any successor
thereto). Prospective transferees of Registrable Securities that are Qualified
Institutional Buyers (as defined in Rule 144A) that would be purchasing such
Registrable Securities in reliance upon Rule 144A may request from the Company
information regarding the business, operations and assets of the Company. Within
five (5) business days of any such request, the Company shall deliver to any
such prospective transferee copies of annual audited and quarterly unaudited
financial statements of the Company and such other information as may be
required to be supplied by the Company for it to comply with Rule 144A.
10. NO CONFLICT OF RIGHTS. The Company will not hereafter enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders in this Agreement. Without limiting the generality
of the foregoing, the Company will not hereafter enter into any agreement with
respect to its securities which grants, or modifies any existing agreement with
respect to its securities to grant, to the holder of its securities equal or
higher priority to the rights granted to the Holders under Sections 2 and 3 of
this Agreement.
11. LOCKUP AGREEMENT. In consideration for the Company agreeing to its
obligations hereunder, the Holders of Registrable Securities agree in connection
with any registration of the Company's securities (which includes Registrable
Securities of at least $75,000 in value) pursuant to Section 3 hereof that, upon
the request of the Company not to sell, make any short sale of, loan, grant any
option for the purchase of or otherwise dispose of any Registrable Securities
(other than those shares included in such registration) without the prior
written consent of the Company for such period of time (not to exceed 180 days)
from the effective date of such registration as the Company may specify.
12. BENEFITS OF AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns, legal representatives and heirs.
This Agreement does not create, and shall not be construed as creating, any
rights enforceable by any other Person.
13. COMPLETE AGREEMENT. This Agreement constitutes the complete
understanding among the parties with respect to its subject matter and
supersedes all existing agreements and
12
understandings, whether oral or written, among them. No alteration or
modification of any provisions of this Agreement shall be valid unless made in
writing and signed, on the one hand, by the Holders of a majority of the
Registrable Securities then outstanding and, on the other, by the Company.
14. SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15. NOTICES. All notices, offers, acceptances and other communications
required or permitted to be given or to otherwise be made to any party to this
Agreement shall be deemed to be sufficient if contained in a written instrument
delivered by hand, first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
if to the Company, at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention:
Chief Financial Officer, with a copy to Xxxx Guest, Esq., 00 Xxxxxxxxx Xxxx,
Xxxxxx, XX 00000, and if to the Shareholder, to Transitional Management
Consultants, Inc., Attn: Xxxxxx X. Xxxxxxxx, 0000 X. Xxxxxx Xxxx, Xxxxx 00,
Xxxxxxx, XX 00000, with a copy to Xxxxxxx X. Xxxxx, Esq., 0000 Xxxxxx Xxxx,
Xxxxx 000, Xxx Xxxxx, XX 00000, or at such other address or addresses as may
have been furnished the Company in writing.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any party may change the address to which each such notice or communication
shall be sent by giving written notice to the other parties of such new address
in the manner provided herein for giving notice.
16. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware without
giving effect to the provisions, policies or principles thereof respecting
conflict or choice of laws.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement.
18. SEVERABILITY. Any provision of this Agreement which is determined
to be illegal, prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such illegality, prohibition or
unenforceability without invalidating the remaining provisions hereof which
shall be severable and enforceable according to their terms and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
13
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first set forth above.
INCENTRA SOLUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx III
-------------------------
Name: Xxxxxx X. Xxxxxxx III
Title: Chief Executive Officer
THE SHAREHOLDER
Transitional Management Consultants, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
