REGISTRATION RIGHTS AGREEMENT
Exhibit
10.42
This
Registration Rights Agreement (“Agreement”)
is entered into as of June 29, 2007, between BPO Management Services, Inc.,
a
Delaware corporation with offices at 00000 XxxXxxxxx Xxxx, Xxxxx 000, Xxxxxx,
XX
00000 (the “Company”),
and Xxxxxx X. Xxxx and Xxxxxxx X. Xxxx, as trustees of the Xxxxxx X. and
Xxxxxxx
X. Xxxx Revocable Trust dated April 24, 2003 (the “Helts”).
W I T N E S S E T H:
WHEREAS,
the
Company has issued shares of the common stock, $.01 par value per share of
the
Company (the “Common
Stock”)
to the Helts, in connection with the purchase by the Company of all of the
issued and outstanding common stock of Human Resource Micro-Systems, Inc.,
a
California corporation (“Target”)
pursuant to the terms of a Stock Purchase Agreement of even date herewith
(the
“Purchase
Agreement”);
WHEREAS,
the Company has agreed to provide to the Helts certain registration rights
as
set forth herein;
NOW,
THEREFORE,
in consideration of the mutual promises, representations, warranties, covenants
and conditions set forth in the Purchase Agreement and this Agreement, the
Company and the Helts agree as follows:
1. Certain
Definitions.
Unless defined herein, capitalized terms used herein and not otherwise defined
shall have the meaning ascribed thereto in the Purchase Agreement. As used
in
this Agreement, the following terms shall have the following respective
meanings:
“Closing
Date”
shall have the meaning ascribed to it in the Purchase Agreement.
“Commission”
or “SEC”
shall mean the Securities and Exchange Commission or any other federal agency
at
the time administering the Securities Act.
“Exchange
Act”
shall mean the Securities Exchange Act of 1934, as amended.
“Holder”
and “Holders”
shall include the Helts and any permitted transferee or transferees of
Registrable Securities (as defined below).
The
terms “register,”
“registered”
and “registration”
shall refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness
of
such registration statement.
“Registrable
Securities”
shall mean: (i) the shares of Common Stock issued to the Helts under the
Purchase Agreement, (ii) securities issued or issuable upon any stock split,
stock dividend, recapitalization or similar event with respect to the foregoing;
and (iii) any other security issued as a dividend or other distribution with
respect to, in exchange for or in replacement of the securities referred
to in
the preceding clauses; provided that all such shares shall cease to be
Registrable Securities at the earlier of such times as (A) they have been
sold under a Registration Statement or pursuant to Rule 144 under the Securities
Act, or (B) they are eligible to be sold pursuant to Rule 144(k) under the
Securities Act.
“Registration
Expenses”
shall mean all expenses, exclusive of underwriting discounts and commissions,
to
be incurred in connection with each Holder’s registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue
sky
fees and expenses, and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees
of
the Company, which shall be paid in any event by the Company).
“Registration
Statement”
shall have the meaning set forth in Section 2(a) herein.
“Regulation
D”
shall mean Regulation D as promulgated pursuant to the Securities Act, and
as
subsequently amended.
“Securities
Act”
or “Act”
shall mean the Securities Act of 1933, as amended.
“Selling
Expenses”
shall mean all underwriting discounts and selling commissions applicable
to the
sale of Registrable Securities.
2. Registration
Requirements.
The Company shall use all reasonable efforts
to effect the registration of the Registrable Securities (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under
the
Securities Act) as soon as practicable after the Closing Date, and in any
event
not later than one year after
the Closing Date, as would permit or facilitate the sale or distribution
of all
the Registrable Securities in the manner (including manner of sale) and in
all
states reasonably requested by the Holder. Such reasonable efforts by the
Company shall include, without limitation, the following:
(a)The
Company shall, as expeditiously as possible:
(i) Prepare
and file a registration statement with the Commission pursuant to Rule 415
under
the Securities Act on Form SB-2 under the Securities Act (or in the event
that
the Company is ineligible to use such form, such other form as the Company
is
eligible to use under the Securities Act provided that such other form shall
be
converted into an SB-2 as soon as Form SB-2 becomes available to the Company)
covering resales by the Holders as selling stockholders (not underwriters)
of
the Registrable Securities (“Registration
Statement”).
The
Company shall use all reasonable efforts to cause such Registration Statement
and other filings to be declared effective as soon as practicable. Without
limiting the foregoing, the Company will promptly respond to all SEC comments,
inquiries and requests, and shall request acceleration of effectiveness at
the
earliest possible date.
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(ii) Prepare
and file with the SEC 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 and notify the Holders of the filing and effectiveness of such
Registration Statement and any amendments or supplements.
(iii) As
soon
as practicable after the effectiveness of the Registration Statement or the
filing date of any amendments or supplements, as the case may be, furnish,
by
email to the respective email addresses set forth on the signature pages
hereto,
to each Holder that has Common Stock included in the Registration Statement
such
numbers of copies of a current prospectus conforming with the requirements
of
the Securities Act, copies of the Registration Statement, any amendment or
supplement thereto and any documents incorporated by reference therein and
such
other documents as such Holder may reasonably request in order to facilitate
the
disposition of Registrable Securities owned by such Holder.
(iv) Register
and qualify the securities covered by such Registration Statement under the
securities or “Blue Sky” laws of all domestic jurisdictions; provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process
in
any such states or jurisdictions.
(v) Notify
promptly each Holder that has Registrable Securities included in the
Registration Statement of the happening of any event (but not the substance
or
details of any such event) of which the Company has knowledge as a result
of
which the prospectus (including any supplements thereto or thereof) included
in
such Registration Statement, as then in effect, includes an untrue statement
of
material fact or omits to state a material fact required to be stated therein
or
necessary to make the statements therein not misleading in light of the
circumstances then existing (each an “Event”),
and
use all reasonable efforts to promptly update and/or correct such prospectus.
Each Holder will hold in confidence and will not make any disclosure of any
such
Event and any related information disclosed by the Company.
(vi) Notify
each Holder of the issuance by the Commission or any state securities commission
or agency of any stop order suspending the effectiveness of the Registration
Statement or the threat or initiation of any proceedings for that purpose.
The
Company shall use its best efforts to prevent the issuance of any stop order
and, if any stop order is issued, to obtain the lifting thereof at the earliest
possible time.
(vii) List
the
Registrable Securities covered by such Registration Statement with all
securities exchange(s) and/or markets on which the Common Stock is then listed
and prepare and file any required filings with the Over The Counter Bulletin
Board (the “OTCBB”),
if
any, or any other exchange or market where the Common Stock is
traded.
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(viii) Take
all
steps reasonably necessary to enable Holders to avail themselves of the
prospectus delivery mechanism set forth in Rule 153 (or successor thereto)
under
the Act.
(b)
Notwithstanding
the obligations under Section 2(a)(v) or any provision of this Agreement,
if (i)
in the good faith judgment of the Company, following consultation with legal
counsel, it would be detrimental to the Company and its stockholders for
resales
of Registrable Securities to be made pursuant to the Registration Statement
due
to the existence of a material development or potential material development
involving the Company that the Company would be obligated to disclose in
the
Registration Statement, which disclosure would be premature or otherwise
inadvisable at such time or would have a material adverse effect upon the
Company and its stockholders, or (ii) in the good faith judgment of the Company,
it would adversely affect or require premature disclosure of the filing of
a
Company-initiated registration of any class of its equity securities, then
the
Company will have the right to suspend the use of the Registration Statement
for
two periods of not more than 30 calendar days each in any 12 month period,
but
only if the Company reasonably concludes, after consultation with outside
legal
counsel, that the failure to suspend the use of the Registration Statement
as
such would create a material liability or violation under applicable securities
laws or regulations. In any event in which the Company suspends use of the
Registration Statement pursuant to this paragraph, the Company shall furnish
to
the Holders a certificate signed by the Chief Executive Officer of the Company
stating the Company’s good faith judgment as set forth in clauses (i) and/or
(ii) of the foregoing sentence; the Company shall (A) use all reasonable
efforts to lift the suspension at the earliest practicable time; (B) extend
the period of effectiveness for the Registration Statement for each day of
suspension; and (C) deliver written notice to the Holders when such
suspension is no longer necessary, within the periods permitted hereby.
(c)
If
at any time subsequent to the date such Registration Statement is declared
effective, the number of shares of Common Stock registered for resale pursuant
to the Registration Statement is not equal to at least 100% of the Registrable
Securities, the Company shall amend the Registration Statement to add such
additional securities. In the event that the Company is unable under the
securities laws to add such additional securities to the then effective
Registration Statement, the Company shall promptly file, in accordance with
the
procedures set forth herein, an additional Registration Statement with respect
to such newly Registrable Securities. The Company shall use all reasonable
efforts to cause any such additional Registration Statement, when filed,
to
become effective as soon as practicable after that date that the need to
file
the Registration Statement arose.
(d)
Subject
to any preexisting rights granted to others by the Company, if at any time
during the term of this Agreement, the registration statement described in
Section 2(a) is not effective with respect to some or all of the Registrable
Securities, each Holder shall have the following “piggyback” registration
rights, provided that such “piggyback” registration rights shall be exercisable
only pari passu with similar rights provided under any other registration
rights
agreements binding on the Company. If the Company at any time following the
Closing Date proposes for any reason to register Common Stock under the
Securities Act (other than registrations relating to employee benefit plans,
business combinations or other registrations on Form S-4 or Form S-8 promulgated
under the Securities Act or any successor forms thereto), it shall promptly
give
written notice to each Holder of its intention to so register such equity
securities and, upon the written request, given within 20 calendar days after
delivery of such notice by the Company, of such Holder to include in such
registration Registrable Securities held by such Holder (which request shall
specify the number of Registrable Shares proposed to be included in such
registration by such Holder and shall state the intended method of disposition
of such Registrable Securities by such Holder), the Company shall use its
best
efforts to cause all such Registrable Securities to be included in such
registration on the same terms and conditions as the securities otherwise
being
sold in such registration; provided, however, that the Company shall have
the
right to delay such a registration under customary circumstances for a period
not in excess of 90 calendar days in any twelve month period and if the managing
underwriter advises the Company in writing that the inclusion of all Registrable
Securities proposed to be included in such registration would interfere
materially with the successful marketing (including pricing) of primary shares
(the “Primary
Shares”)
proposed to be registered by the Company, then the number of Primary Shares
and
Registrable Securities proposed to be included in such registration shall
be
included in the following order:
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(i) first,
the Primary Shares; and
(ii) second,
the Registrable Securities requested to be included in such registration
pursuant to this Section 2(d) on a pari passu basis with the securities of
other
holders with “piggyback” registration rights;
provided,
that in the case of any such underwritten offering of Common Stock by the
Company that is in satisfaction of a demand registration pursuant to
Section 2(e), the order for inclusion of Primary Shares and Registrable
Securities shall be as set forth in that section.
(e)
If
at any time during the period beginning one year after the Closing Date and
ending two years after the Closing Date, the registration statement described
in
Section 2(a) is not effective with respect to some or all of the Registrable
Securities, Holders who collectively hold more than $50,000 in value of the
Registrable Securities (determined as of the Closing Date) shall have the
following demand registration rights. If the Company shall be requested in
writing by an eligible Holder, or eligible Holders, to effect a registration
on
Form S-1, or on Form SB-2 if the Company is so eligible, under the
Securities Act of Registrable Securities, then the Company shall promptly
use
all reasonable efforts to effect such registration under the Securities Act
of
such Registrable Securities which the Company has been so requested to register
in the manner described in Section 2(a); provided, however, that the Company
shall not be obligated to effect any registration under this Section 2(e)
except
in accordance with the following provisions:
(i) The
Company shall not be obligated to file and cause to become effective (x)
more
than two
registration statements on Form S-1 or Form SB-2 with respect to
Registrable Securities initiated by the Holders pursuant to this
Section 2(e); or (y) any registration statement covering less than $50,000
in value of Registrable Securities determined as of the Closing Date;
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(ii) The
Company may delay the filing or effectiveness of any registration statement
pursuant to this Section 2(e) for a period of up to 60 calendar days after
the date of a request for registration pursuant to this Section 2(e) if the
Company determines in good faith that (A) it is in possession of material,
non-public information concerning an acquisition, merger, recapitalization,
consolidation, reorganization or other material transaction by or of the
Company
or concerning pending or threatened litigation and (B) disclosure of such
information would jeopardize any such transaction or litigation or otherwise
materially harm the Company; provided,
however,
that the Company may not exercise such deferral right more than twice in
any
twelve month-period.
(f) At
such time as the Company shall have qualified for the use of Form S-3
promulgated under the Securities Act or any successor form thereto, the Holders
shall have the right to request in writing registrations on Form S-3 or such
successor form of Registrable Shares held by the Holders in the manner described
in Section 2(a), which request or requests shall (i) specify the number of
Registrable Shares held by the requesting Holders intended to be sold or
disposed of, (ii) state the intended method of disposition of such Registrable
Shares held by the Holders and (iii) relate to Registrable Shares having
an
anticipated aggregate offering price of at least $50,000 in value of Registrable
Securities determined as of the Closing Date. A requested registration on
Form
S-3 or any such successor form in compliance with Section 4 shall not count
as a
registration statement initiated pursuant to Section 2(e) but shall otherwise
be
treated as a registration statement initiated pursuant to, and shall, except
as
otherwise expressly provided in Section 4, be subject to Section 2. In
no event will any Holder be entitled to demand any registration on Form S-3
if
the registration would require filing under Blue Sky or similar state securities
laws in any jurisdiction in which the Company would be required to qualify
to do
business or execute a general consent to service of process to effect such
registration and filing.
(g) With
a view to making available to the Holders the benefit of certain SEC rules
and
regulations which may permit the sale of the Registrable Securities to the
public without registration, the Company agrees to use all reasonable efforts
to:
(i) make
and keep public information available, as those terms are understood and
defined
in Rule 144 under the Securities Act so long as the Company remains subject
to
the periodic reporting requirements under Sections 13 or 15(d) of the
Exchange Act;
(ii) file
with the SEC, in a timely manner, all reports and other documents required
of
the Company under the Exchange Act; and
(iii) so
long as a Holder owns any Registrable Securities, furnish to such Holder
forthwith upon request: (A) a written statement by the Company as to the
Company’s compliance with the reporting requirements of Rule 144 under the
Securities Act and of the Exchange Act; (B) a copy of the most recent
annual or quarterly report of the Company; and (C) such other reports and
documents as a Holder may reasonably request in availing itself of such SEC
rule
or regulation allowing the Holder to sell any such securities without
registration.
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(h) Subject
to any preexisting rights granted to others by the Company, the Company shall
not grant to any person other than the Holders, whether by agreement or
otherwise, any registration rights that are senior and/or superior to the
rights
conferred upon the Holders hereunder
(“Senior Registration Rights”),
unless the Company simultaneously grants to the Holders such Senior Registration
Rights, without requiring any consideration therefor from the Holders;
provided,
however that this Section 2(h) shall not apply to any issuance by the Company
of
securities with Senior Registration Rights, in a bona fide single transaction,
if the Company receives, in consideration for such issuance, an aggregate
amount
of cash and/or property (valued at its fair market value) that exceeds
$1,000,000.
3. Expenses
of Registration.
All Registration Expenses in connection with any registration, qualification
or
compliance with registration pursuant to this Agreement shall be borne by
the
Company, and all Selling Expenses of a Holder shall be borne by such
Holder.
4. Registration
on Form SB-2.
The Company shall use its reasonable best efforts to continue to meet the
“registrant eligibility” requirements for a secondary offering set forth in the
general instructions to Form SB-2 or any comparable or successor form or
forms,
or in the event that the Company is ineligible to use such form, such form
as
the Company is eligible to use under the Securities Act, provided that if
such
other form is used, the Company shall convert such other form to a Form SB-2
as
soon as the Company becomes so eligible.
5. Registration
Period.
In the case of any registration effected by the Company pursuant to this
Agreement, the Company shall keep such registration effective and current
until
the earlier of (a) the date on which all the Holders have completed the sales
or
distribution described in the Registration Statement relating thereto or,
if
earlier until such Registrable Securities may be sold by the Holders under
Rule
144(k) under the Securities Act (provided that the Company’s transfer agent has
accepted an instruction from the Company to such effect) or (b) the the
second anniversary of the Closing Date.
6. Indemnification.
(a)
Company
Indemnity.
The Company will indemnify and hold harmless each Holder, each of its officers,
directors, agents and partners, and each person controlling each of the
foregoing, within the meaning of Section 15 of the Securities Act and the
Exchange Act and the rules and regulations thereunder 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, within
the meaning of Section 15 of the Securities Act and the rules and regulations
thereunder, any underwriter, against all claims, losses, damages 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 final
prospectus (as amended or supplemented if the Company files any amendment
or
supplement thereto with the SEC), Registration Statement filed pursuant to
this
Agreement or any post-effective amendment thereof 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 in light of the
circumstances under which they were made, or any violation by the Company
of the
Securities Act, the Exchange Act, any state securities law, 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 Holder, each of its
officers, directors, agents and partners, and each person controlling each
of
the foregoing, for any reasonable legal fees and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable
in any
such case to a Holder to the extent that any such claim, loss, damage, liability
or expense arises out of or is based on (i) any untrue statement or omission
based upon written information furnished to the Company by such Holder and
stated to be specifically for use therein, (ii) any failure by any Holder
to
comply with prospectus delivery requirements of the Securities Act or Exchange
Act or any other law or legal requirement applicable to the Holders or this
Agreement or (iii) an offer of sale of Common Stock occurring during a period
in
which sales under the Registration Statement are suspended as permitted by
this
Agreement. The indemnity agreement contained in this Section 6(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent will not be unreasonably withheld).
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(b)Holder
Indemnity.
Each Holder will, severally but not jointly, if Registrable Securities held
by
it are included in the securities as to which such registration, qualification
or compliance is being effected, indemnify and hold harmless the Company,
each
of its directors, officers, agents and partners, and any other Holder selling
securities pursuant to the Registration Statement and any of its directors,
officers, agents, partners, and any person who controls such stockholder
within
the meaning of the Securities Act or Exchange Act and each underwriter, if
any,
of the Company’s securities covered by such a Registration Statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder,
each
other Holder (if any), and each of their officers, directors and partners,
and
each person controlling such other Holder(s) against all claims, losses,
damages
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 final prospectus (as amended or supplemented if the Company files
any
amendment or supplement thereto with the SEC), Registration Statement filed
pursuant to this Agreement or any post-effective amendment thereof or based
on
any omission (or alleged omission) to state therein a material fact required
to
be stated therein or necessary to make the statement therein not misleading
in
light of the circumstances under which they were made, and will reimburse
such
persons for any reasonable legal fees or any other expenses reasonably incurred
in connection with investigating and 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 final prospectus (as amended or supplemented if
the
Company files any amendment or supplement thereto with the SEC), Registration
Statement filed pursuant to this Agreement or any post-effective amendment
thereof in reliance upon and in conformity with written information furnished
to
the Company by such Holder and stated to be specifically for use therein,
and
provided that the maximum amount for which such Holder shall be liable under
this indemnity shall not exceed the net proceeds (after Selling Expenses)
received by such Holder from the sale of the Registrable Securities pursuant
to
the Registration Statement in question. The indemnity agreement contained
in
this Section 6(b) shall not apply to amounts paid in settlement of any such
claims, losses, damages or liabilities if such settlement is effected without
the consent of such Holder (which consent shall not be unreasonably
withheld).
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(c)
Procedure.
Each party entitled to indemnification under this Section 6 (the “Indemnified
Party”)
shall give written 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
participate in and, if the Indemnifying Party so elects, to assume the defense
of any such claim in 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 its own 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 except
to
the extent that the Indemnifying Party is materially and adversely affected
by
such failure to provide notice. 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 furnish such
non-privileged 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 the defense of such claim and litigation resulting
therefrom.
7. Contribution.
If the indemnification provided for in Section 6 herein is held by a court
of
competent jurisdiction to be unavailable to an Indemnified Party in respect
of
any losses, claims, damages or liabilities referred to herein (other than
by
reason of the exceptions provided therein), then each Indemnifying Party,
in
lieu of indemnifying such Indemnified Party, shall, to the extent permitted
by
applicable law, contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages or liabilities as between
the
Company on the one hand and any Holder(s) on the other, in such proportion
as is
appropriate to reflect the relative fault of the Company and of such Holder(s)
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of
any
Holder(s) on the other shall be determined by a court of law by reference
to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by such Holder(s) and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission.
In
no event shall the obligation of any Indemnifying Party to contribute under
this
Section 7 exceed the amount that such Indemnifying Party would have been
obligated to pay by way of indemnification if the indemnification provided
for
under Section 6(a) or 6(b) hereof had been available under the
circumstances.
The
Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Holders were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraphs. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraphs
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section, no Holder shall be required
to
contribute any amount in excess of the net proceeds (after Selling Expenses)
received by such Holder from the sale of Registrable Securities pursuant
to the
Registration Statement in question. 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.
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8. Survival.
The indemnity and contribution agreements contained in Sections 6 and 7 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement or the Purchase Agreement, and (ii) the consummation of
the
sale or successive resales of the Registrable Securities.
9. Information
by Holders.
As a condition to the obligations of the Company to complete any registration
pursuant to this Agreement with respect to the Registrable Securities of
each
Holder, such Holder will furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended methods of
disposition of the Registrable Securities held by it as is reasonably required
by the Company to effect the registration of the Registrable Securities.
At
least five business days prior to the first anticipated filing date of a
Registration Statement for any registration under this Agreement, the Company
will notify each Holder of the information the Company requires from that
Holder
whether or not such Holder has elected to have any of its Registrable Securities
included in the Registration Statement.
10. Further
Assurances.
Each Holder will cooperate with the Company, as reasonably requested by the
Company, in connection with the preparation and filing of any Registration
Statement hereunder, unless such Holder has notified the Company in writing
of
such Holder’s irrevocable election to exclude all of such Holder’s Registrable
Securities from such Registration Statement.
11. Suspension
of Sales.
Upon receipt of any notice from the Company under Section 2(a)(v) or 2(b),
each
Holder will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until, as applicable, (i) it receives copies of a supplemented or amended
prospectus contemplated by Section 2(a)(v) or (ii) the Company advises the
Holder that a suspension of sales under Section 2(b) has terminated. If so
directed by the Company, each Holder will deliver to the Company (at the
expense
of the Company) or destroy all copies in the Holder’s possession (other than a
limited number of file copies) of the prospectus covering such Registrable
Securities that is current at the time of receipt of such notice.
12. Replacement
Certificates.
The certificate(s) representing the Registrable Securities held by a Holder
may
be exchanged by such Holder at any time and from time to time for certificates
with different denominations representing an equal aggregate number of Common
Stock, as reasonably requested by such Holder upon surrendering the same.
No
service charge will be made for such registration or transfer or exchange.
Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of the certificates for the Common Stock
of any
of the foregoing, and, in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it, or upon surrender and cancellation of such
certificate if mutilated, the Company will make and deliver a new certificate
of
like tenor and dated as of such cancellation at no charge to the
holder.
10
13. Transfer
or Assignment.
Except as otherwise provided herein, this Agreement shall be binding upon
and
inure to the benefit of the parties and their successors and permitted assigns.
The rights granted to each Holder by the Company under this Agreement to
cause
the Company to register Registrable Securities, and all other rights granted
to
any Holder by the Company hereunder, may be transferred or assigned (in whole
or
in part) by such Holder to (i) any partner or retired partner of such Holder,
if
such Holder is a partnership, (ii) any family member of such Holder or trust
for
the benefit thereof or of such Holder; or (iii) any transferee from such
Holder
of shares of Registrable Securities provided such transferee holds at least
$50,000 in value of the Registrable Securities (determined as of the Closing
Date); provided
in each case that (i) the Company is given written notice by the Holder at
the
time of or within a reasonable time after such 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
agrees in writing to be bound by the registration provisions of this Agreement,
(ii) such transfer or assignment is not made under the Registration Statement
or
Rule 144 under the Securities Act, and (iii) the transferee has provided to
the Company an investor questionnaire (or equivalent document) evidencing
that
the transferee is a “qualified institutional buyer”, as defined in Rule 144A
promulgated under the Securities Act or an “accredited investor”, as defined in
Rule 501(a) of Regulation D.
14. Miscellaneous.
(a)Remedies.
The Company and each Holder acknowledge and agree that irreparable damage
would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It
is accordingly agreed that the parties shall be entitled to an injunction
or
injunctions to prevent or cure breaches of the provisions of this Agreement
and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which any of them may be entitled by law or
equity.
(b)Notices.
Any notice or other communication required or permitted to be given hereunder
shall be in writing by facsimile, mail or personal delivery and shall be
effective upon actual receipt of such notice. The addresses for such
communications shall be:
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to
the Company:
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BPO
MANAGEMENT SERVICES, INC.
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|
Attention:
Xxxxxxx Xxxxx and Xxx Xxxxxxx
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0000
X Xxxxxxx Xxxxxx, Xxxxx 000
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|
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Xxxxxxx
Xxxxx, XX 00000
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Fax:______________
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11
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with
a copy to:
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Xxxx
X. Xxxxxxx, Esq.
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Xxxxxxx
& Xxxxxx
|
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00000
XxxXxxxxx Xxxx., Xxxxx 000
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Xxxxxx,
XX 00000
|
|
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Fax:
(000) 000 0000
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If
to the Helts, to:
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Xxxxxx
X. Xxxx
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X.X.
Xxx 000
|
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Xxxxxxxxx,
XX 00000-0000
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with
a copy to:
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Xxxxxx
X. Xxxxxx
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Xxxxxx
Xxxxxx Xxxxx, a Law Corporation
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|
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0000 X.
Xxxxxxxxxx Xxxx., Xxxxx 000
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|
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Xxxxxx
Xxxxx, XX 00000-0000
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|
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Fax:
(000) 000-0000
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Any
party hereto may from time to time change its address for notices by giving
at
least five calendar days’ written notice of such changed address to the other
parties hereto.
(c)
Waivers.
No waiver by any party of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver
in
the future or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder
in
any manner impair the exercise of any such right accruing to it thereafter.
(d)
Execution
in Counterparts.
This Agreement may be executed in two or more counterparts, all of which
shall
be considered one and the same agreement, it being understood that all parties
need not sign the same counterpart.
(e)
Signatures.
Facsimile signatures shall be valid and binding on each party submitting
the
same.
(f)
Entire
Agreement; Amendment.
This Agreement, together with the Purchase Agreement and the agreements and
documents contemplated hereby and thereby, contains the entire understanding
and
agreement of the parties with respect to the matters contemplated hereby.
This
Agreement may not be amended, modified or terminated except by a written
agreement signed by the Company and all Holders. Any such amendment,
modification or termination shall be binding upon the Company and the
Holders.
(g)
Governing
Law; Venue.
This Agreement and the validity and performance of the terms hereof shall
be
governed by and construed in accordance with the laws of the State of Delaware
applicable to contracts executed and to be performed entirely within such
state.
The exclusive venue for any legal proceeding with respect to this Agreement
shall be San Francisco County, California.
(h)
Jury
Trial.
TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH PARTY HERETO WAIVES THE RIGHT
TO A
TRIAL BY JURY.
12
(i)
Titles.
The titles used in this Agreement are used for convenience only and are not
to
be considered in construing or interpreting this Agreement.
(j)
No
Strict Construction.
The language used in this Agreement will be deemed to be the language chosen
by
the parties to express their mutual intent, and no rule of strict construction
will be applied against any party.
13
IN
WITNESS WHEREOF,
the undersigned have caused this Agreement to be executed as of the date
first
written above.
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COMPANY:
|
|
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BPO
MANAGEMENT SERVICES, INC.
|
|
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By:
__________________________________
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|
|
Name: ________________________________
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|
Title
_________________________________
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HELTS:
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| _________________________________ | |
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Xxxxxx
X. Xxxx, as trustee of the Xxxxxx X.
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|
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and
Xxxxxxx X. Xxxx Revocable Trust dated
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|
|
April 24,
2003
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| _________________________________ | |
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Xxxxxxx
X. Xxxx, as trustee of the Xxxxxx X.
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and
Xxxxxxx X. Xxxx Revocable Trust dated
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|
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April 24,
2003
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14
