Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as
of the ____ day of __________, 2005, by and among Confluence Acquisition
Partners I, Inc., a Delaware corporation (the "Company"); and the undersigned
parties listed under the designation "Holders" on the signature page hereto
(each, a "Holder" and collectively, the "Holders").
WHEREAS, the Holders currently hold all of the issued and outstanding
securities of the Company;
WHEREAS, the Holders and the Company desire to enter into this Agreement
to provide the Holders with certain rights relating to the registration of
shares of Common Stock held by them;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS. The following capitalized terms used herein have the following
meanings:
"Agreement" means this Agreement, as amended, restated, supplemented, or
otherwise modified from time to time.
"Blackout Period" means the period (a) beginning ninety (90) days prior
to the date the Company expects to file a Registration Statement for a public
offering (other than a registration statement relating to any employee benefit
plan, or a registration statement related solely to stock issued upon
conversion of debt securities) and, in the event no such Registration Statement
is filed, ending on the earlier of ninety (90) days thereafter or the date that
the Company no longer expects to file such Registration Statement, or, in the
event such a Registration Statement is filed, ending on the last day of the
distribution (as contemplated in Regulation M under the Securities Exchange
Act of 1934, as amended) of such public offering of securities; or (b)
beginning on the date following a determination of the Company's board of
directors made in the good faith judgement of such board of directors that it
would be materially detrimental to the Company and its stockholders for such
Registration Statement to be effected at such time, ending on the earlier of
ninety (90) days thereafter or the date on which the Company's board of
directors determines that it would no longer be materially detrimental to the
Company and its stockholders for such Registration Statement to be effected at
such time.
"Business Combination" means a merger, capital stock exchange, asset
acquisition or other similar business combination with an operating business in
the banking industry as more specifically described in the Company's
registration statement on Form S-1, as amended, filed with the Commission in
connection with the Company's Initial Public Offering.
"Commission" means the Securities and Exchange Commission, or any other
federal agency then administering the Securities Act or the Exchange Act.
"Common Stock" means the common stock, par value $0.01 per share, of the
Company.
"Company" is defined in the preamble to this Agreement.
"Demand Registration" is defined in Section 2.1.1.
"Demanding Holder" is defined in Section 2.1.1.
"Effective Date" means the date of effectiveness of the registration
statement filed with the Commission in connection with the Company's Initial
Public Offering.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder, all as the
same shall be in effect at the time.
"Expiration Date" shall mean ___________, 2010.
"Form S-3" is defined in Section 2.3.
"Holder" is defined in the preamble to this Agreement.
"Indemnified Party" is defined in Section 4.1.
"Indemnifying Party" is defined in Section 4.3.
"Initial Public Offering" means the Company's initial public offering
conducted in _____________, 2005 pursuant to the Securities Act.
"Maximum Number of Shares" is defined in Section 2.1.4.
"Notices" is defined in Section 6.3.
"Piggy-Back Registration" is defined in Section 2.2.1.
"Register," "registered" and "registration" mean a registration effected
by preparing and filing a registration statement or similar document in
compliance with the requirements of the Securities Act, and the applicable rules
and regulations promulgated thereunder, and such registration statement becoming
effective.
"Registrable Securities" mean all of the shares of Common Stock owned or
held by Holders or Transferees. Registrable Securities include any warrants,
shares of capital stock or other securities of the Company issued as a dividend
or other distribution with respect to or in exchange for or in replacement of
such shares of Common Stock. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when: (a) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been sold,
transferred, disposed of or exchanged in accordance with such Registration
Statement; (b) such securities shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent public distribution of them
shall not require registration under the Securities Act; or (c) such securities
shall have ceased to be outstanding. In addition, Registrable Securities shall
not include any securities held by any Holder if such securities are then
saleable under Rule 144 in the opinion of counsel to the Company.
"Registration Statement" means a registration statement filed by the
Company with the Commission in compliance with the Securities Act and the rules
and regulations promulgated thereunder for a public offering and sale of Common
Stock (other than a registration statement on Form S-4 or Form S-8, or their
successors, or any registration statement covering only securities proposed to
be issued in exchange for securities or assets of another entity).
"Release Date" means the date on which shares of Common Stock are
disbursed from escrow pursuant to Section 3 of that certain Stock Escrow
Agreement dated as of ______, 2005 by and among the parties hereto and
Continental Stock Transfer & Trust Company.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.
"Transferee" or "Transferees" means the persons, trusts or entities to
whom the Registrable Securities are transferred (i) by gift to a member of
Holder's immediate family or to a trust, the beneficiary of which is a Holder or
a member of a Holder's immediate family, (ii) by virtue of the laws of descent
and distribution upon death of any Holder, (iii) pursuant to a qualified
domestic relations order, or (iv) pursuant to a transfer of record ownership
whereby there is no change in beneficial ownership.
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"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer's market-making activities.
"Warrants" means those warrants to purchase shares of Common Stock of the
Company expiring five years from the Effective Date.
2. REGISTRATION RIGHTS.
2.1 Demand Registration.
2.1.1 Grant of Right. The Company, upon the delivery of the Initial
Demand Notice (as defined below) of the Holder(s) of at least 51% (collectively,
the "Demanding Holders") of the Registrable Securities (defined below), agrees
to register (a "Demand Registration") on no more than two occasions, all or any
portion of the Registrable Securities requested by the Demanding Holders in the
Initial Demand Notice. With respect to such registration request, the Company
will use its commercially reasonable efforts to file a Registration Statement
covering the Registrable Securities as soon as reasonably practicable but no
later than one hundred twenty (120) days after the Initial Demand Notice and,
upon filing, use its commercially reasonable efforts to have such Registration
Statement declared effective as soon as practicable thereafter; provided, that
the Company shall be deemed to have complied with its obligation hereunder so
long as it has made such commercially reasonable efforts; provided, further,
that the Demanding Holders shall provide at least fifteen (15) business days
notice to the Company that the Demanding Holders desire the Company commence the
preparation of and effect the filing of a Registration Statement with the
Commission as to the Registrable Securities (the "Initial Demand Notice").
Notwithstanding the foregoing, if the Company provides the Demanding Holders
notice of a Blackout Period within seven (7) business days after it receives the
Initial Demand Notice, then (x) the Company's obligation to take any action
pursuant to this Section 2.1.1, including to file a Registration Statement
covering the Registrable Securities, shall be suspended during the Blackout
Period and (y) the Initial Demand Notice shall thereupon be deemed received, for
purposes of determining the timing of any obligation of the Company under this
Section 2.1.1 to register the Registrable Securities, on the first business day
immediately following the termination of such Blackout Period. An Initial Demand
Notice shall be effective only if it is received by the Company during the
period beginning on the Release Date and ending on the fifth anniversary
thereof. The Company shall give written notice of its receipt of any Initial
Demand Notice from any Holder(s) to all other registered Holders of the
Registrable Securities within ten (10) business days from the date of receipt of
any such Initial Demand Notice. Once made, a request for registration pursuant
to an Initial Demand Notice provided in accordance with this Section 2.1.1 may
not be revoked, except that such a request for registration pursuant to an
Initial Demand Notice may be revoked (and shall not be deemed to have been made
for purposes of determining the rights of the Holders under this Section 2.1) if
(i) the Demanding Holders have received a notice of a Blackout Period from the
Company and (ii) the Demanding Holders provide written notice to the Company
within ten (10) business days of receipt of any such notice of a Blackout Period
requesting such revocation for the purpose of preserving the right to request
registration pursuant to an Initial Demand Notice at a time subsequent thereto.
For the avoidance of doubt, the Company may not delay the ability of the
Demanding Holders to exercise their registration rights under this Agreement by
way of giving notice of a Blackout Period more than once during any 12 month
period, and any notice of a Blackout Period given by the Company to the
Demanding Holders shall not be made within four months of any previous Blackout
Period notice given by the Company.
2.1.2 Effective Registration. A registration will not count as a
Demand Registration until the Registration Statement filed with the Commission
with respect to such Demand Registration has been declared effective and the
Company has complied with all of its obligations under this Agreement with
respect thereto.
2.1.3 Underwritten Offering. If a majority-in-interest of the
Demanding Holders so elect and such Holders so advise the Company as part of
their written demand for a Demand Registration, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In such event, the right of any Holder to include its
Registrable Securities in such registration 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
Demanding Holders shall
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enter into an underwriting agreement in customary form with the Underwriter or
Underwriters selected for such underwriting by a majority-in-interest of the
Holders initiating the Demand Registration.
2.1.4 Reduction of Offering. If the managing Underwriter or
Underwriters for a Demand Registration that is to be an underwritten offering
advises the Company and the Demanding Holders in writing that the dollar amount
or number of shares of Registrable Securities which the Demanding Holders desire
to sell, taken together with all other shares of Common Stock or other
securities which the Company desires to sell and the shares of Common Stock, if
any, as to which registration has been requested pursuant to written contractual
piggy-back registration rights held by other shareholders of the Company who
desire to sell, exceeds the maximum dollar amount or maximum number of shares
that can be sold in such offering without adversely affecting the proposed
offering price, the timing, the distribution method, or the probability of
success of such offering (such maximum dollar amount or maximum number of
shares, as applicable, the "Maximum Number of Shares"), then the Company shall
include in such registration: (i) first, the Registrable Securities as to which
Demand Registration has been requested by the Demanding Holders (pro rata in
accordance with the number of shares of Registrable Securities which such
Demanding Holder has requested be included in such registration, regardless of
the number of shares of Registrable Securities held by each Demanding Holder)
that can be sold without exceeding the Maximum Number of Shares; (ii) second, to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), the shares of Common Stock or other securities that the
Company desires to sell that can be sold without exceeding the Maximum Number of
Shares; (iii) third, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (i) and (ii), the shares of Common
Stock for the account of other persons that the Company is obligated to register
pursuant to written contractual arrangements with such persons and that can be
sold without exceeding the Maximum Number of Shares; and (iv) fourth, to the
extent that the Maximum Number of Shares have not been reached under the
foregoing clauses (i), (ii), and (iii), the shares of Common Stock that other
security holders desire to sell that can be sold without exceeding the Maximum
Number of Shares.
2.1.5 Withdrawal. If a majority-in-interest of the Demanding Holders
disapprove of the terms of any underwriting or are not entitled to include all
of their Registrable Securities in any offering, such majority-in-interest of
the Demanding Holders may elect to withdraw from such offering by giving written
notice to the Company and the Underwriter or Underwriters of their request to
withdraw prior to the effectiveness of the Registration Statement filed with the
Commission with respect to such Demand Registration. If the majority-in-interest
of the Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, then such registration shall not count as a Demand Registration
provided for in this Section 2.1.
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2.2 Piggy-Back Registration.
2.2.1 Piggy-Back Rights. If at any time on or after the Release Date
the Company proposes to file a Registration Statement under the Securities Act
with respect to an offering of equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into, equity
securities, by the Company for its own account or for shareholders of the
Company for their account (or by the Company and by shareholders of the Company
including, without limitation, pursuant to Section 2.1), other than a
Registration Statement (i) filed in connection with any employee stock option or
other benefit plan, (ii) for an exchange offer or offering of securities solely
to the Company's existing shareholders, (iii) for an offering of debt that is
convertible into equity securities of the Company or (iv) for a dividend
reinvestment plan, then the Company shall (x) give written notice of such
proposed filing to the Holders of Registrable Securities as soon as practicable
but in no event less than ten (10) business days before the anticipated filing
date,which notice shall describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the name
of the proposed managing Underwriter or Underwriters, if any, of the offering,
and (y) offer to the holders of Registrable Securities in such notice the
opportunity to register the sale of such number of shares of Registrable
Securities as such Holders may request in writing within five business (5) days
following receipt of such notice (a "Piggy-Back Registration"). The Company
shall cause such Registrable Securities to be included in such registration and
shall use its commercially reasonable efforts to cause the managing Underwriter
or Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions as any similar securities of the Company and to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. All Holders of
Registrable Securities proposing to distribute their securities through a
Piggy-Back Registration that involves an Underwriter or Underwriters shall enter
into an underwriting agreement in customary form with the Underwriter or
Underwriters selected for such Piggy-Back Registration.
2.2.2 Reduction of Offering. If the managing Underwriter or
Underwriters for a Piggy-Back Registration that is to be an underwritten
offering advises the Company and the Holders of Registrable Securities in
writing that the dollar amount or number of shares of Common Stock which the
Company desires to sell, taken together with shares of Common Stock, if any, as
to which registration has been demanded pursuant to written contractual
arrangements with persons other than the Holders of Registrable Securities
hereunder, the Registrable Securities as to which registration has been
requested under this Section 2.2, and the shares of Common Stock, if any,
as to which registration has been requested pursuant to the written contractual
piggy-back registration rights of other shareholders of the Company, exceeds the
Maximum Number of Shares, then the Company shall include in any such
registration:
(i) If the registration is undertaken for the Company's
account: (A) first, the shares of Common Stock or other securities that the
Company desires to sell that can be sold without exceeding the Maximum Number of
Shares; (B) second, to the
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extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the shares of Common Stock, if any, including the
Registrable Securities, as to which registration has been requested pursuant to
written contractual piggy-back registration rights of security Holders (pro rata
in accordance with the number of shares of Common Stock which each such person
has actually requested to be included in such registration, regardless of the
number of shares of Common Stock with respect to which such persons have the
right to request such inclusion) that can be sold without exceeding the Maximum
Number of Shares; and
(ii) If the registration is a "demand" registration undertaken
at the demand of persons other than the Holders of Registrable Securities
pursuant to written contractual arrangements with such persons, (A) first, the
shares of Common Stock for the account of the demanding persons that can be sold
without exceeding the Maximum Number of Shares; (B) second, to the extent that
the Maximum Number of Shares has not been reached under the foregoing clause
(A), the shares of Common Stock or other securities that the Company desires to
sell that can be sold without exceeding the Maximum Number of Shares; and (C)
third, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clauses (A) and (B), the Registrable Securities as to which
registration has been requested under this Section 2.2 and any Shares as to
which registration has been requested pursuant to written contractual piggy-back
registration rights which other securityholders desire to sell that can be sold
without exceeding the Maximum Number of Shares (pro rata in accordance with the
number of shares of Registrable Securities held by each such Holder).
2.2.3 Withdrawal. Any Holder of Registrable Securities may elect to
withdraw such Holder's request for inclusion of Registrable Securities in any
Piggy-Back Registration by giving written notice to the Company of such request
to withdraw prior to the effectiveness of the Registration Statement. The
Company may also elect to withdraw a Registration Statement at any time prior to
the effectiveness of the Registration Statement. Notwithstanding any such
withdrawal, the Company shall pay all expenses incurred by the Holders of
Registrable Securities in connection with such Piggy-Back Registration as
provided in Section 3.3.
2.3 Registrations on Form S-3. The Holders of a majority in interest of
Registrable Securities may at any time and from time to time, request in writing
that the Company register the resale of any or all of such Registrable
Securities on Form S-3 or any similar short-form registration which may be
available at such time ("Form S-3"); provided, however, that the Company shall
not be obligated to effect such request through an underwritten offering. Upon
receipt of such written request, the Company will promptly give written notice
of the proposed registration to all other Holders of Registrable Securities,
and, as soon as practicable thereafter, effect the registration of all or such
portion of such Holder's or Holders' Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within fifteen (15) business days after receipt of such
written notice from the Company; provided, however, that the Company shall not
be obligated to effect any such registration pursuant to this Section 2.3: (i)
if Form S-3 is not
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available for such offering. Registrations effected pursuant to this Section
2.3 shall not be counted as a Demand Registration effected pursuant to Section
2.1.
3. CERTAIN AGREEMENTS RESPECTING REGISTRATIONS.
3.1 Certain Registration Limitations and Procedures
3.1.1 Limitations. Notwithstanding anything herein to the contrary,
the Company shall not be obligated to effect any registration pursuant to
Section 2.1 of this Agreement if the Holders of the Registrable Securities,
together with the Holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public of less than
$500,000; provided, further, that the Company shall not be obligated to file a
second Registration Statement until a Registration Statement that has been filed
is counted as a Demand Registration or is terminated or withdrawn.
3.1.2 Copies. The Company shall, prior to filing a Registration
Statement or prospectus, or any amendment or supplement thereto, furnish without
charge to the Holders of Registrable Securities included in such registration,
and such Holders' legal counsel, copies of such Registration Statement as
proposed to be filed, each amendment and supplement to such Registration
Statement (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such Registration
Statement (including each preliminary prospectus), and such other documents as
the Holders of Registrable Securities included in such registration or legal
counsel for any such Holders may request in order to facilitate the disposition
of the Registrable Securities owned by such Holders.
3.1.3 Amendments and Supplements. Subject to the provisions of
Section 3.2 the Company shall use its commercially reasonable efforts to prepare
and file with the Commission such amendments, including post-effective
amendments, and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective and in
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compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such Registration Statement (which period shall not exceed the sum of one
hundred eighty (180) days plus any period during which any such disposition is
interfered with by any stop order or injunction of the Commission or any
governmental agency or court and any period of suspension pursuant to Section
3.2.1) or such securities have been withdrawn from such registration.
3.1.4 Notification. After the filing of a Registration Statement,
the Company shall promptly, and in no event more than two (2) business days
after such filing, notify the Holders of Registrable Securities included in such
Registration Statement of such filing, and shall further notify such Holders
promptly and confirm such advice in writing in all events within two (2)
business days of the occurrence of any of the following: (i) when such
Registration Statement becomes effective; (ii) when any post-effective amendment
to such Registration Statement becomes effective; (iii) the issuance or
threatened issuance by the Commission of any stop order (and the Company shall
take all actions required to prevent the entry of such stop order or to remove
it if entered); and (iv) any request by the Commission for any amendment or
supplement to such Registration Statement or any prospectus relating thereto or
for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and promptly make
available to the Holders of Registrable Securities included in such Registration
Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement
thereto, including documents incorporated by reference, the Company shall
furnish to the Holders of Registrable Securities included in such Registration
Statement and to the legal counsel for any such Holders, copies of all such
documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents
and comment thereon, and the Company shall not file any Registration Statement
or prospectus or amendment or supplement thereto, including documents
incorporated by reference, to which such Holders or their legal counsel shall
object.
3.1.5 State Securities Laws Compliance. The Company shall use its
commercially reasonable efforts to (i) register or qualify the Registrable
Securities covered by the Registration Statement under such securities or "blue
sky" laws of such jurisdictions in the United States as the Holders of
Registrable Securities included in such Registration Statement (in light of
their intended plan of distribution) may request and (ii) take such action
necessary to cause such Registrable Securities covered by the Registration
Statement to be registered with or approved by such other Governmental
Authorities as may be necessary by virtue of the business and operations of the
Company and do any and all other acts and things that may be necessary or
advisable to enable the Holders of Registrable Securities included in such
Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions; provided, however, that the Company shall not
be required to qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph 3.1.5 or
subject itself to taxation in any such jurisdiction.
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3.1.6 Agreements for Disposition. The Company shall enter into
customary agreements (including, if applicable, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of such Registrable Securities. The
representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the
extent applicable, shall also be made to and for the benefit of the Holders of
Registrable Securities included in such Registration Statement. No Holder of
Registrable Securities included in such Registration Statement shall be required
to make any representations or warranties in the underwriting agreement except,
if applicable, with respect to such Holder's organization, good standing,
authority, title to Registrable Securities, lack of conflict of such sale with
such Holder's material agreements and organizational documents, and with respect
to written information relating to such Holder that such Holder has furnished in
writing expressly for inclusion in such Registration Statement.
3.1.7 Cooperation. The principal executive officer of the Company,
the principal financial officer of the Company, the principal accounting officer
of the Company and all other officers and members of the management of the
Company shall cooperate fully in any offering of Registrable Securities
hereunder, which cooperation shall include, without limitation, the preparation
of the Registration Statement with respect to such offering and all other
offering materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential Holders.
3.1.8 Records. The Company shall make available for inspection by
the Holders of Registrable Securities included in such Registration Statement,
any Underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other professional retained by any
Holder of Registrable Securities included in such Registration Statement or any
Underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, as shall be necessary to enable them to exercise
their due diligence responsibility, and cause the Company's officers, directors
and employees to supply all information requested by any of them in connection
with such Registration Statement.
3.1.9 Delivery of Opinions and Other Documents. The Company shall
furnish to each the Holders participating in any of the foregoing offerings, a
signed counterpart, addressed to the participating Holders, of (i) an opinion of
counsel to the Company, dated the effective date of such Registration Statement
(and, if such registration includes an underwritten public offering, an opinion
dated the date of the closing under any underwriting agreement related thereto),
and (ii) a "cold comfort" letter dated the effective date of such Registration
Statement (and, if such registration includes an underwritten public offering, a
letter dated the date of the closing under the underwriting agreement) signed by
the independent registered public accountants who have issued a report on the
Company's financial statements included in such Registration Statement, in each
case covering substantially the same matters with respect to such Registration
Statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities.
3.1.10 Earnings Statement. The Company shall comply with all
applicable rules and regulations of the Commission and the Securities Act, and
make available to its shareholders, as soon as practicable, an earnings
statement covering a period of twelve (12) months, beginning within three (3)
months after the effective date of the Registration
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Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder.
3.1.11 Listing. The Company shall use its commercially reasonable
efforts to cause all Registrable Securities included in any Registration
Statement to be listed on such exchanges or otherwise designated for trading in
the same manner as similar securities issued by the Company are then listed or
designated or, if no such similar securities are then listed or designated, in a
manner satisfactory to the Holders of a majority of the Registrable Securities
included in such registration.
3.2 Obligation to Suspend Distribution. If after a Registration Statement
relating to the registration of Registrable Securities under Section 2 has been
declared effective ("Effective Registration Statement"), upon the good faith
determination by the Board of Directors of the Company that it is reasonably
necessary to suspend the use of such Effective Registration Statement or sales
of Registrable Securities by Holders under such Effective Registration
Statement, the Company may, upon written notice (a "Suspension Notice") to the
Holders, direct the Holders to suspend the use of or sales under such Effective
Registration Statement. Upon the occurrence of any such suspension, the Company
shall use its commercially reasonable efforts to take or cause to be taken such
action as is necessary to permit resumed use of such Effective Registration
Statement promptly following the cessation of the Suspension Event giving rise
to such suspension so as to permit the Holders to resume use of and sales under
such Effective Registration Statement as soon as practicable thereafter. Upon
cessation of the Suspension Event giving rise to such suspension, the Company
shall promptly provide the Holders with prompt written notice that the
Suspension Event has ceased (an "End of Suspension Notice"). The Holders shall
not effect any sales of the Registrable Securities pursuant to such Effective
Registration Statement at any time after it has received a Suspension Notice
from the Company and prior to receipt of an End of Suspension Notice. If so
directed by the Company in a Suspension Notice, each Holder will deliver to the
Company (at the expense of the Company) all copies, other than permanent file
copies then in such Holder's possession, of any prospectuses covering the
Registrable Securities at the time of receipt of such Suspension Notice.
3.3 Registration Expenses. The Company shall bear all costs and expenses
incurred by the Company in connection with any Demand Registration pursuant to
Section 2.1, any Piggy-Back Registration pursuant to Section 2.2, and any
registration on Form S-3 effected pursuant to Section 2.3, and all expenses
incurred in performing or complying with its other obligations under this
Agreement, whether or not the Registration Statement becomes effective,
including, without limitation: (i) all registration and filing fees; (ii) fees
and expenses of compliance with securities or "blue sky" laws (including fees
and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (iii) printing expenses; (iv) the Company's internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees); (v) the fees and expenses incurred in connection with
the listing of the Registrable Securities as required by Section 3.1.11; (vi)
National Association of Securities Dealers, Inc. fees; (vii) fees and
disbursements of counsel for the Company and fees and expenses for independent
certified registered public accountants retained by the Company (including the
expenses or costs associated with the delivery of any opinions or comfort
letters requested pursuant to Section 3.1.9); and (viii) the fees and expenses
of any special experts retained by the Company in connection with such
registration. The Company shall have no obligation to pay any underwriting
discounts or selling commissions attributable to the Registrable Securities
being sold by the Holders thereof, which underwriting discounts or selling
commissions shall be borne by such Holders. Additionally, in an underwritten
offering, all selling shareholders and the
10
Company shall bear the expenses of the underwriter pro rata in proportion to
the respective amount of shares each is selling in such offering. The Holders of
Registrable Securities shall bear all costs and expenses incurred by them in
connection with any such registration except to the extent specifically provided
in this Section 3.3.
3.4 Information. The Holders of Registrable Securities shall provide such
information as may reasonably be requested by the Company, or the managing
Underwriter, if any, in connection with the preparation of any Registration
Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company's obligation to comply with federal
and applicable state securities laws.
4. INDEMNIFICATION AND CONTRIBUTION.
4.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder and each other Holder of Registrable Securities, and
each of their respective officers, employees, affiliates, directors, partners,
members, attorneys and agents, and each person, if any, who controls a Holder
and each other Holder of Registrable Securities (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) (each, a "Holder
Indemnified Party"), from and against any expenses, losses, judgments, claims,
damages or liabilities, whether joint or several, arising out of or based upon
any untrue statement (or allegedly untrue statement) of a material fact
contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained in the Registration Statement,
or any amendment or supplement to such Registration Statement, or arising out of
or based upon any omission (or alleged omission) to state 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 promulgated thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration; and the Company shall promptly reimburse the Holder Indemnified
Party for any legal and any other expenses reasonably incurred by such Holder
Indemnified Party in connection with investigating and defending any such
expense, loss, judgment, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
expense, loss, claim, damage or liability arises out of or is based upon any
untrue statement or allegedly untrue statement or omission or alleged omission
made in such Registration Statement, preliminary prospectus, final prospectus,
or summary prospectus, or any such amendment or supplement, in reliance upon and
in conformity with information furnished to the Company, in writing, by such
selling Holder expressly for use therein. The Company also shall indemnify any
Underwriter of the Registrable Securities, their officers, affiliates,
directors, partners, members and agents and each person who controls such
Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.
4.2 Indemnification by Holders of Registrable Securities. Each selling
Holder of Registrable Securities will, in the event that any registration is
being effected under the Securities Act pursuant to this Agreement of any
Registrable Securities held by such selling Holder, indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any),
and each other person, if any, who controls such selling Holder or such
underwriter within the meaning of the Securities Act, against any losses,
11
claims, judgments, damages or liabilities, whether joint or several, insofar as
such losses, claims, judgments, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or allegedly untrue
statement of a material fact contained in any Registration Statement under which
the sale of such Registrable Securities was registered under the Securities Act,
any preliminary prospectus, final prospectus or summary prospectus contained in
the Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or the alleged
omission to state a material fact required to be stated therein or necessary to
make the statement therein not misleading, if the statement or omission was made
in reliance upon and in conformity with information furnished in writing to the
Company by such selling Holder expressly for use therein, and shall reimburse
the Company, its directors and officers, and each such controlling person for
any legal or other expenses reasonably incurred by any of them in connection
with investigation or defending any such loss, claim, damage, liability or
action. Each selling Holder's indemnification obligations hereunder shall be
several and not joint and shall be limited to the amount of any net proceeds
actually received by such selling Holder.
4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any
person of any notice of any loss, claim, damage or liability or any action in
respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such
person (the "Indemnified Party") shall, if a claim in respect thereof is to be
made against any other person for indemnification hereunder, notify such other
person (the "Indemnifying Party") in writing of the loss, claim, judgment,
damage, liability or action; provided, however, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying Party may have to
such Indemnified Party hereunder, except and solely to the extent the
Indemnifying Party is actually prejudiced by such failure. If the Indemnified
Party is seeking indemnification with respect to any claim or action brought
against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume control of the defense thereof
with counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control of
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that in any action in
which both the Indemnified Party and the Indemnifying Party are named as
defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an
12
unconditional release of such Indemnified Party from all liability arising out
of such claim or proceeding.
4.4 Contribution.
4.4.1 If the indemnification provided for in the foregoing Sections
4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss,
claim, damage, liability or action referred to herein, then each such
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 loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the Indemnified Parties and the
Indemnifying Parties in connection with the actions or omissions which resulted
in such loss, claim, damage, liability or action, as well as any other relevant
equitable considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
4.4.2 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding Section
4.4.1. The amount paid or payable by an Indemnified Party as a result of any
loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no Holder of Registrable
Securities shall be required to contribute any amount in excess of the dollar
amount of the net proceeds (after payment of any underwriting fees, discounts,
commissions or taxes) actually received by such Holder from the sale of
Registrable Securities which gave rise to such contribution obligation. 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.
5. UNDERWRITING AND DISTRIBUTION.
5.1 Rule 144. The Company covenants that it shall file all reports
required to be filed by it under the Securities Act and the Exchange Act and
shall take such further action as the Holders of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holders to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 under the
Securities Act, as such Rules may be amended or interpreted from time to time,
or any similar Rule or regulation hereafter adopted by the Commission.
13
6. MISCELLANEOUS.
6.1 Other Registration Rights. The Company represents and warrants that no
person, other than the Holders of the Registrable Securities, persons who
acquired the underwriters' unit purchase options in the Initial Public Offering
and their respective transferees, has any right to require the Company to
register any shares of the Company's capital stock for sale or to include shares
of the Company's capital stock in any registration filed by the Company for the
sale of shares of capital stock for its own account or for the account of any
other person.
6.2 Assignment; No Third Party Beneficiaries. This Agreement and the
rights, duties and obligations of the Company hereunder may not be assigned or
delegated by the Company in whole or in part. This Agreement and the rights,
duties and obligations of the Holders of Registrable Securities hereunder may be
freely assigned or delegated by such Holder of Registrable Securities in
conjunction with and to the extent of any transfer of Registrable Securities by
any such Holder. This Agreement and the provisions hereof shall be binding upon
and shall inure to the benefit of each Holder and Transferee. This Agreement is
not intended to confer any rights or benefits on any persons that are not party
hereto other than as expressly set forth in Section 4 and this Section 6.2.
6.3 Notices. All notices, demands, requests, consents, approvals or other
communications (collectively, "Notices") required or permitted to be given
hereunder or which are given with respect to this Agreement, other than as
expressly set forth in Section 2.1, shall be in writing and shall be personally
served, delivered by reputable air courier service with charges prepaid, or
transmitted by hand delivery, or facsimile, addressed as set forth below, or to
such other address as such party shall have specified most recently by written
notice. Notice shall be deemed given on the date of service or transmission if
personally served or transmitted by facsimile; provided, that if such service or
transmission is not on a business day or is after normal business hours, then
such notice shall be deemed given on the next business day. Notice otherwise
sent as provided herein shall be deemed given on the next business day following
timely delivery of such notice to a reputable air courier service with a
pre-paid order for next-day delivery.
To the Company:
Confluence Acquisition Partners I, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, President
with a copy to:
Xxxxxxxx Xxxxxx LLP
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx XX 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.;
14
To a Holder, to:
The persons at the addresses set forth on Exhibit A hereto.
with a copy to:
Xxxxxxxx Xxxxxx LLP Blank Rome LLP
0000 X Xxxxxx, X.X. 0000 X. Xxxxxxx Xxxxxxx
Xxxxx 000 Xxxxx 000
Xxxxxxxxxx XX 00000 Xxxx Xxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq. Attn: Xxxxx X. Xxxxxxx, Esq.
6.4 Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
6.5 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.
6.6 Entire Agreement. This Agreement (including all agreements entered
into pursuant hereto and all certificates and instruments delivered pursuant
hereto and thereto) constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede all prior and contemporaneous
agreements, representations, understandings, negotiations and discussions
between the parties, whether oral or written.
6.7 Modifications and Amendments. No amendment, modification or
termination of this Agreement shall be binding upon any party unless executed in
writing by such party.
6.8 Titles and Headings. Titles and headings of sections of this Agreement
are for convenience only and shall not affect the construction of any provision
of this Agreement.
6.9 Waivers and Extensions. Any party to this Agreement may waive any
right, breach or default which such party has the right to waive, provided that
such waiver will not be effective against the waiving party unless it is in
writing, is signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen or the
breach or default waived has occurred. Any waiver may be conditional. No waiver
of any breach of any agreement or provision herein contained shall be deemed a
waiver of any preceding or succeeding breach thereof nor of any other agreement
or provision herein contained. No waiver or extension of time for performance of
any obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
15
6.10 Remedies Cumulative. In the event that the Company fails to observe
or perform any covenant or agreement to be observed or performed under this
Agreement, the Holder or any other Holder of Registrable Securities may
proceed to protect and enforce its rights by suit in equity or action at law,
whether for specific performance of any term contained in this Agreement or for
an injunction against the breach of any such term or in aid of the exercise of
any power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to
post a bond. None of the rights, powers or remedies conferred under this
Agreement shall be mutually exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.
6.11 Governing Law. This Agreement shall be governed by, interpreted
under, and construed in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed within the State of Delaware,
without giving effect to any choice-of-law provisions thereof that would compel
the application of the substantive laws of any other jurisdiction.
6.12 Waiver of Trial by Jury. Each party hereby irrevocably and
unconditionally waives the right to a trial by jury in any action, suit,
counterclaim or other proceeding (whether based on contract, tort or otherwise)
arising out of, connected with or relating to this Agreement, the transactions
contemplated hereby, or the actions of the Holder in the negotiation,
administration, performance or enforcement hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed and delivered by their duly authorized representatives
as of the date first written above.
CONFLUENCE ACQUISITION PARTNERS I,
INC., a Delaware corporation
By: ________________________________________
Xxxx X. Xxxxxxx, Chief Executive Officer
HOLDERS:
________________________________________
Xxxx X. Xxxxxxx
________________________________________
B. Xxxxxxx Xxxx Revocable Living Trust
________________________________________
Xxxxxx X. May
SV Life Sciences Advisers, Inc.
By: ____________________________________
Confluence Acquisition, LLC
By: ______________________________
Xxxx X. Xxxxxxx, Manager
Pequot Scout Fund, L.P.
By: ____________________________________
Pequot Mariner Master Fund, L.P.
By: ____________________________________
________________________________________
Xxxx X. Xxxxxx
17
________________________________________
Xxxx X. Xxxxx Revocable Trust
________________________________________
Xxxxxxx Xxxxxxxxx
________________________________________
Xxxxxx Xxxxx
________________________________________
Xxxxx X. Xxxxxxxx
________________________________________
Xxxxx X. Xxxxxxxx
________________________________________
Xxxxxx Xxxxxxxx
________________________________________
Xxxxx X. Xxxxxxx
________________________________________
Xxxx Xxxxxxxx
________________________________________
Xxxxx X. Xxxx
________________________________________
Xxxxxx Xxxxxxxxxx
________________________________________
Xxxxxxx Xxx
________________________________________
Xxxxxxx Xxxxx
18
EXHIBIT A
HOLDER NUMBER OF SHARES
------ ----------------
Xxxx X. Xxxxxxx 325,000
000 X. Xxxxxx Xxxx
Xx. Xxxxx, XX 00000
B. Xxxxxxx Xxxx Revocable Living Trust 325,000
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx X. May 325,000
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
SV Life Sciences Advisers, Inc. 300,000
00 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Confluence Acq. LLC 225,000
000 X. Xxxxxx Xxxx
Xx. Xxxxx, XX 00000
Pequot Scout Fund, L.P. 169,900
c/o Pequot Capital Mgmt.
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Pequot Mariner Master Fund, L.P. 105,100
c/o Pequot Capital Mgmt.
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Xxxx X. Xxxxxx 75,000
0000 Xxxxxx Xxxx
Xx. Xxxxx, XX 00000
Xxxx X. Xxxxx Revocable Trust 20,000
0000 Xxxxxxxxx Xxxxx Xx.
Xx. Xxxxx, XX 00000
Xxxxxxx Xxxxxxxxx 15,000
000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
19
Xxxxxx Xxxxx 15,000
00000 Xxxxxx Xxxx
Xx. Xxxxx, XX 00000
Xxxxx X. Xxxxxxxx 15,000
000 Xxxxxxx
Xx. Xxxxx, XX 00000
Xxxxx X. Xxxxxxxx 15,000
0000 X. Xxxxx Xxxx
Xxxx & Xxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 15,000
000 X. Xxxxxx Xxxx
Xx. Xxxxx, XX 00000
Xxxxx X. Xxxxxxx 10,000
000 X. Xxxxxx Xxxx
Xx. Xxxxx, XX 00000
Xxxx Xxxxxxxxx 10,000
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxx X. Xxxx 10,000
00000 Xxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxxxx 10,000
0000 Xxxx Xxxx Xxxx.
Xx. Xxxxx, XX 00000
Xxxxxxx Xxx 7,500
0 Xxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Xxxxxxx Xxxxx 7,500
00000 Xxxxxxxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxx, XX 00000
20
