Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of
________, 2001, by and between Optika Investment Company, Inc., a Nevada
corporation (the "Company"), and the Persons (as defined below) set forth on
SCHEDULE 1 hereto (each an "Investor" and collectively, the "Investors").
The parties to this Agreement are parties to a Series A Convertible
Preferred Stock Subscription Agreement of even date herewith (the "Purchase
Agreement"). In order to induce the Investors to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement.
The parties hereto agree as follows:
1. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. Whenever the Company proposes to register
any of its securities under the Securities Act (except for registration
relating to employee benefit plans and corporate reorganizations) and
the registration form to be used may be used for the registration of
Registrable Securities (a "Piggyback Registration"), the Company will
give prompt written notice to all holders of Registrable Securities of
its intention to effect such a registration and will include in such
registration up to one-third of each Investor's Registrable Securities
with respect to which the Company has received written requests for
inclusion therein (subject to any "Underwriters Cutback") within 15 days
after the receipt of the Company's notice. For purposes of this
Agreement, "Registrable Securities" shall have the meaning set forth in
Section 5.
(b) PIGGYBACK EXPENSES. The Registration Expenses of the holders
of Registrable Securities will be paid by the Company in all Piggyback
Registrations.
(c) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Company, and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering
(an "Underwriters' Cutback"), the Company will include in such
registration (i) first, the securities the Company proposes to sell,
(ii) second, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities
on the basis of the number of shares owned by each such holder, and
(iii) third, other securities requested to be included in such
registration; provided, however that no Underwriters' Cutback shall
reduce the amount of Registrable Securities requested to be included in
such registration to less than 20% of the aggregate number of shares to
be included in such registration (except for a registration relating to
the Company's first underwritten public offering which follows after the
date of this Agreement, from which all Registrable Securities may be
excluded).
(d) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration (which occurs
after the first initial underwritten registration after the date of this
Agreement) on behalf of holders of the Company's securities, and the
managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering
without adversely affecting the marketability of the offering, the
Company will include in such registration (i) first, the securities
requested to be included therein bu the holders requesting such
registration, (ii) second, the Registrable Securities requested to be
included in such registration, pro rata among the holders of such
Registrable Securities on the basis of the number of shares owned by
each such holder, and (iii) third, other securities registered to be
included in such registration; provided, however, that no Underwriters'
Cutback shall reduce the amount of Registrable Securities requested to
be included in such registration to less than 20% of the aggregate
number of shares to be included in such registration.
(e) OTHER REGISTRATIONS. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant
to this paragraph 1, and if such previous registration has not been
withdrawn or abandoned, the Company will not file or cause to be
effected any other registration of any of its equity securities or
securities convertible or exchangeable into or exercisable for its
equity securities under the Securities Act (except on Form S-8 or any
successor form), whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least 12
months has elapsed from the effective date of such previous
registration.
2. REGISTRATION PROCEDURES. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof held by a holder of Registrable
Securities requesting registration as to which the Company has received
reasonable assurances that only Registrable Securities will be distributed to
the public, and pursuant thereto the Company will as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission
a registration statement with respect to such Registrable Securities and
use its best efforts to cause such registration statement to become
effective (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will
furnish to the counsel selected by the holders of a majority of the
Registrable Securities covered by such registration statement copies of
all such documents proposed to be filed;
(b) prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than three
months and comply with the provisions of the Securities Act with respect
to the disposition of all
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securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number
of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as such
seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller (provided that the Company
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement contains an
untrue statement of a material fact or omits any fact necessary to make
the statements therein not misleading, and, at the request of any such
seller, the Company will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company
are then listed and, if not so listed, to be listed oil the NASD
automated quotation system;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
holders of a majority of the Registrable Securities being sold or the
underwriters, if any reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities (including,
without limitation, effecting a stock split or a combination of shares);
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(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with
such registration statement; and
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least
twelve months beginning with the first day of the Company's first full
calendar quarter after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section II(a)
of the Securities Act and Rule 158 thereunder.
3. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all
registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery
expenses, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding
discounts and commissions) and other Persons retained by the Company
(all such expenses being herein called "Registration Expenses"), will be
borne as provided in this Agreement, except that the Company will, in
any event, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review,
the expense of any liability insurance and the expenses and fees for
listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the
NASD automated quotation system.
(b) In connection with each Piggyback Registration, the Company
will reimburse the holders of Registrable Securities covered by such
registration for the reasonable fees and disbursements of one counsel
chosen by the holders of a majority of the Registrable Securities
initially requesting such registration, up to an aggregate amount of
$15,000.
(c) To the extent Registration Expenses are not required to be
paid by the Company, each holder of securities included in any
registration hereunder will pay those Registration Expenses allocable to
the registration of such holder's securities so included, and any
Registration Expenses not so allocable will be borne by all sellers of
securities included in such registration in proportion to the aggregate
selling price of the securities to be so registered.
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4. INDEMNIFICATION.
(a) The Company agrees to Indemnify. to the extent permitted by
law, each holder of Registrable Securities, its officers and directors
and each Person who controls such holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and
expenses caused by any untrue or alleged untrue statement of material
fact contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements
thereto after the Company has furnished such holder with a sufficient
number of copies of the same. In connection with an underwritten
offering, the Company will indemnify, such underwriters, their officers
and directors and each Person who controls such underwriters (within the
meaning of the Securities Act) to the same extent is provided above with
respect to the indemnification of the holders of Registrable Securities.
(b) In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder will
furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such
registration statement or prospectus and, to the extent permitted by
law, will indemnify the Company, its directors and officers and each
Person who controls the Company (within the meaning of the Securities
Act) against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained
in any information or affidavit so furnished in writing by such holder;
provided that the obligation to indemnify will be individual to each
holder and mill be limited to the net amount of proceeds received by
such holder from the sale of Registrable Securities pursuant to such
registration statement.
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the indemnified party. If
such defense is assumed, the indemnifying partv will not be subject to
any liability for any settlement made by the indernnified party without
its consent (but such consent, will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of
more than one counsel for all parties
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indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of anv investigation made by
or on behalf of the indemnified party or an officer, director or
controlling Person of such indemnified party and will survive the
transfer of securities. The Company also agrees to make such provisions,
as are reasonably requested by any indemnified party for contribution to
such party in the event the Company's indemnification is unavailable for
any reason.
5. PARTICIPATION UNDERWRITTEN REGISTRATIONS. No Person may participate
in any registration hereunder which is underwritten unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
6. DEFINITIONS.
"Person" means and includes any individual, corporation, a joint
venture, partnership, association, limited liability company, trust, estate, or
other entity.
"Registrable Securities" means (i) any Common Stock issued upon the
conversion of any of the Company's Series A Convertible Preferred Stock, par
value $0.001 per share, issued pursuant to the Purchase Agreement, (ii) any
other Common Stock issued or issuable with respect to the securities referred to
in clause (i) and by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, such securities
will cease to be Registrable Securities when they have been distributed to the
public pursuant to an offering registered under the Securities Act or sold to
the public through a broker, dealer or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force). For purposes of
this Agreement, a Person will be deemed to be a holder of Registrable Securities
whenever such Person has the right to acquire directly or indirectly such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected.
Unless otherwise stated, other capitalized terms contained herein have
the meanings set forth in the Purchase Agreement.
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7. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company will not hereafter
enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of
Registrable Securities in this Agreement.
(b) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company
will not take any action, or permit any change to occur, with respect to
its securities which would materially and adversely affect the ability
of the holders of Registrable Securities to include such Registrable
Securities in a registration undertaken pursuant to this Agreement or
which would materially and adversely affect the marketability of such
Registrable Securities in any such registration (including, without
limitation, effecting a stock split or a combination of shares).
(c) REMEDIES. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for
specific performance and for other injunctive relief in order to enforce
or prevent violation of the provisions of this Agreement.
(d) AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may be amended or waived only upon the
prior written consent of the Company and holders of at least a majority
of the Registrable Securities.
(e) SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and
inure to the benefit of the respective successors and permitted assigns
of the parties hereto whether so expressed or not. The provisions of
this Agreement which are for the benefit of the Investors as holders of
Registrable Securities are also for the benefit of, and enforceable by,
any subsequent holder of at least 50,000 shares of Registrable
Securities.
(f) SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is
held to be prohibited by or invalid under applicable law, such provision
will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
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(g) COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain &
signatures of more than one party, but all such counterparts taken
together will constitute one and the same Agreement.
(h) DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
(i) GOVERNING LAW. The corporate law of Nevada will govern all
issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity
and interpretation of this Agreement and the exhibits and schedules
hereto shall be governed by the internal law, and not the law of
conflicts, of Nevada.
(j) NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this
Agreement shall be in writing and shall be deemed to have been given
when delivered personally to the recipient, sent to the recipient by
reputable express courier service (charges prepaid) or mailed to the
recipient by certified or registered mail, return receipt requested and
postage prepaid. Such notices, demands and other communications will be
sent to each Investor at the address indicated on the Schedule of
Investors to the Company and address indicated below:
Optika Investment Company, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxx
or such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending
party.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
OPTIKA INVESTMENT COMPANY, INC.
By:
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Name:
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Its:
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INVESTORS:
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