EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of February 6, 2004 by and among Indus International, Inc., a
Delaware corporation (the "Company"), and those persons (the "Purchasers")
identified on, and a party to, an executed copy of the Subscription Agreement to
which this Agreement is an Exhibit (the "Subscription Agreement").
This Agreement is made pursuant to the Subscription Agreement and the
Purchase Agreement that is included as Exhibit A to the Subscription Agreement
(the "Purchase Agreement"), by and between the Company and the Purchasers,
pursuant to which the Company is issuing and selling up to 5,000,000 shares of
its common stock, $0.001 par value per share (the "Common Stock" or the
"Shares"). The Shares are being offered and sold to the Purchasers without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon the exemption from registration provided by Section 4(2)
of the Securities Act and the provisions of Rule 506 of Regulation D,
promulgated under the Securities Act. In order to induce the Purchasers to enter
into the Purchase Agreement, the Company has agreed to provide to the Purchasers
(and their direct and indirect permitted transferees, if any) the registration
rights set forth in this Agreement with respect to the resale of the Shares. The
execution and delivery of this Agreement is a condition to the Closing under the
Purchase Agreement. Capitalized terms used but not defined herein shall have the
meaning provided in the Purchase Agreement.
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
SECTION 1
REGISTRATION RIGHTS
1.1. FILING OF FORM S-3 RESALE REGISTRATION STATEMENT. As soon as
practical and, within thirty (30) days after the Closing under the Purchase
Agreement, the Company shall file with the Securities and Exchange Commission
(the "SEC" or the "Commission") a registration statement on Form S-3 pursuant to
Rule 415 under the Securities Act, or, in the event that Form S-3 is unavailable
to the Company, a registration statement on such other SEC Form that is
available to the Company (together with any exhibits, amendments or supplements
thereto, and any documents incorporated by reference therein, the "Registration
Statement"), with respect to the resale of the Shares, and any securities of the
Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Shares. The securities described in the
preceding sentence are collectively referred to herein as the "Registrable
Securities"; provided, that the term "Registrable Securities" shall not include
securities transferred to a person other than a permitted transferee.
1.2. EFFECTIVENESS OF REGISTRATION STATEMENT. The Company shall,
subject to Section 6 hereof, use its commercially reasonable efforts to cause
the Registration Statement to be declared effective as soon as reasonably
practicable and within 90 days after the Closing or, in the event of a review of
the Registration Statement by the Commission, within 120 days after the Closing,
and shall use its commercially reasonable efforts to keep the Registration
Statement continuously effective from the date such Registration Statement
becomes effective until the earlier of (i) the date on which all Registrable
Securities have been resold under such Registration Statement, and (ii) the date
on which all Registrable Securities may be resold without restriction or
limitation under the federal securities laws (the "Effectiveness Period").
1.3 LIQUIDATED DAMAGES.
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(a) If the Registration Statement is not filed within the
period provided under Section 1.1 of this Agreement, the Company shall
pay to each Purchaser liquidated damages (in addition to the rights and
remedies available to each Purchaser under applicable law and this
Agreement) for the period from and including the first business day
following 30 days after the Closing until the date on which such
Registration Statement is filed, at a rate per week equal to
twenty-five basis points of the total purchase price of the Shares
purchased by such Purchaser pursuant to this Agreement. Such liquidated
damages shall be payable monthly in cash.
(b) If the Registration Statement is not declared effective
within the period provided under Section 1.2 of this Agreement, the
Company shall pay to each Purchaser liquidated damages (in addition to
the rights and remedies available to each Purchaser under applicable
law and this Agreement) for the period from and including the first
business day following 90 days after the Closing or, in the event of a
review of the Registration Statement by the Commission, the first
business day following 120 days after the Closing until, but excluding
the date on which such Registration Statement is declared effective, at
a rate per week equal to twenty-five basis points of the total purchase
price of the Shares purchased by such Purchaser pursuant to this
Agreement. Such liquidated damages shall be payable monthly in cash.
(c) If the effectiveness of the Registration Statement lapses
at any point during the Effectiveness Period, without such lapse being
cured within twenty (20) business days (the "Cure Period") by a
post-effective amendment to the Registration Statement, a supplement to
the prospectus included in the Registration Statement or a report filed
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
that cures such lapse, then the Company shall pay to each Purchaser
that holds Shares purchased under this Agreement at the time such Cure
Period has expired, liquidated damages (in addition to the rights and
remedies available to each Purchaser under applicable law and this
Agreement), for the period from and including the first business day
following the expiration of the Cure Period until, but excluding, the
earlier of (1) the date on which such failure is cured and (2) the date
on which the Effectiveness Period expires, at a rate per week equal to
twenty-five basis points of the total purchase price of the Shares
purchased and still held by such Purchaser pursuant to this Agreement.
Such liquidated damages shall be payable monthly in cash.
1.4. SUPPLEMENTS; AMENDMENTS. Subject to Section 6 hereof, the Company
shall supplement or amend the Registration Statement, (i) as required by Form
S-3, including, without limitation, the instructions applicable to Form S-3, or
by the Securities Act, the Exchange Act, or the rules and regulations
promulgated under the Securities Act or the Exchange Act, respectively, and (ii)
to include in the Registration Statement any additional securities that become
Registrable Securities by operation of the definition thereof unless such
securities are otherwise registered under the Securities Act. The Company shall
furnish to the holders, or their permitted transferees, as appropriate
(collectively, the "Holders") of the Registrable Securities to which the
Registration Statement relates copies of any such supplement or amendment
sufficiently in advance (but in no event less than five (5) business days in
advance) of its use and/or filing with the Commission to allow the Holders a
meaningful opportunity to comment thereon with respect to the information
contained therein regarding the Holders. The Holders agree that they will within
five (5) business days prior to the filing of the Registration Statement supply
information regarding themselves and their plan of resale to the Company and
hereby waive any notice of the initial filing of the Registration Statement, and
that such Holders and their successors and assigns will promptly notify the
Company of any changes in such information, other than sales or transfers of
Common Stock.
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SECTION 2
EXPENSES
The Company shall pay all expenses, fees and costs incurred in
connection with the preparation, filing, distribution and effectiveness of the
Registration Statement and any supplements or amendments thereto, whether or not
the Registration Statement becomes effective, and whether all, none or some of
the Registrable Securities are sold pursuant to the Registration Statement,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, fees and state
securities, or "blue sky," and the expense of any special audits incident to or
required by, or in connection with the filing and effectiveness of the
Registration Statement (but excluding the compensation of regular employees of
the Company, which shall be paid in any event by the Company). The Holders
shall, severally and not jointly, pay all underwriting fees and discounts,
selling commissions, brokerage fees and stock transfer taxes applicable to the
Registrable Securities sold by such Holder and the fees and expenses of their
counsel, if any.
SECTION 3
REGISTRATION PROCEDURES
The Company will advise the Holders as to the status of the
preparation, filing and effectiveness of the Registration Statement and, at the
Company's expense, will do the following:
(a) make available to each Holder upon request a copy of the
Registration Statement (including all exhibits thereto) and any
prospectus forming a part thereof and any amendments and supplements
thereto (including all documents incorporated or deemed incorporated by
reference therein prior to the effectiveness of the Registration
Statement and including each preliminary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, which
documents, other than documents incorporated or deemed incorporated by
reference, will be subject to the review of the information contained
therein regarding the Holders and any such underwriter for a period of
at least five (5) business days from the Holder's receipt of such
documents, and the Company shall not file the Registration Statement or
such prospectus or any amendment or supplement to the Registration
Statement or prospectus if any Holder shall reasonably object within
the five (5) business day period after the receipt thereof unless the
Company shall have been advised by its counsel that the Registration
Statement or such prospectus or amendment or supplement thereto is
required under the Securities Act or the rules or regulations adopted
thereunder in connection with the distribution of Registrable
Securities by the Holders or the Company. A Holder shall be deemed to
have reasonably objected to such filing only if the Registration
Statement, amendment, prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission with
respect to such Holder or its plan of resale;
(b) make available to each Holder upon request one conformed
copy of the Registration Statement and of each amendment and supplement
thereto (in each case including all exhibits) and such number of copies
of the prospectus forming a part of the Registration Statement
(including each preliminary prospectus) and any other prospectus filed
under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents,
including, without limitation, documents incorporated or deemed to be
incorporated by reference prior to the effectiveness of such
Registration Statement, as each of the Holders or any such underwriter,
from time to time may reasonably request;
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(c) to the extent practicable, promptly upon the filing of any
document that is to be incorporated by reference into the Registration
Statement or prospectus forming a part thereof subsequent to the
effectiveness thereof, and in any event no later than five (5) business
days after such document is filed with the Commission, make available
copies of such document to the Holders upon request, and make
representatives of the Company available for discussion of such
document and other customary due diligence matters; and provide
promptly to the Holders upon request any document filed by the Company
with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act;
(d) make available at reasonable times for inspection by the
Holders, and any attorney, accountant, financial adviser or other
representative (collectively, "Representatives") retained by the
Holders, subject to the recipient's prior written agreement to keep
such information confidential and not use or disclose it, all financial
and other records, pertinent corporate documents and properties of the
Company and cause the officers, directors and employees of the Company
to supply all information reasonably requested by the Holders or their
respective Representatives in connection with the preparation, filing
and effectiveness of the Registration Statement;
(e) use its commercially reasonable efforts (i) to register or
qualify all Registrable Securities covered by the Registration
Statement under state securities, or "blue sky," laws of such States of
the United States of America where required and where an exemption is
not available and as the Holders of Registrable Securities covered by
the Registration Statement shall reasonably request, (ii) to keep such
registration or qualification in effect for so long as the Registration
Statement is required to be effective hereunder, and (iii) to take any
other action which may be reasonably necessary or advisable to enable
the Holders to consummate the disposition of the securities to be sold
by the Holders in such jurisdictions, consistent with the plan of
distribution described in the prospectus included in the Registration
Statement, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation
in any jurisdiction where it is not so qualified, or to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to
service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;
(f) use its commercially reasonable efforts to cause all
Registrable Securities covered by the Registration Statement to be
registered or qualified with or approved by all other applicable
Governmental Authorities as may be necessary, in the opinion of counsel
to the Company and counsel to the Holders of Registrable Securities, to
enable the Holders thereof the consummate the disposition of such
Registrable Securities;
(g) subject to Section 6 hereof, promptly notify each Holder
of Registrable Securities covered by the Registration Statement (i)
upon discovery that, or upon the occurrence of any event as a result of
which, the prospectus forming a part of the Registration Statement, as
then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (ii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
proceedings for that purpose, (iii) of any request by the Commission
for (A) amendments to the Registration Statement or any document
incorporated or deemed to be incorporated by reference in the
Registration Statement, or (B) supplements to the prospectus forming a
part of the Registration Statement, or (C) additional information, or
(iv) of the receipt by the Company of any notification
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with respect to the suspension of the registration, qualification or
exemption from registration or qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, and at the request of any such Holder
promptly prepare and file an amendment to the Registration Statement or
a supplement to the prospectus as the Company may deem necessary so
that, as thereafter delivered to the purchasers of such securities,
such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and make
available to each Holder upon their request a reasonable number of
copies of such supplement to, or amendment of, such Registration
Statement and prospectus, and, in the event of a stop order, use its
commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement, or the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction;
(h) if reasonably requested by any Holder or if required by
law or SEC or other applicable rule or regulation, promptly incorporate
in the Registration Statement such appropriate information as the
Holder may reasonably request to have included therein by filing a Form
8-K, or filing a supplement to the prospectus, to reflect any change in
the information regarding the Holder, and make all required filings
with the Commission in respect of any offer or sale of Registrable
Securities or any amendment or supplement to the Registration Statement
or related prospectus;
(i) otherwise use its commercially reasonable best efforts to
comply with all applicable rules and regulations, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve (12) months, but not
more than eighteen (18) months, beginning with the first full calendar
month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder; and
(j) use its commercially reasonable efforts to cause all
Registrable Securities included in the Registration Statement to be
listed on Nasdaq and each securities exchange on which securities of
the same class are then listed, or, if not then listed on any
securities exchange or Nasdaq, to be eligible for trading in any
over-the-counter market or trading system in which securities of the
same class are then traded.
SECTION 4
INDEMNIFICATION
4.1. INDEMNIFICATION BY THE COMPANY. The Company will indemnify:
(a) each of the Holders, as applicable,
(b) each of the Holder's officers, directors, members and
partners, and
(c) each individual, partnership, joint stock company,
corporation, trust, unincorporated organization, government
agency or political subdivision (each of the foregoing, a
"Person") controlling each of the Holders within the meaning
of SEC Rule 405 under the Securities Act, Section 15 of the
Securities Act or Section 20 of the Exchange Act,
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with respect to the Registration Statement, against all expenses, claims,
losses, damages and liabilities (or actions, investigations or proceedings in
respect thereof) (collectively, a "Claim") arising out of or based on any actual
or alleged untrue statement of a material fact, or any omission or alleged
omission of a material fact required to be stated therein or necessary in order
to make the statements included therein not misleading, contained in the
Registration Statement, any prospectus or other offering document, and will
reimburse each of the Holders, each of its officers, directors, members and
partners, and each Person controlling each of the Holders, for any legal and any
other expenses reasonably incurred in connection with investigating and
defending any such Claim; provided, however, that the Company will not be liable
in any such case to the extent that any such Claim arises out of or is based on
(i) any untrue statement or omission based upon written information furnished to
the Company by the Holders or their Representatives and stated to be
specifically for use therein, or (ii) any untrue statement or omission of a
material fact required to make such statement not misleading in any prospectus
that is corrected in any subsequent prospectus that was delivered to the Holder
before the pertinent sale or sales by such Holder.
4.2. INDEMNIFICATION BY THE HOLDERS. Each of the Holders will, if
Registrable Securities held by it are included in the securities as to which
such Registration Statement is being effected, severally and not jointly,
indemnify the Company, each of its directors and officers, and each Person who
"controls" the Company within the meaning of SEC Rule 405 under the Securities
Act, Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each other Holder, against all Claims arising out of or based on (i) any actual
or alleged untrue statement of a material fact, or any omission or alleged
omission of a material fact required to be stated therein or necessary in order
to make the statement included or incorporated therein not misleading, contained
in the Registration Statement, prospectus, or other offering document based
solely upon written information furnished to the Company by or on behalf of such
Holder and stated to be specifically for use therein, or (ii) any untrue
statement or omission of a material fact required to make such statement not
misleading in any prospectus that is corrected in any subsequent prospectus that
was delivered to such Holder before the pertinent sale or sales by such Holder,
and will reimburse the Company, its directors, officers, partners, members or
control Persons for any legal or any other expenses reasonably incurred in
connection with investigating and defending any such Claim, in the case of
subsection (i) above to the extent, but only to the extent as to, that such
untrue statement (or alleged untrue statement) or omission (or alleged omission)
is made in the Registration Statement, prospectus, offering memorandum or other
document in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder and stated to be specifically for
use therein; provided, however, that the several obligations of each of the
Holders hereunder shall be limited to an amount equal to the net proceeds
received by such Holder from the sale of the Registrable Securities pursuant to
the Registration Statement.
4.3. PROCEDURES. Each party entitled to indemnification under this
Agreement (each, an "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any Claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such Claim; provided that counsel for the Indemnifying Party, who shall conduct
the defense of such Claim, shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party's expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in
which case the fees and expenses of one such counsel for all Indemnified Parties
shall be at the expense of the Indemnifying Party), 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 Agreement unless
the Indemnifying Party is materially prejudiced thereby. No Indemnifying Party,
in the investigation or defense of any such Claim shall, except with the consent
of each Indemnified Party (which consent shall not be unreasonably withheld or
delayed), consent to entry of any judgment or enter into any settlement or
compromise which does not include an unconditional
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release of the Indemnified Party from all liability in respect to such Claim.
Each Indemnified Party shall furnish such information regarding itself or the
Claim in question as an Indemnifying Party may reasonably request in writing and
as shall be reasonably required in connection with the investigation and defense
of such Claim.
4.4. CONTRIBUTION. If the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any Claim, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or omissions
which resulted in such Claim, as well as any other relevant equitable
considerations; provided, however, that the Company will not be liable in any
such case to the extent that any such Claim (i) arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Company by the Holders or their Representatives and stated to be specifically
for use therein, or (ii) is finally judicially determined to have resulted
primarily from the gross negligence or willful misconduct of any person or
entity set forth in Section 4.1(a) through 4.1(c) above. The relative fault of
the Indemnifying Party and of the Indemnified 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 the Indemnifying Party or by
the Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
and provided that each Holder shall not be required to contribute, in the
aggregate, more than the net proceeds received by such Holder from the sale of
its Registrable Securities pursuant to the Registration Statement and further
provided that the obligations of the Holders under this Section 4.4 shall be
several and not joint.
SECTION 5
PROVISION OF INFORMATION BY THE HOLDERS
Each of the Holders whose Registrable Securities are included in the
Registration Statement shall furnish to the Company such information regarding
such Holder as the Company may reasonably request in writing and as shall be
reasonably required or advisable in connection with any registration,
qualification or compliance referred to in this Agreement, and shall promptly
notify the Company if such information becomes incorrect or misleading, or
requires amendment or updating. Each of the Holders, severally and not jointly,
agrees that the plan of distribution included in any prospectus relating to the
Registrable Securities shall be substantially as set forth on Schedule B-1
hereto and that such Holder will not resell any Registrable Securities pursuant
to the Registration Statement in any manner other than as provided therein or
herein. The other information regarding the Holders required for the initial
filing of the Registration Statement has been provided by each Holder on the
Subscription Agreement. Each Holder, severally and not jointly, represents,
warrants and covenants to the Company that the information regarding such Holder
that appears in the Subscription Agreement and/or Schedule B-2 is accurate and
complete in all material respects consistent with Commission Regulation S-K,
Items 507 and 508. The Purchaser will confirm promptly by delivery of a signed
copy of Schedule B-2, the sale of any Shares pursuant to Rule 144 or the
Registration Statement.
SECTION 6
HOLDBACK; POSTPONEMENT
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Notwithstanding the other provisions of this Agreement, if (a) there is
material non-public information regarding the Company which the Company's Board
of Directors reasonably and in good faith determines not to be in the Company's
best interest to disclose and which the Company is not otherwise required to
disclose, or (b) there is a extraordinary business opportunity (including but
not limited to the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or other
similar extraordinary transaction not in the ordinary course of business) which
the Company's Board of Directors reasonably and in good faith determines not to
be in the Company's best interest to disclose, then the Company may postpone or
suspend filing or effectiveness of a registration statement for a period not to
exceed forty-five (45) days, provided that the Company may not postpone or
suspend filing or effectiveness of a registration statement for more than ninety
(90) days in the aggregate during any 365-day period and there shall be an
aggregate of not more than two (2) suspensions during any 365-day period;
provided, however that no postponement or suspension shall be permitted for
consecutive forty-five (45) day periods arising out of the same set of facts,
circumstances or transactions.
SECTION 7
RULE 144 REPORTING, ETC.
7.1. SEC REPORTING COMPLIANCE.
(a) With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without
registration, through the second anniversary of this Agreement, the
Company will:
(i) make and keep "current public information"
regarding the Company available, as defined in Commission Rule
144(c) under the Securities Act, and cooperate with the
Holders and take such further reasonable action as the Holders
may reasonably request in writing (including, without
limitation, making such reasonable representations as the
Holders may reasonably request);
(ii) use its commercially reasonable efforts to file
with the Commission in a timely manner all SEC Reports and
other filings and documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) so long as a Holder owns any Registrable
Securities, furnish the Holder forthwith upon request a
written statement by the Company as to its compliance with the
reporting requirements under the Securities Act and the
Exchange Act, including compliance with SEC Rule 144(c), a
copy of the most recent annual or quarterly report of the
Company, and such other reports and documents of the Company
and other information in the possession of, or reasonably
obtainable by, the Company as a Holder may reasonably request
in availing itself of any rule or regulation of the Commission
allowing a Holder to sell any such securities without
registration.
Notwithstanding the foregoing, nothing in this Section 7.1(a) shall be
deemed to require the Company to register any of its securities (other
than the Common Stock) under any section of the Exchange Act.
(b) The Company shall file the reports required to be filed by
it under the Exchange Act and shall comply with all other requirements
set forth in the instruction to Form S-3 in order to allow the Company
to be eligible to file registration statements on Form S-3.
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SECTION 8
MISCELLANEOUS
8.1. ASSIGNMENT. The registration rights set forth herein may be
assigned, in whole or in part, to any transferee of Registrable Securities
permitted in accordance with the Purchase Agreement, which transferee, upon
registration on the Company's or its transfer agent's books and records as a
holder of record of Registrable Securities, shall be considered thereafter to be
a Holder (provided that any transferee who is not an affiliate of a Purchaser
shall be a Holder only with respect to such Registrable Securities so acquired
and any stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, such Registrable
Securities) and shall be bound by all obligations and limitations of this
Agreement and the Purchase Agreement.
8.2. SECTION HEADINGS. The titles and headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.
8.3. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
the conflict of law rules thereof to the extent that the application of the law
of another jurisdiction would be required thereby.
8.4. NOTICES.
(a) All communications under this Agreement shall be in
writing and shall be delivered by facsimile, by hand, by reliable
overnight delivery service such as UPS or FedEx or by registered or
certified mail, postage prepaid:
(i) if to the Company, to the address listed in the
Purchase Agreement, or at such other address as it may have
furnished in writing to the Purchasers;
(ii) if to the Purchasers, at the addresses listed on
Subscription Agreement, or at such other addresses as may have
been furnished the Company in writing.
(b) Any notice so addressed shall be deemed to be given (i) if
delivered by hand, on the date of such delivery, (ii) if sent by
reliable overnight delivery service such as UPS or FedEx, on the first
business day following the date of delivery to such service for
overnight delivery, (iii) if delivered by facsimile, on the date of
such facsimile, or (iv) if mailed by registered or certified mail, on
the third business day after the date of such mailing. In the event
that any notice is sent by facsimile transmission to the Company, such
transmission shall be followed immediately by overnight delivery to the
Company of such notice.
8.5. SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of each of the parties. No other person is intended to or
shall have any rights or remedies hereunder, whether as a third part beneficiary
or otherwise.
8.6. COUNTERPARTS. Persons may become parties to this Agreement be
entering into the Subscription Agreement, which may be executed in one or more
identical counterparts, each of which shall be deemed an original and all of
which shall be one and the same agreement. Any signature that is delivered by
facsimile signature page shall be valid and binding, with the same force and
effect as if an original, manually signed counterpart.
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8.7. REMEDIES. Each Holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
8.8. SEVERABILITY. In the event that any provision contained
herein is unenforceable, the remaining provisions shall continue in full force
and effect.
8.9. DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to the Holders, upon any breach or
default of the Company under this Agreement, shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any provision hereof, or
of any similar breach or default thereafter occurring; nor shall any waiver of
any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. It is further agreed that any waiver,
permit, consent or approval of any kind or character by a Holder of any breach
or default under this Agreement, or any waiver by a Holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in the writing, and that all remedies, either
under this Agreement, or by law or otherwise afforded to a Holder, shall be
cumulative and not alternative.
8.10. ATTORNEY'S FEES. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
8.11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Purchase
Agreement, the Subscription Agreement and the other Agreements constitute the
entire understanding and agreement of the parties with respect to the subject
matter hereof and supersede all prior understandings, written or otherwise,
among such parties. This Agreement may be amended only in a writing signed by
the Company and the Holders of at least a majority of the then outstanding
Registrable Securities.
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B-10
SCHEDULE B-1
PLAN OF DISTRIBUTION
The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility (including,
without limitation, the Nasdaq National Market and the over the counter market)
on which the shares are traded or in private transactions, subject to applicable
law. These sales may be public or private at prices prevailing in such market,
fixed prices or prices negotiated at the time of sale. The shares may be sold by
the Selling Stockholders directly to one or more purchasers, through agents
designated from time to time or to or through broker-dealers designated from
time to time. In the event the shares are publicly offered through
broker-dealers or agents, the selling stockholders may enter into agreements
with respect thereto. The Selling Stockholders may, subject to applicable law,
also use any one or more of the following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- short sales;
- sales by broker-dealers of a specified number of such shares
at a stipulated price per share;
- a combination of any such methods of sale; or
- any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus. Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.
The Selling Stockholder may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3), or other applicable provision of the Securities Act of
1933, amending the list of Selling Stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus.
The Selling Stockholders also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus. The Selling Stockholders and the broker-dealers or agents that
participate in the distribution of the shares may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales. In such
event, any discounts and any commissions received by such broker-dealers or
agents and any profit on the sale of the shares purchased by them and any
discounts or commissions might be deemed to be underwriting discounts or
commissions under the Securities Act. Any such broker-dealers and agents may
engage in transactions with, and perform services for, the Company. At the time
a particular offer of shares is made by the selling stockholders, to the extent
required, a prospectus will be distributed which will set forth the aggregate
number of shares being offered, and the terms of the offering, including the
public offering price thereof, the name or names of any broker-dealers or
agents, any discounts, commissions and other items constituting compensation
from, and the resulting net proceeds to, the Selling Stockholders. Each Selling
Stockholder has purchased the shares of our common stock in the ordinary course
of business, and at the time the Selling Stockholder purchased the shares of our
common stock, it was not a party to any agreements, plans or understandings,
directly or indirectly, with any person to distribute the shares.
In order to comply with the securities laws of certain states, sales of
shares offered hereby to the public in such states may be made only through
broker-dealers who are registered or licensed in such states. Sales of shares
offered hereby must also be made by the Selling Stockholders in compliance with
other applicable state securities laws and regulations. The Company is required
to pay all fees and expenses incident to the registration of the shares;
provided, that the Selling Stockholders are required, severally and not jointly,
to pay any legal or other fees incurred by such Selling Stockholder and all
underwriting fees and discounts, selling commissions, brokerage fees and stock
transfer taxes applicable to shares sold by such Selling Stockholders hereby.
The Company has agreed to indemnify the Selling Stockholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act.
SCHEDULE B-2
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE(1)
The undersigned, an officer of, or other person duly authorized by the
Purchaser named below hereby certifies to the Company, as defined in the
Registration Rights Agreement, dated as of __________, 2004 (the "Agreement")
that he/she (said institution) is the Purchaser of the shares evidenced by the
attached certificate, and as such, sold or otherwise transferred such shares on
___________________, 200__ in accordance with:
(i) Registration Statement number ______________________________,
in the manner indicated under "Plan of Distribution" in the
current prospectus and has delivered a current prospectus, or
(ii) Pursuant to the applicable requirements of Rule 144 of the
Securities Act of 1933, as amended, in which case, a copy of
Form 144 as filed with the Securities and Exchange Commission,
together with the representation letter of the undersigned and
the broker's representation letter are enclosed.
Print or Type:
Name of Purchaser (Individual or Institution):
_________________________________
Name of Individual Representing Purchaser (if an Institution):
_________________________________
Title:___________________________
Confirmed by the undersigned thereunto duly authorized:
_________________________________
Purchaser Name
By:________________________________
Name:
Title:
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(1) All capitalized terms used but not defined herein shall have the meanings
provided in the Agreement.
