EXHIBIT 99.4
[Execution Copy]
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 31, 2001, between Cimnet, Inc. a Delaware corporation
(the "Company"), and General Electric Company, a New York corporation, acting
through its GE Power Systems business unit ("Purchaser ").
This Agreement is made pursuant to the Preferred Stock and Warrant
Purchase Agreement, dated as of the date hereof between the Company and the
Purchaser (the "Purchase Agreement").
The Company and the Purchaser hereby agree as follows:
1. Definitions.
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Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in
the Purchase Agreement. As used in this Agreement, the following terms shall
have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government actions to close.
"Closing Date" means the date hereof.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $0.0001 per
share.
"Effectiveness Date" means with respect to the initial Registration
Statement required to be filed hereunder, the date on which such Registration
Statement is declared effective by the Commission.
"Effectiveness Period" shall have the meaning set forth in Section
2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 6(c).
"Indemnifying Party" shall have the meaning set forth in Section 6(c).
"Losses" shall have the meaning set forth in Section 6(a).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"Registrable Securities" means (i) the shares of Common Stock issuable
upon conversion of the Shares (including any shares of Series A issuable as
dividends) owned by the Purchaser; and (ii) the shares of Common Stock issuable
upon exercise of the Warrants.
"Registration Statement" means the registration statement and any
additional registration statements contemplated by Section 2(a), (b) or (c),
including (in each case) the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
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"Series A" means the Company's Series A Convertible Preferred Stock.
"Shares" shall have the meaning set forth in the Purchase Agreement.
"Special Counsel" means one special counsel to the Holders, for which
the Holders will be reimbursed by the Company pursuant to Section 4.
"Target Date" means, with respect to the initial Registration
Statement, no later than the 180th day following the Closing Date.
"Warrants" shall have the meaning set forth in the Purchase Agreement.
2. Registration.
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(a) Initial Registration. As soon as practicable, the Company shall
prepare and file with the Commission a Registration Statement covering the
resale of all Registrable Securities for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement shall be on Form SB-2
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form SB-2, in which case such registration shall be on
another appropriate form subject to Section 2(f) below), (i) the Company shall
use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof, but in any event prior to the Target Date, and (ii) the Company shall
use its reasonable commercial efforts to keep such Registration Statement
continuously effective under the Securities Act until such date when all
Registrable Securities covered by such Registration Statement have been sold or
may be sold without volume restrictions pursuant to Rule 144(k) (the
"Effectiveness Period").
(b) Evergreen Registration. As soon as it is qualified to do so (the
"S-3 Eligibility Time") and within thirty (30) days after the receipt of the
written request of the holders of a majority of the Series A, the Company will
file an evergreen shelf registration statement on Form S-3 with respect to the
Registrable Securities which it will keep effective and updated (except as
provided in Section 2(f) below) until after the Purchaser has sold all
Registrable Securities included in such registration statement.
(c) Piggyback Registration Rights. If, at any time prior to the end
of Effectiveness Period, the Company proposes to register any of its securities
under the Securities Act for sale to the public for its own account or for the
account of other security holders (other than those registration statements
referred to in Sections 2(a) and 2(b) above and registration statements on Forms
S-4 or S-8 or another form not available for registering the Registrable
Securities for sale to the public) and the Registrable Securities are not
covered by an effective Registration Statement, each such time the Company will
give written notice thereof to Holders of its intention so to do (such notice to
be given at least ten (10) days prior to the filing thereof). Upon the written
request of any such Holder (which request shall specify the number of
Registrable Securities intended to be disposed of by such Holder and the
intended method of disposition thereof), received by the Company within ten days
after giving of any such notice by the Company, to register any of such Holder's
Registrable Securities, the Company will use its reasonable efforts, subject to
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Section 2(d) below, to cause the Registrable Securities as to which registration
shall have been so requested to be included in the securities to be covered by
the Registration Statement proposed to be filed by the Company, all to the
extent requisite to permit the sale or other disposition by the Holder (in
accordance with its written request) of such Registrable Securities so
registered ("Piggyback Registration Rights"); provided that (i) if such
registration involves an underwritten offering, all Holders requesting to be
included in the Company's registration must sell their Registrable Securities to
the underwriters selected by the Company on the same terms and conditions as
apply to the Company; and (ii) if, at any time after giving written notice of
its intention to register any securities pursuant to this Section 2(c) and prior
to the effective date of the Registration Statement filed in connection with
such registration, the Company shall determine for any reason not to register
such securities and does not register such securities, the Company shall give
written notice to all Holders and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration. If a registration pursuant to this Section 2(c) involves an
underwritten public offering, any Holder requesting to be included in such
registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not to
register such securities in connection with such registration. The foregoing
provisions notwithstanding, (i) the Company may withdraw any registration
statement referred to in this Section 2(c) without thereby incurring any
liability to the Holders, and (ii) the inclusion of shares of Registrable
Securities under such Piggyback Registration Rights is subject to the cut-back
provisions of Section 2(d) below.
(d) Priority in Piggyback Registration. If a registration pursuant to
Section 2(c) hereof involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
equity securities (including all Registrable Securities) which the Company, the
Holders and any other persons intended to be included in such registration
exceeds the largest number of securities which can be sold without having a
material adverse effect on such offering, including the price at which such
securities can be sold, the Company will include in such registration (i) first,
all the securities the Company proposes to sell for its own account, (ii)
second, to the extent that the number of securities which the Company proposes
to sell for its own account pursuant to Section 2(d)(i) hereof is less than the
number of securities which the Company has been advised can be sold in such
offering without having the material adverse effect referred to above, the
securities requested to be included in such registration by the Holders, and
(iii) third, to the extent that the number of securities which the Company and
the Holders propose to sell pursuant to Sections 2(d)(i) and 2(d)(ii) hereof is
less than the number of securities which the Company has been advised can be
sold in such offering without having the material adverse effect referred to
above, the number of securities requested to be included in such registration by
other security holders in accordance with any contractual provisions binding on
the Company or, if no contractual provisions apply, as the Company may
determine. Any such reductions shall be pro rata in relation to the number of
shares of Common Stock held (or issuable upon the conversion or exercise of
securities issuable for Common Stock) by each person participating in the
offering.
(e) Holdback Agreements. If any registration of Registrable
Securities shall be in connection with an underwritten public offering, each
Holder agrees, to the extent requested by the managing underwriter, not to
effect any public sale or distribution, including any sale pursuant to Rule 144
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under the Securities Act, of any Registrable Securities, and not to effect any
such public sale or distribution of any other equity security of the Company or
of any security convertible into or exchangeable or exercisable for any equity
security of the Company (in each case, other than as part of such underwritten
public offering) during the thirty (30) days prior to, and during the ninety
(90) day period beginning on, the effective date of such Registration Statement
(except as part of such registration) without the prior written consent of the
managing underwriter; provided, however, that (i) all executive officers and
directors of the Company enter into similar agreements, the provisions of which
have not and will not be waived, (ii) such lock-up agreement shall be applicable
only to the two such registration statements of the Company after the date
hereof, which cover common stock to be sold on its behalf to the public in an
underwritten offering; and (iii) such market stand-off or lock-up agreements
contains reasonable and customary exceptions (including, without limitation,
permitting transfers to Affiliates, transfers of shares in connection with
hedging transactions effected in accordance with applicable laws and transfers
of shares owned as the result of open market purchases without restriction).
(f) Exceptions. Notwithstanding the foregoing, the Company may delay
the registration of Registrable Securities, including the filing of amendments
to Registration Statements, upon the occurrence of any of the following:
(i) the Company shall have previously entered into an
agreement or letter of intent contemplating an underwritten public offering on a
firm commitment or best efforts basis of Common Stock or securities convertible
into or exchangeable for Common Stock and the managing underwriter of such
proposed public offering advises the Company in writing that in its opinion such
proposed underwritten offering would be materially and adversely affected by a
concurrent registered offering of Registrable Securities (such opinion to state
the reasons therefor);
(ii) the Company shall have entered into an agreement or letter
of intent, which has not expired or otherwise terminated, contemplating a
material business acquisition or divestiture by the Company or its subsidiaries
whether by way of merger, consolidation, acquisition or sale of assets,
acquisition or sale of securities or otherwise;
(iii) the Company is in possession of material nonpublic
information that the Company would be required to disclose in a registration
statement and that is not, but for such registration, otherwise required to be
disclosed at the time of such registration, the disclosure of which, in its good
faith judgment, would have a material adverse effect on the business,
operations, prospects or competitive position of the Company;
(iv) the Company shall receive the written opinion of the
managing underwriter of the underwritten public offering pursuant to which
Common Stock has been registered, within the three-month period prior to the
date the Registrable Securities are to be registered, that the registration of
additional Common Stock will materially and adversely affect the market for the
Common Stock (such opinion to state the reasons therefor); or
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(v) the Company is engaged, or its board of directors has
adopted by resolution a plan to engage, in any program for the purchase of
shares of Common Stock or securities convertible into or exchangeable for shares
of Common Stock and, in the opinion of counsel, reasonably satisfactory to the
requesting Holders, the distribution of the Common Stock to be registered would
cause such purchase of shares to be in violation of Regulation M promulgated
under the Exchange Act.
(g) Period of Delay.
(i) If an event described in clauses (i) through (iv) of
Section 2(f) shall occur, the Company may, by written notice to the Holders,
delay the filing of a registration statement (or any amendment thereto) required
under Sections 2(a), (b) or (c) with respect to the Registrable Securities to be
covered thereby for a period of time not exceeding 90 days, such delay to be
permitted no more than two (2) times during any period of 12 months.
(ii) If an event described in clause (v) of Section 2(f) shall
occur, the filing of a registration statement with respect to the Registrable
Securities to be covered thereby shall be delayed until the first date that the
Registrable Securities to be covered thereby can be sold without violation of
Regulation M of the Exchange Act.
3. Registration Procedures.
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If and whenever the Company is required to effect the Registration of
Registrable Securities, the Company shall:
(h) Not less than five Business Days prior to the filing of each
Registration Statement or any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated or deemed to be
incorporated therein by reference) (i) furnish to the Purchaser and its Special
Counsel copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by reference) will
be subject to the review of the Purchaser and its Special Counsel, and (ii)
cause its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file the
Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Holders of a majority of the Registrable Securities and
their Special Counsel shall reasonably object, provided, the Company is notified
of such objection no later than 3 Business Days after the Purchaser has been so
furnished copies of such documents.
(i) (i) Prepare and file with the Commission a Registration
Statement under the Securities Act relating to the Registrable Securities to be
offered and such amendments, including post-effective amendments, to the
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
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(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; (iii) respond as promptly as reasonably possible, to any comments
received from the Commission with respect to the Registration Statement or any
amendment thereto and as promptly as reasonably possible provide the Holders
true and complete copies of all correspondence from and to the Commission
relating to the Registration Statement; and (iv) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with respect to
the disposition of all Registrable Securities covered by the Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the Holders thereof set forth in the Registration Statement as
so amended or in such Prospectus as so supplemented.
(j) Notify the Holders of Registrable Securities to be sold and their
Special Counsel as promptly as reasonably possible and (if requested by any such
Person) confirm such notice in writing no later than one Business Day following
the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a "review" of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders); and (C) with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose (and, in such event, the Company
shall promptly use its reasonable best efforts to prevent the issuance of any
stop order or to obtain its withdrawal promptly if a stop order should be
issued); (iv) if at any time any of the representations and warranties of the
Company contained in any agreement contemplated hereby ceases to be true and
correct in all material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible for
inclusion therein or any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any 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,
in light of the circumstances under which they were made, not misleading.
(k) Promptly deliver to each Holder and their Special Counsel,
without charge, copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request. The Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Holders in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto.
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(l) Prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Holders and
their Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder requests in writing, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.
(m) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to a Registration Statement, which certificates shall
be free, to the extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holders may request.
(n) Upon the occurrence of any event contemplated by Section
3(c)(vi), as promptly as reasonably possible, prepare a supplement or amendment,
including a posteffective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain 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 light of the circumstances under which they were made,
not misleading.
(o) (i) Make available for inspection by the Holders participating
in such offering, any underwriter participating in any distribution pursuant to
the Registration Statement and any attorney, accountant or other agent retained
by such Holders or any such underwriter, all relevant financial and other
records, pertinent corporate documents and properties of the Company and (ii)
cause the Company's officers, directors and employees to supply all relevant
information reasonably requested by such Holders or any such underwriter,
attorney, accountant or agent in connection with the Registration Statement.
(p) Comply with all applicable rules and regulations of the
Commission.
(q) Cause all such Registrable Securities registered pursuant hereto
to be listed on each securities exchange or electronic stock quotation system,
if any, on which similar securities issued by the Company are then listed.
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4. Registration Expenses.
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All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with any
market on which the Common Stock is then listed for trading, and (B) in
compliance with applicable state securities or Blue Sky laws (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as requested by the Purchaser), (ii)
reasonable printing expenses (including, expenses of printing certificates for
Registrable Securities and of printing prospectuses requested by the Holders),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company and Special Counsel for the Purchaser (in the case of
the latter, the reasonable expenses of only one firm of attorneys for the
Purchaser and only up to a maximum of $5,000); except, the Company shall not be
responsible for any fees, discounts or commissions to any underwriter directly
attributable to the Registrable Securities held by the Purchaser.
5. Other Covenants of Company.
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(r) Reports Under the Exchange Act. Subject to Section 5(b) below,
with a view to making available to the Holders the benefits of Rule 144 and any
other rule or regulation of the Commission that may at any time permit a Holder
to sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3, the Company agrees to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144; and
(ii) take such action, including the voluntary registration of
its Common Stock under Section 12 of the Exchange Act, as is necessary to enable
the Holders to utilize Form S-3 for the sale of their Registrable Securities;
and
(iii) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and document so filed by the Company, and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the Commission which permits the selling of any such
securities without registration or pursuant to such form.
(s) No Restrictions on Sale by the Company. Nothing contained in this
Agreement, shall limit, restrict or prohibit the Company from engaging in any
transaction pursuant to which the Company sells substantially all of its assets,
merges with and into another entity, or consummates some other business
combination, and as result, no longer files periodic reports under the Exchange
Act.
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(t) Restrictions on Public Sale by the Company. The Company agrees,
unless it obtains the consent of the managing underwriter(s) of any underwritten
offering of Registrable Securities pursuant to this Agreement, not to effect any
public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such equity securities,
during the period commencing on the 30th day prior to, and ending on the 180th
day (or such longer period as shall be reasonably required by the managing
underwriters) following, the effective date of any underwritten registration,
except in connection with any such underwritten registration, or pursuant to any
registration statements on Forms S-4 or S-8 or the then equivalent form.
6. Indemnification.
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(u) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
the Purchaser, its officers, directors, agents and employees, each Person who
controls the Purchaser (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out
of or relating to any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, or any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law, except to the extent such Losses arise out of or by reason of
(i) information regarding the Purchaser or the Purchaser's proposed method of
distribution of Registrable Securities, in either case furnished in writing to
the Company by the Purchaser; (ii) in the case of an occurrence of an event of
the type specified in Section 3(c)(ii)-(vi), the use by the Purchaser of an
outdated or defective Prospectus after the Company has notified the Purchaser in
writing that the Prospectus is outdated or defective and prior to the receipt by
the Purchaser of the Advice contemplated in Section 6(e); or (iii) Purchaser's
gross negligence or willful misconduct. The Company shall notify the Purchaser
promptly of the institution, threat or assertion of any Proceeding of which the
Company is aware in connection with the transactions contemplated by this
Agreement.
(v) Indemnification by Purchaser. The Purchaser shall, indemnify and
hold harmless the Company, its directors, officers, agents and employees, each
Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers,
agents or employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses (as determined by a court of
competent jurisdiction in a final judgment not subject to appeal or review) to
the extent arising out of or based upon: (i) any untrue statement of a material
fact contained in any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto; or plan of proposed
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distribution, or any omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading to the extent, but
only to the extent, that such untrue statement or omission was made in reliance
upon written information about the Purchaser as a stockholder of the Company or
regarding the Purchaser's proposed method of distribution of the Registrable
Securities, in either case furnished to the Company in a writing by the
Purchaser; (ii) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(vi), the use by the Purchaser of an outdated or defective
Prospectus after the Company has notified the Purchaser in writing that the
Prospectus is outdated or defective and prior to the receipt by the Purchaser of
the Advice contemplated in Section 6(e); or (iii) Purchaser's gross negligence
or willful misconduct.
(w) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten
11
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(x) Contribution. If a claim for indemnification under Section 5(a)
or 5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each 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 Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentations (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. The obligation of any
Holder obliged to make contribution pursuant to this Section 5(d) shall be
several and not joint, and no such Holder shall be obliged to make contribution
in excess of an amount equal to the net proceeds received by such Holder from
the Registrable Securities sold by such Holder in the applicable Registration.
The indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
7. Miscellaneous.
-------------
(y) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of at least one-half of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights of
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other Holders may be given by Holders of at least a majority of the Registrable
Securities to which such waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence.
(z) No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its subsidiaries, on or after the date of this Agreement, enter into any
agreement with respect to its securities that would have the effect of impairing
the rights granted to the Purchaser in this Agreement or otherwise conflicts
with the provisions hereof. Neither the Company nor any of its subsidiaries has
previously entered into any agreement granting any registration rights with
respect to any of its securities to any Person that have not been satisfied in
full.
(aa) Compliance. The Purchaser covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement.
(bb) Discontinued Disposition. The Purchaser agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Sections 2(f), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement, or until it
is advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.
(cc) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 6:30 p.m. (New
York City time) on a Business Day, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Agreement later than 6:30 p.m. (New
York City time) on any date and earlier than 11:59 p.m. (New York City time) on
such date, (iii) the Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:
If to the Company: Cimnet, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx
With copies to: Berlack, Israels & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
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If to Purchaser: GE Power Systems
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx-Losique
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
With a copy to: Long Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxxxx X. Short, Esq.
(dd) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of the Purchaser. Neither party may
assign its rights or obligations hereunder without the prior written consent of
the other party; provided, however, that any Holder may assign, in its sole
discretion, any or all of its rights, interests and obligations under this
Agreement to any of its Affiliates or to any transferee of Registrable
Securities who agrees to be bound by the provisions of this Agreement other than
a transferee who shall acquire such Registrable Securities by means of the sale
of such Registrable Securities to the public pursuant to a public offering
registered under the Securities Act or to the public through a broker or
market-maker pursuant to the provisions of Rule 144.
(ee) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
(ff) Governing Law. The corporate laws of Delaware shall govern all
issues concerning the relative rights of the Company and its stockholders. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
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(gg) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(hh) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(ii) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(l) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH ANY OF THIS AGREEMENT.
[Signatures located on following page.]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
CIMNET, INC.
By: /s/ XXXX XXXXXXXXXX
----------------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Chief Executive Officer
GENERAL ELECTRIC COMPANY, acting through
its GE Power Systems business unit
By: /s/ XXXXXXX XXXXXXX LOSIQUE
----------------------------------------
Name: Xxxxxxx Xxxxxxx Losique
Title: Director, GEPS Equity Investments
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