1
EXHIBIT 10.1
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
among
ECLIPSYS CORPORATION
and
CERTAIN OF ITS STOCKHOLDERS
----------------------------
Dated: January __, 1998
----------------------------
2
TABLE OF CONTENTS
Page
----
1. Definitions............................................................................5
2. General: Securities Subject to this Agreement.........................................10
(a) Grant of Rights......................................................10
(b) Registrable Securities...............................................10
(c) Holders of Registrable Securities....................................11
(d) Xxxxxx Stockholders and Xxxxxxx
Stockholders.........................................................11
3. Demand Registration...................................................................11
(a) Request for Demand Registration......................................11
(b) Incidental or "Piggy-Back" Rights With
Respect to a Demand Registration.....................................13
(c) Effective Demand Registration........................................14
(d) Expenses.............................................................14
(e) Underwriting Procedures..............................................14
(f) Selection of Underwriters............................................15
4. Piggy-Back Registration...............................................................15
(a) Piggy-Back Rights....................................................15
(b) Expenses.............................................................16
5. Form S-3 Registration.................................................................16
(a) Request for a Form S-3 Registration..................................16
(b) Form S-3 Underwriting Procedures.....................................16
(c) Limitations on Form S-3 Registrations................................17
(d) Expenses.............................................................18
(e) No Demand Registration...............................................18
6. Holdback Agreements...................................................................18
(a) Restrictions on Public Sale by
Designated Holders...................................................18
(b) Restrictions on Public Sale by the Company...........................18
7. Registration Procedures...............................................................19
(a) Obligations of the Company...........................................19
(b) Seller Information...................................................22
(c) Notice to Discontinue................................................22
(d) Registration Expenses................................................23
2
3
8. Indemnification: Contribution.........................................................23
(a) Indemnification by the Company.......................................23
(b) Indemnification by Designated Holders................................24
(c) Conduct of Indemnification Proceedings...............................24
(d) Contribution.........................................................25
9. Rule 144..............................................................................25
10. Miscellaneous.........................................................................26
(a) Recapitalizations, Exchanges, etc....................................26
(b) No Inconsistent Agreements...........................................26
(c) Remedies.............................................................26
(d) Amendments and Waivers...............................................26
(e) Notices..............................................................27
(f) Successors and Assigns; Third Party
Beneficiaries........................................................31
(g) Counterparts.........................................................32
(h) Headings.............................................................32
(i) GOVERNING LAW........................................................33
(j) Severability.........................................................33
(k) Entire Agreement.....................................................33
(l) Further Assurances...................................................33
3
4
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of January __, 1998 (this "Agreement"), among
Eclipsys Corporation, a Delaware corporation (the "Company"), Partners
HealthCare Systems, Inc., a Massachusetts not-for-profit corporation
("Partners"), General Atlantic Partners 38, L.P., a Delaware limited partnership
("GAP 38"), General Atlantic Partners 28 L.P., a Delaware limited partnership
("GAP 28"), GAP Coinvestment Partners, L.P., a New York limited partnership
("GAP Coinvestment"), General Atlantic partners 47, L.P., a Delaware limited
partnership ("GAP 47"), Xxxxxx X. Xxxxxx ("Xxxxxx"), Wilfam Ltd., a Florida
limited partnership ("Wilfam"), ALLTEL Information Services, Inc., an Arkansas
corporation ("Alltel"). First Union Corporation, a North Carolina corporation
("FUCP"), BT Investment Partners, Inc., a Delaware corporation ("BT"), Xxxxx
Xxxxxx Associates IHS L.P., a Delaware limited partnership ("Xxxxx Xxxxxx"),
Xxxxxx Xxxxxxxxxx ("Xxxxxxxxxx"), St. Xxxx Venture Capital IV, L.L.C., a
Delaware limited liability company ("St. Xxxx"), Xxxxx Xxxxxxxx, Jr.
("Karmanos"), the Xxxxxxx Stockholders (as hereinafter defined) and Motorola,
Inc., a Delaware corporation ("Motorola").
WHEREAS, the Company, Partners, GAP 28, GAP Coinvestment, Xxxxxx,
Wilfam, Xxxxx Xxxxxx and Manolovici had previously entered into a Registration
Rights Agreement, dated May 3, 1996 (the "Original Registration Rights
Agreement"); and
WHEREAS, the Company, Partners, GAP 38, GAP 28, GAP Coinvestment,
Xxxxxx, Wilfam, Alltel, FUCP, BT, Brean Murray, Manolovici, St. Xxxx and
Karmanos amended and restated the Original Registration Rights Agreement as of
January 24, 1997 (the "First Restated Registration Rights Agreement"); and
WHEREAS, the parties to the First Restated Registration Rights
Agreement, together with the Xxxxxxx Stockholders (as hereinafter defined),
amended such agreement as of June 27, 1997; and
WHEREAS, the parties to the First Restated Registration Rights
Agreement, as amended, wish to amend and restate such agreement, as set forth
herein, as to (i) include Motorola as a party hereto and as an inducement to
Motorola to enter into a certain asset purchase agreement with the Company to be
dated on or about January 30, 1998 and (ii) include GAP 47 as a party hereto and
as an inducement to GAP 47 and GAP Coinvestment to enter into a certain
preferred stock purchase agreement with the Company to acquire Series G
Preferred Stock (as defined below), which agreement the Company expects to enter
into.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. As used in this Agreement the following terms
have the meanings indicated:
4
5
"Affiliate" means any Person who is an "affiliate" as defined
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. In
addition, the following shall be deemed to be Affiliates of GAP 38: (a) GAP LLC,
the members of GAP LLC, the limited partners of GAP 38, the limited partners of
GAP 28 and the limited partners of GAP 47; (b) any Affiliate of GAP LLC, the
members of GAP LLC, the limited partners of GAP 38, the limited partners of GAP
28 and the limited partners of GAP 47; and (c) any limited liability company or
partnership a majority of whose members or partners, as the case may be, are
members, former members, consultants or key employees of GAP LLC. In addition,
GAP 38, GAP 28, GAP 47 and GAP Coinvestment shall be deemed to be Affiliates of
one another.
"Alltel" has the meaning assigned to such term in the recital
to this Agreement.
"Alltel Stockholders" means Alltel and any Affiliate thereof
to which Registrable Securities are transferred.
"Approved Underwriter" has the meaning assigned to such term
in Section 3(f) of this Agreement.
"Xxxxx Xxxxxx" has the meaning assigned to such term in the
recital to this Agreement.
"Xxxxx Xxxxxx Stockholders" means Xxxxx Xxxxxx and any
Affiliate thereof to which Registrable Securities are transferred.
"BT" has the meaning assigned to such term in the recital to
this Agreement.
"BT Stockholders" means BT and any Affiliate thereof to which
Registrable Securities are transferred.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company, substantially in the form attached
to the Stock Purchase Agreement as Exhibit C.
"Class A Common Stock" means the common stock, $.01 par value
per share, of the Company.
"Class B Common Stock" means the non-voting common stock,
$.01 par value, of the Company.
"Closing Price" means, with respect to the Registrable
Securities, as of the date of determination, (a) the closing price per share of
a Registrable Security on such date
5
6
published in the Wall Street Journal or, if no such closing price on such date
is published in the Wall Street Journal, the average of the closing bid and
asked prices on such date, as officially reported on the principal national
securities exchange (including, without limitation, The Nasdaq Stock Market,
Inc.) on which the Registrable Securities are then listed or admitted to
trading; or (b) if the Registrable Securities are not then listed or admitted to
trading on any national securities exchange but are designed as national market
system securities by the NASD, the last trading price per share of a Registrable
Security on such date; or (c) if there shall have been no trading on such date
or if the Registrable Securities are not so designated, the average of the
reported closing bid and asked prices of the Registrable Securities on such date
as shown by The Nasdaq Stock Market, Inc. (or its successor) and reported by any
member firm of the New York Stock Exchange, Inc. selected by the Company; or (d)
if none of (a), (b) or (c) is applicable, a market price per share reasonably
satisfactory to the Designated Holder for whom such determination is being made,
by a nationally recognized investment banking firm selected by the Company and
such Designated Holder, the expenses for which shall be borne equally by the
Company and such Designated Holder.
"Common Stock" means the Class A Common Stock, the Class B
Common Stock and any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"Company Underwriter" has the meaning assigned to such term
in Section 4(a) of this Agreement.
"Demand Registration" has the meaning assigned to such term
in Section 3(a) of this Agreement.
"Designated Holder" means each of the Partners Stockholders,
the General Atlantic Stockholders, the Xxxxxx Stockholders, the Alltel
Stockholders, the FUCP Stockholders, the BT Stockholders, the Xxxxx Xxxxxx
Stockholders, the Manolovici Stockholders, the St. Xxxx Stockholders, the
Karmanos Stockholders, the Xxxxxxx Stockholders and the Motorola Stockholders
and any transferee of any of them to whom Registrable Securities have been
transferred in accordance with the provisions of this Agreement, other than a
transferee to whom such securities have been transferred pursuant to a
registration statement under the Securities Act or Rule 144 or Regulation S
under the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"First Restated Registration Rights Agreement" has the
meaning assigned to such term in the recital to this Agreement.
"FUCP" has the meaning assigned to such term in the recital
to this Agreement.
6
7
"FUCP Warrant" has the meaning assigned to such term in the
recital to this Agreement.
"FUCP Stockholders" means FUCP and any Affiliate thereof to
which shares are transferred.
"GAP Coinvestment" has the meaning assigned to such term in
the recital to this Agreement.
"GAP 47" has the meaning assigned to such term in the recital
to this Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware
limited liability company and the general partner of GAP 38, GAP 28 and GAP 47,
and any successor to such entity.
"GAP 38" has the meaning assigned to such term in the recital
to this Agreement.
"GAP 28" has the meaning assigned to such term in the recital
to this Agreement.
"General Atlantic Stockholders" means GAP 38, GAP 28, GAP 47,
GAP Coinvestment and any Affiliate thereof to which Registrable Securities are
transferred.
"Holders' Counsel" has the meaning assigned to such term in
Section 4(a) of this Agreement.
"Initiating Holder" has the meaning assigned to such term in
Section 3(a) of this Agreement.
"Inspector" has the meaning assigned to such term in Section
7(a)(viii) of this Agreement.
"IPO Effectiveness Date" means the date upon which the
Company consummates its initial offer for sale of shares of Common Stock
pursuant to an effective Registration Statement filed under the Securities Act.
"Karmanos" has the meaning assigned to such term in the
recital to this Agreement.
"Karmanos Stockholders" means Karmanos and any Permitted
Transferee (as defined in the Stockholders Agreement) thereof to which
Registrable Securities are transferred.
7
8
"Xxxxxxx Stockholders" means, collectively, (i) Xxxxxxx X.
Xxxxxxx: (ii) Xxxxxxx Xxxxxxx; (iii) Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxxx as
Trustees of the Xxxxxxx X. Xxxxxxx Family Trust u/t/a dated September 3, 1993;
(iv) Xxxxxxx X. Xxxxxxx as Trustee of the Xxx X. Xxxxxxx 1990 Trust u/t/a dated
December 28, 1990; (v) Xxxxxxx X. Xxxxxxx as Trustee of the Xxx X. Xxxxxxx 1990
Trust u/t/a dated December 28, 1990; and (vi) Xxxxx X. Xxxxxxx as Trustee of the
Xxxxxxx X. Xxxxxxx Trust pursuant to a Trust Agreement dated June 10, 1976; and
any Permitted Transferee (as defined in the Stockholders Agreement) thereof to
which Registrable Securities are transferred.
"Manolovici" has the meaning assigned to such term in the
recital to this Agreement.
"Manolovici Stockholders" means Manolovici and any Permitted
Transferee (as defined in the Stockholders Agreement) thereof to which
Registrable Securities are transferred.
"Market Price" means, on any date of determination, the
average of the daily Closing Price of the Registrable Securities for the
immediately preceding thirty (30) days on which the national securities
exchanges are open for trading.
"Motorola" has the meaning assigned to such term in the
recital to this Agreement.
"Motorola Stockholders" means Motorola and any Affiliate
thereof to which Registrable Securities are transferred and any other Person
deemed a Motorola Stockholder pursuant to Section 10(f) of this Agreement.
"NASD" has the meaning assigned to such term in Section
7(a)(xiii) of this Agreement.
"Original Registration Rights Agreement" means the
Registration Rights Agreement, dated May 3, 1996, among the Company, Partners,
GAP 28, GAP Coinvestment, Xxxxxx, Wilfam, Xxxxx Xxxxxx and Manolovici.
"Partners" has the meaning assigned to such term in the
recital to this Agreement.
"Partners Stockholders" mean Partners and any Affiliate
thereof to which Registrable Securities are transferred.
"Person" means any individual, firm, corporation,
partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, limited liability company,
government (or an agency or political subdivision thereof) or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
8
9
"Registrable Securities" means each of the following: (a) any
and all shares of Class A Common Stock owned by the Designated Holders or issued
or issuable upon conversion of shares of Class B Common Stock, Series D
Preferred Stock, Series F Preferred Stock and Series G Preferred Stock, (b) any
other shares of Class A Common Stock acquired or owned by any of the Designated
Holders prior to the IPO Effectiveness Date, or acquired or owned by any of the
Designated Holders after the IPO Effectiveness Date, if such Designated Holder
is an Affiliate of the Company and (c) any shares of Class A Common Stock or
voting common stock of the Company issued or issuable to any of the Designated
Holders with respect to shares of Class A Common Stock, Class B Common Stock,
Series D Preferred Stock or Series F Preferred Stock by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise shares of Class A
Common Stock or voting common stock issuable upon conversion, exercise or
exchange thereof.
"Registration Expenses" has the meaning assigned to such term
in Section 7(d) of this Agreement.
"Registration Statement" means a registration statement filed
pursuant to the Securities Act.
"S-3 Initiating Holder" has the meaning assigned to such term
in Section 5(a) of this Agreement.
"SEC" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Securities Act" means the Securities Act of 193, as amended,
and the rules and regulations promulgated thereunder.
"Series B Preferred Stock" means the Series B 8.5% Cumulative
Redeemable Preferred Stock, par value $.01 per share, of the Company.
"Series C Preferred Stock" means the Series C 8.5% Cumulative
Redeemable Preferred Stock, par value $.01 per share, of the Company.
"Series D Preferred Stock" means the Series D Convertible
Preferred Stock, par value $.01 per share, of the Company.
"Series E Preferred Stock" means the Series E Convertible
Preferred Stock, par value $.01 per share, of the Company.
"Series F Preferred Stock" means the Series F Convertible
Preferred Stock, par value $.01 per share, of the Company.
9
10
"Series G Preferred Stock" means the Series G Convertible
Preferred Stock, par value $.01 per share, of the Company.
"Stockholder Agreement" means the Second Amended and Restated
Stockholders Agreement, dated as of the date hereof among the Company and
certain of its Stockholders.
"Xxxxxx" has the meaning assigned to such term in the recital
to this Agreement.
"Xxxxxx Stockholders" means Xxxxxx, Wilfam, the Xxxxxxx
Stockholders and any Permitted Transferee (as defined in the Stockholders
Agreement) thereof to which Registrable Securities are transferred.
2. General: Securities Subject to this Agreement.
(a) Grant of Rights. The Company hereby grants
registration rights to the Partners Stockholders, the General Atlantic
Stockholders, the Xxxxxx Stockholders, the Alltel Stockholders, the FUCP
Stockholders, the BT Stockholders, the Xxxxx Xxxxxx Stockholders, the Manolovici
Stockholders, the St. Xxxx Stockholders, the Karmanos Stockholders and the
Motorola Stockholders upon the terms and conditions set forth in this Agreement.
(b) Registrable Securities. For the purpose of this
Agreement, Registrable Securities will cease to be Registrable Securities when
(i) a registration statement covering such Registrable Securities has been
declared effective under the Securities Act by the SEC and such Registrable
Securities have been disposed of pursuant to such effective registration
statement, (ii) the entire amount of such Registrable Securities proposed to be
sold in a single sale are or, in the opinion of counsel satisfactory to the
Company and the Designated Holder, each in their reasonable judgement, may be
distributed to the public without any limitation as to volume pursuant to Rule
144 (or any successor provision then in effect) under the Securities Act or
(iii) such Registrable Securities are proposed to be sold or distributed by a
Person not entitled to the registration rights granted by this Agreement.
(c) Holders of Registrable Securities. A Person is deemed
to be a holder of Registrable Securities whenever such Person owns of record
Registrable Securities, or holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities
whether or not such acquisition or conversion has actually been effected and
disregarding any legal restrictions upon the exercise of such rights. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company may act
upon the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities. Registrable Securities issuable
upon exercise of an option or upon conversion of another security shall be
deemed outstanding for the purposes of this Agreement.
10
11
(d) Xxxxxx Stockholders and Xxxxxxx Stockholders. With
respect to any rights or obligations of the Xxxxxx Stockholders, the Xxxxxxx
Stockholders shall share such rights or obligations with the other Xxxxxx
Stockholders, allocated among all the Xxxxxx Stockholders (including Xxxxxxx
Stockholders) as a group on a pro rata basis, calculated with reference to the
total number of Shares owned by the Xxxxxxx Stockholders as compared to the
total number of shares owned by the Xxxxxx Stockholders as a group. As among the
Xxxxxx Stockholders, including the Xxxxxxx Stockholders, all decisions to be
made by the Xxxxxx Stockholders with respect to the exercise of rights under
this Agreement shall be made by Xxxxxx Stockholders holding a majority of the
Registrable Securities held by all Xxxxxx Stockholders.
3. Demand Registration.
(a) Request for Demand Registration. At any time after
six months following the IPO Effectiveness Date, the Xxxxxx Stockholders, the
General Atlantic Stockholders, the Partners Stockholders, the Alltel
Stockholders, the FUCP Stockholders, the BT Stockholders or the Motorola
Stockholders may make a written request to the Company to register (each of such
Xxxxxx Stockholders, General Atlantic Stockholders, Partners Stockholders,
Alltel Stockholders, FUCP Stockholders, BT Stockholders or Motorola Stockholders
making such request being referred to hereinafter as the "Initiating Holder"),
under the Securities Act and under the securities or "blue sky" laws of any
jurisdiction reasonably designated by such holder or holders, the number of
Registrable Securities, the offer and sale of which shall result in net proceeds
(after expenses and underwriting commissions and discounts) to such Initiating
Holder of at least $5,000,000 (a "Demand Registration"), and the Company shall
use its reasonable efforts to cause such Demand Registration to become and
remain effective not later than three (3) months after it receives a request for
a Demand Registration; provided, however, that the Company shall not be required
to effect more than one Demand Registration at the request of the Xxxxxx
Stockholders, two Demand Registrations at the request of the General Atlantic
Stockholders, one Demand Registration at the request of the Partners
Stockholders, one Demand Registration at the request of the Alltel Stockholders,
one Demand Registration at the request of the FUCP Stockholders, one Demand
Registration at the request of the BT Stockholders and two demands at the
request of the Motorola Stockholders, and provided further that, if (x) the
Initiating Holder is a Motorola Stockholder, (y) the Motorola Stockholders'
Registrable Securities may not then be sold pursuant to Rule 144 under the
Securities Act (whether or not subject to the volume limitations thereof), and
(z) the Motorola Stockholders request the registration of all of their
Registrable Securities, then the Company shall be required to effect a Demand
Registration at the request of the Motorola Stockholders even if the offer and
sale of all of the Motorola Stockholders' Registrable Securities shall result in
end proceeds to the Motorola Stockholders of less than $5,000,000. For purposes
of the preceding sentence, two or more registration statements filed in response
to one demand shall be counted as one registration statement. If at the time of
any request to register Registrable Securities pursuant to this Section 3(a),
the Company is engaged in, or has fixed plans to engage in within three months
of the time of such request, a registered public offering or is engaged in any
other activity which, in the good faith determination of the Board of Directors
of the Company, would be adversely affected by
11
12
the requested registration to the material detriment of the Company, then the
Company may at is option direct that such request be delayed for a reasonable
period not in excess of three months from the effective date of such offering or
the date of completion of such other material activity, as the case may be, such
right to delay a request to be exercised by the Company not more than once in
any one-year period. In addition, the Company shall not be required to effect
any Demand Registration within three months after the effective date of any
other Registration Statement of the Company. Notwithstanding the foregoing, a
Demand Registration may not be initiated by:
(i) (x) the Partners Stockholders within 12
months of the effective date of any Registration Statement of the Company in
which (1) the Partners Stockholders were offered an opportunity to register
Registrable Securities pursuant to Section 3(b) or Section 4 and (2) none of the
Registrable Securities requested by the Partners Stockholders for inclusion in
such Registration Statement were excluded pursuant to the last sentence of
Section 3(e) or Section 4(a), or (y) the Motorola Stockholders within 12 months
of the effective date of any Registration Statement of the Company in which (1)
the Motorola Stockholders were offered an opportunity to register Registrable
Securities pursuant to Section 3(b) or Section 4 and were eligible to
participate in such registration, and (2) none of the Registrable Securities
requested by the Motorola Stockholders for inclusion in such Registration
Statement were excluded pursuant to the last sentence of Section 3(e) or Section
4(a), or
(ii) any of the Xxxxxx Stockholders, the General
Atlantic Stockholders, the FUCP Stockholders or the BT Stockholders within 12
months of the effective date of any Registration Statement of the Company (x)
filed in response to a request for a Demand Registration pursuant to this
Section 3(a) and (y) in which the Designated Holders were offered an opportunity
to register Registrable Securities in such Demand Registration pursuant to
Section 3(b), or
(iii) by the Motorola Stockholders before the
second anniversary of this Agreement.
Each request for a Demand Registration by the Initiating Holders shall state the
amount of the Registrable Securities proposed to be sold and the intended method
of disposition thereof. Upon a request for a Demand Registration, the Company
shall promptly take such steps as are necessary or appropriate to prepare for
the registration of the Registrable Securities to be registered.
(b) Incidental or "Piggy-Back" Rights With
Respect to a Demand Registration. Each of the Designated Holders (other than the
Initiating Holder) may offer its Registrable Securities under any Demand
Registration pursuant to this Section 3. Within 10 days after the receipt from
an Initiating Holder of a request for a Demand Registration, the Company shall
(i) give written notice thereof to all of the Designated Holders (other than the
Initiating Holder) and (ii) subject to Section 3(e), include in such
registration all of the Registrable Securities held by such Designated Holders
from whom the Company has received a written
12
13
request for inclusion therein within 10 days of the receipt by such Designated
Holders of such written notice referred to clause (i) above. Each such request
by such Designated Holders shall specify the number of Registrable Securities
proposed to be registered and the intended method of disposition thereof. The
failure of any Designated Holder to respond within such 10-day period referred
to in clause (ii) above shall be deemed to be a waiver of such Designated
Holder's rights under this Section 3, provided that any Designated Holder may
waive its rights under this Section 3 prior to the expiration of such 10-day
period by giving written notice to the Company, with a copy to the Initiating
Holder. Notwithstanding the foregoing, none of the Motorola Stockholders may
exercise any "piggy-back" registration rights before the second anniversary of
this Agreement, except that Motorola may exercise its "piggyback" registration
rights prior to such date if the Company initially files a registration
statement under the Securities Act during the ninety-day period immediately
prior to the second anniversary of this Agreement pursuant to a Demand
Registration made under Section 3(a) of this Agreement.
(c) Effective Demand Registration. A
registration shall not constitute a Demand Registration until it has become
effective and remains continuously effective for the lesser of (i) the period
during which all Registrable Securities registered in the Demand Registration
are sold and (ii) three months; provided, however, that a registration shall not
constitute a Demand Registration if (x) after such Demand Registration has
become effective, such registration or the related offer, sale or distribution
of Registrable Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or other governmental agency
or court for any reason not attributable to the Initiating Holders and such
interference is not thereafter eliminated or (y) the conditions to closing
specified in the underwriting agreement, if any, entered into in connection with
such Demand Registration are not satisfied or waived, other than by reason of a
failure by the Initiating Holders.
(d) Expenses. In any registration initiated as a
Demand Registration, the Company shall pay all Registration Expenses (other than
underwriting discounts and commissions) in connection therewith, whether or not
such Demand Registration becomes effective; provided, however, that the
Initiating Holder and each Designated Holder participating in such registration
shall bear the fees, charges and disbursements of its own legal counsel.
(e) Underwriting Procedures. If the Initiating
Holders holding a majority of the Registrable Securities held by all of the
Initiating Holders to which the requested Demand Registration relates so elect,
the Company shall use its reasonable efforts to cause the offering of such
Registrable Securities pursuant to such Demand Registration to be in the form of
a firm commitment underwritten offering and the managing underwriter or
underwriters selected for such offering shall be the Approved Underwriter (as
hereinafter defined) selected in accordance with Section 3(f). In connection
with any Demand Registration under this Section 3 involving an underwriting,
none of the Registrable Securities held by any Designated Holder making a
request for inclusion of such Registrable Securities pursuant to Section 3(b)
hereof shall be included in such underwriting unless such Designated Holder
accepts the terms of the underwriting as agreed upon by the Company, the
Initiating Holder and the Approved
13
14
Underwriter, and then only in such quantity as will not, in the opinion of the
Approved Underwriter, jeopardize the success of such offering by the Initiating
Holder. If the Approved Underwriter advises the Company in writing that in its
opinion the aggregate amount of such Registrable Securities request to be
included in such offering is sufficiently large to have a material adverse
effect on the success of such offering, then the Company shall include in such
registration only the aggregate amount of Registrable Securities that in the
opinion of the Approved Underwriter may be sold without any such material
adverse effect and shall reduce, first as to the Designated Holders (who are not
Initiating Holders) as a group, if any, and second as the Initiating Holders as
a group, pro rata within each group based on the number of Registrable
Securities included in the request for Demand Registration, the amount of
Registrable Securities to be included in such registration; provided, however,
that if the number of Registrable Securities to be included in a Demand
Registration by an Initiating Holder is reduced by the Approved Underwriter,
then such Initiating Holder shall be entitled to retain a Demand Registration
with respect to such number of Registrable Securities excluded by the Approved
Underwriter, provided that such Initiating Holder may not initiate such Demand
Registration within 12 months of the effective date of the Registration
Statement with respect to the Demand Registration in which the Approved
Underwriter excluded such Initiating Holder's Registrable Securities.
(f) Selection of Underwriters. If any Demand
Registration of Registrable Securities is in the form of an underwritten
offering, the Initiating Holders holding a majority of the Registrable
Securities held by all such Initiating Holders shall select and obtain an
investment banking firm of national reputation to act as the managing
underwriter of the offering (the "Approved Underwriter"); provided, however,
that the Approved Underwriter shall, in any case, be acceptable to he Company in
its reasonable judgment.
4. Piggy-Back Registration.
(a) Piggy-Back Rights. At any time after the IPO
Effectiveness Date, if the Company proposes to file a registration statement
under the Securities Act (other than pursuant to Section 5) with respect to an
offering by the Company for its own account or for the account of any
stockholder of the Company (in connection with a Demand Registration requested
by a Designated Holder, which shall be governed by Section 3(b)) of any class of
security (other than a registration statement on Form S-4 or S-8 or any
successor thereto), then the Company shall give written notice of such proposed
filing to each of the Designated Holders of Registrable Securities at least 30
days before the anticipated filing date, and such notice shall describe in
detail the proposed registration and distribution and offer such Designated
Holders the opportunity to register the number of Registrable Securities as each
such holder may request. The Company shall, and shall use reasonable efforts to
cause the managing underwriter or underwriters of a proposed underwriter
offering (the "Company Underwriter") to, permit the Designated Holders of
Registrable Securities who have requested in writing to participate in the
registration for such offering to include such Registrable Securities in such
offering on the same terms and conditions as the securities of the Company
included therein. In connection with any offering under this Section 4(a)
involving an underwriting, the Company shall not be required to
14
15
include any Registrable Securities in such underwriting unless the holders
thereof accept the terms of the Underwriting as reasonably agreed upon between
the Company and the Company Underwriter, and then only in such quantity as will
not, in the opinion of the Company Underwriter, jeopardize the success of the
offering by the Company. If in the written opinion of the Company Underwriter
the registration of all or part of the Registrable Securities which the
Designated Holders have requested to be included would materially adversely
affect such public offering, then the Company shall be required to include in
the underwriting, to the extent of the amount that the Company Underwriter
believes may be sold without causing such adverse effect, first, all of the
securities to be offered for the account of the Company; second, the Registrable
Securities to be offered for the account of the Designated Holders pursuant to
this Section 4, pro rata based on the number of Registrable Securities proposed
to be offered for the account of such Designated Holders; and third, any other
securities requested to be included in such underwriting. Notwithstanding the
foregoing, none of the Motorola Stockholders may exercise any "piggy-back"
rights before the second anniversary of this Agreement.
(b) Expenses. The Company shall bear all
Registration Expenses (other than underwriting discounts and commissions) in
connection with any registration pursuant to this Section 4; provided, however,
that each Designated Holder participating in such registration shall bear the
fees, charges and disbursements of its own legal counsel.
5. Form S-3 Registration.
(a) Request for a Form S-3 Registration. In the
event that the Company shall receive from any Designated Holder (the "S-3
Initiating Holder") a written request that the Company register, under the
Securities Act and the securities and "blue sky" laws of any jurisdiction
reasonably designated by such Designated Holder, on Form S-3 (or any successor
form then in effect), all or a portion of the Registrable Securities owned by
such S-3 Initiating Holder, the Company shall give written notice of such
request to each of the other Designated Holders at least 30 days before the
anticipated filing date of such Form S-3, and such notice shall describe the
proposed registration and offer such other Designated Holders the opportunity to
register the number of Registrable Securities as each such Designated Holder may
request in writing to the Company, given within 15 days after their receipt from
the Company of the written notice of such registration. The Company shall (i)
take such steps as are necessary or appropriate to prepare for the registration
of the Registrable Securities to be registered and (ii) use its reasonable best
efforts to (x) cause such registration pursuant to this Section 5(a) to become
and remain effective as soon as practicable, but in any event not later than
three months after it receives a request therefor and (y) cause the Company
Underwriter to permit the Designated Holders who have requested in writing to
participate in such registration to include their Registrable Securities in such
offering on the same terms and conditions as the Registrable Securities of the
S-3 Initiating Holder included therein.
(b) Form S-3 Underwriting Procedures. If the S-3
Initiating Holder so elects, the Company shall use reasonable efforts to cause
the offering on Form S-3 pursuant to this Section 5 to be in the form of a firm
commitment underwritten offering and the S-3
15
16
Initiating Holder shall select an investment banking firm of national reputation
to act as the managing underwriter of such offering; provided, however, that
such underwriter shall, in any case, be acceptable to the Company in its
reasonable judgment. In connection with any offering under Section 5(a)
involving an underwriting, the Company shall not be required to include any
Registrable Securities in such underwriting unless the Designated Holders
thereof accept the terms of the underwriting as agreed upon between the Company,
such underwriter selected by the S-3 Initiating Holder and the S-3 Initiating
Holder, and then only in such quantity as will not, in the opinion of such
underwriter, jeopardize the success of the offering by the S-3 Initiating
Holder. If in the written opinion of such underwriter the registration of all or
part of the Registrable Securities within the S-3 Initiating Holder and the
other Designated Holders have requested to be included would materially
adversely affect such public offering, then the Company shall be required to
include in the underwriting, to the extent of the amount that such underwriter
believes may be sold without causing such adverse effect, first, all of the
Registrable Securities to be offered for the account of the S-3 Initiating
Holder; second, the Registrable Securities to be offered for the account of the
other Designated Holders who requested inclusion of their Registrable Securities
pursuant to Section 5(a), pro rata based on the number of Registrable Securities
proposed to be offered for the account of such Designated Holders; and third,
any other securities requested to be included in such underwriting.
(c) Limitations on Form S-3 Registrations. If at
the time of any request to register Registrable Securities pursuant to Section
5(a), the Company is engaged in, or has fixed plans to engage in within three
months of the time of such request, a registered public offering or is engaged
in any other activity which, in the good faith determination of the Board of
Directors of the Company, would be adversely affected by the requested
registration on Form S-3 (or any successor form then in effect) to the material
detriment of the Company, then the Company may at its option direct that such
request be delayed for a reasonable period not in excess of three months from
the effective date of such offering or the date of completion of such other
material activity, as the case may be, such right to delay a request to be
exercised by the Company not more than once in any one-year period. In addition,
the Company shall not be required to effect any registration pursuant to Section
5(a): (i) within three months after the effective date of any other Registration
Statement of the Company, (ii) as to any S-3 Initiating Holder, if within the
12-month period preceding the date of such request, the Company has effected two
registrations on Form S-3 pursuant to Section 5(a) and all of the Registrable
Securities registered therein have been sold and the S-3 Initiating Holder was
eligible to participate in such registrations, (iii) if Form S-3 is not
available for such offering by the Initiating S-3 Holder or (iv) if the S-3
Initiating Holder, together with the Designated Holders (other than the S-3
Initiating Holder) registering Registrable Securities in such registration,
propose to sell their Registrable Securities at an aggregate price (calculated
based upon the Market Price of the Registrable Securities on the date of
filing of the Form S-3 with respect to such Registrable Securities) to the
public of less than $2,500,000; provided, however, the if (x) the S-3 Initiating
Holder is a Motorola Stockholder, and (y) the Motorola Stockholders' Registrable
Securities may not then be sold pursuant to Rule 144 under the Securities Act
(whether or not subject to the volume limitations thereof), and (z) Motorola
requests registration of all of the Motorola Stockholders' Registrable
Securities, then the Company shall be required to effect a registration pursuant
to Section 5(a) upon Motorola's request, notwithstanding the foregoing subclause
(iv).
16
17
(d) Expenses. In connection with any
registration pursuant to this Section 5, the Company shall pay all Registration
Expenses (other than underwriting discounts and commissions), whether or not
such registration becomes effective; provided, however, that the S-3 Initiating
Holder and each Designated Holder participating in such registration shall bear
the fees, charges and disbursements of its own legal counsel; and provided
further, that the Company shall not be required to pay the Registration Expenses
of an S-3 Initiating Holder for a registration pursuant to this Section 5 if the
Company has paid the Registration Expenses of another registration pursuant to
this Section 5 in the preceding 12-month period and such S-3 Initiating Holder
was eligible to participate in such prior registration. All Registration
Expenses incurred in connection with any registration pursuant to this Section 5
for which the Company has no obligation to pay such Registration Expenses shall
be borne by the Designated Holders who participate in such registration on a pro
rata basis according to the number of Registrable Securities owned by the
Designated Holders that are included in such registration at the time that such
registration becomes effective.
(e) No Demand Registration. No registration
requested by any Designated Holder pursuant to this Section 5 shall be deemed a
Demand Registration pursuant to Section 3.
6. Holdback Agreements.
(a) Restrictions on Public Sale by Designated
Holders. If and to the extent requested by the Company, the Initiating Holders
or the S-3 Initiating Holder, as the case may be, in the case of a
non-underwritten public offering or if and to the extent requested by the
Approved Underwriter, the Company Underwriter or the underwriter selected by the
S-3 Initiating Holder, as the case may be, in the case of an underwritten public
offering, each Designated Holder of Registrable Securities agrees not to effect
any public sale or distribution of any Registrable Securities being registered
or of any securities convertible into or exchangeable or exercisable for such
Registration Securities, including a sale pursuant to Rule 144 under the
Securities Act, during the 180-day period or such shorter period agreed upon by
such Designated Holder and the requesting party beginning on the effective date
of such registration statement (except as part of such registration).
(b) Restrictions on Public Sale by the Company.
The Company agrees not to effect any public sale or distribution of any of its
securities, or any securities convertible into or exchangeable or exercisable
for such securities (except pursuant to registrations on Form S-4 or S-8 or any
successor thereto), during the period beginning on the effective date of any
registration statement in which the Designated Holders of Registrable Securities
are participating and ending on the earlier of (i) the date on which all
Registrable Securities registered on such registration statement are sold and
(ii) 180 days after the effective date of such registration statement.
17
18
7. Registration Procedures.
(a) Obligations of the Company. Whenever
registration of Registrable Securities has been requested pursuant to Section 3,
Section 4 or Section 5 of this Agreement, the Company shall use its reasonable
efforts to effect the registration and sale of such Registrable Securities in
accordance with the intended method of distribution thereof as quickly as
practicable, and in connection with any such request, the Company shall, as
expeditiously as possible:
(i) use its reasonable efforts to
prepare and file with the SEC a registration statement on any form for which the
Company then qualifies or which counsel for the Company shall reasonably deem
appropriate and which form shall be available for the sale of such Registrable
Securities in accordance with the intended method of distribution thereof, and
use its reasonable efforts to cause such registration statement to become
effective; provided, however, that (x) before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall provide
counsel selected by the Designated Holders holding a majority of the Registrable
Securities being registered in such registration ("Holders' Counsel") and any
other Inspector (as hereinafter defined) with an adequate and appropriate
opportunity to participate in the preparation of such registration statement and
each prospectus included therein (and each amendment or supplement thereto) to
be filed with the SEC, which documents shall be subject to the review of
Holders' Counsel, and (y) the Company shall notify the Holders' Counsel and each
seller of Registrable Securities of any stop order issued or threatened by the
SEC and take all reasonable action required to prevent the entry of such stop
order or to remove it if entered;
(ii) prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for the lesser of (x) three months and (y) such shorter
period which will terminate when all Registrable Securities covered by such
registration statement have been sold, and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;
(iii) as soon as reasonable possible,
furnish to each seller of Registrable Securities, prior to filing a registration
statement, copies of such registration statement as it proposed to be filed, and
thereafter such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as each such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such seller;
(iv) use its reasonable efforts to
register or qualify such Registrable Securities under such other securities or
"blue sky" laws of such jurisdictions as any
18
19
seller of Registrable Securities may reasonably request, and to continue such
qualification in effect in such jurisdiction for the lesser of (x) three months
and (y) such shorter period which will terminate when all Registrable Securities
covered by such registration statement have been sold, and do any and all other
acts and things which may be reasonably necessary or advisable to enable any
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller; provided, however, that the Company
shall not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 7(a)(iv), (y) subject itself to taxation in any such jurisdiction or (z)
consent to general service of process in any such jurisdiction;
(v) use its reasonable efforts to cause
the Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the Company to
enable the seller or sellers of Registrable Securities to consummate the
disposition of such Registrable Securities;
(vi) upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in a
registration statement covering Registrable Securities contains 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 not misleading in
light of the circumstances under which they were made, (x) promptly prepare a
supplement or amendment to such prospectus and furnish to each seller of
Registrable Securities a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, after delivery to the
purchasers of such Registrable Securities, such prospectus shall not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances under which they were made and (y) immediately
prior to the preparation of such amendment or supplement to such prospectus,
notify each seller of Registrable Securities of the anticipated preparation
thereof;
(vii) enter into and perform customary
agreements (including an underwriting agreement in customary form with the
Approved Underwriter or Company Underwriter, if any, selected as provided in
Section 3, Section 4 or Section 5) and take such other actions as are prudent
and reasonably required in order to expedite or facilitate the disposition of
such Registrable Securities;
(viii) make available for inspection by
any seller of Registrable Securities, any managing underwriter participating in
any disposition pursuant to such registration statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or any
managing underwriter (each, an "Inspector" and collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and properties of
the Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's and its subsidiaries' officers,
directors and employees, and the independent public accountants of the
19
20
Company, to supply all information reasonably requested by any such Inspector in
connection with such registration statement. Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (x)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in the Registration Statement, (y) the release of such Records if
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction or (z) the information in such Records was known to the Inspectors
on a non-confidential basis prior to its disclosure by the Company or has been
made generally available to the public. Each seller of Registrable Securities
agrees that it shall, upon learning that disclosure of such Records is sought in
a court of competent jurisdiction, give notice to the Company and allow the
Company, at the Company's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(ix) if such sale is pursuant to an
underwritten offering, use its reasonable efforts to obtain a "cold comfort"
letter from the Company's independent public accountants in customary form and
covering such matters of the type customarily covered by "cold comfort" letters
as Holders' Counsel or the managing underwriter reasonably request;
(x) use its reasonable efforts to
furnish, at the request of any seller of Registrable Securities on the date such
securities are delivered to the underwriters for sale pursuant to such
registration or, if such securities are not being sold through underwriters, on
the date the registration statement with respect to such securities becomes
effective, an opinion, dated such date, of counsel representing the Company for
the purposes of such registration, addressed to the underwriters, if any, and to
the seller making such request, covering such legal matters with respect to the
registration in respect of which such opinion is being given as such seller may
reasonably request and are customarily included in such opinions;
(xi) otherwise use its reasonable
efforts to comply with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable but no
later than 15 months after the effective date of the registration statement, an
earnings statement covering a period of 12 months beginning after the effective
date of the registration statement, in a manner which satisfies the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder;
(xii) cause all such Registrable
Securities to be listed on each securities exchange or over-the-counter market
on which similar securities issued by the Company are then listed, provided,
that the applicable listing requirements are satisfied;
(xiii) cooperate with each seller of
Registrable Securities and each underwriter participating in the disposition of
such Registrable Securities and their respective counsel in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc. (the "NASD");
20
21
(xiv) use reasonable efforts to take all
other steps necessary to effect the registration of the Registrable Securities
contemplated hereby.
(b) Seller Information. The Company may require
each seller of Registrable Securities as to which any registration is being
effected to furnish to the Company such information regarding the distribution
of such securities as the Company may from time to time reasonably request in
writing.
(c) Notice to Discontinue. Each Designated
Holder of Registrable Securities agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 7(a)
(vi), such Designated Holder shall forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Designated Holder's receipt of the copies of
the supplemented or amended prospectus contemplated by Section 7(a)(vi) and, if
so directed by the Company, such Designated Holder shall deliver to the Company
(at the Company's expense) all copies, other than permanent file copies then in
such Designated Holder's possession, of the prospectus covering such Registrable
Securities which is current at the time of receipt of such notice. If the
Company shall give any such notice, the Company shall extend the period during
which such registration statement shall be maintained effective pursuant to this
Agreement (including, without limitation, the period referred to in Section
7(a)(ii)) by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 7(a)(vi) to and including the date
when the Designated Holder shall have received the copies of the supplemented or
amended prospectus contemplated by and meeting the requirements of Section
7(a)(vi).
(d) Registration Expenses. The Company shall pay
all expenses (other than as set forth in Sections 3(d), 4(b) and 5(d)) arising
from or incident to the performance of, or compliance with, this Agreement,
including, without limitation, (i) SEC, stock exchange and NASD registration and
filing fees, (ii) all fees and expenses incurred in complying with securities or
"blue sky" laws (including reasonable fees, charges and disbursements of counsel
in connection with "blue sky" qualifications of the Registrable Securities),
(iii) all printing, messenger and delivery expenses, (iv) the fees, charges and
disbursements of counsel to the Company and of its independent public
accountants and any other accounting and legal fees, charges and expenses
incurred by the Company (including, without limitation, any expenses arising
from any "cold comfort" letters and any special audits incident to or required
by any registration or qualification) and (v) any liability insurance or other
premiums for insurance obtained in connection with any Demand registration,
piggyback registration or registration on Form S-3 pursuant to the terms of this
Agreement, regardless of whether such registration statement is declared
effective. All of the expenses described in this Section 7(d) are referred to
herein as "Registration Expenses".
8. Indemnification: Contribution.
(a) Indemnification by the Company. The Company
agrees to indemnify and hold harmless, to the fullest extent permitted by law,
each Designated Holder, its officers, directors, trustees, partners, employees,
advisors and agents and each Person who
21
22
controls (within the meaning of the Securities Act or the Exchange Act) such
Designated Holder from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and,
subject to Section 8(c), reasonable fees, disbursements and other costs of
counsel) arising out of or based upon any untrue, or allegedly untrue, statement
of a material fact contained in any registration statement, prospectus or
preliminary prospectus or notification or offering circular (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same are caused by
or contained in any information concerning such Designated Holder furnished in
writing to the Company by such Designated Holder expressly for use therein. The
Company shall also provide customary indemnities to any underwriters of the
Registrable Securities, their officers, directors and employees and each Person
who controls such underwriters (within the meaning of the Securities Act and the
Exchange Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders of Registrable Securities.
(b) Indemnification by Designated Holders. In
connection with any registration statement in which a Designated Holder is
participating pursuant to Section 3, Section 4 or Section 5 hereof, each such
Designated Holder shall furnish to the Company in writing such information with
respect to such Designated Holder as the Company may reasonably request or as
may be required by law for use in connection with any such registration
statement or prospectus and each Designated Holder agrees to indemnify and hold
harmless, to the fullest extent permitted by law, the Company, any underwriter
retained by the Company and their respective directors, officers, employees and
each Person who controls the Company or such underwriter (within the meaning of
the Securities Act and the Exchange Act) to the same extent as the foregoing
indemnity from the Company to the Designated Holders, but only with respect to
any such information with respect to such Designated Holder furnished in writing
to the Company by such Designated Holder expressly for use therein; provided,
however, that the total amount to be indemnified by such Designated Holder
pursuant to this Section 8(b) shall be limited to the net proceeds received by
such Designated Holder in the offering to which the registration statement or
prospectus relates.
(c) Conduct of Indemnification Proceedings. Any
Person entitled to indemnification hereunder (the "Indemnified Party") agrees to
give prompt written notice to the indemnifying party (the "Indemnifying Party")
after the receipt by the Indemnified Party of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which the Indemnified Party intends to claim indemnification
or contribution pursuant to this Agreement; provided, however, that the failure
so to notify the Indemnifying Party shall not relieve the Indemnifying Party of
any liability that it may have to the Indemnified Party hereunder. If notice of
commencement of any such action is given to the Indemnifying Party as provided,
the Indemnifying Party shall be entitled to participate in and to the extent it
may wish, jointly with any other Indemnifying Party similarly notified, to
assume the defense of such action at its own expense, with counsel chosen by it
and satisfactory to such Indemnified Party. The Indemnified Party shall have the
right to employ separate counsel in
22
23
any such action and participate in the defense thereof, but the fees and
expenses of such counsel (other than reasonable costs of investigation) shall be
paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay
the same, (ii) the Indemnifying Party fails to assume the defense of such action
with counsel satisfactory to the Indemnified Party in its reasonable judgment or
(iii) the named parties to any such action (including any impleaded parties)
have been advised by such counsel that either (x) representation of such
Indemnified Party and the Indemnifying Party by the same counsel would be
inappropriate under applicable standards of professional conduct or (y) there
may be one or more legal defenses available to it which are different from or
additional to and in conflict with those available to the Indemnifying Party and
in such event, the Indemnifying Party shall pay the reasonable fees and expenses
of counsel to the Indemnified Party only to the extent that such separate
counsel is necessary under such applicable standards of professional conduct in
the case of the foregoing clause (x) or to the extent necessary to avoid any
conflict in the case of the foregoing clause (y). In either of such cases, the
Indemnifying Party shall not have the right to assume the defense of such action
on behalf of such Indemnified Party. No Indemnifying Party shall be liable for
any settlement entered into without its written consent, which consent shall not
be unreasonably withheld.
(d) Contribution. If the indemnification
provided for in this Section 8 from the Indemnifying Party is unavailable to an
Indemnified Party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the 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, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
faults 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 to state a material fact has been 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. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Sections 8(a), 8(b)
and 8(c), any legal or other fees, charges or expenses reasonably incurred by
such party in connection with any investigation or proceeding; provided that the
total amount to be indemnified by such Designated Holder shall be limited to the
net proceeds received by such Designated Holder in the offering.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rate allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person.
23
24
9. Rule 144. From and after the IPO Effectiveness Date, the
Company covenants that it shall timely file any reports required to be filed by
it under the Exchange Act and that it shall take such further action as each
Designated Holder of Registrable Securities may reasonably request (including
providing any information necessary to comply with Rules 144 and 144A under the
Securities Act), all to the extent required from time to time to enable such
Designated Holder to sell Registrable Securities without registration under the
Securities Act within the limitations of the exemptions provided by (a) Rule 144
under the Securities Act, as such rules may be amended from time to time, or (b)
any similar rules or regulations hereafter adopted by the SEC. The Company
shall, upon the request of any Designated Holder of Registrable Securities,
deliver to such Designated Holder a written statement as to whether it has
complied with such requirements.
10. Miscellaneous.
(a) Recapitalizations, Exchanges, etc. The provisions of
this Agreement shall apply, to the full extent set forth herein with respect to
(i) the shares of Class A Common Stock, (ii) any and all shares of voting common
stock of the Company into which the shares of Class A Common Stock or Class B
Common Stock are converted, exchanged or substituted in any recapitalization or
other capital reorganization by the Company and (iii) any and all equity
securities of the Company or any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in conversion of, in exchange for or in substitution of, the shares
of Common Stock and shall be appropriately adjusted for any stock dividends,
splits, reverse splits, combinations, recapitalizations and the like occurring
after the date hereof. The Company shall cause any successor or assign (whether
by sale, merger or otherwise) to enter into a new registration rights agreement
with the Designated Holders on terms substantially the same as this Agreement as
a condition of any such transaction.
(b) No Inconsistent Agreements. The Company represents
and warrants that it has not granted to any Person the right to request or
require the Company to register any securities issued by the Company, other than
the rights granted to the Designated Holders herein. The Company shall not enter
into any agreement with respect to its securities that is inconsistent with the
rights granted to the Designated Holders in this Agreement or grant any
registration rights to any Person or with respect to any securities which are
not Registrable Securities which are prior in right to or inconsistent with the
rights granted in this Agreement.
(c) Remedies. The Designated Holders, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, shall be entitled to specific performance of their 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 agreed to waive in any action for specific
performance the defense that a remedy at law would be adequate.
(d) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers
24
25
or consents to departures from the provisions hereof may not be given unless
consented to in writing by (i) the Company and (ii) the Designated Holders
holding at least 85% of the Registrable Securities owned by all of the
Designated Holders; provided, however, that any such amendment, modification,
supplement, waiver or consent shall not be effective to withdraw, deny or
adversely affect the rights of any Designated Holder who has not consented in
writing thereto. Subject to the proviso in the preceding sentence, any such
written consent shall be binding upon the Company and all of the Designated
Holders.
(e) Notices. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be made by registered or certified first-class mail, return receipt
requested, telecopier, courier service, overnight mail or personal delivery:
(i) if to the Company:
Eclipsys Corporation
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
with a copy to:
Goulston & Storrs
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
(ii) if to Partners:
Partners HealthCare System, Inc.
Prudential Tower, Suite 1150
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxx Xxxxxx
25
26
(iii) if to GAP LLC or GAP Coinvestment:
c/o General Atlantic Service
Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
(iv) if to Xxxxxx or Wilfam:
000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
with a copy to:
Xx. Xxxxxxx X. Xxxxxxx
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
(v) if to Alltel:
ALLTEL Information Services, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: President, with a copy to the
General Counsel of Alltel
26
27
(vi) if to FUCP:
First Union Corporation
Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxxxxx X. Xxxxxx, XX
with a copy to:
Kennedy, Covington, Xxxxxxx &
Xxxxxxx, L.L.P.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
(vii) if to BT:
BT Investment Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Mr. Xxxxxx Xxxx
with a copy to:
Winston & Stawn
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
(viii) if to Xxxxx Xxxxxx:
Xxxxx Xxxxxx Associates IHS L.P.
c/o Xxxxx Xxxxxx & Co.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. X. Xxxxx Xxxxxx
27
28
with a copy to:
Xxxxx, Raysman & Xxxxxxxxx
000 Xxxx Xxxxx-Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxxx, Esq.
(ix) if to Manolovici:
Gilder, Gagnon, Xxxx & Co.
0000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
(x) if to St. Xxxx:
St. Xxxx Venture Capital
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxxx Xxx
(xi) if to Karmanos:
Compuware Corporation
00000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
(xii) if to the Xxxxxxx Stockholders:
Xxxxxxx X. Xxxxxxx
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
28
29
(xiii) if to Motorola:
Land Mobile Products Sector
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxx
with a copy to:
Corporate Law Department
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxx, Esq.
(xiv) if to any other designated Holder, at its
address as it appears on the record books
of the Company.
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; when delivered by courier
or overnight mail, if delivered by commercial courier service or overnight mail;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; and when receipt is mechanically acknowledged, if telecopied.
(f) Successors and Assigns; Third Party Beneficiaries.
This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto. The Demand Registration rights and
the other rights of the Xxxxxx Stockholders, General Atlantic Stockholders, the
Partners Stockholders, the Alltel Stockholders, the FUCP Stockholders, the BT
Stockholders and the Motorola Stockholders with respect thereto shall be, with
respect to any Registrable Security, (i) automatically transferred among the
Xxxxxx Stockholders, the General Atlantic Stockholders, the Partners
Stockholders, the Alltel Stockholders, the FUCP Stockholders, the BT
Stockholders or the Motorola Stockholders, as the case may be, and (ii) in all
other cases (except as set forth in the next sentence), transferred only with
the consent of the Company. The Demand Registration rights of the Motorola
Stockholders, with respect to any Registrable Security, and the other rights of
the Motorola Stockholders with respect thereto may be transferred by the
Motorola Stockholders to any other Person without the consent of the Company so
long as (y) in each case the transferee of any such Motorola Stockholder holds
an aggregate of not less than $2,500,000 of Registrable Securities or,
29
30
if the aggregate value of the Registrable Securities owned by the Motorola
Stockholders is less than $2,500,000, the Motorola Stockholders transfer all of
their Registrable Securities and Demand Registration rights to such transferee,
and (z) each such transferee agrees in writing that (1) Motorola (or any Person
to which Motorola transfers all of its Registrable Securities) shall be the
representative of such transferee, authorized to act on such transferee's behalf
in all matters arising under or relating to this Agreement and (2) that such
transferee shall in all respects act together with Motorola (or any Person to
which Motorola transfers all of its Registrable Securities) and shall be deemed
a Motorola Stockholder hereunder. The "incidental" registration rights of the
Designated Holders contained in Sections 3(b) and 4, the Form S-3 registration
rights contained in Section 5 and the other rights of each of the Designated
Holders with respect thereto may be, with respect to any Registrable Security,
(i) automatically transferred among the Partners Stockholders, (ii)
automatically transferred among the General Atlantic Stockholders, (iii)
automatically transferred among the Xxxxxx Stockholders, (iv) automatically
transferred among the Alltel Stockholders, (v) automatically transferred among
the FUCP Stockholders, (vi) automatically transferred among the BT Stockholders,
(vii) automatically transferred among the Xxxxx Xxxxxx Stockholders, (viii)
automatically transferred among the Manolovici Stockholders, (ix) automatically
transferred among the St. Xxxx Stockholders, (x) automatically transferred among
the Karmanos Stockholders, (xi) automatically transferred among the Xxxxxxx
Stockholders, (xii) automatically transferred among the Motorola Stockholders
and (xiii) automatically transferred by such Designated Holder to any other
Person, so long as in each case the transferee of Registrable Securities holds
an aggregate of not less than $2,500,000 of Registrable Securities. For purposes
of calculating such $2,500,000, the value of each of the FUCP Warrant and the BT
Warrant shall be calculated by determining the Market Price on the date of the
particular transfer of the number of shares of Class A Common Stock into which
the number of shares of Class B Common Stock issuable upon exercise of such
Warrant may be converted. All of the obligations of the Company hereunder shall
survive any such transfer. No Person other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of any of the
rights granted hereunder.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate 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.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
30
31
(j) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, it being
intended that all of the rights and privileges of the Designated Holders shall
be enforceable to the fullest extent permitted by law.
(k) Entire Agreement. This Second Restated Registration
Rights Agreement shall become effective: (i) as to all parties to the First
Restated Registration Rights Agreement, upon the execution hereof by the Company
and the Designated Holders under the First Restated Registration Rights
Agreement holding at least 85% of the Registrable Securities owned by all of the
Designated Holders under the First Restated Registration Rights Agreement, as
amended, (ii) as to the Motorola Stockholders, upon the execution hereof by the
Company, Motorola, and the Designated Holders under the First Restated
Registration Rights Agreement holding at least 85% of the Registrable Securities
owned by all of the Designated Holders under the First Restated Registration
Rights Agreement, as amended, and (iii) as to GAP 47, upon the execution hereof
by the Company, GAP 47, and the Designated Holders under the First Restated
Registration Rights Agreement holding at least 85% of the Registrable Securities
owned by all of the Designated Holders under the First Restated Registration
Rights Agreement, as amended. This Second Restated Registration Rights Agreement
is intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are
no additional restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein.
(l) Further Assurances. Each of the parties shall execute
such documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
31
32
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Agreement on the date first written above.
ECLIPSYS CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
PARTNERS HEALTHCARE SYSTEMS, INC.
By: /s/ Xxx X. Xxxxxx
--------------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
GENERAL ATLANTIC PARTNERS 38, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: A Managing Member
GENERAL ATLANTIC PARTNERS 28, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: A Managing Member
32
33
GENERAL ATLANTIC PARTNERS 47, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: A Managing Member
GAP COINVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: A General Partner
/s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx
WILFAM LTD.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
ALLTEL INFORMATION SERVICES, INC.
By:/s/ Xxxxxxx X. Xxx
--------------------------------------
Name: Xxxxxxx X. Xxx
Title: President
33
34
FIRST UNION CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxx XX
--------------------------------------
Name: Xxxxxxxxx X. Xxxxxx XX
Title: Senior Vice President
BT INVESTMENT PARTNERS, INC.
By: /s/ Xxxxxxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Principal
XXXXX XXXXXX ASSOCIATES IHS L.P.
By: /s/ A. Xxxxx Xxxxxx
--------------------------------------
Name: A. Xxxxx Xxxxxx
Title:
/s/ Xxxxxx Xxxxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxxxx
ST. XXXX VENTURE CAPITAL IV, L.L.C.
By: /s/ Xxxxxxx X. Xxx
--------------------------------------
Name: Xxxxxxx X. Xxx
Title: General Partner
/s/ Xxxxx Xxxxxxxx, Jr.
------------------------------------------
Xxxxx Xxxxxxxx, Jr.
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx
34
35
/s/ Xxxxxxx Xxxxxxx
------------------------------------------
Xxxxxxx Xxxxxxx
Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxx,
Trustees of the Xxxxxxx X. Xxxxxxx Family
Trust u/t/a dated 9/3/93
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx, Trustee
Xxxxxxx X. Xxxxxxx, Trustee of the
Xxx X. Xxxxxxx 1990 Trust u/t/a
December 28, 1990
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx, Trustee
Xxxxxxx X. Xxxxxxx, Trustee of the
Xxx X. Xxxxxxx 1990 Trust u/t/a
December 28, 1990
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx, Trustee
Xxxxx X. Xxxxxxx or her successor in Trust, as
Trustee of the Xxxxxxx X. Xxxxxxx Trust
pursuant to a Trust Agreement dated
June 30, 1976
/s/ Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx, Trustee
MOTOROLA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:
35
