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EXHIBIT 10.12
REGISTRATION RIGHTS AGREEMENT IN FAVOR OF
THE HOLDERS OF REGISTABLE SECURITIES
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of February 13, 1997 by and among MAI Systems Corporation, a Delaware
corporation, and the holders of Registrable Securities (the "Holders") signatory
to this Agreement.
This Agreement is made pursuant to the Subscription and Commitment
Agreement (the "S&C Agreement") dated as of February 13, 1997 by and among MAI
Systems Corporation, the ("Company"), and the Holders pursuant to which the
Holders are purchasing certain shares of Common Stock of the Company and may
purchase other securities of the Company at a later date. In order to induce the
Holders to purchase the Registrable Securities, the Company has agreed to
provide the registration rights set forth in this Agreement for the benefit of
the Holders. The execution and delivery of this Agreement is called for in the
S&C Agreement.
The parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the
following respective meanings:
(a) AFFILIATE of a specified Person means any other Person that
directly, or indirectly through one or more intermediates, controls, is
controlled by or is under common control with the Person specified, or who holds
or beneficially owns 50% or more of the equity interest in the Person specified
or 50% or more of the voting securities of the Person specified. A managed
account of a Person is also an Affiliate of such Person.
(b) COMMISSION means the Securities and Exchange Commission.
(c) COMPANY means MAI Systems Corporation or any successor to it
or to its business.
(d) COMMON STOCK means (except where the context otherwise
indicates) the Common Stock of the Company, par value $0.01 per share, as
constituted on its original date of issue by the Company, and any capital stock
into which such Common Stock may thereafter be changed, and shall also include
(i) capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of any Common Stock upon any
reclassification thereof which is also not preferred as to dividends or
liquidation over any other class of stock of the Company and which is not
subject to redemption and (ii) shares of common stock of any successor
corporation, acquiring corporation or Constituent Corporation (as defined in the
Warrant Agreement).
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(e) CONTINUOUSLY EFFECTIVE means, with respect to a specified
registration statement, that it shall not cease to be effective and available
for transfers of Registrable Securities thereunder for longer than any
forty-five (45) consecutive Business Days, during which time the Company shall
not be permitted to call the Warrants, prior to the Expiration Date.
(f) DEMAND REGISTRATION shall have the meaning set forth in
Section 2(b)(i).
(g) DEMANDING HOLDERS shall have the meaning set forth in Section
2(b)(i).
(h) EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
(i) EXPIRATION DATE means the earlier of (i) the tenth (10th)
anniversary of the date of this Agreement or (ii) the date on which no Holder
holds any Registrable Securities.
(j) HOLDERS shall have the meaning set forth in the first
paragraph hereof.
(k) PERSON means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
(l) REGISTRABLE SECURITIES means any shares of Common Stock of
the Company acquired pursuant to the S&C Agreement, any shares of common stock
of any Constituent Corporation (as defined in the Warrant Agreement) which may
become issuable pursuant to new warrants issued pursuant to Section 6.7 of the
Warrant Agreement or any Warrant Shares (as defined below) which may be acquired
and owned by a Holder, or any securities received by a Holder in exchange for
such securities. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (x) such securities shall have
been disposed of pursuant to an effective registration statement, (y) such
securities shall have been transferred to any Person other than the Holders
pursuant to Rule 144 (or any successor provision) or shall be transferable
pursuant to paragraph (k) thereof (or any successor provision) under the
Securities Act, or (z) they shall have ceased to be held by the Holders or any
Affiliate of the Holders or any Transferee of the Holders or their Affiliates.
(m) REGISTRATION EXPENSES means all expenses incident to the
performance of or compliance with the registration rights granted herein,
including, without limitation, all registration, filing, listing and NASD fees,
all fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and expenses of the Company's counsel, the fees and expenses of one
counsel for the Selling Holders chosen by a majority vote of them, the fees and
expenses of the Company's independent public accountants, including the expenses
of any special audits or "cold comfort" letters required by or incident to such
performance and compliance, and any fees and disbursements of underwriters
customarily paid by issuers and sellers of securities; provided, however, that
Registration Expenses
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shall not include underwriting discounts, commissions and transfer taxes, if
any, all of which shall be borne by the Selling Holders.
(n) S&C AGREEMENT means the Subscription and Commitment
Agreement, dated as of February 13, 1997 between the Company and the Purchasers
named therein.
(o) SECURITIES ACT means the Securities Act of 1933, as amended,
or any successor statute thereto, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder, all as the same shall
be in effect at the time.
(p) SELLING HOLDERS means those Holders who have requested
registration pursuant to Section 2(b) hereof and who are selling securities
thereunder.
(q) SHARES means the Company's common stock, as constituted on
the date hereof, or any stock or other securities, for which such common stock
shall have been exchanged, or any stock or other securities resulting from any
reclassification of such Shares.
(r) SHELF REGISTRATION shall have the meaning set forth in
Section 2(a).
(s) TRANSFEREE shall mean the first holder of Registrable
Securities by a transfer from a Holder or an Affiliate of a Holder provided,
however, that a Person acquiring such Registrable Securities pursuant to a
transfer under an effective registration statement or pursuant to a sale under
Rule 144 shall not be a Transferee.
(t) UNDERWRITERS' REPRESENTATIVE shall mean the managing
underwriter, or, in the case of a co-managed underwriting, the managing
underwriter designated as the Underwriters' Representative by the co-managers.
(u) VIOLATION shall have the meaning set forth in Section 6(a).
(v) WARRANT AGREEMENT means the Warrant Agreement, dated as of
________, 1997 between the Company and the Warrant Holders listed therein.
(w) WARRANTS shall mean any warrants issued pursuant to the
Warrant Agreement.
(x) WARRANT SHARES shall mean the Shares of Company Common Stock
and other securities issuable upon exercise of the Warrants.
2. REGISTRATION RIGHTS.
(a) SHELF REGISTRATION. The Company shall, within thirty (30)
days from the date of this Agreement, use all reasonable efforts to file a
registration statement for purposes of permitting an offering of all of the
Registrable Securities for the Holders on a delayed or continuous
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basis pursuant to Rule 415 under the Securities Act which shall initially cover
the shares purchased pursuant to the S&C Agreement and shall be amended from
time to time as neccessary to cover all Registrable Securities, including any
Warrant Shares underlying the Warrants once the Warrants are issued (a "Shelf
Registration") and shall use reasonable efforts cause such Shelf Registration to
be and continue to be, until the Expiration Date, Continuously Effective within
one hundred-twenty (120) days from the date of this Agreement.
(b) (i) DEMAND REGISTRATION. If the conditions specified in
Section 2(a) are not satisfied, then in addition to any other rights of the
Holders, at any time commencing sixty (60) days from the date of this Agreement,
upon written request by the Holders of at least 10% of the Registrable
Securities then outstanding (the "Demanding Holders") to the Company that the
Company effect a registration of any or all of the Registrable Securities and
specifying the intended method of disposition thereof (a "Demand Registration"),
the Company will use its best efforts to effect the registration under the
Securities Act of the Registrable Securities which the Company has been so
requested to register by such Holders for disposition in accordance with the
intended method of disposition stated in such request within 45 days of the
request therefore. However, this Section 2(b) shall terminate on the Expiration
Date.
(ii) Notwithstanding anything in the foregoing paragraphs of
this Section 2(b), the Company shall have the right to delay any registration of
Registrable Securities requested pursuant to this Section 2(b) for up to 60 days
if such registration would, in the sole reasonable judgment of the Company's
Board of Directors (or equivalent governing body), substantially interfere with
any material transaction being considered at the time of receipt of the request.
(c) REGISTRATION STATEMENT FORM. The Company may, if permitted by
law, effect any registration requested under Section 2(b) by the filing of a
registration statement on Form S-3 (or any successor or similar short-form
registration statement).
(d) EXPENSES. The Company shall pay all Registration Expenses
incurred in connection with the registration of Registrable Securities pursuant
to Section 2(a) or 2(b).
(e) EFFECTIVE REGISTRATION STATEMENT. The registration requested
pursuant to Section 2(b) shall not be deemed to have been effected unless it has
become effective with the Commission, provided, however, that a registration
which does not become effective after the Company has filed a registration
statement with respect thereto with the Commission solely by reason of the
Demanding Holders failing to proceed with the registration shall be deemed to
have been effected by the Company in satisfaction of the Company's obligation to
register Registrable Securities pursuant to a Demand Registration, unless the
Demanding Holders reimburse the Company for all of its costs and expenses
incurred in connection with such registration statement. Notwithstanding the
foregoing, a registration statement will not be deemed to have been effected if
(i) after it has become effective with the Commission, such registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or any court proceeding for any
reason other than a misrepresentation or omission by the Holders or (ii)
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the conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied,
other than by reason of some act or omission or failure to agree to close by a
Selling Holder.
(f) CONFLICTING INSTRUCTIONS FROM HOLDERS. (i) The Company may
rely and shall be protected in relying upon any resolution, certificate,
opinion, request, communication, demand, receipt or other paper or document in
good faith believed by it to be genuine and to have been signed or presented by
the proper party or parties. The Company may act in reliance upon the advice of
its counsel in reference to any matter in connection with this Agreement and
shall not incur any liability for any action taken in good faith in accordance
with such advice.
(ii) In the event the Company receives conflicting
instructions regarding any action to be taken or withheld hereunder, the Company
may suspend further action relating to such action until such time as the
conflicting instructions are resolved by the parties giving the same or until
the Company is instructed to take or withhold the requested action by a final
order from which no appeal may be taken issued by a court of competent
jurisdiction.
3. REGISTRATION PROCEDURES.
(a) Whenever the Company is required to effect the registration
of any Registrable Securities under the Securities Act as provided in Section 2,
the Company, as expeditiously as possible and subject to the terms and
conditions herein, will:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and use its best efforts to
cause such registration to become effective;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement Continuously
Effective and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
until such time as all of such securities have been disposed of in accordance
with the intended methods of disposition by the Selling Holders thereof set
forth in such registration statement or, if earlier, until the Expiration Date;
(iii) furnish to the Selling Holders such number of conformed
copies of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under the
Securities Act, in conformity with the requirements of the Securities Act, and
such other documents, as the Selling Holders may reasonably request;
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(iv) use its best efforts to register or qualify all
Registrable Securities covered by such registration statement under such other
United States state securities or blue sky laws of such jurisdictions as the
Selling Holders shall reasonably request, to keep such registration statement
qualification in effect for so long as such registration remains in effect, and
take any other action which may be reasonably necessary or advisable to enable
the Selling Holders to consummate the disposition in such jurisdictions of the
securities owned by the Selling Holders, except that the Company shall not for
any such purpose be required to (a) qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so qualified, (b)
subject itself to taxation in any such jurisdiction or (c) consent to general
service of process in any such jurisdiction;
(v) in any underwritten offering, and if reasonable and
customary in the context of such offering, use its best efforts to furnish to
the Selling Holders a signed counterpart, addressed to the Selling Holders or
seller of Registrable Securities (and the underwriters, if any), of
(x) an opinion of counsel for the Company, dated
the effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated the date of
the closing under the underwriting agreement), reasonably satisfactory
to the Selling Holders in their reasonable judgment, and
(y) a "comfort" letter, reasonably satisfactory to
the Selling Holders dated the effective date of such registration
statement (and, if such registration includes an underwritten public
offering, dated the date of the closing under the underwriting
agreement), signed by the independent public accountants who have
certified the Company's financial statements included in such
registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to the underwriters in underwritten public
offerings of securities and, in the case of the accountants' letter, such other
financial matters as such seller or such holder (or the underwriters, if any)
may reasonably request;
(vi) immediately notify the Selling Holders at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, and at the request of the
Selling Holders promptly prepare and furnish to the Selling Holders a reasonable
number of copies of a supplement to or an amendment of such
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prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
(vii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first full calendar month after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act, and not file any amendment or
supplement to such registration statement or prospectus to which the Selling
Holders shall have reasonably objected in writing on the grounds that such
amendment or supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations thereunder,
having been furnished with a copy thereof (other than with respect to a pricing
amendment) at least two business days prior to the filing thereof;
(viii) provide a transfer agent and registrar for all
Registrable Securities covered by such registration statement not later than the
effective date of such registration statement; and
(ix) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which any
of the Registrable Securities are then listed.
(b) As a condition of these Registration Rights, the Company may
require the Demanding Holders, at their own expense, to furnish the Company with
such information and undertakings regarding such Holders and the distribution of
such securities as the Company may from time to time reasonably request in
writing, and the Holders, by their execution hereof, agree to provide such
information and make such undertakings as are requested.
(c) The Selling Holders agree (A) that upon receipt of any notice
from the Company of the happening of any event of the kind described in
subdivision (vi) of Section 3(a), the Selling Holders will forthwith discontinue
their disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until the Selling Holders'
receipt of the copies of the supplemented or amended prospectus contemplated by
subdivision (vi) of Section 3(a) and, if so directed by the Company, will
deliver to the Company all copies, other than permanent file copies, then in the
Selling Holders' possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice and (B) that they will
immediately notify the Company, at any time when a prospectus relating to the
registration of such Registrable Securities is required to be delivered under
the Securities Act, of the happening of any event as a result of which
information previously furnished by the Selling Holders to the Company for
inclusion in such prospectus contains an untrue statement of a material fact or
omits to state any material fact required
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to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances under which they were made.
(d) Notwithstanding anything in this agreement to the contrary,
the Company will not be required to file such a registration statement if it
receives an opinion of counsel in form and substance reasonably satisfactory to
the Selling Holders, or counsel to the Selling Holders, to the effect that the
sale of the Registrable Securities in the manner contemplated by the Selling
Holders may be effected without registration regardless of the identity or
status of the buyer(s) of such Registrable Securities.
4. UNDERWRITTEN OFFERINGS.
(a) UNDERWRITTEN OFFERINGS. If requested by the underwriters for
any underwritten offering by the Selling Holders pursuant to a registration
requested under Section 2(b), the Company will enter into an underwriting
agreement with such underwriters for such offering, such agreement to be in form
and substance reasonably satisfactory to the Company, the Selling Holders and
its underwriters and to contain such representations and warranties by the
Company and such other terms as are customarily contained in agreements of this
type, including, without limitation, indemnities to the effect and to the extent
provided in Section 6. The Selling Holders shall be a party to such underwriting
agreement and may, at their option (reasonably exercised), require that any or
all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of the Selling Holders and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of the Selling
Holders.
(b) SELECTION OF UNDERWRITERS. If a requested registration
pursuant to Section 2(b) involves an underwritten offering, then the Demanding
Holders may by majority select the underwriter from underwriting firms of
national reputation, provided their selection is reasonably satisfactory to the
Company.
(c) HOLDBACK AGREEMENTS. (i) Each Holder agrees, if so required
by the managing underwriter, not to effect any public sale or distribution of
Registrable Securities or sales of such Registrable Securities pursuant to Rule
144 or Rule 144A under the Securities Act, during the seven days prior to and
the 90 days after any firm commitment underwritten registration pursuant to
Section 2(b) has become effective (except as part of such registration), whether
or not the Holder participates in such registration.
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5. PREPARATION, REASONABLE INVESTIGATION.
In connection with the preparation and filing of each
registration statement under the Securities Act, the Company will give the
Selling Holders, the underwriters, if any, and their respective counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the reasonable opinion of the Selling Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
6. INDEMNIFICATION; CONTRIBUTION. If any Registrable Securities are
included in a registration statement under this Agreement:
(a) To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the meaning of the Securities Act, and each
officer, director, partner, and employee of such Selling Holder and such
controlling Person, against any and all losses, claims, damages, liabilities and
expenses (joint or several), including reasonable attorneys' fees and
disbursements and expenses of investigation, incurred by such party pursuant to
any actual or threatened action, suit, proceeding or investigation, or to which
any of the foregoing Persons may become subject under the Securities Act, the
Exchange Act or other federal or state laws, insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"):
(i) Any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, or any amendments
or supplements thereto;
(ii) The omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; or
(iii) Any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any applicable state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
applicable state securities law; provided, however, that the indemnification
required by this Section 6(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or expense if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for any
such loss, claim, damage, liability or expense to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished to the Company by the indemnified party
expressly for use in connection with such registration; provided, further, that
the indemnity agreement contained in this
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Section 6 shall not apply to any underwriter to the extent that any such loss is
based on or arises out of an untrue statement or alleged untrue statement of a
material fact, or an omission or alleged omission to state a material fact,
contained in or omitted from any preliminary prospectus if the final prospectus
shall correct such untrue statement or alleged untrue statement, or such
omission or alleged omission, and a copy of the final prospectus has not been
sent or given to such person at or prior to the confirmation of sale to such
person if such underwriter was under an obligation to deliver such final
prospectus and failed to do so. The Company shall also indemnify underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers, directors, agents and
employees and each person who controls such persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same
extent as provided above with respect to the indemnification of the Selling
Holders.
(b) To the extent permitted by applicable law, each Selling
Holder shall indemnify and hold harmless the Company, each of its directors,
each of its officers who shall have signed the registration statement, each
Person, if any, who controls the Company within the meaning of the Securities
Act, any other Selling Holder, any controlling Person of any such other Selling
Holder and each officer, director, partner, and employee of such other Selling
Holder and such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint and several), including reasonable attorneys'
fees and disbursements and expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or investigation,
or to which any of the foregoing Persons may otherwise become subject under the
Securities Act, the Exchange Act or other federal or state laws, insofar as such
losses, claims, damages, liabilities and expenses arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Selling Holder expressly for use in connection with such
registration; provided, however, that (x) the indemnification required by this
Section 6(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if settlement is effected without the
consent of the relevant Selling Holder of Registrable Securities, which consent
shall not be unreasonably withheld, and (y) in no event shall the amount of any
indemnity under this Section 6(b) exceed the gross proceeds from the applicable
offering received by such Selling Holder.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified party
may make a claim under this Section 6, such indemnified party shall deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel at its own expense except as provided
below. The failure to deliver written notice to the indemnifying party within a
reasonable time following the commencement of any such action, if prejudicial to
its ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 6 but shall not relieve
the indemnifying party of any liability that it may have to any indemnified
party otherwise
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than pursuant to this Section 6. Any fees and expenses incurred by the
indemnified party (including any fees and expenses incurred in connection with
investigating or preparing to defend such action or proceeding) shall be paid to
the indemnified party, as incurred, within sixty (60) 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, but in such event such amounts shall be refunded). Any such
indemnified party shall have the right to employ separate counsel in any such
action, claim or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be the expenses of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees and expenses
or (ii) the indemnifying party shall have failed to promptly assume the defense
of such action, claim or proceeding or (iii) the named parties to any such
action, claim or 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 there may be one or more legal defenses
available to it which are different from or in addition to those available to
the indemnifying party and that the assertion of such defenses would create a
conflict of interest such that counsel employed by the indemnifying party could
not faithfully represent the indemnified 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 of such
action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties
with respect to such action, claim or proceeding, in which event the
indemnifying party shall be obligated to pay the reasonable fees and expenses of
such additional counsel or counsels). No indemnifying party shall be liable to
an indemnified party for any settlement of any action, proceeding or claim
without the written consent of the indemnifying party, which consent shall not
be unreasonably withheld.
(d) If the indemnification required by this Section 6 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to in this
Section 6:
(i) 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 parties 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 fault of such
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether any Violation has been committed by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such
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Violation. 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 Section 6(a) and Section 6(b),
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d)(ii) were determined by
pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to in Section 6(d)(i). No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(e) If indemnification is available under this Section 6, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Section 6 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 6(d).
(f) The obligations of the Company and the Selling Holders of
Registrable Securities under this Section 6 shall survive the completion of any
offering of Registrable Securities pursuant to a registration statement under
this Agreement, and otherwise.
7. COVENANTS OF THE COMPANY. The Company hereby agrees and covenants as
follows:
The Company shall file as and when applicable, on a timely
basis, all reports required to be filed by it under the Exchange Act. If the
Company is not required to file reports pursuant to the Exchange Act, upon the
request of any Holder of Registrable Securities, the Company shall make publicly
available the information specified in subparagraph (c)(2) of Rule 144 of the
Securities Act, and take such further action as may be reasonably required from
time to time and as may be within the reasonable control of the Company, to
enable the Holders to transfer Registrable Securities to a Transferee without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 under the Securities Act or any similar rule or regulation
hereafter adopted by the Commission.
8. MISCELLANEOUS.
8.1 SPECIFIC PERFORMANCE. The parties hereto acknowledge that
there may be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, may be entitled to compel
specific performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions of this Agreement.
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8.2 NOTICES. All notices, requests, claims, demands, waivers and
other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered by hand, if delivered
personally by courier, or three days after being deposited in the mail
(registered or certified mail, postage prepaid, return receipt requested) as
follows:
(a) The Holders at the addresses indicated on the
signature page hereof with a copy to Canyon Capital
Management:
c/o Canyon Partners Incorporated
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
(b) Company:
MAI Systems Corporation
0000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy No. (000) 000-0000
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8.3 LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICT OF LAWS.
8.4 ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees (including any fees incurred in any appeal) in
addition to its costs and expenses and any other available remedy.
8.5 HEADINGS. The descriptive headings of the several Sections
and paragraphs of this Agreement are inserted for convenience only, and do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
8.6 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other
writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may be
waived
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(either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and the
Holders. Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by an amendment or waiver authorized by this Section
8.6, whether or not any such Registrable Securities shall have been marked to
indicate such consent.
8.7 ASSIGNABILITY. This Agreement shall be binding upon and inure
to the benefit of the respective successors and assigns of the parties hereto
provided, however, that the Registration Rights hereunder shall only be
available to the Holders, their Affiliates and to their Transferees.
8.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.9 VALIDITY, DUE AUTHORIZATION. By its execution hereof, the
Company represents and warrants that it has the corporate power to execute,
deliver and perform the terms and provisions of this Agreement and that it has
taken all appropriate and necessary corporate action to authorize the
transactions contemplated hereby and the execution, delivery and performance of
this Agreement.
MAI Systems Corporation
By:
------------------------------
INVESTORS:
The Value Realization Fund, L.P., Address:
a California limited partnership The Value Realization Fund, L.P.
c/o Canyon Partners Incorporated
By: Canpartners Investments III, L.P., 0000 Xxxxxxxx Xxxxxxxxx
a California limited partnership, Suite 200
its general partner Xxxxxxx Xxxxx, XX 00000
By: Canyon Capital Management, L.P., 310/247-2700 (O)
a California limited partnership, 310/247-2701 (F)
its general partner
By: Canpartners Incorporated,
a California corporation,
its general partner
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By:
--------------------------------
Name:
Title:
Canyon Value Realization Fund (Cayman), Address:
Ltd. Canyon Value Realization Fund (Cayman), Ltd.
c/o MeesPierson (Cayman) Limited
By: MeesPierson (Cayman) Limited, X.X. Xxx 0000
its Administrator British American Center, Phase 3
Xx. Xxx'x Drive
Grand Cayman, B.W.I.
By:
--------------------------------- 809/949-7942 (O)
Name: 809/949-8340 (F)
Title:
GRS Partners II Address:
By: Grosvenor Capital Management L.P., GRS Partners II
its Administrator c/o Grosvenor Capital Management, L.P.
000 Xxxx Xxxxxx Xxxxx
By: Grosvenor Capital Management, Inc., Suite 1600
its general partner Xxxxxxx, Xxxxxxxx 00000
By: 312/263-7777 (O)
----------------------------------- 312/782-4759 (F)
Name:
Title:
CPI Securities L.P., Address:
a California limited partnership CPI Securities L.P.
c/o Canyon Partners Incorporated
By: Canpartners Incorporated, 0000 Xxxxxxxx Xxxxxxxxx
a California corporation, Suite 200
its general partner Xxxxxxx Xxxxx, XX 00000
By: 310/247-2700 (O)
---------------------------------- 310/247-2701 (F)
Name:
Title:
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