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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is entered into as of
this 31st day of January, 1999, by and between Electronic Transmission
Corporation, a Delaware corporation (the "the Company") and Xxxxxx Xxxxxxx, an
individual ("Shareholder").
ARTICLE I
RECITALS
SECTION 1.1. REORGANIZATION AGREEMENT. The Company has entered into a
Plan and Agreement of Reorganization by and among the Company, Health Plan
Initiatives, Inc., and ETC Acquisition Corp., wherein Health Plan Initiatives,
Inc. will be merged with and into ETC Acquisition Corp. (the "Reorganization
Agreement").
SECTION 1.2. ISSUANCE OF SHARES. Pursuant to the Reorganization
Agreement, Xxxxxxx will receive shares of common stock, $.001 par value of the
Company.
NOW THEREFORE, for and in consideration of the premises, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and confessed, the Company and Shareholder hereby agree as follows:
ARTICLE II
DEMAND REGISTRATION
SECTION 2.1. REQUEST. At any time after July 31, 1999, upon the written
request of Shareholder requesting that the Company effect the registration under
the Securities Act (as hereinafter defined) of all or part of such holder's
Registrable Securities (as hereinafter defined), and specifying (i) the intended
method of disposition thereof, (ii) whether or not such requested registration
is to be an underwritten offering, and (iii) the price range (net of
underwriting discount and commissions) acceptable to such holder to be received
for such Registrable Securities, the Company will use reasonable efforts to
effect an effective registration under the Securities Act of the Registrable
Securities which the Company has been so requested to register.
SECTION 2.2. REGISTRATION STATEMENT FORM. Registrations under this
Article II shall be on an appropriate registration form of the Commission (as
hereinafter defined) (i) as shall be selected by the Company and (ii) as shall
permit the disposition of such Registrable Securities in accordance with the
intended method or methods of disposition specified in the request for such
registration. The Company agrees to include in any such registration statement
all information which Shareholder shall reasonably request and which is required
to be included therein.
SECTION 2.3. EXPENSES. The Company will pay all Registration Expenses
(as hereinafter defined) in connection with any registrations requested pursuant
to this Article II.
SECTION 2.4. EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Article II shall not be deemed to have been effected (i) unless
a registration statement with respect thereto has become effective, (ii) if,
after it has become effective, such registration is withdrawn by the Company,
interfered with by any stop order, injunction or other order or
REGISTRATION RIGHTS AGREEMENT PAGE 1
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requirement of the Commission or other governmental agency or court for any
reason prior to the expiration of a 180 day period following such registration
statement effectiveness, or (iii) if the conditions to closing specified in any
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied.
SECTION 2.5. SELECTION OF UNDERWRITERS. The underwriter or underwriters
shall be selected by the Company and shall be reasonably acceptable to the
Shareholder.
SECTION 2.6. PRIORITY IN REQUESTED REGISTRATIONS. If in a requested
registration pursuant to this Article II, the managing underwriter shall advise
the Shareholder in writing that, in its opinion, the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering within a price range reasonably acceptable to the
Shareholder , the Shareholder may include a number of shares in such
registration in any manner and amount selected by the Shareholder.
SECTION 2.7. MATERIAL TRANSACTIONS; PRIOR REGISTRATIONS.
Notwithstanding the provisions of Section 2.1, the Company shall not be required
to register shares if:
(a) The Company shall have filed a registration statement
covering Company shares and closed the sale of such Company shares
within the previous 180 days;
(b) The Company is engaged in negotiations covering material
transactions and in the good faith judgment of the Company the filing
of such registration statement would materially adversely affect the
Company's ability to consummate such transactions.
ARTICLE III
"PIGGY BACK" REGISTRATION
SECTION 3.1. RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at
any time proposes to sell Company shares pursuant to a registration statement
under the Securities Act covering any Company shares other than a registration
on Form S-4 or S-8, or any successor or similar forms and other than pursuant to
Article II, it will each such time give prompt written notice to Shareholder of
its intention to do so and of rights under this Article III. Upon the written
request of Shareholder made within 30 days after the receipt of any such notice
(which request shall specify the Registrable Securities intended to be disposed
of and the intended method of disposition thereof), the Company will use its
best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Shareholder has been requested to register, to
the extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be registered,
by inclusion of such Registrable Securities in the registration statement which
covers the securities proposed to be registered; provided, that if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason either not to
register or to delay registration of such securities, the Company may, at its
election, give written notice of such determination to Company and, thereupon,
(i) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection
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therewith), without prejudice, however, to the rights of any holder or holders
of Registrable Securities entitled to request that such registration be effected
as a registration under Article II and (ii) in the case of a determination to
delay registering, shall be permitted to delay registering any Registrable
Securities, for the same period as the delay in registering such other
securities. No registration effected under this Article III shall relieve the
Company of its obligation to effect any registration upon request under Article
II. The Company will pay all Registration Expenses incurred by holders by
Registrable Securities in connection with each registration of Registrable
Securities requested pursuant to this Article III.
SECTION 3.2. PRIORITY IN PIGGY-BACK REGISTRATIONS. If (i) a
registration pursuant to this Article III involves an underwritten offering of
the securities being registered, to be distributed (on a firm commitment basis)
by or through one or more underwriters of recognized standing under underwriting
terms appropriate for such a transaction, and (ii) the managing underwriter of
such underwritten offering shall inform such Company holders of the Registrable
Securities requesting such registration by letter of its belief that the
distribution of all or a specified number of such Registrable Securities
concurrently with the securities being distributed by such underwriters would
interfere with the successful marketing of the securities being distributed by
such underwriters (such writing to state the basis of such belief and the
approximate number of such Registrable Securities which may be distributed
without such effect), then the underwriter may, upon written notice to all
holders of such Registrable Securities, reduce pro rata (if and to the extent
stated by such managing underwriter to be necessary to eliminate such effect)
the number of such securities proposed to be sold by each holder of Registrable
Securities so that the resultant aggregate number of such Registrable Securities
so included in such registration shall be equal to the number of shares stated
in such managing underwriter's letter.
ARTICLE IV
REGISTRATION PROCEDURES
SECTION 4.1. PREPARATION OF FILINGS. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Articles II or III, the
following shall apply:
(a) Registration Statement. The Company shall promptly prepare
and use its best efforts to cause to be filed with the Commission the
requisite registration statement to effect such registration (including
such audited financial statements as may be required by the Securities
Act or the rules and regulations promulgated thereunder) and thereafter
use its best efforts to cause such registration statement to become and
remain effective; provided that before filing such registration
statement or any amendments thereto, the Company will furnish to the
holders of Registrable Securities that are to be included in such
registration copies of the registration statement proposed to be filed.
(b) Amendments. The Company shall prepare and use its best
efforts to cause to be filed with the Commission such amendments, post
effective amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep
such registration statement effective and to comply
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with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement.
(c) Copies of Documents. The Company shall furnish to each
seller of Registrable Securities covered by such registration statement
and each underwriter, if any, of the securities being sold by such
seller such number of conformed copies of such registration statement
and of each amendment and supplement thereto (in each case including
all exhibits to such Registration Statement), 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 pursuant to Rule 424 under the Securities Act and such
other documents, as such seller and underwriter, if any, may
reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities owned by Shareholder.
(d) Blue-Sky. The Company will use its best efforts to
register or qualify all Registrable Securities under the securities
laws or blue sky laws of the jurisdictions of any seller thereof and
any underwriter of the securities being sold by such seller shall
reasonably request, to keep such registrations or qualifications in
effect for so long as such registration statement remains in effect,
and take any other action which may be reasonably necessary or
advisable to enable such seller and underwriter to consummate the
disposition in such jurisdictions of the securities owned by such
seller.
(e) Other Approvals. The Company will use its best efforts to
cause all Registrable Securities covered by such registration statement
to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the seller or sellers
thereof to consummate the intended disposition of such Registrable
Securities.
(f) Notice of Events. The Company will notify each seller of
Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, upon the Company's discovery that, or upon
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 any such seller promptly prepare
and furnish to such seller and each underwriter, if any, a reasonable
number of copies of a supplement to or an amendment of such 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.
(g) Listing. The Company will cause all Registrable Securities
covered by the registration statement to be listed on each securities
exchange or traded or quoted on each market on which the same class of
securities issued by the Company are then listed, traded or quoted.
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(h) Transfer Agent. The Company will provide a transfer agent,
registrar and a CUSIP number for all Registrable Securities no later
than the effective date of such Registration Statement.
SECTION 4.2. DATA FROM HOLDERS OF REGISTRABLE SECURITIES. The Company
may require each seller of Registrable Securities as to which any registration
is being effected to furnish the Company such information, representations and
warranties regarding such seller and the distribution of such securities as the
Company or the underwriters may from time to time reasonably request in writing
for inclusion in the registration statement or otherwise.
SECTION 4.3. UNDERWRITTEN OFFERINGS. If requested by the underwriters
for any underwritten offering by holders of Registerable Securities pursuant to
a registration requested under Article II, the Company will enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be reasonably satisfactory in form and substance to the Company, each such
holder and the underwriters, and shall contain such representations and
warranties by the Company and such other terms as are generally prevailing in
agreements of this type, including, without limitation, indemnities to the
effect and to the extent provided in Section 5.1. The holders of the Registrable
Securities will cooperate with the Company in the negotiation of the
underwriting agreement and will give consideration to the reasonable suggestions
of the Company regarding the form thereof; provided, that nothing herein
contained shall diminish the foregoing obligations of the Company. The holders
of Registrable Securities to be distributed by such underwriters shall be
parties to such underwriting agreement.
SECTION 4.4. PREPARATION; REASONABLE INVESTIGATION. In connection with
the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their 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 opinion of such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
ARTICLE V
INDEMNIFICATION
SECTION 5.1. INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any shares under the Securities Act, the Company will, and
hereby does, indemnify and hold harmless the holder of any Registrable
Securities covered by such registration statement, their respective directors
and officers, if any, each other Person who participates as an underwriter in
the offering or sale of such securities, such holder or any such underwriter
within the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which such holder or any such director or
officer or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
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liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or 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, and the Company will
reimburse such holder, and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
holder for use in the preparation thereof and, provided further that the Company
shall not be liable to any Person who participates as an underwriter, in the
offering or sale of Registrable Securities or to any other Person, if any, who
controls such underwriter within the meaning of the Securities Act, in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of such Person's failure to
send or give a copy of the final prospectus, as the same may be then
supplemented or amended, within the time required by the Securities Act to the
Person asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus.
SECTION 5.2. INDEMNIFICATION BY THE SELLERS. The Company may require,
as a condition to including any Registrable Securities in any registration
statement filed pursuant to Article II or III, that the Company shall have
received an undertaking from the prospective sellers of Registrable Securities,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 5.1) the Company, each director of the Company, if any, each
officer of the Company, if any, and each other person, if any, who controls the
Company within the meaning of the Securities Act, with respect to any statement
or alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in conformity with
information furnished to the Company for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement; provided, that such liability under such
indemnification shall be limited to the net sales proceeds actually received by
such seller from the sale of the Company shares pursuant to such Registration
Statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement.
SECTION 5.3. NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Sections 5.1 or 5.2, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action, provided
that the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under Sections 5.1
or 5.2, except to the
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extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, the indemnifying party shall be entitled to participate in and to assume
the defense thereof, jointly with any other indemnifying party similarly
notified, to the extent that the indemnifying party may wish, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability, or a covenant not to xxx, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
SECTION 5.4. INDEMNIFICATION PAYMENTS. The indemnification required by
this Article V shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
ARTICLE VI
DEFINITIONS
As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:
Commission: The Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.
Company: Electronic Transmission Corporation, its successors or
assigns, including any successor by merger, consolidation, or purchase.
Company Shares: Any shares of the $.001 par value common stock of the
Company.
Exchange Act: The Securities Exchange Act of 1934, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time. Reference to a particular section of
the Securities Exchange Act of 1934 shall include a reference to the comparable
section, if any, of any such similar federal statute.
Person: A corporation, an association, a partnership, an organization,
business, an individual, a governmental or political subdivision thereof or a
governmental agency.
Registrable Securities: All shares of the $.001 par value common stock
of Electronic Transmission Corporation issued to Xxxxxx Xxxxxxx in connection
with the Reorganization Agreement. As to any particular Registrable Securities,
once issued such securities shall cease to be Registrable Securities when (a) a
registration statement with respect to the sale of such
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securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been distributed to the public pursuant to Rule
144 (or any successor provision) under the Securities Act, (c) they shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by and subsequent
disposition of them shall not require registration or qualification of them
under the Securities Act or any similar state law then in force, or (d) they
shall have ceased to be outstanding.
Registrants: Collectively, Xxxxxx Xxxxxxx, his successors and assigns.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with Article II or III, 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, printing and engraving expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and compliance, the
fees and disbursements of a single counsel and accountants retained by the
holder of the Registrable Securities being registered, premiums and other costs
of policies of insurance against liabilities arising out of the public offering
of the Registrable Securities being registered and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if any.
Securities Act: The Securities Act of 1933, or any similar Federal
statute, and the rules and regulations of the Commission thereunder, all as of
the same shall be in effect at the time. References to a particular section of
the Securities Act of 1933 shall include a reference to the comparable section,
if any, of any such similar Federal statute.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the parties hereto shall also be for the benefit of and enforceable by any
subsequent holder of any Registrable Securities.
SECTION 7.2. DESCRIPTIVE HEADINGS. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.
SECTION 7.3. GOVERNING LAW. This agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the state of Delaware without reference to the principles of
conflicts of laws.
SECTION 7.4. COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.
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SECTION 7.5. ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings relating to the subject matter hereof.
SECTION 7.6. SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
SECTION 7.7. AMENDMENTS AND WAIVERS. This Agreement may not be amended.
SECTION 7.8. NOMINEES FOR BENEFICIAL OWNERS. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election, be treated as the holder of
such Registrable Securities for purposes of any request or other action by any
holder or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement.
SECTION 7.9. NOTICES. Except as otherwise provided in this Agreement,
all communications provided for hereunder shall be in writing and sent by
first-class mail, postage prepaid, and (a) if addressed to any other holder of
Registrable Securities, at the address that such holder shall have furnished to
the Company in writing, or, until any such other holder so furnishes to the
Company an address, then to and at the address of the last holder of such
Registrable Securities who has furnished an address to the Company, or (b) if to
the Company at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, or such other
address that the Company shall have furnished to the holder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
ELECTRONIC TRANSMISSION CORPORATION
By: /s/ Xxxxx Xxxxxxxxxxx
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Xxxxx Xxxxxxxxxxx, Executive Vice
President and Chief Operating Officer
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
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