REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of December 31, 1996 between NETWORK IMAGING
CORPORATION, a corporation duly organized and validly existing under the laws of
the State of Delaware (the "Company") and ▇▇▇▇ ▇▇▇▇▇▇▇, an individual with an
address at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Holder").
W I T N E S S E T H:
WHEREAS, the Holder has been issued warrants to purchase 100,000 shares
of the common stock, $.0001 par value (the "Common Stock") of the Company and
will be issued such additional warrants as shall be issued by the Company
pursuant to a Warrant Agreement of even date herewith (the "Warrants");
WHEREAS, this is the Registration Rights Agreement referred to in the
Loan Agreement, of even date herewith (the "Loan Agreement") between the Company
and the Holder; and
WHEREAS, it is a condition to the willingness of the Holder to enter
into the Loan Agreement and to make the Loan provided for thereunder that the
Company enter into this Agreement,
NOW, THEREFORE, in order to induce the Holder to enter into the Loan
Agreement and to make the Loan provided for thereunder, the Company hereby
agrees with the Holder as follows:
1. Registration Rights.
(a) At the conclusion of the twelfth full calendar
month following the date hereof, the Company will cause all the Common Stock
issued or issuable upon exercise of the Warrants (such Common Stock is
hereinafter referred to as the "Registrable Securities") to be included in a
registration statement on Form S-3 or to the extent not so eligible, then on
Form S-1 or other available form, all to the extent requisite to permit the sale
or other disposition by the prospective seller or sellers of the Registrable
Securities.
(b) From and after the date hereof, and prior to
the requirement of filing in (a) above, if the Company shall determine to
proceed with the actual preparation and filing of a registration statement under
the Act (the "Act") in connection with the proposed offer and sale of any of its
securities by it or any of its security holders (other than a registration
statement on Form ▇-▇, ▇-▇ or other limited purpose form), the Company will give
written notice of its determination to all record holders of (i) the Warrants
and (ii) any Registrable Securities. Upon the written request from the Holders
then holding 40% or more of the Registrable Securities (on a fully diluted
basis) within fifteen (15) days after receipt of any such notice from the
Company, the Company will, except as herein provided, cause all such Registrable
Securities for which registration is requested to be included in such
registration statement, all to the extent requisite to permit the sale or other
disposition by the prospective seller or sellers of the Registrable Securities
for which registration is requested to be so registered; provided, further, that
nothing herein shall prevent the Company from, at any time, abandoning or
delaying any registration. If any registration pursuant to this clause (b) of
Section l(b) shall be underwritten in whole or in part, the Company may require
that the Registrable Securities requested for inclusion pursuant to this Section
l(b) be included in the underwriting on the same terms and conditions as the
securities otherwise being sold through the underwriters.
The obligation of the Company under this clause (b) of Section
1 shall be limited to include Registrable Securities in two registration
statements only.
2. Registration Procedures. If and whenever the Company is
required by the provisions of Section 1 to effect the registration of
Registrable Securities under the Act, the Company will:
(a) prepare and file with the SEC a registration
statement with respect to such securities, and use its best efforts to cause
such registration statement to become and (with respect to registrations
pursuant to clause (b) of Section 1) remain effective for such period as may be
reasonably necessary to effect the sale of such securities, not to exceed six
months;
(b) (with respect to registrations pursuant to
clause (b) of Section 1) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for such period
as may be reasonably necessary to effect the sale of such securities, not to
exceed six months;
(c) (with respect to registrations pursuant to
clause (b) of Section 1) furnish to the security holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities;
(d) use its best efforts to register or qualify the
securities covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as such participating holders may reasonably
request in writing within twenty (20) days following the original filing of such
registration statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified;
(e) notify the security holders participating in
such registration, promptly after it shall receive notice thereof, of the time
when such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(f) notify such holders promptly of any request by
the SEC for the amending or supplementing of such registration statement or
prospectus or for additional information;
(g) prepare and file with the SEC, promptly upon
the request of any such holders, any amendments or supplements to such
registration statement or prospectus which, in the reasonable opinion of counsel
for such holders (and concurred in by counsel for the Company), is required
under the Act or the rules and regulations thereunder in connection with the
distribution of Common Stock by such holder;
(h) prepare and promptly file with the SEC and
promptly notify such holders of the filing of such amendment or supplement to
such registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Act, any event shall have
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances in which they were made, not misleading;
(i) advise such holders, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the SEC suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued; and
(j) If the Holder(s) elect to participate in the
underwriting and have the underwriter(s) sell their shares, upon registration,
the Holder(s) shall sign such agreements (including underwriting agreements and
lock-up agreements) as are customary in connection with such registration and
provide the Company with such information for inclusion in the registration
statement as is reasonably and customarily requested.
3. Expenses.
(a) With respect to each inclusion of Registrable
Securities in a registration statement pursuant to Section 1 hereof, all fees,
costs and expenses of and incidental to such registration, inclusion and public
offering (as specified in paragraph (b) below) in connection therewith shall be
borne by the Company, provided, however, that any security holders participating
in such registration shall bear their pro rata share of the underwriting
discount and commissions and transfer taxes.
(b) The fees, costs and expenses of registration to
be borne by the Company as provided in paragraph (a) above shall include,
without limitation, all registration, filing, and NASD fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, and all legal
fees and disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered are to
be registered and qualified (except as provided in 3(a) hereof). Fees and
disbursements of counsel and accountants for the selling security holders and
any other expenses incurred by the selling security holders not expressly
included above shall be borne by the selling security holders.
4. Indemnification.
(a) The Company will indemnify and hold harmless
each holder of Registrable Securities which are included in a registration
statement pursuant to the provisions of Section 1 hereof, its directors and
officers, and any underwriter (as defined in the Act) for such holder and each
person, if any, who controls such holder or such underwriter within the meaning
of the Act, from and against, and will reimburse such holder and each such
underwriter and controlling person with respect to, any and all loss, damage,
liability, cost and expense to which such holder or any such underwriter or
controlling person may become subject under the Act or otherwise, insofar as
such losses, damages, liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, provided, however, that the Company will not be
liable in any such case to the extent that any such loss, damage, liability,
cost or expenses arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by such holder, such underwriter or such controlling
person in writing specifically for use in the preparation thereof.
(b) Each holder of Registrable Securities included
in a registration pursuant to the provisions of Section 1 hereof will indemnify
and hold harmless the Company, its directors and officers, any controlling
person and any underwriter from and against, and will reimburse the Company, its
directors and officers, any controlling person and any underwriter with respect
to, any and all loss, damage, liability, cost or expense to which the Company or
any controlling person and/or any underwriter may become subject under the Act
or otherwise, insofar as such losses, damages, liabilities, costs or expenses
are caused by any untrue statement or alleged untrue statement of any material
fact contained in such registration statement, any prospectus contained therein
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by or on behalf of such
holder specifically for use in the preparation thereof.
5. Miscellaneous.
(a) All notices and other communications provided
for herein shall be by telex, telegraph, cable or in writing and telexed,
telecopied, telegraphed, cabled, mailed or delivered to the intended recipient
at the telephone number or "Address for Notices" specified below its name on the
signature pages hereof; or, as to any party, at such other telephone number or
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all notices and other
communications hereunder shall be deemed to have been duly given when
transmitted by telex or telecopier or delivered to the telegraph or cable
office, in each case addressed as aforesaid or personally delivered or, in the
case of a mailed notice, three (3) days after deposit in mail.
(b) Any provision of this Agreement may be mod-
ified or waived only by an instrument or instruments in writing signed by the
Company and the Holder.
(c) This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
(c) This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
(d) Captions and section headings appearing herein
are included solely for convenience of reference only and are not intended to
affect the interpretation of any provision of this Agreement.
(e) THIS AGREEMENT SHALL BE GOVERNED BY, AND CON-
STRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW JERSEY APPLICABLE TO
AGREEMENTS EXECUTED AND TO BE WHOLLY PERFORMED WITHIN THAT STATE.
(f) THE COMPANY BY ITS EXECUTION HEREOF (i) HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW
JERSEY AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT LOCATED IN
ESSEX COUNTY IN NEW JERSEY FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF AND (ii) HEREBY WAIVES TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW,
AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY
SUCH PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION
OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT
OR EXECUTION, THAT ANY SUCH PROCEEDING BROUGHT IN ONE OF THE ABOVE-NAMED COURTS
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN ONE OF THE ABOVE-NAMED COURTS IS IMPROPER, OR THAT THIS AGREEMENT OR
THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT. THE COMPANY
HEREBY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH PROCEEDING IN ANY MANNER
PERMITTED BY THE CIVIL CODE OF THE STATE OF NEW JERSEY, AND AGREES THAT SERVICE
OF PROCESS BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT ITS
ADDRESS SPECIFIED IN OR PURSUANT TO SECTION 5(a) HEREOF IS REASONABLY CALCULATED
TO GIVE ACTUAL NOTICE.
(e) Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
NETWORK IMAGING CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Title: President & CEO
Address for Notices:
Network Imaging Corporation
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Telephone No.:
Telecopier No.:
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Address for Notices:
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:
with copies to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇