Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
dated as of July 19, 1999
between
MAGELLAN HEALTH SERVICES, INC.
and
TPG MAGELLAN LLC
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT ("AGREEMENT"), dated as of July
19, 1999, by and between Magellan Health Services, Inc., a Delaware corporation
(the "COMPANY"), and TPG Magellan LLC, a Delaware limited liability company
(together with its permitted assigns, "TPG" or the "INVESTOR").
W I T N E S S E T H:
WHEREAS, the Company and the Investor have entered into an
Investment Agreement, dated as of July 19, 1999 (the "INVESTMENT AGREEMENT"),
pursuant to which the Investor has agreed to purchase from the Company, and the
Company has agreed to issue and sell to the Investor, shares of the Company's
Series A Cumulative Convertible Preferred Stock, without par value (the "SERIES
A PREFERRED STOCK"), having the rights, preferences, privileges and restrictions
set forth in the form of Certificate of Designations attached as Exhibit A to
the Investment Agreement and shares of the Company's Series B Cumulative
Convertible Preferred Stock, without par value (the "SERIES B PREFERRED STOCK"),
having the rights, preferences, privileges and restrictions set forth in the
form of Certificate of Designations attached as Exhibit B to the Investment
Agreement; and
WHEREAS, as an inducement to the Investor entering into the
Investment Agreement, the Investor has required that the Company agree, and the
Company has agreed, to provide the rights set forth in this Agreement; and
WHEREAS, the consummation of the Closing is conditioned upon,
among other things, the execution and delivery of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual premises, covenants and agreements of the parties hereto, and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
1.1. CAPITALIZED TERMS. Capitalized terms used but not defined
herein shall have the respective meanings assigned to such terms in the
Investment Agreement.
1.2. DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"ADVERSE DISCLOSURE" means public disclosure of material
non-public information, disclosure of which, in the Board's good faith judgment,
after consultation with independent outside counsel to the Company, (i) would be
required to be made in any Registration Statement filed with the SEC by the
Company so that such Registration Statement would not be materially misleading;
(ii) would not be required to be made at such time but for the filing of such
Registration Statement; and (iii) the Company has a BONA FIDE business purpose
for not disclosing publicly.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"BOARD" means the board of directors of the Company.
"COMMON STOCK" means the Company's common stock, par value
$0.25 per share.
"COMPANY" has the meaning set forth in the preamble and shall
include the Company's successors by merger, acquisition, reorganization or
otherwise.
"COMPANY PUBLIC SALE" has the meaning set forth in Section
2.3(a).
"DEMAND NOTICE" has the meaning set forth in Section 2.2(e).
"DEMAND PERIOD" has the meaning set forth in Section 2.2(d).
"DEMAND REGISTRATION" has the meaning set forth in Section
2.2(a).
"DEMAND REGISTRATION STATEMENT" has the meaning set forth in
Section 2.2(a).
"EFFECTIVENESS DATE" means the 120th day following the Closing
Date.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any successor thereto, and any rules and regulations promulgated
thereunder, all as the same shall be in effect from time to time.
"FILING DATE" means the 30th day following the Closing Date.
"HOLDER" means any holder of Registrable Securities (whether
or not acquired pursuant to the Investment Agreement) who is a party hereto or
who succeeds to rights hereunder pursuant to Section 3.5.
"INVESTMENT AGREEMENT" has the meaning set forth in the
recitals hereto.
"INVESTOR" has the meaning set forth in the preamble hereto.
"NASD" means the National Association of Securities Dealers,
Inc.
"PERSON" means any individual, firm, limited liability company
or partnership, joint venture, corporation, joint stock company, trust or
unincorporated organization, incorporated or unincorporated association,
government (or any department, agency or political subdivision thereof) or other
entity of any kind, and shall include any successor (by merger or otherwise) of
such entity.
"PIGGYBACK REGISTRATION" has the meaning set forth in Section
2.3(a).
"PROSPECTUS" means the prospectus included in any Registration
Statement, all amendments and supplements to such prospectus, including
post-effective amendments, and all other material incorporated by reference in
such prospectus.
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"REGISTRABLE SECURITIES" means any shares of Series A
Preferred Stock, any shares of Series B Preferred Stock, any shares of Common
Stock or other securities issued upon the conversion of or as a dividend with
respect to the Series A Preferred Stock or Series B Preferred Stock, any
securities of the Issuer acquired by the Investor or its Affiliates in
accordance with Section 6.01(c) or Section 8.05 of the Investment Agreement, and
any securities that may be issued or distributed or be issuable in respect of
any Registrable Securities by way of conversion, dividend, stock split or other
distribution, merger, consolidation, exchange, recapitalization or
reclassification or similar transaction; PROVIDED, HOWEVER, that any such
Registrable Securities shall cease to be Registrable Securities to the extent
(i) a Registration Statement with respect to the sale of such Registrable
Securities has been declared effective under the Securities Act and such
Registrable Securities have been disposed of in accordance with the plan of
distribution set forth in such Registration Statement, (ii) such Registrable
Securities have been distributed pursuant to Rule 144 (or any similar provisions
then in force) under the Securities Act or (iii) such Registrable Securities
shall have been otherwise transferred and new certificates for them not bearing
a legend restricting transfer under the Securities Act shall have been delivered
by the Company and such securities may be publicly resold without Registration
under the Securities Act. For purposes of this Agreement, a "class" of
Registrable Securities shall mean all securities with the same terms and a
"percentage" (or a "majority") of the Registrable Securities (or, where
applicable, of any other securities) shall be determined (x) based on the number
of shares of such securities, in the case of Registrable Securities which are
equity securities, and (y) based on the principal amount of such securities, in
the case of Registrable Securities which are debt securities.
"REGISTRATION" means a registration with the SEC of the
Company's securities for offer and sale to the public under a Registration
Statement. The term "Register" shall have a correlative meaning.
"REGISTRATION EXPENSES" has the meaning set forth in Section
2.8.
"REGISTRATION STATEMENT" means any registration statement of
the Company filed with, or to be filed with, the SEC under the rules and
regulations promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and any successor thereto, and any rules and regulations promulgated thereunder,
all as the same shall be in effect from time to time.
"SERIES A PREFERRED STOCK" has the meaning set forth in the
preamble hereto.
"SERIES B PREFERRED STOCK" has the meaning set forth in the
preamble hereto.
"SHELF PERIOD" has the meaning set forth in Section 2.1(b).
"SHELF REGISTRATION" means a Registration effected pursuant to
Section 2.1.
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"SHELF REGISTRATION STATEMENT" means a Registration Statement
of the Company filed with the SEC on Form S-3 (or any successor form or other
appropriate form under the Securities Act) for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (or any similar
rule that may be adopted by the SEC) covering the Registrable Securities, as
applicable.
"SHELF SUSPENSION" has the meaning set forth in Section
2.1(c).
"UNDERWRITTEN OFFERING" means a Registration in which
securities of the Company are sold to an underwriter or underwriters on a firm
commitment basis for reoffering to the public.
1.3. GENERAL INTERPRETIVE PRINCIPLES. Whenever used in this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and the section captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, the terms "hereof," "herein" and similar terms refer
to this Agreement as a whole (including the exhibits, schedules and disclosure
statements hereto), and references herein to Sections refer to Sections of this
Agreement.
SECTION 2. REGISTRATION RIGHTS.
2.1. SHELF REGISTRATION.
(a) FILING. The Company shall file with the SEC, on or before
the Filing Date, a Shelf Registration Statement relating to the offer and sale
of the Registrable Securities by the holders from time to time in accordance
with the methods of distribution elected by such holders, and the Company shall
use its best efforts to cause such Shelf Registration Statement to be declared
effective under the Securities Act by the Effectiveness Date. If the Company
does not qualify to file a Shelf Registration Statement under the Securities
Act, then the provisions of Section 2.2 shall apply, but at any time thereafter
that the Company does so qualify, it shall, as promptly as practicable, file a
Shelf Registration Statement and use its best efforts to cause the Shelf
Registration Statement to be declared effective.
(b) CONTINUED EFFECTIVENESS. The Company shall use its best
efforts to keep such Shelf Registration Statement continuously effective under
the Securities Act in order to permit the Prospectus forming a part thereof to
be usable by holders until the earlier of (i) the 10th anniversary of the
effectiveness of such Shelf Registration Statement, (ii) the date as of which
all the Registrable Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement (but in no event prior to
the applicable period referred to in Section 4(3) of the Securities Act and Rule
174 thereunder) and (iii) the date as of which the Investor and its Affiliates
are no longer entitled to representation on the Board under the Investment
Agreement and are permitted to freely sell their Registrable Securities under
Rule 144(k) under the Securities Act (such period of effectiveness, the "SHELF
PERIOD"). Subject to Section 2.1(c), the Company shall not be deemed to have
used its best efforts to keep the Shelf Registration Statement effective during
the Shelf Period if the Company voluntarily takes any
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action or omits to take any action that would result in holders of the
Registrable Securities covered thereby not being able to offer and sell any
Registrable Securities pursuant to such Shelf Registration Statement during the
Shelf Period, unless such action or omission is required by applicable law.
(c) SUSPENSION OF REGISTRATION. If the continued use of such
Shelf Registration Statement at any time would require the Company to make an
Adverse Disclosure, the Company may, upon giving prompt written notice of such
action to the holders, suspend use of the Shelf Registration Statement (a "SHELF
SUSPENSION"); PROVIDED, HOWEVER, that the Company shall not be permitted to
exercise a Shelf Suspension (i) more than three times during any 18-month
period, or (ii) for a period exceeding 40 days on any one occasion. In the case
of a Shelf Suspension, the holders agree to suspend use of the applicable
Prospectus in connection with any sale or purchase of, or offer to sell or
purchase, Registrable Securities, upon receipt of the notice referred to above.
The Company shall immediately notify the holders upon the termination of any
Shelf Suspension, amend or supplement the Prospectus, if necessary, so it does
not contain any untrue statement or omission therein and furnish to the holders
such numbers of copies of the Prospectus as so amended or supplemented as the
holders may reasonably request. The Company represents that, as of the date
hereof, it has no knowledge of any circumstance that would reasonably be
expected to cause it to exercise its rights under this Section 2.1(c).
(d) UNDERWRITTEN OFFERING. If the holders of not less than a
majority of any class of Registrable Securities included in any offering
pursuant to such Shelf Registration Statement so elect, such offering of
Registrable Securities shall be in the form of an Underwritten Offering, and the
Company shall amend or supplement the Shelf Registration Statement for such
purpose. The holders of a majority of the class of such Registrable Securities
included in such Underwritten Offering shall have the right to select the
managing underwriter or underwriters to administer such offering; PROVIDED that
such managing underwriter or underwriters shall be reasonably acceptable to the
Company.
2.2. DEMAND REGISTRATIONS.
(a) DEMAND BY HOLDERS. If, on or at any time after the
Effectiveness Date, the Shelf Registration Statement is not effective under the
Securities Act or is not available for use by the holders, then at any time
thereafter the holders of not less than 25% of any class of Registrable
Securities may make a written request to the Company for Registration of
Registrable Securities held by such holders and any other holders of Registrable
Securities; PROVIDED that the estimated market value or stated value of the
Registrable Securities to be so Registered is at least $10 million in the
aggregate at the time such request is made. Any such requested Registration
shall hereinafter be referred to as a "DEMAND REGISTRATION." Each request for a
Demand Registration shall specify the kind and aggregate amount of Registrable
Securities to be Registered and the intended methods of disposition thereof.
Within thirty days of a request for a Demand Registration, the Company shall
file a Registration Statement relating to such Demand Registration (a "DEMAND
REGISTRATION STATEMENT"), and shall use its best efforts to cause such Demand
Registration Statement to promptly be declared effective under the Securities
Act.
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(b) LIMITATION ON DEMAND REGISTRATIONS. Subject to Section
2.2(h), in no event shall the Company be required to effect more than 4 Demand
Registrations.
(c) DEMAND WITHDRAWAL. A holder may withdraw its Registrable
Securities from a Demand Registration at any time prior to the effectiveness of
the applicable Demand Registration Statement. If all such holders do so, the
Issuer shall cease all efforts to secure Registration and such Registration
nonetheless shall be deemed a Demand Registration for purposes of Section 2.2(b)
unless the withdrawing holders shall have paid or reimbursed the Company for all
of the reasonable out-of-pocket fees and expenses incurred by the Company in
connection with the Registration of such withdrawn Registrable Securities.
(d) EFFECTIVE REGISTRATION. The Company shall be deemed to
have effected a Demand Registration if the Demand Registration Statement is
declared effective by the SEC and remains effective for not less than 180 days
(or such shorter period as will terminate when all Registrable Securities
covered by such Demand Registration Statement have been sold or withdrawn), or
if such Registration Statement relates to an Underwritten Offering, such longer
period as in the opinion of counsel for the underwriter or underwriters a
Prospectus is required by law to be delivered in connection with sales of
Registrable Securities by an underwriter or dealer (the applicable period, the
"DEMAND PERIOD"). No Demand Registration shall be deemed to have been effected
if (i) during the Demand Period such Registration is interfered with by any stop
order, injunction or other order or requirement of the SEC or other governmental
agency or court or (ii) the conditions to closing specified in the underwriting
agreement, if any, entered into in connection with such Registration are not
satisfied by reason of a wrongful act, misrepresentation or breach of such
applicable underwriting agreement by the Company.
(e) DEMAND NOTICE. Promptly upon receipt of any request for a
Demand Registration pursuant to Section 2.2(a) (but in no event more than 5
business days thereafter), the Company shall deliver a written notice (a "DEMAND
NOTICE") of any such Registration request to all other holders of Registrable
Securities of the same class or classes to be included in such Demand
Registration, and the Company shall include in such Demand Registration all such
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 15 days after the date that the Demand
Notice has been delivered. All requests made pursuant to this Section 2.2(e)
shall specify the class and aggregate amount of Registrable Securities to be
registered and the intended method of distribution of such securities.
(f) DELAY IN FILING; SUSPENSION OF REGISTRATION. If the
filing, initial effectiveness or continued use of a Demand Registration
Statement at any time would require the Company to make an Adverse Disclosure,
the Company may, upon giving prompt written notice of such action to the
holders, delay the filing or initial effectiveness of, or suspend use of, the
Demand Registration Statement (a "DEMAND SUSPENSION"); PROVIDED, HOWEVER, that
the Company shall not be permitted to exercise a Demand Suspension (i) more than
three times during any 18-month period, or (ii) for a period exceeding 40 days
on any one occasion. In the case of a Demand Suspension, the holders agree to
suspend use of the applicable Prospectus in connection with any sale or
purchase, or offer to sell or purchase, Registrable Securities, upon receipt of
the notice referred to above. The Company shall immediately notify the holders
upon the termination of any Demand Suspension, amend or supplement the
Prospectus, if necessary, so it does not contain any untrue statement or
omission therein and furnish to the holders such
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numbers of copies of the Prospectus as so amended or supplemented as the holders
may reasonably request. The Company represents that, as of the date hereof, it
has no knowledge of any circumstance that would reasonably be expected to cause
it to exercise its rights under this Section 2.2(f).
(g) UNDERWRITTEN OFFERING. If the holders of not less than a
majority of any class of Registrable Securities requesting a Demand Registration
so elect, such offering of Registrable Securities shall be in the form of an
Underwritten Offering. The holders of a majority of the class of such
Registrable Securities included in such Underwritten Offering shall have the
right to select the underwriter or underwriters to administer the offering;
PROVIDED, that such underwriter or underwriters shall be reasonably acceptable
to the Company.
(h) PRIORITY OF SECURITIES REGISTERED PURSUANT TO DEMAND
REGISTRATIONS. If the managing underwriter or underwriters of a proposed
Underwritten Offering of a class of Registrable Securities included in a Demand
Registration (or, in the case of a Demand Registration not being underwritten,
the holders of a majority of a class of Registrable Securities included
therein), informs the holders of such class of Registrable Securities in writing
that, in its or their opinion, the number of securities of such class requested
to be included in such Demand Registration exceeds the number which can be sold
in such offering without being likely to have a significant adverse effect on
the price, timing or distribution of the securities offered or the market for
the securities offered, the number of Registrable Securities of such class to be
included in such Demand Registration shall be allocated PRO RATA among the
holders that have requested to participate in such Demand Registration on the
basis of the relative number of Registrable Securities of such class then held
by each such holder, to the extent necessary to reduce the total number of
Registrable Securities of such class to be included in such offering to the
number recommended by the managing underwriter or underwriters or such holders,
PROVIDED that any securities thereby allocated to a holder that exceed such
holder's request shall be reallocated among the remaining requesting holders in
like manner. To the extent that Registrable Securities so requested to be
registered are excluded from the offering, then the holders of such Registrable
Securities shall have the right to one additional Demand Registration under this
Section 2.2.
(i) REGISTRATION STATEMENT FORM. Registrations under this
Section 2.2 shall be on such appropriate form of the SEC (i) as shall be
selected by the Company and as shall be reasonably acceptable to the holders of
a majority of each class of Registrable Securities requesting a Demand
Registration and (ii) as shall permit the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
specified in such holders' requests for such Registration. Notwithstanding the
foregoing, if, pursuant to a Demand Registration, (x) the Company proposes to
effect Registration by filing a Registration Statement on Form S-3 (or any
successor or similar short-form registration statement), (y) such Registration
is in connection with an Underwritten Offering and (z) the managing underwriter
or underwriters shall advise the Company in writing that, in its or their
opinion, the use of another form of registration statement is of material
importance to the success of such proposed offering, then such Registration
shall be effected on such other form; PROVIDED, HOWEVER, that the holders of the
Registrable Securities registered pursuant to such Registration Statement shall
bear any incremental Registration Expenses directly associated with the use of
such other form.
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2.3. PIGGYBACK REGISTRATIONS.
(a) PARTICIPATION. If the Company at any time proposes to file
a Registration Statement under the Securities Act with respect to any offering
of its securities for its own account or for the account of any other Persons
(other than (i) a Registration under Section 2.1 or 2.2 hereof, (ii) a
Registration on Form S-4 or S-8 or any successor form to such Forms or (iii) a
Registration of securities solely relating to an offering and sale to employees
or directors of the Company pursuant to any employee stock plan or other
employee benefit plan arrangement) (a "COMPANY PUBLIC SALE"), then, as soon as
practicable (but in no event less than 45 days prior to the proposed date of
filing such Registration Statement), the Company shall give written notice of
such proposed filing to all holders of Registrable Securities that are equity
securities in the case of a Company Public Sale of equity securities or
Registrable Securities that are debt securities in the case of a Company Public
Sale of debt securities, and such notice shall offer the holders of such
Registrable Securities the opportunity to Register under such Registration
Statement such number of Registrable Securities as each such holder may request
in writing (a "PIGGYBACK REGISTRATION"). Subject to Section 2.3(b), the Company
shall include in such Registration Statement all such Registrable Securities
which are requested to be included therein within 15 days after the receipt by
such holder of any such notice; PROVIDED, HOWEVER, 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 not to Register or to
delay Registration of such securities, the Company may, at its election, give
written notice of such determination to each holder of Registrable Securities
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 therewith) 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. If the offering pursuant to such Registration Statement is to be
underwritten, then each holder making a request for a Piggyback Registration
pursuant to this Section 2.3(a) must, and the Company shall make such
arrangements with the underwriters so that each such holder may, participate in
such Underwritten Offering. If the offering pursuant to such Registration
Statement is to be on any other basis, then each holder making a request for a
Piggyback Registration pursuant to this Section 2.3(a) must, and the Company
will make such arrangements so that each such holder may, participate in such
offering on such basis. Each holder of Registrable Securities shall be permitted
to withdraw all or part of such holder's Registrable Securities from a Piggyback
Registration at any time prior to the effective date thereof.
(b) PRIORITY OF PIGGYBACK REGISTRATION. If the managing
underwriter or underwriters of any proposed Underwritten Offering of a class of
Registrable Securities included in a Piggyback Registration informs the Company
and the holders of such class of Registrable Securities in writing that, in its
or their opinion, the number of securities of such class which such holders and
any other Persons intend to include in such offering exceeds the number which
can be sold in such offering without being likely to have a significant adverse
effect on the price, timing or distribution of the securities offered or the
market for the securities offered, then the securities to be included in such
Registration shall be (i) first, 100% of the securities of such class that the
Company or (subject to Section 2.7) any Person (other than a holder of
Registrable Securities) exercising a contractual right to demand Registration,
as the case may be, proposes to
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sell, and (ii) second, and only if all the securities referred to in clause (i)
have been included, the number of Registrable Securities of such class that, in
the opinion of such managing underwriter or underwriters, can be sold without
having such adverse effect, with such number to be allocated PRO RATA among the
holders that have requested to participate in such Registration based on the
relative number of Registrable Securities of such class then held by each such
holder (PROVIDED that any securities thereby allocated to a holder that exceed
such holder's request shall be reallocated among the remaining requesting
holders in like manner) and (iii) third, and only if all of the Registrable
Securities referred to in clause (ii) have been included in such Registration,
any other securities eligible for inclusion in such Registration.
2.4. BLACK-OUT PERIODS
(a) BLACK-OUT PERIODS FOR HOLDERS. In the event of a Company
Public Sale of the Company's equity securities in an Underwritten Offering, the
holders of Registrable Securities agree, if requested by the managing
underwriter or underwriters in such Underwritten Offering, not to effect any
public sale or distribution of any securities (except, in each case, as part of
the applicable Registration, if permitted) that are the same as or similar to
those being Registered in connection with such Company Public Sale, or any
securities convertible into or exchangeable or exercisable for such securities,
during the period beginning 7 days before, and ending 90 days (or such lesser
period as may be permitted by the Company or such managing underwriter or
underwriters) after, the effective date of the Registration Statement filed in
connection with such Registration, to the extent timely notified in writing by
the Company or the managing underwriter or underwriters.
(b) BLACK-OUT PERIOD FOR THE COMPANY AND OTHERS. In the case
of a Registration of Registrable Securities pursuant to Section 2.1 or 2.2 for
an Underwritten Offering, the Company agrees, if requested by the holders of a
majority of a class of Registrable Securities to be included in such
Registration or the managing underwriter or underwriters, not to effect any
public sale or distribution of any securities which are the same as or similar
to those being Registered, or any securities convertible into or exchangeable or
exercisable for such securities, during the period beginning 7 days before, and
ending 90 days (or such lesser period as may be permitted by such holders or
such managing underwriter or underwriters) after, the effective date of the
Registration Statement filed in connection with such Registration (or, in the
case of an offering under a Shelf Registration Statement, the date of the
closing under the underwriting agreement in connection therewith), to the extent
timely notified in writing by a holder of Registrable Securities covered by such
Registration Statement or the managing underwriter or underwriters.
Notwithstanding the foregoing, the Company may effect a public sale or
distribution of securities of the type described above and during the periods
described above if such sale or distribution is made pursuant to Registrations
on Form S-4 or S-8 or any successor form to such Forms or as part of any
Registration of securities for offering and sale to employees or directors of
the Company pursuant to any employee stock plan or other employee benefit plan
arrangement. The Company agrees to use its best efforts to obtain from each
holder of restricted securities of the Company which securities are the same as
or similar to the Registrable Securities being Registered, or any restricted
securities convertible into or exchangeable or exercisable for any of such
securities, an agreement not to effect any public sale or distribution of such
securities during any such period referred to in this paragraph, except as part
of any such Registration, if permitted. Without limiting the foregoing (but
subject to
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Section 2.7), if after the date hereof the Company grants any Person (other than
a holder of Registrable Securities) any rights to demand or participate in a
Registration, the Company agrees that the agreement with respect thereto shall
include such Person's agreement to comply with this Section as if it were the
Company hereunder.
2.5. REGISTRATION PROCEDURES.
(a) In connection with the Company's Registration obligations
under Sections 2.1, 2.2 and 2.3 hereof, the Company will use its best efforts to
effect such Registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of distribution thereof as
expeditiously as reasonably practicable, and in connection therewith the Company
will:
(i) prepare the required Registration Statement including all
exhibits and financial statements required under the Securities Act to be filed
therewith, and before filing a Registration Statement or Prospectus, or any
amendments or supplements thereto, (x) furnish to the underwriters, if any, and
to the holders of the Registrable Securities covered by such Registration
Statement, copies of all documents prepared to be filed, which documents will be
subject to the review of such underwriters and such holders and their respective
counsel and (y) except in the case of a Registration under Section 2.3, not file
any Registration Statement or Prospectus or amendments or supplements thereto to
which the holders of a majority of any class of Registrable Securities covered
by such Registration Statement or the underwriters, if any, shall reasonably
object;
(ii) prepare and file with the SEC such amendments and
post-effective amendments to such Registration Statement and supplements to the
Prospectus as may be (x) reasonably requested by the holders of a majority of
any class of participating Registrable Securities, (y) reasonably requested by
any participating holder (to the extent such request relates to information
relating to such holder), or (z) necessary to keep such Registration effective
for the period of time required by this Agreement;
(iii) notify the participating holders of Registrable
Securities and the managing underwriter or underwriters, if any, and (if
requested) confirm such advice in writing and provide copies of the relevant
documents, as soon as reasonably practicable after notice thereof is received by
the Company (i) when the applicable Registration Statement or any amendment
thereto has been filed or becomes effective, when the applicable Prospectus or
any amendment or supplement to such Prospectus has been filed, (ii) of any
written comments by the SEC or any request by the SEC or any other federal or
state governmental authority for amendments or supplements to such Registration
Statement or such Prospectus or for additional information, (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of such
Registration Statement or any order preventing or suspending the use of any
preliminary or final Prospectus or the initiation or threatening of any
proceedings for such purposes, (iv) if, at any time, the representations and
warranties of the Company in any applicable underwriting agreement cease to be
true and correct and in all material respects, and (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
10
(iv) promptly notify each selling holder of Registrable
Securities and the managing underwriter or underwriters, if any, when the
Company becomes aware of the happening of any event as a result of which the
applicable Registration Statement or the Prospectus included in such
Registration Statement (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein (in the case of such Prospectus and any preliminary Prospectus, in light
of the circumstances under which they were made) not misleading or, if for any
other reason it shall be necessary during such time period to amend or
supplement such Registration Statement or Prospectus in order to comply with the
Securities Act and, in either case as promptly as reasonably practicable
thereafter, prepare and file with the SEC, and furnish without charge to the
selling holders and the managing underwriter or underwriters, if any, an
amendment or supplement to such Registration Statement or Prospectus which will
correct such statement or omission or effect such compliance;
(v) use its best efforts to prevent or obtain the withdrawal
of any stop order or other order suspending the use of any preliminary or final
Prospectus;
(vi) promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriter or
underwriters and the holders of a majority of any class of Registrable
Securities being sold agree should be included therein relating to the plan of
distribution with respect to such Registrable Securities; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
reasonably practicable after being notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment;
(vii) furnish to each selling holder of Registrable Securities
and each underwriter, if any, without charge, as many conformed copies as such
holder or underwriter may reasonably request of the applicable Registration
Statement and any amendment or post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(viii) deliver to each selling holder of Registrable
Securities and each underwriter, if any, without charge, as many copies of the
applicable Prospectus (including each preliminary prospectus) and any amendment
or supplement thereto as such holder or underwriter may reasonably request (it
being understood that the Company consents to the use of such Prospectus or any
amendment or supplement thereto by each of the selling holders of Registrable
Securities and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto) and such other documents as such selling holder or
underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities by such holder or underwriter;
(ix) on or prior to the date on which the applicable
Registration Statement is declared effective, use its reasonable best efforts to
register or qualify, and cooperate with the selling holders of Registrable
Securities, the managing underwriter or underwriters, if any, and their
respective counsel, in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or "Blue Sky"
laws of each state and other jurisdiction of the United States as any such
selling holder or managing underwriter or
11
underwriters, if any, or their respective counsel reasonably request in writing
and do any and all other acts or things reasonably necessary or advisable to
keep such registration or qualification in effect for so long as such
Registration Statement remains in effect and so as to permit the continuance of
sales and dealings in such jurisdictions for as long as may be necessary to
complete the distribution of the Registrable Securities covered by the
Registration Statement, PROVIDED that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to taxation or general
service of process in any such jurisdiction where it is not then so subject;
(x) cooperate with the selling holders of Registrable
Securities and the managing underwriter or underwriters, if any, to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends;
(xi) use its best efforts to cause the Registrable Securities
covered by the applicable 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 or the underwriter or underwriters, if
any, to consummate the disposition of such Registrable Securities;
(xii) not later than the effective date of the applicable
Registration Statement, provide a CUSIP number for all Registrable Securities
and provide the applicable transfer agent with printed certificates for the
Registrable Securities which are in a form eligible for deposit with The
Depository Trust Company;
(xiii) obtain for delivery to the holders of Registrable
Securities being registered and to the underwriter or underwriters, if any, an
opinion or opinions from counsel for the Company dated the effective date of the
Registration Statement or, in the event of an Underwritten Offering, the date of
the closing under the underwriting agreement, in customary form, scope and
substance, which counsel and opinions shall be reasonably satisfactory to such
holders or underwriters, as the case may be, and their respective counsel;
(xiv) in the case of an Underwritten Offering, obtain for
delivery to the Company and the managing underwriter or underwriters, with
copies to the holders of Registrable Securities included in such Registration, a
cold comfort letter from the Company's independent certified public accountants
in customary form and covering such matters of the type customarily covered by
cold comfort letters as the managing underwriter or underwriters reasonably
request, dated the date of execution of the underwriting agreement and brought
down to the closing under the underwriting agreement;
(xv) cooperate with each seller of Registrable Securities and
each underwriter, if any, participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD;
(xvi) use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC and make generally available to its
security holders, as soon as reasonably practicable (but not more than 15
months) after the effective date of the applicable Registration Statement, an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act and the rules and regulations promulgated thereunder;
12
(xvii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by the applicable Registration
Statement from and after a date not later than the effective date of such
Registration Statement;
(xviii) cause all Registrable Securities covered by the
applicable Registration Statement to be listed on each securities exchange on
which any of the Company's securities are then listed or quoted and on each
inter-dealer quotation system on which any of the Company's securities are then
quoted;
(xix) make available upon reasonable notice at reasonable
times and for reasonable periods for inspection by a representative appointed by
the majority of the holders of each class of Registrable Securities covered by
the applicable Registration Statement, by any underwriter participating in any
disposition to be effected pursuant to such Registration Statement and by any
attorney, accountant or other agent retained by such holders or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company's
officers, directors and employees and the independent public accountants who
have certified its financial statements to make themselves available to discuss
the business of the Company and to supply all information reasonably requested
by any such Person in connection with such Registration Statement as shall be
necessary to enable them to exercise their due diligence responsibility; and
(xx) in the case of an Underwritten Offering, cause the senior
executive officers of the Company to participate in the customary "road show"
presentations that may be reasonably requested by the managing underwriter or
underwriters in any such Underwritten Offering and otherwise to facilitate,
cooperate with, and participate in each proposed offering contemplated herein
and customary selling efforts related thereto.
(b) 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 and such
other information relating to such holder and its ownership of Registrable
Securities as the Company may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees to furnish such information to the
Company and to cooperate with the Company as reasonably necessary to enable the
Company to comply with the provisions of this Agreement.
(c) Each holder of Registrable Securities agrees by
acquisition of such Registrable Securities that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
2.5(a)(iv) hereof, such holder will forthwith discontinue disposition of
Registrable Securities pursuant to such Registration Statement until such
holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 2.5(a)(iv) hereof, or until such holder is advised in
writing by the Company that the use of the Prospectus may be resumed, and if so
directed by the Company, such holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period during which the applicable Registration
Statement is required to be maintained effective shall be extended by the number
of days during the period from and including the date of the giving of
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such notice to and including the date when each seller of Registrable Securities
covered by such Registration Statement either receives the copies of the
supplemented or amended Prospectus contemplated by Section 2.5(a)(iv) hereof or
is advised in writing by the Company that the use of the Prospectus may be
resumed.
(d) Holders may seek to register different types of
Registrable Securities and different classes of the same type of Registrable
Securities simultaneously and the Company shall use its best efforts to effect
such Registration and sale in accordance with the intended method or methods of
disposition specified by such holders.
2.6. UNDERWRITTEN OFFERINGS.
(a) UNDERWRITING AGREEMENTS. If requested by the underwriters
for any Underwritten Offering requested by holders of Registrable Securities
pursuant to a Registration under Section 2.1 or Section 2.2, the Company shall
enter into an underwriting agreement with such underwriters for such offering,
such agreement to be reasonably satisfactory in substance and form to the
Company, holders of a majority of each class of the Registrable Securities to be
included in such Underwritten Offering, and the underwriters. Such agreement
shall contain such representations and warranties by the Company and such other
terms as are generally prevailing in agreements of that type, including, without
limitation, indemnities no less favorable to the recipient thereof than those
provided in Section 2.9. The holders of any Registrable Securities to be
included in any Underwritten Offering by such underwriters shall enter into such
underwriting agreement at the request of the Company. 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 such holders and any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement shall be conditions
precedent to the obligations of such holders. No holder shall be required in any
such underwriting agreement to make any representations or warranties to, or
agreements with, the Company or the underwriters other than representations,
warranties or agreements regarding such holder, such holder's Registrable
Securities, such holder's intended method of distribution and any
representations required by law.
(b) PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any Underwritten Offering hereunder unless such Person (i) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Persons entitled to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
2.7. NO INCONSISTENT AGREEMENTS; ADDITIONAL RIGHTS. The
Company will not hereafter enter into, and is not currently a party to, any
agreement with respect to its securities which is inconsistent with the rights
granted to the holders of Registrable Securities by this Agreement.
14
2.8. REGISTRATION EXPENSES.
EXPENSES PAID BY COMPANY. All expenses incident to the
Company's performance of or compliance with this Agreement will be paid by the
Company, including, without limitation, (i) all registration and filing fees,
and any other fees and expenses associated with filings required to be made with
the SEC or the NASD, (ii) all fees and expenses in connection with compliance
with state securities or "Blue Sky" laws, (iii) all printing, duplicating, word
processing, messenger, telephone, facsimile and delivery expenses (including
expenses of printing certificates for the Registrable Securities in a form
eligible for deposit with The Depository Trust Company and of printing
prospectuses), (iv) all fees and disbursements of counsel for the Company and of
all independent certified public accountants of the Company (including the
expenses of any special audit and cold comfort letters required by or incident
to such performance), (v) Securities Act liability insurance or similar
insurance if the Company so desires or the underwriters so require in accordance
with then-customary underwriting practice, (vi) all fees and expenses incurred
in connection with the listing of the Registrable Securities on any securities
exchange or quotation of the Registrable Securities on any inter-dealer
quotation system, (vii) all applicable rating agency fees with respect to the
Registrable Securities, (viii) all reasonable fees and disbursements of one law
firm or other counsel selected by the holders of a majority of the Registrable
Securities being registered, (ix) all fees and expenses of one firm of
accountants selected by the holders of a majority of the Registrable Securities
being registered, (x) any reasonable fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, (xi) all fees and expenses
of any special experts or other Persons retained by the Company in connection
with any Registration, and (xii) all of the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties). All such expenses are referred
to herein as "REGISTRATION EXPENSES." The Company shall not be required to pay
any fees and disbursements of underwriters not customarily paid by the issuers
of securities, including underwriting discounts and commissions and transfer
taxes, if any, attributable to the sale of Registrable Securities.
2.9. INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, each holder of
Registrable Securities, its Affiliates and their respective officers, directors,
shareholders, employees, advisors, and agents and each Person who controls
(within the meaning of the Securities Act or the Exchange Act) such Persons from
and against any and all losses, claims, damages, liabilities (or actions or
proceedings in respect thereof, whether or not such indemnified party is a party
thereto) and expenses, joint or several (including reasonable costs of
investigation and legal expenses) (each, a "LOSS" and collectively "LOSSES")
arising out of or based upon (i) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement under which such
Registrable Securities were Registered under the Securities Act (including any
final, preliminary or summary Prospectus contained therein or any amendment
thereof or supplement thereto or any documents incorporated by reference
therein), or (ii) any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
(in the case of a Prospectus or preliminary Prospectus, in light of the
circumstances under which they were made) not misleading; PROVIDED, HOWEVER,
that the Company shall not be liable to any particular indemnified party in any
such case to the extent that any such Loss arises out of
15
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by such indemnified
party expressly for use in the preparation thereof. This indemnity shall be in
addition to any liability the Company may otherwise have. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such holder or any indemnified party and shall survive the transfer of
such securities by such holder. The Company will also indemnify underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (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 indemnified parties.
(b) INDEMNIFICATION BY THE SELLING HOLDER OF REGISTRABLE
SECURITIES. Each selling holder of Registrable Securities agrees (severally and
not jointly) to indemnify and hold harmless, to the full extent permitted by
law, the Company, its directors and officers and each Person who controls the
Company (within the meaning of the Securities Act and the Exchange Act) from and
against any Losses resulting from any untrue statement of a material fact or any
omission of a material fact required to be stated in the Registration Statement
under which such Registrable Securities were Registered under the Securities Act
(including any final, preliminary or summary Prospectus contained therein or any
amendment thereof or supplement thereto or any documents incorporated by
reference therein), or necessary to make the statements therein (in the case of
a Prospectus or preliminary Prospectus, in light of the circumstances under
which they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission is contained in any information furnished
in writing by such selling holder to the Company specifically for inclusion in
such Registration Statement and has not been corrected in a subsequent writing
prior to or concurrently with the sale of the Registrable Securities to the
Person asserting such loss, claim, damage, liability or expense. In no event
shall the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the proceeds received by such holder
under the sale of the Registrable Securities giving rise to such indemnification
obligation. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above (with appropriate modification) with respect to information so furnished
in writing by such Persons specifically for inclusion in any Prospectus or
Registration Statement. Each holder also shall indemnify any underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the
Company.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(PROVIDED, that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it is actually and materially prejudiced by reason of such delay
or failure) and (ii) permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
PROVIDED, HOWEVER, that any Person entitled to indemnification hereunder shall
have the right to select and employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
16
expense of such Person unless (i) the indemnifying party has agreed in writing
to pay such fees or expenses, (ii) the indemnifying party shall have failed to
assume the defense of such claim within a reasonable time after receipt of
notice of such claim from the Person entitled to indemnification hereunder and
employ counsel reasonably satisfactory to such Person, (iii) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, or (iv) in the
reasonable judgment of any such Person, based upon advice of its counsel, a
conflict of interest may exist between such Person and the indemnifying party
with respect to such claims (in which case, if the Person notifies the
indemnifying party in writing that such Person 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 claim on behalf of such Person). If such
defense is not assumed by the indemnifying party, the indemnifying party will
not be subject to any liability for any settlement made without its consent, but
such consent may not be unreasonably withheld; PROVIDED, that an indemnifying
party shall not be required to consent to any settlement involving the
imposition of equitable remedies or involving the imposition of any material
obligations on such indemnifying party other than financial obligations for
which such indemnified party will be indemnified hereunder. If the indemnifying
party assumes the defense, the indemnifying party shall not have the right to
settle such action without the consent of the indemnified party. No indemnifying
party shall consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of an unconditional release from all
liability in respect to such claim or litigation. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time from all such indemnified party or
parties unless (x) the employment of more than one counsel has been authorized
in writing by the indemnified party or parties, (y) an indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it that are different from or in addition to those
available to the other indemnified parties or (z) a conflict or potential
conflict exists or may exist (based on advice of counsel to an indemnified
party) between such indemnified party and the other indemnified parties, in each
of which cases the indemnifying party shall be obligated to pay the reasonable
fees and expenses of such additional counsel or counsels.
(d) CONTRIBUTION. If for any reason the indemnification
provided for in paragraphs (a) and (b) of this Section 2.9 is unavailable to an
indemnified party or insufficient to hold it harmless as contemplated by
paragraphs (a) and (b) of this Section 2.9, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such Loss in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the indemnified party on the other.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. Notwithstanding anything in this
Section 2.9(d) to the contrary, no indemnifying party (other than the Company)
shall be required pursuant to this Section 2.9(d) to
17
contribute any amount in excess of the amount by which the net proceeds received
by such indemnifying party from the sale of Registrable Securities in the
offering to which the Losses of the indemnified parties relate exceeds the
amount of any damages which such indemnifying party has otherwise been required
to pay by reason of such untrue statement or omission. The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section
2.9(d) were determined by PRO RATA allocation or by any other method of
allocation that 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 who was not guilty of such
fraudulent misrepresentation. If indemnification is available under this Section
2.9, the indemnifying parties shall indemnify each indemnified party to the full
extent provided in Sections 2.9(a) and 2.9(b) hereof without regard to the
relative fault of said indemnifying parties or indemnified party.
2.10. RULES 144 AND 144A. The Company covenants that it will
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if
the Company is not required to file such reports, it will, upon the request of
any holder of Registrable Securities, make publicly available such necessary
information for so long as necessary to permit sales pursuant to Rules 144, 144A
or Regulation S under the Securities Act), and it will take such further action
as any holder of Registrable Securities may reasonably request, all to the
extent required from time to time to enable such holder to sell Registrable
Securities without Registration under the Securities Act within the limitation
of the exemptions provided by (i) Rules 144, 144A or Regulation S under the
Securities Act, as such Rules may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of any
holder of Registrable Securities, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements and, if
not, the specifics thereof.
SECTION 3. MISCELLANEOUS.
3.1. TERM. This Agreement shall terminate upon the expiration
of the Shelf Period, except for the provisions of Sections 2.9 and 2.10 and all
of this Section 3, which shall survive any such termination.
3.2. INJUNCTIVE RELIEF. It is hereby agreed and acknowledged
that it will be impossible to measure in money the damage that would be suffered
if the parties fail to comply with any of the obligations herein imposed on them
and that in the event of any such failure, an aggrieved Person will be
irreparably damaged and will not have an adequate remedy at law. Any such Person
shall, therefore, be entitled (in addition to any other remedy to which it may
be entitled in law or in equity) to injunctive relief, including, without
limitation, specific performance, to enforce such obligations, and if any action
should be brought in equity to enforce any of the provisions of this Agreement,
none of the parties hereto shall raise the defense that there is an adequate
remedy at law.
3.3. 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
18
successful party shall, to the extent permitted by applicable law, be entitled
to recover reasonable attorneys' fees in addition to any other available remedy.
3.4. NOTICES. All notices, other communications or documents
provided for or permitted to be given hereunder, shall be made in writing and
shall be given either personally by hand-delivery, by facsimile transmission, by
mailing the same in a sealed envelope, registered first-class mail, postage
prepaid, return receipt requested, or by air courier guaranteeing overnight
delivery:
(a) if to the Company:
Magellan Health Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
with copies to:
King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(b) if to the Investor:
TPG Magellan LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with copies to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Each holder, by written notice given to the Company in
accordance with this Section 3.4 may change the address to which notices, other
communications or documents are to be sent to such holder. All notices, other
communications or documents shall be deemed to have been duly given: (i) at the
time delivered by hand, if personally delivered; (ii) when receipt is
acknowledged in writing by addressee, if by facsimile transmission; (iii) five
business days after being deposited in the mail, postage prepaid, if mailed by
first class mail; and (iv) on the first
19
business day with respect to which a reputable air courier guarantees delivery;
PROVIDED, HOWEVER, that notices of a change of address shall be effective only
upon receipt.
3.5. SUCCESSORS, ASSIGNS AND TRANSFEREES. (a) The registration
rights of any holder under this Agreement with respect to any Registrable
Securities may be transferred and assigned, PROVIDED that, other than an
assignment to the Investor or an Affiliate of the Investor, a Designated
Purchaser or an Affiliate of a Designated Purchaser, no such assignment shall be
binding upon or obligate the Company to any such assignee unless and until the
Company shall have received notice of such assignment as herein provided and a
written agreement of the assignee to be bound by the provisions of this
Agreement.
(b) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto, and their respective successors and permitted
assigns. Whether or not any express assignment shall have been made, the
provisions of this Agreement which are for the benefit of the parties hereto
other than the Company shall also be for the benefit of and enforceable by any
subsequent holder of Registrable Securities, subject to the provisions contained
herein.
3.6. GOVERNING LAW; SERVICE OF PROCESS; CONSENT TO
JURISDICTION. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED WITHIN THE STATE, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
(b) To the fullest extent permitted by applicable law, each
party hereto (i) agrees that any claim, action or proceeding by such party
seeking any relief whatsoever arising out of, or in connection with, this
Agreement or the transactions contemplated hereby shall be brought only in the
United States District Court for the Southern District of New York and in any
New York State court located in the Borough of Manhattan and not in any other
State or Federal court in the United States of America or any court in any other
country, (ii) agrees to submit to the exclusive jurisdiction of such courts
located in the State of New York for purposes of all legal proceedings arising
out of, or in connection with, this Agreement or the transactions contemplated
hereby, and (iii) irrevocably waives any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
3.7. HEADINGS. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
3.8. SEVERABILITY. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained therein.
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3.9. AMENDMENT; WAIVER.
(a) This Agreement may not be amended or modified and waivers
and consents to departures from the provisions hereof may not be given, except
by an instrument or instruments in writing making specific reference to this
Agreement and signed by the Company, the holders of a majority of Registrable
Securities then outstanding and, so long as it is a holder, the Investor. Each
holder of any Registrable Securities at the time or thereafter outstanding shall
be bound by any amendment, modification, waiver or consent authorized by this
Section 3.9(a), whether or not such Registrable Securities shall have been
marked accordingly.
(b) The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. Except as otherwise expressly provided herein, no failure on the part of
any party to exercise, and no delay in exercising, any right, power or remedy
hereunder, or otherwise available in respect hereof at law or in equity, shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
3.10. COUNTERPARTS. This Agreement may be executed in any
number of separate 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 together shall constitute one and the same agreement.
3.11. EFFECTIVENESS. The provisions of this Agreement shall
take effect upon the occurrence of the Closing (as such term is defined in the
Investment Agreement) without further action by or on behalf of any party
hereto, and other than this Section 3.11 shall have no force or effect prior to
the Closing. This Agreement shall terminate and be of no further force and
effect upon the termination of the Investment Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed as of the date first written above.
MAGELLAN HEALTH SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
TPG MAGELLAN LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President