EXHIBIT 10.3
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REGISTRATION RIGHTS AGREEMENT
Dated as of February 23, 2000
by and among
Optika Inc.
the Founders and Investors described herein
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners, L.P.
TWP CEO Founders' Circle (AI), L.P.
TWP CEO Founders' Circle (QP), ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners Employee Fund, L.P.
TWP 2000 Co-Investment Fund, L.P.
and
RKB Capital, L.P.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of February 23, 2000 (this
"Agreement"), by and between Optika Inc., a Delaware corporation (the
"Company"), the holders of Founders Shares and Investors Shares listed on the
signature pages hereto, and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners, L.P., TWP CEO
Founders' Circle (AI), L.P., TWP CEO Founders' Circle (QP), L.P., ▇▇▇▇▇▇ ▇▇▇▇▇▇
Capital Partners Employee Fund, L.P., RKB Capital, L.P. and TWP 2000 Co-
Investment Fund, L.P., as purchasers (together, the "Purchasers", and
individually, each a "Purchaser").
WHEREAS, the Company proposes to issue and sell (i) an aggregate of 731,851
shares of Series A Convertible Preferred Stock, par value $0.001 per share (the
"Preferred Stock") of the Company, the terms of which are set forth in the
Certificate of Designation in the form of Exhibit 2.2 to the Purchase Agreement
(as defined below) and (ii) warrants (the "Warrants"; and, together with the
Preferred Stock, the "Securities") to purchase an aggregate of 307,298 shares of
the Company's Common Stock, par value $0.001 per share (the "Common Stock"), the
terms of which are set forth in the Warrant Agreement attached in the form of
Exhibit 1.2(b) to the Purchase Agreement;
WHEREAS, as an inducement to the Purchasers to enter into the Purchase
Agreement, and as a condition to the closing of the transactions contemplated
thereby, the Company agreed to provide the Purchasers with registration rights;
WHEREAS, the Company has previously entered into that certain Amended and
Restated Registration Agreement, dated November 22, 1995, as amended by the
First Amendment thereto dated May 6, 1996 (as so amended, the "Existing
Registration Agreement") pursuant to which the Company has granted to the
holders of Founders' Shares (the "Founders") and the holders of Investors'
Shares (the "Investors") certain registration rights on the terms set forth
herein;
WHEREAS, the Company and the Founders and the Investors who are, or may
after the date hereof become, parties to the Agreement wish to effect an
amendment and restatement of their respective rights and obligations under the
Existing Registration Agreement so that, upon the effectiveness of such
amendment at the Effective Date as set forth in Section 12(m) of this Agreement
(i) the Existing Registration Agreement will terminate and be of no further
force and effect; and (ii) all of the registration rights of the Founders and
the Investors (whether or not signatories hereto) will thereafter be governed
solely by this Agreement;
NOW, THEREFORE, the parties agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms shall have the
following respective meanings:
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The term "broker-dealer" shall mean any broker or dealer registered
with the Commission under the Exchange Act.
"Closing" shall mean the date of the closing of the issuance and sale
of Securities pursuant to the Purchase Agreement.
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute for
the particular purpose.
"Common Stock" shall have the meaning assigned thereto in the recitals
to this Agreement and shall include any equity securities issued with
respect to the Common Stock in connection with any recapitalization,
reclassification, merger, consolidation or other reorganization.
"Company" shall have the meaning assigned thereto in the first
paragraph of this Agreement.
"Controlling Person" shall have the meaning assigned thereto in
Section 8(a) hereof.
"Demand Exercise Notice" shall have meaning assigned thereto in
Section 2(a) hereof.
"Demand Registration" shall have meaning assigned thereto in Section
2(a) hereof.
"Demand Registration Request" shall have the meaning assigned thereto
in Section 2(a) hereof.
"Demand Registration Statement" shall have the meaning assigned
thereto in Section 2(a) hereof.
"Effective Time" shall mean, in the case of (i) a Registration, the
time and date as of which the Commission declares the related Registration
Statement effective or as of which the related Registration Statement
otherwise becomes effective; and (iii) a Market Making Registration, the
time and date as of which the Commission declares the Market Making
Registration Statement effective or as of which time the Market Making
Registration otherwise becomes effective.
"Electing Holder" shall mean any holder of Registrable Shares, as
applicable, that has returned a completed and signed Notice and
Questionnaire to the Company in accordance with Sections 5(a)(ii) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.
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"Existing Registration Agreement" shall have the same meaning set
forth in the recitals hereto.
"Founders" shall have the meaning assigned thereto in the recitals
hereto.
"Founders' Shares" shall mean at any time (i) the shares of Common
Stock owned by each of the persons listed as a "Founder" on Schedule A
hereto; (ii) with respect to shares of Common Stock previously held by a
Founder, a transferee of such Founder who consents to be bound by this
Agreement; (iii) any shares of Common Stock then outstanding that were
issued upon exercise of the options held by such Founder; (iv) any shares
of Common Stock then issuable upon exercise of the options held by such
Founder; (v) any shares of Common Stock then outstanding which were issued
as, or were issued directly or indirectly upon the conversion or exercise
of other securities issued as, a dividend or other distribution with
respect to or in replacement of other Founders' shares and (vi) any shares
of Common Stock then issuable directly or indirectly upon the conversion or
exercise of other securities which were issued as a dividend or other
distribution with respect to or in replacement of other Founders' Shares;
provided, that Founders' Shares shall not include any shares the sale of
which has been registered pursuant to the Securities Act or sold to the
public pursuant to Rule 144 promulgated by the Commission under the
Securities Act. For purposes of this Agreement, a Person will be deemed to
be a holder of Founders' Shares whenever such Person holds a security
exercisable for or convertible into such Founders' Shares, whether or not
such exercise or conversion has actually been effected.
The term "holder" shall mean each of the Purchasers and other Persons
who acquire Registrable Shares from time to time (including any successors
or assigns), in each case for so long as such Person owns any Registrable
Shares.
"Indemnified Person" shall have the meaning assigned thereto in
Sections 8(a) and 8(b).
"Initiating Holders" shall have the meaning assigned thereto in
Section 2(a) hereof.
"Investors" shall have the meaning assigned thereto in the recitals
hereto.
"Investors' Shares" shall mean, at any time (i) the shares of Common
Stock owned by each of the persons listed as an "Investor" on Schedule B
hereto; (ii) shares of Common Stock acquired by an Investor from a Founder;
(iii) any shares of Common Stock then outstanding which were issued as, or
were issued directly or indirectly upon the conversion or exercise of other
securities issued as, a dividend or other distribution with respect to or
in replacement of other Investors' Shares; and (iv) any shares of Common
Stock then issuable directly or indirectly upon the conversion or exercise
of other securities which were issued as a dividend or other distribution
with respect to or in replacement of other Investors' Shares; provided,
that Investors' Shares shall not include any shares the sale of which has
been registered pursuant to the Securities Act or sold to
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the public pursuant to Rule 144 promulgated by the Commission under the
Securities Act. For purposes of this Agreement, a person will be deemed to
be a Holder of Investors' Shares whenever such Person holds a security
exercisable for or convertible into such Investors' Shares whether or not
such exercise or conversion has actually been effected.
"Majority Electing Holders" means, the holders of a majority in the
number of shares of Common Stock elected to be included under such
Registration Statement by the Electing Holders.
"Market Making Period" shall have the meaning assigned thereto in
Section 4(a) hereof.
"Market Making Prospectus" shall mean the prospectus included in the
Market Making Registration Statement relating to offers and sales of Market
Making Securities by TWP in secondary transactions.
"Market Making Registration" shall mean the registration of Market
Making Securities in connection with offers and sales thereof by TWP in
secondary transactions.
"Market Making Registration Statement" shall mean a shelf registration
statement on Form S-3 or other short form registration statement (which may
be the Registration Statement if permitted by the rules and regulations of
the Commission) pursuant to Rule 415 under the Securities Act or any
similar rule that may be adopted by the Commission providing for the
registration of, and the sale on a continuous or delayed basis in secondary
transactions by TWP of, the Market Making Securities.
"Market Making Request Date" shall have the meaning assigned thereto
in Section 5(a) hereof.
"Market Making Securities" shall mean any of the Common Stock issued
by the Company.
"NASD" shall have the meaning assigned thereto in Section 5(a)(xvii)
hereof.
"Notice and Questionnaire" means a Notice of Registration Statement
Selling Securityholder Questionnaire customary in form and substance and
for such a Registration.
"Person" shall mean a corporation, association, partnership, limited
liability company, trust, organization, business, individual, government or
political subdivision thereof or governmental agency or any other entity.
"Piggyback Registration" shall have the meaning assigned thereto in
Section 3(a) hereof.
"Piggyback Registration Statement" shall have the meaning assigned
thereto in Section 3(a) hereof.
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"Purchase Agreement" shall mean the Securities Purchase Agreement,
dated as of February 9, 2000, between the Company and the Purchasers.
"Purchasers" shall have the meaning assigned thereto in recitals to
this Agreement.
"Registrable Shares" shall mean, at any time, (A) the Founders'
Shares, (B) the Investors' Shares and (C) the shares of Common Stock into
or for which the Securities are than convertible or exchangeable, as the
case may be; provided, however, that any such shares of Common Stock
referred to in clauses (A) through (C) above shall cease to be Registrable
Shares when (i) in the circumstances contemplated by Section 2 (other than
Section 2(f)) or Section 3, a Demand Registration Statement or a Piggyback
Registration Statement registering such shares of Common Stock under the
Securities Act has been declared or becomes effective and such shares of
Common Stock shall have been sold or otherwise transferred by the holder
thereof pursuant to and in a manner contemplated by such effective
Registration Statement; or (ii) the Founders' Shares, the Investors' Shares
or the shares of Common Stock underlying the Founders Shares, the Investors
Shares and the Securities is sold pursuant to Rule 144 or Rule 144A under
circumstances in which any legend borne by such Common Stock relating to
restrictions on transferability thereof, under the Securities Act or
otherwise, is removed by the Company or pursuant to the Warrant Agreement.
"Registration Expenses" shall have the meaning assigned thereto in
Section 6 hereof.
"Requisite Holders" means Requisite Investor Holders or Requisite
Purchaser Holders as the context may require.
"Requisite Investor Holders" means the holders of Investors' Shares
representing at least 70% of the total number of Investors' Shares then
outstanding.
"Requisite Purchaser Holders" means the holders of Securities
representing or covering on conversion or exercise, in the aggregate, 25%
or more of the total number of shares of Common Stock issuable on
conversion or exercise of the Securities at the Closing.
"Registration" shall have the meaning assigned thereto in Section 3(a)
hereof.
"Registration Statements" shall have the meaning assigned thereto in
Section 3(a) hereof.
"Rule 144," "Rule 144A", "Rule 405" and "Rule 415" shall mean, in each
case, such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.
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"Secondary Offer Registration Statement" shall mean (i) any
Registration Statement required to be filed by the Company pursuant to
Section 2 or 3 hereof, and/or (ii) the Market Making Registration Statement
required to be filed by the Company pursuant to Section 4 hereof, in each
case, as applicable. As used herein, references to a Secondary Offer
Registration Statement in the singular shall, if applicable, be deemed to
be in the plural.
"Securities" shall have the meaning assigned thereto in the recitals
to this Agreement.
"Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
"TWP" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners Group LLC and its affiliates.
"Underwriters' Representative" shall mean the managing underwriter,
or, in the case of a co-managed underwriting, the managing underwriter
designated as the Underwriters' Representative by the co-managers.
"Warrants" shall have the meaning assigned thereto in the recitals to
this Agreement.
Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this
Agreement, and the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision.
Section 2. Demand Registration of the Registrable Shares under the
Securities Act.
(a) If either the Requisite Investors Holders or the Requisite Purchaser
Holders shall at any time make a written request (a "Demand Registration
Request") to the Company in compliance with this Section 2, the Company shall
cause to be filed with the Commission a registration statement (a "Demand
Registration Statement") under the Securities Act covering all or any part of
the Registrable Shares (a "Demand Registration"), as such holders (the
"Initiating Holders") shall request in writing.
(i) Any request made pursuant to this Section 2(a) by Requisite
Purchaser Holders shall be addressed to the attention of the Secretary of the
Company, and shall specify the number of Registrable Shares to be registered
(which shall result in gross proceeds of not less than $10,000,000, assuming no
reduction in the number of Registrable Shares that may be included in such
Demand Registration pursuant to Section 2(e)); provided, however, that the
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holders of the Registrable Shares (other than Founders' Shares or Investors'
Shares) may request registration of any amount of such Registrable Shares where
such holders request registration of all of the remaining such Registrable
Shares, the intended method of distribution thereof and that the request is for
a Demand Registration pursuant to this Section 2(a).
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(ii) Any request made pursuant to this Section 2(a) by the Requisite
Investor Holders shall be addressed to the Company, and shall specify the number
of Restricted Shares to be registered (which shall result in gross proceeds of
not less than (x) $750,000 if the Registration is required to be effected on
Form S-1 or any similarly long-form registration statement under the Securities
Act (a "Long-Form Registration") or (y) $250,000 if the Registration may be
effected on Form S-2 or S-3 or any similar short-form registration statement
under the Securities Act (a "Short-Form Registration").
(iii) As promptly as practicable, but no later than ten days after
receipt of a Demand Registration Request, the Company shall give written notice
(the "Demand Exercise Notice") of such Demand Registration Request to all
holders of Registrable Shares. Following a request for a Demand Registration,
the Company shall include in a Demand Registration (x) the Registrable Shares of
the Initiating Holders and (y) the Registrable Shares of any other holders of
Registrable Shares who shall have made a written request to the Company for
inclusion in such registration (which request shall specify the maximum number
of Registrable Shares intended to be disposed of by such holder) within 30 days
after the receipt of the Demand Exercise Notice. The Company shall, as
expeditiously as possible, use its best efforts to effect such registration
under the Securities Act (including, without limitation, by means of a shelf
registration pursuant to Rule 415 under the Securities Act if so requested and
if the Company is then eligible to use such registration) of the Registrable
Shares which the Company has been so requested to register, for distribution in
accordance with such intended method of distribution by the holders electing to
include Registrable Shares therein.
(b) Following receipt of a request for a Demand Registration, the Company
shall:
(i) file the Demand Registration Statement with the Commission as
promptly as reasonably practicable, and, subject to Section 2(a), shall use
all reasonable efforts to have the Demand Registration Statement declared
effective under the Securities Act as soon as reasonably practicable, in
each instance giving due regard to the need to prepare current financial
statements, conduct due diligence and complete other actions that are
reasonably necessary to effect a registered public offering; and
(ii) use all reasonable efforts to keep the relevant registration
statement continuously effective, for up to 180 days or until such earlier
date as of which all the Registrable Shares under the Demand Registration
Statement shall have been disposed of in the manner described in the
Registration Statement, or such longer period as in the judgment of counsel
for the underwriters a prospectus is required by law to be delivered in
connection with sales of Registrable Shares by an underwriter or dealer in
accordance with the plan of distribution included in such Demand
Registration Statement; provided, however, that such obligation to
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maintain the continuous effectiveness of the registration statement shall
not apply if such registration statement is on Form S-1 or an equivalent
form which does not permit incorporation by reference.
(c) (i) The Company shall not be obligated to effect more than three
Demand Registrations by Requisite Purchaser Holders pursuant to Section 2(a)
which are Long-Form Registration; provided that the Company shall be obligated
to effect an unlimited number of
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Demand Registrations by the Requisite Purchaser Holders pursuant to Section 2(c)
which are Short-Form Registrations. For purposes of the preceding sentence, a
Demand Registration shall not be deemed to have been effected (i) unless a
Demand Registration Statement with respect thereto has become effective, (ii) if
after such Demand Registration Statement has become effective, such Demand
Registration Statement or the related offer, sale or distribution of Registrable
Shares thereunder is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court for
any reason not attributable to the holder of the Registrable Shares and such
interference is not thereafter eliminated or (iii) if the conditions to closing
specified in any underwriting agreement entered into in connection with such
registration are not satisfied or waived, other than by reason of a failure on
the part of the holder of the Registrable Shares. If the Company shall have
complied with its obligations under this Agreement, a right to demand a
registration pursuant to this Section 2 shall be deemed to have been satisfied
upon the earlier of (x) the date as of which all of the Registrable Shares
included therein shall have been distributed pursuant to the Registration
Statement, and (y) the date as of which such Demand Registration shall have been
continuously effective for a 180-day period or other period specified in Section
2(b)(ii) following the effectiveness of such Demand Registration Statement,
provided no stop order or similar order, or proceedings for such an order, is
thereafter entered or initiated.
(ii) (x) The holders of Investors' Shares may request two Long-Form
Demand Registrations pursuant to paragraph 2(a) for which the Company will pay
all Registration Expenses. A registration will not count as a Long-Form Demand
Registration under this paragraph (x) until it has become effective and will not
count as a Long-Form Demand Registration under this paragraph (i) unless the
Holders of Investors' Shares initially requesting such registration are able to
register and sell at least 50% of the Registrable Shares requested to be
included in such registration; provided that in any event the Company will pay
all Registration Expenses in connection with any such registration initiated as
a Long-Form Demand Registration.
(y) In addition to the rights provided by paragraph (x) of this
Section 2(c), if the number of prior Long-Form Demand Registrations pursuant to
such paragraph (x) equals two, the holders of Investors' Shares shall be
entitled to request pursuant to paragraph 2(a) an unlimited number of additional
Long-Form Demand Registrations provided that the holders of securities to be
registered thereunder agree to pay their pro rata share (as determined in
accordance with the number of shares requested to be registered in such
registration) of all associated Registration Expenses in connection with such
registration, whether or not such registration becomes effective.
Notwithstanding the terms of the preceding sentence, if the failure of a
registration initiated pursuant to this paragraph (y) to become effective is the
result of a breach by the Company of any of its obligations under this
Agreement, the Company shall pay all Registration Expenses in connection with
such registration.
(z) In addition to the Long-Form Demand Registrations that may
be requested pursuant to Section 2(a), the holders of Investors' Shares will be
entitled to request pursuant to paragraph 2(a) an unlimited number of Short-Form
Demand Registrations. The Corporation will pay all Registration Expenses
incurred in connection with such registration if
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the aggregate offering value of all Registrable Shares requested to be
registered in such registration pursuant to Section 2(a) is reasonably expected
to equal at least $750,000, whether or not such registration becomes effective.
If the aggregate offering value of all Registrable Shares requested to be
registered in such registration pursuant to Section 2(a) is not reasonably
expected to equal at least $750,000, the holders of securities to be registered
thereunder shall pay their pro rata share (as determined in accordance with the
percentage of shares requested to be registered in such registration) of all
associated Registration Expenses in connection with such registration, whether
or not such registration becomes effective. Notwithstanding the terms of the
preceding sentence, if the failure of such registration to become effective is
the result of a breach by the Company of any of its obligations under this
Agreement, the Company shall pay all Registration Expenses in connection with
such registration.
(d) In connection with any Demand Registration, the Majority Electing
Holders shall have the right to select the underwriter or underwriters and
manager or managers to administer such offering; provided, however, that each
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Person so selected shall be acceptable to the Company in its reasonable
judgment.
(e) If the Underwriters' Representative in connection with any
underwritten offering described in this Section 2 shall have informed the
Company that in its opinion the total number of shares of Common Stock that
the holders of the Registrable Shares, and any other Persons desiring to
participate in such registration, intend to include in such offering is such
as to materially and adversely affect the success and pricing of such offering,
then the Company shall include in such Demand Registration (a) first, all
Registrable Shares requested to be included in such registration by the
Electing Holders of Registrable Shares; provided that if the number of shares of
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Common Stock so elected to be included in such registration by all Electing
Holders of Registrable Shares exceeds the number recommended by the
Underwriters' Representative, then the number of Registrable Shares to be so
included in such registration will be reduced pro rata in accordance with the
number of shares requested to be included by each Electing Holder, to such
number recommended by the Underwriters' Representative; provided, further, that
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on no more than two occasions if the Initiating Holders are holders of
Purchasers' Shares and on no more than two occasions if the Initiating Holders
are holders of Investors' Shares, the Initiating Holders may specify that (x) if
such Initiating Holders are holders of Registrable Shares (other than Investors'
Shares or Founders' Shares) (all such non-excluded Registrable Shares, the
"Purchasers' Shares"), such reduction will be effected first by reducing the
number of Investors' Shares pro rata in accordance with the number of Investors'
Shares to be included therein until the number of Investors' Shares to be so
included are reduced to zero and then by reducing the number of Purchasers'
Shares pro rata in accordance with the number of Purchasers' Shares to be
included therein, and (y) if such Initiating Holders are holders of Investors'
Shares, such reduction will be effected first by reducing the number of
Purchasers' Shares pro rata in accordance with the number of Purchasers' Shares
to be included therein until the number of Purchasers' Shares to be so included
is reduced to zero and then by reducing the number of Investors' Shares pro rata
in accordance with the number of Investors' Shares to be included therein; and
(b) second, if all Registrable Shares so elected to be included by the Electing
Holders are so included, such additional number of shares of Common Stock that
the Company or any other Persons entitled to participate in such registration
desire to include in such
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registration and that the Underwriters' Representative has informed the Company
may be included in such registration without adversely affecting the success and
pricing of the offering of all Registrable Shares so requested to be included
therein; provided that the number of shares of Common Stock to be offered for
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the account of all such other Persons participating in such registration shall
be reduced or limited to the extent necessary so that the total number of shares
of Common Stock requested to be included in such offering does not exceed the
maximum number of shares of Common Stock recommended by such Underwriters'
Representative.
(f) Notwithstanding anything herein to the contrary, the Company shall not
be obligated to take any action to effect any such registration, qualification
or compliance pursuant to this Section 2 if (i) the Board of Directors
determines in the exercise of its reasonable judgment that effecting such Demand
Registration at such time would require disclosure of a material fact that the
Board determines in good faith would have a material adverse effect on any
proposal or plan by the Company or any of its subsidiaries to engage in a
significant transaction, then, in which case the Company may defer such Demand
Registration for a single period not to exceed 90 days once every 12 months and
(ii) in any particular jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act.
Section 3. Piggyback Registration.
(a) If at any time the Company proposes to register (including for this
purpose a registration effected by the Company for the account of the Company or
shareholders of the Company other than the holders of the Registrable Shares,
whether or not pursuant to the Existing Registration Agreement) shares of Common
Stock or securities convertible or exercisable into shares of Common Stock under
the Securities Act in connection with the public offering solely for cash on
Form ▇-▇, ▇-▇ or S-3 (or any replacement or successor forms), as soon as
practicable (but in no event less than 10 business days prior to the date of
filing any related Registration Statement), the Company shall promptly give the
holders of the Registrable Shares written notice of such registration (a
"Piggyback Registration," and, collectively with a Demand Registration, a
"Registration"). Upon the written request of the holders of the Registrable
Shares given within 10 days following the date of such notice, the Company shall
use all reasonable efforts to cause to be included in such registration
statement (a "Piggyback Registration Statement," and, collectively with the
Demand Registration Statement, the "Registration Statements"), and use all
reasonable efforts to cause to be registered under the Securities Act all the
Registrable Shares that the holders of the Registrable Shares shall have
requested to be registered. The Company shall have the absolute right to
withdraw or cease to prepare or file any Piggyback Registration Statement for
any offering referred to in this Section 3 without any obligation or liability
to the holder of the Registrable Shares; provided, that the Company shall
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promptly notify the holders of the Registrable Shares in writing of any such
action.
(b) If the Piggyback Registration Statement relates to an underwritten
offering of Common Stock or securities convertible or exercisable into shares of
Common Stock for the account of the Company and if the Underwriters'
Representative of such underwritten offering
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shall inform the Company that in its opinion the inclusion in such underwritten
distribution of all or a specified number of such Registrable Shares or of any
other shares of Common Stock requested to be included therein would materially
and adversely effect the success and pricing of such offering or of such
distribution then the Company shall include in such Piggyback Registration (a)
first, all shares of Common Stock requested to be included in such registration
for the account of the Company, (b) second, all Registrable Shares requested to
be included therein by holders of Founders Shares, and (c) third, all
Registrable Securities requested to be included therein by the holders of
Purchasers' Shares and Investors' Shares, provided that if the number of
Registrable Shares otherwise includable under clause (b) or (c) above is to be
reduced, such number shall be reduced by reducing the number of Registrable
Shares otherwise includable pro rata in accordance with the number of
Registrable Shares requested to be included by the Holders of Founders' Shares
(in the case of clause (b)), and by the holders of Purchasers' Shares and
Investors' Shares (in the case clause (c)). If the Piggyback Registration
Statement relates to an underwritten offering of Common Stock or securities
convertible or exercisable into Common Stock otherwise than for the account of
the Company and if the Underwriters' Representative of such underwritten
offering shall inform the Company that in its opinion the inclusion in such
underwritten distribution of all or a specified number of such shares of Common
Stock to be included therein would materially and adversely affect the success
and pricing of such offering or of such distribution then the Company shall
include in such Piggyback Registration (a) first, all shares of Common Stock
requested to be included in such registration for the account of the persons
(other than holders of Purchasers' Shares or Investors' Shares) who requested
such registration, (b) second, all Registrable Shares requested to be included
in such Registration by the holders of Purchasers' Shares and Investors' Shares
pro rata in accordance with the number of Registrable Shares requested be
included therein and (c) third, all shares of Common Stock requested to be
included therein for the account of the Company.
The Company may decline to file a Piggyback Registration Statement referred
to in this Section 3(b) after giving notice to the holders of the Registrable
Shares, or withdraw such a Piggyback Registration Statement after filing, or
otherwise abandon any such proposed underwritten offering; provided that the
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Company shall promptly notify the holders of the Registrable Shares in writing
of any such action.
(c) The Electing Holders with respect to any Registration may not
participate in any underwritten offering under Sections 2(a) or 3(a) hereof
unless it completes and executes all customary questionnaires (including a
Notice and Questionnaire as contemplated by Section 5(a)(ii)), powers of
attorney, custody agreements, underwriting agreements and other customary
documents required under the terms of such underwriting arrangements (if any).
In connection with any underwritten offering under Sections 2(a) or 3(a), each
of the Electing Holders and the Company shall be a party to the underwriting
agreement with the underwriters and may be required to make certain customary
representations and warranties (in the case of the Electing Holders as to the
Registrable Shares being sold by the Electing Holder in such underwritten
offering and the plan of distribution thereof) and provide certain customary
indemnifications for the benefit of the underwriters.
-11-
(d) The holders of the Registrable Shares shall be entitled to have their
Registrable Shares included in an unlimited number of Piggyback Registrations
pursuant to this Section 3.
(e) Notwithstanding the foregoing the Company shall not be obligated to
take any action pursuant to this Section 3 in any particular jurisdiction in
which the Company would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance unless the
Company is already subject to service in such jurisdiction and except as may be
required by the Securities Act.
Section 4. Registration of Registrable Shares under a Market Making
Shelf Registration Statement.
The Company agrees with TWP that if TWP and the Company mutually agree that
TWP or an affiliate should act as a market-maker with respect to Market Making
Securities,:
(a) If requested in writing by TWP, at any time that the Purchasers
determine that TWP is or may be deemed to be an affiliate (as defined under Rule
405) of the Company, the Company shall prepare the Market Making Prospectus and
Market Making Registration Statement in a form approved by TWP and file such
Market Making Prospectus and Market Making Registration Statement pursuant to
the Securities Act not later 60 days after the date of such request (the "Market
Making Request Date"), to make no further amendment or any supplement to the
Market Making Registration Statement or the Market Making Prospectus during the
Market Making Period (as defined below) which shall be disapproved by TWP
promptly after reasonable notice thereof, to use all reasonable efforts to cause
the Market Making Registration Statement to become effective under the
Securities Act 115 days after the Market Making Request Date, to advise TWP,
promptly after the Company receives notice thereof, of the time when the Market
Making Registration Statement, or any amendment thereto, has been filed or
becomes effective during the Market Making Period, or any supplement to the
Market Making Prospectus or any amended Market Making Prospectus has been filed
during such period, and to furnish TWP with copies thereof; to advise TWP,
promptly after the Company receives notice thereof during the Market Making
Period, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any preliminary Market Making Prospectus or
Market Making Prospectus, of the suspension of the qualification of the Market
Making Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Market Making Registration
Statement or Market Making Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or suspending
the use of any preliminary Market Making Prospectus or Market Making Prospectus
or suspending any such qualification during the Market Making Period, to use
promptly its reasonable efforts to obtain the withdrawal of such order (the
period beginning on such date as the Purchasers determine that TWP is or may be
deemed to be an affiliate of the Company and continuing for as long as may be
required under applicable law, in the reasonable judgment of TWP after
consultation with the Company, in order to offer and sell Market Making
Securities as contemplated by the Market Making Prospectus, is herein called the
"Market Making Period");
-12-
(b) Promptly from time to time to take such action as TWP may reasonably
request to qualify the Market Making Securities for offering and sale during the
Market Making Period under the securities laws of such jurisdictions as TWP may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions during such period, provided that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) To furnish TWP with copies of the Market Making Prospectus in such
quantities as TWP may from time to time reasonably request during the Market
Making Period, and, if at any time during such period any event shall have
occurred as a result of which the Market Making Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Market
Making Prospectus is to be delivered during such period, not misleading, or, if
for any other reason it shall be necessary during such period to amend or
supplement the Market Making Prospectus or to amend the Market Making
Registration Statement in order to comply with the Securities Act, to file under
the Exchange Act any document incorporated by reference in such Market Making
Prospectus in order to comply with the Securities Act or the Exchange Act, to
notify TWP immediately and upon its request to file such document and to prepare
and furnish without charge to TWP as many copies as it may from time to time
during such period reasonably request of an amended Market Making Prospectus or
a supplement to the Market Making Prospectus which will correct such statement
or omission or effect such compliance;
(d) During the Market Making Period, to furnish to TWP copies of all
reports or other communications (financial or other) furnished to shareholders
generally, and to deliver to TWP (i) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the Commission
or any national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the business
and financial condition of the Company as TWP may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in reports
furnished to its shareholders generally or to the Commission); and
(e) To use its reasonable efforts to furnish or cause to be furnished to
TWP upon its request at reasonable intervals, when the Market Making
Registration Statement or the Market Making Prospectus shall be amended or
supplemented during the Market Making Period, written opinions of counsel for
the Company, a letter from the independent accountants who have certified the
financial statements included in the Market Making Registration Statement as
then amended and certificates of officers of the Company, in each case in form
and substance reasonably satisfactory to TWP, all to the effect specified in
subsection (xvi) of Section 5(a) hereof (as modified to relate to the Market
Making Registration Statement and the Market Making Prospectus as then amended
or supplemented).
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Notwithstanding the foregoing provisions, if at any time the Company
determines in the exercise of its reasonable judgment that it is in possession
of material, non-public information that it would not be required to disclose
publicly in the absence of a registration of Market Making Securities under the
Securities Act, the Company may, upon 15 business days' prior written notice to
TWP, cease to comply with any of its obligations under this Section 4, whereupon
TWP shall cease using the Market Making Prospectus or any amendment or
supplement thereto until it receives notice from the Company that it may resume
using such document.
Section 5. Registration Procedures.
If the Company files a registration statement pursuant to Sections 2, 3 or
4, the following provisions shall apply:
(a) In connection with the Company's obligations with respect to any
Registration or any Market Making Registration, as applicable, the Company shall
use its best efforts to cause the applicable Secondary Offer Registration
Statement to permit the disposition (x) of Registrable Shares by the holders
thereof in the case of a Registration, and, of Market Making Securities by TWP,
in each case in accordance with the intended method or methods of disposition
thereof provided for in the applicable Secondary Offer Registration Statement.
In connection therewith, the Company shall, as soon as reasonably possible (or
as otherwise specified):
(i) (A) prepare and file with the Commission, as soon as practicable,
but in any case within the time periods specified in Sections 2, 3 or 4, as
applicable, a Secondary Offer Registration Statement on any form which may
be utilized by the Company, which shall (x) register all the Registrable
Shares, in the case of a Registration Statement, and all of the Market
Making Securities, in the case of a Market Making Registration, and in each
case to be included therein for resale (if applicable) by the holders
thereof in accordance with such method or methods of disposition as may be
specified by the holders of the applicable Registrable Shares or TWP in the
case of a Market Making Registration and (y) be, in the case of a Market
Making Registration, in a form approved by TWP, and (B) use its
commercially reasonable efforts to cause such Secondary Offer Registration
Statement to become effective as soon as practicable after such filing, but
in any case within the time periods specified in Sections 2, 3 or 4 hereof,
as applicable;
(ii) not less than 30 calendar days prior to the Effective Time of any
applicable Registration Statement, mail the Notice and Questionnaire to the
holders of the applicable Registrable Shares; no holder shall be entitled
to be named as a selling securityholder in any Registration Statement as of
the Effective Time thereof, and no holder shall be entitled to use the
prospectus forming a part thereof for resales of Registrable Shares at any
time, unless such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth
therein;
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provided, however, holders of Registrable Shares shall have at least 28
-------- -------
calendar days from the date on which the Notice and Questionnaire is first
mailed to such holders to return a completed and signed Notice and
Questionnaire to the Company;
(iii) as soon as practicable (A) prepare and file with the Commission
such amendments and supplements to the Secondary Offer Registration
Statement and the prospectus included therein as may be necessary to effect
and maintain the effectiveness of such Secondary Offer Registration
Statement for the period specified in Sections 2, 3 or 4 hereof, as
applicable, and as may be required by the applicable rules and regulations
of the Commission and the instructions applicable to the form of such
Secondary Offer Registration Statement, and, in the case of an amendment to
or supplement of the Market Making Registration Statement, in a form
approved by TWP and (B) furnish to the Electing Holders, in the case of any
Registration, and TWP, in the case of a Market Making Registration, copies
of any such supplement or amendment simultaneously with or prior to its
being used or filed with the Commission;
(iv) comply with the provisions of the Securities Act with respect to
the disposition of all of the Registrable Shares or Market Making
Securities, as applicable, covered by such Secondary Offer Registration
Statement in accordance with the intended methods of disposition provided
for therein by the Electing Holders, in the case of any Registration, or
TWP, in the case of a Market Making Registration;
(v) provide (A) with respect to any Registration, the Electing
Holders and not more than one counsel for all the Electing Holders; (B)
with respect to a Market Making Registration, TWP and its counsel; and (C)
in either case, the underwriters (which term, for purposes of this
Agreement shall include a Person deemed to be an underwriter within the
meaning of Section 2(11) of the Securities Act), if any, thereof, the sales
or placement agent, if any, therefor, and counsel for such underwriters or
agent, the opportunity to participate in the preparation of such Secondary
Offer Registration Statement, each prospectus included therein or filed
with the Commission and each amendment or supplement thereto;
(vi) for a reasonable period prior to the filing of such Secondary
Offer Registration Statement, and throughout the applicable periods
specified in Sections 2, 3 or 4 hereof, as applicable, make available at
reasonable times at the Company's principal place of business or such other
reasonable place for inspection by the Persons referred to in Section
5(a)(v) who shall certify to the Company that they have a current intention
to sell the Registrable Shares pursuant to any Registration, or Market
Making Securities pursuant to the Market Making Registration, as
applicable, such financial and other information and books and records of
the Company, and cause the officers, employees, counsel and independent
certified public accountants of the Company to respond to such inquiries,
as shall be reasonably necessary, in the judgment of the respective counsel
referred to in such Section 5(a)(v), to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act; provided; however,
that each such party shall be required to maintain in confidence and not to
disclose to any other Person any
-15-
information or records reasonably designated by the Company as being
confidential until such time as, (A) such information becomes a matter of
public record (whether by virtue of its inclusion in such registration
statement or otherwise), or (B) such Person shall be required so to
disclose such information pursuant to a subpoena or order of any court or
other governmental agency or body having jurisdiction over the matter or
otherwise pursuant to the request of any governmental agency (only after
such Person shall have given the Company prompt prior written notice of
such requirement), or (C) such information is required to be set forth in
such Secondary Offer Registration Statement or the prospectus included
therein or in an amendment to such Secondary Offer Registration Statement
or an amendment or supplement to such prospectus in order that such
Secondary Offer Registration Statement, prospectus, amendment or
supplement, as the case may be, complies with applicable requirements of
the federal securities laws and the rules and regulations of the Commission
and does not contain an untrue statement of a material fact or omit to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances
then existing;
(vii) promptly notify each of the Electing Holders or TWP, as
applicable, any sales or placement agent therefor and any underwriter
thereof (which notification may be made through any managing underwriter
that is a representative of such underwriter for such purpose) and confirm
such advice in writing, (A) when such Secondary Offer Registration
Statement or the prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and, with respect to
such Secondary Offer Registration Statement or any post-effective
amendment, when the same has become effective, (B) of the receipt of
written comments from the Commission and from the blue sky or securities
commissioner or regulator of any state with respect thereto or any request
by the Commission for amendments or supplements to such Secondary Offer
Registration Statement or prospectus or for additional information, (C) of
the issuance by the Commission of any stop order suspending the
effectiveness of such Secondary Offer Registration Statement or the
initiation or threatening of any proceedings for that purpose, (D) if at
any time during which such Secondary Offer Registration Statement is
effective the representations and warranties of the Company contemplated by
Section 5(a)(xv) or Section 7 cease to be true and correct in all material
respects, (E) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Shares or
the Market Making Securities, as applicable, for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, or (F)
if at any time when a prospectus is required to be delivered under the
Securities Act, such Secondary Offer Registration Statement, prospectus,
prospectus amendment or supplement or post-effective amendment, or any
document incorporated by reference in any of the foregoing, does not
conform in all material respects to the applicable requirements of the
Securities Act and the rules and regulations of the Commission thereunder
or contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
-16-
(viii) use commercially reasonable efforts to obtain the withdrawal
of any order suspending the effectiveness of such Secondary Offer
Registration Statement or any post-effective amendment thereto at the
earliest practicable date;
(ix) if requested by any managing underwriter or underwriters, any
placement or sales agent, any Electing Holder or TWP, promptly incorporate
in a prospectus supplement or post-effective amendment such information as
is required by the applicable rules and regulations of the Commission and
as such managing underwriter or underwriters, such agent, such Electing
Holder or TWP specify should be included therein relating to the terms of
the sale of such Registrable Shares, or Market Making Securities, as
applicable, including information with respect to the number of Registrable
Shares or other Market Making Securities being sold by TWP, such Electing
Holder, TWP, or agent or underwriter, the offering price of such
Registrable Shares or the Market Making Securities, as applicable, and any
discount, commission or other compensation payable in respect thereof and
the purchase price being paid therefor by such underwriters, and with
respect to any other terms of the offering of the Registrable Shares, or
Market Making Securities, as applicable, to be sold by such Electing
Holder, TWP, or agent or to such underwriters, as applicable; and to make
all required filings of such prospectus supplement or post-effective
amendment promptly after notification of the matters to be incorporated in
such prospectus supplement or post-effective amendment;
(x) furnish to each Electing Holder, TWP, each placement or sales
agent, if any, therefor, each underwriter, if any, thereof and the
respective counsel referred to in Section 5(a)(v) a conformed copy of such
Secondary Offer Registration Statement, each such amendment and supplement
thereto (in each case, including all exhibits thereto (in the case of an
Electing Holder of Registrable Shares, upon request) and documents
incorporated by reference therein) and such number of copies of such
Secondary Offer Registration Statement (excluding exhibits thereto and
documents incorporated by reference therein unless specifically so
requested by such Electing Holder, TWP, or agent or underwriter, as the
case may be) and of the prospectus included in such Secondary Offer
Registration Statement (including each preliminary prospectus and any
summary prospectus), in conformity in all material respects with the
applicable requirements of the Securities Act and the rules and regulations
of the Commission thereunder, and such other documents, as TWP, such
Electing Holder, TWP, agent, if any, and underwriter, if any, may
reasonably request in order to facilitate the offering and disposition of
the Registrable Shares owned by such Electing Holder or the Market Making
Securities owned by TWP, to satisfy the prospectus delivery requirements of
the Securities Act; and the Company hereby consents to the use of such
prospectus (including such preliminary and summary prospectus) and any
amendment or supplement thereto by each such Electing Holder, TWP and any
such agent and underwriter, in each case in the form most recently provided
to such party by the Company, in connection with the offering and sale of
the Registrable Shares or the Market Making Securities covered by the
prospectus (including such preliminary and summary prospectus) or any
supplement or amendment thereto;
-17-
(xi) use commercially reasonable efforts to (A) register or qualify
the Registrable Shares, or the Market Making Securities as applicable, to
be included in such Secondary Offer Registration Statement under such
securities laws or blue sky laws of such jurisdictions as any Electing
Holder, TWP and each placement or sales agent, if any, therefor and each
underwriter, if any, thereof shall reasonably request, (B) keep such
registrations or qualifications in effect and comply with such laws so as
to permit the continuance of offers, sales and dealings therein in such
jurisdictions during the period the Market Making Registration is required
to remain effective under Section 4 or the applicable Registration
Statement is required to remain effective under Sections 2 or 3 above, as
applicable, (C) make reasonably available its employees and personnel
(including senior executive officers of the Company) and otherwise provide
reasonable assistance to the underwriters (taking into account the
requirements of the marketing process) in the marketing of Registrable
Shares in any underwritten offering, including participation in any road
show related thereto, and (D) take any and all other actions as may be
reasonable necessary or advisable to enable each such Electing Holder and
TWP, as applicable, such agent, if any, and such underwriter, if any, to
consummate the disposition in such jurisdictions of such Registrable
Shares, or the Market Making Securities, as applicable;
(xii) use commercially reasonable efforts to obtain the consent or
approval of each governmental agency or authority, whether federal, state
or local, which may be required of the Company or otherwise to effect any
Registration or the Market Making Registration or the offering or sale in
connection therewith or to enable the selling holder or holders or TWP to
offer, or to consummate the disposition of, the Registrable Shares or the
Market Making Securities, as applicable;
(xiii) cooperate with the Electing Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Shares to be sold, which certificates
shall be printed, lithographed or engraved, or otherwise produced, and
which shall not bear any restrictive legends; and, in the case of an
underwritten offering, enable such Registrable Shares to be in such
denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of the Registrable
Shares;
(xiv) enter into one or more underwriting agreements, engagement
letters, agency agreements, "best efforts" underwriting agreements or
similar agreements, as appropriate, including customary provisions relating
to indemnification and contribution, and take such other actions in
connection therewith as, in the case of a Registration, the Requisite
Holders, or, in the case of a Market Making Registration, TWP shall request
in order to expedite, or facilitate the disposition of such Registrable
Shares or the Market Making Securities, as applicable;
(xv) whether or not an agreement of the type referred to in Section
5(xiv) hereof is entered into and whether or not any portion of the
offering contemplated by such Secondary Offer Registration Statement is an
underwritten offering or is made
-18-
through a placement or sales agent or any other entity, (A) make such
representations and warranties to the Electing Holders, TWP and the
placement or sales agent, if any, therefor and the underwriters, if any,
thereof in form, substance and scope as are customarily made in connection
with an offering of common stock pursuant to any appropriate agreement or a
registration statement filed on the form applicable to the Registration or
the Market Making Registration, as applicable; (B) obtain an opinion of
counsel to the Company in customary form and covering such matters, of the
type customarily covered by such an opinion, as the managing underwriters,
if any, and in the case of a any Registration, as the Electing Holders or,
in the case of a Market Making Registration, as TWP may reasonably request,
addressed to such Electing Holders, TWP and the placement or sales agent,
if any, therefor and the underwriters, if any, thereof and dated the
effective date of such Secondary Offer Registration Statement (and if such
Secondary Offer Registration Statement contemplates an underwritten
offering of a part or all of the Registrable Shares or the Market Making
Securities, as applicable, dated the date of the closing under the
underwriting agreement relating thereto) and the date of filing of an
amendment or supplement to such Secondary Offer Registration Statement or
any other document that is incorporated in such Secondary Offer
Registration Statement by reference and includes financial data with
respect to a fiscal quarter or year, as the case may be (it being agreed
that the matters to be covered by such opinion shall include the due
incorporation and existence of the Company and its subsidiaries; the
qualification of the Company and its subsidiaries to transact business as
foreign corporations; the due authorization, execution and delivery of the
relevant agreement of the type referred to in Section 5(a)(xiv) hereof; the
due authorization, execution, authentication and issuance, and the validity
and enforceability, of the Registrable Shares or the Market Making
Securities, as applicable; the absence of material legal or governmental
proceedings involving the Company or its subsidiaries; the absence of a
breach by the Company or any of its subsidiaries of, or a default under,
material agreements binding upon the Company or any subsidiary of the
Company; the absence of governmental approvals required to be obtained by
the Company in connection with any Registration or the Market Making
Registration, as applicable, the offering and sale of the Registrable
Shares, or the Market Making Securities, as applicable, this Agreement or
any agreement of the type referred to in Section 5(a)(xiv) hereof, except
such approvals as may be required under state securities or blue sky laws;
the material compliance as to form of such Secondary Offer Registration
Statement and any documents incorporated by reference therein with the
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, respectively; and, as of the date of the opinion and
of the Secondary Offer Registration Statement or most recent post-effective
amendment thereto, as the case may be, the absence from such Secondary
Offer Registration Statement and the prospectus included therein, as then
amended or supplemented, and from the documents incorporated by reference
therein (in each case other than the financial statements and other
financial information contained therein) of an untrue statement of a
material fact or the omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading (in the case of such documents, in the light of the
circumstances existing at the time that such documents were filed with the
Commission under the Exchange Act)); (C) obtain a "cold comfort" letter or
letters
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from the independent certified public accountants of the Company addressed
to the selling Electing Holders, TWP, the placement or sales agent, if any,
therefor or the underwriters, if any, thereof, dated (i) the effective date
of such Secondary Offer Registration Statement and (ii) the effective date
of any prospectus supplement to the prospectus included in such Secondary
Offer Registration Statement or amendment or supplement to such Secondary
Offer Registration Statement or any other document that is incorporated in
such Secondary Offer Registration Statement by reference and includes
unaudited or audited financial statements as of a date or for a period
subsequent to that of the latest such statements included in such
prospectus (and, if such Secondary Offer Registration Statement
contemplates an underwritten offering pursuant to any prospectus supplement
to the prospectus included in such Secondary Offer Registration Statement
or post-effective amendment to such Secondary Offer Registration Statement
which includes unaudited or audited financial statements as of a date or
for a period subsequent to that of the latest such statements included in
such prospectus, dated the date of the closing under the underwriting
agreement relating thereto), such letter or letters to be in customary form
and covering such matters of the type customarily covered by letters of
such type; (D) deliver such documents and certificates, including officers'
certificates, as may be reasonably requested, in the case of any
Registration, by the Requisite Holders or, in the case of a Market Making
Registration, by TWP, and, in either case, the placement or sales agent, if
any, therefor and the managing underwriters, if any, thereof, dated the
effective date of such Secondary Offer Registration Statement (and if such
Secondary Offer Registration Statement contemplates an underwritten
offering of a part or all of the Registrable Shares or the Market Making
Securities, as applicable, dated the date of the closing under the
underwriting agreement relating thereto) and the date of filing of an
amendment or supplement to such Secondary Offer Registration Statement or
any other document that is incorporated in such Secondary Offer
Registration Statement by reference and includes financial data with
respect to a fiscal quarter or year, as the case may be, to evidence the
accuracy of the representations and warranties made pursuant to clause (A)
above or those contained in Section 7 hereof and the compliance with or
satisfaction of any agreements or conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (E) undertake
such obligations relating to expense reimbursement, indemnification and
contribution as are provided in Sections 6 and 8 hereof;
(xvi) notify in writing each holder of Registrable Shares affected
thereby and TWP, of any proposal by the Company to amend or waive any
provision of this Agreement pursuant to Section 11(j) hereof and of any
amendment or waiver effected pursuant thereto, each of which notices shall
contain the text of the amendment or waiver proposed or effected, as the
case may be;
(xvii) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Shares or the Market Making
Securities, as applicable, or participate as a member of an underwriting
syndicate or selling group or "assist in the distribution" (within the
meaning of the Rules of Fair Practice and the By-Laws of the National
Association of Securities Dealers, Inc. ("NASD") or any successor thereto,
as
-20-
amended from time to time) thereof, whether as a holder of such Registrable
Shares or the Market Making Securities, as applicable, or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, assist such broker dealer in complying with the
requirements of such Rules and By-Laws, including by (A) if such Rules or
By-Laws shall so require, engaging a "qualified independent underwriter"
(as defined in Rule 2720 (or any successor thereto)) to participate in the
preparation of the Secondary Offer Registration Statement relating to such
Registrable Shares or the Market Making Securities, as applicable, to
exercise usual standards of due diligence in respect thereto and, if any
portion of the offering contemplated by such Secondary Offer Registration
Statement is an underwritten offering or is made through a placement or
sales agent, to recommend the yield of such Registrable Shares or the
Market Making Securities, as applicable, (B) indemnifying any such
qualified independent underwriter to the extent of the indemnification of
underwriters provided in Section 8 hereof (or to such other customary
extent as may be requested by such underwriter), and (C) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Rules of Fair Practice
of the NASD; and
(xviii) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as soon as
practicable but in any event not later than eighteen months after the
effective date of such Secondary Offer Registration Statement, an income
statement of the Company and its subsidiaries complying with Section 11(a)
of the Securities Act (including, at the option of the Company, Rule 158
thereunder).
(b) In the event that the Company would be required to provide notice
pursuant to Section 5(a)(vii)(F) above to the Electing Holders, TWP, the
placement or sales agent, if any, therefor and the managing underwriters, if
any, thereof, the Company shall as promptly as reasonably practicable prepare
and furnish to each such Person a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Shares or Market Making Securities, as applicable, such prospectus
shall conform in all material respects to the applicable requirements of the
Securities Act and the rules and regulations of the Commission thereunder and
shall not contain 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. Each Electing Holder and TWP agrees, that upon receipt
of any notice from the Company pursuant to Section 5(a)(vii)(F) hereof, such
Electing Holder and TWP, shall forthwith discontinue the disposition of
Registrable Shares or Market Making Securities, as applicable, pursuant to the
Secondary Offer Registration Statement applicable to such Registrable Shares or
Market Making Securities, as applicable, until such Electing Holder or TWP, as
applicable, shall have received copies of such amended or supplemented
prospectus, and if so directed by the Company, such Electing Holder or TWP shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Electing Holder's or TWP's possession of the
prospectus covering such Registrable Shares or Market Making Securities, as
applicable, at the time of receipt of such notice.
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(c) In addition to the information required to be provided in a Notice and
Questionnaire by each Electing Holder as to which any Registration is being
effected or to be provided by TWP in connection with the Market Making
Registration pursuant to Section 4, the Company may require an Electing Holder
or TWP, as applicable, to furnish to the Company such additional information
regarding such Electing Holder or TWP and such Electing Holder's or TWP's
intended method of distribution of the applicable Registrable Shares or Market
Making Securities as applicable, as the Company may from time to time reasonably
request in writing, but only to the extent that such information is required in
order to comply with the Securities Act. Each such Electing Holder and TWP
agrees to notify the Company as promptly as practicable of any inaccuracy or
change in information previously furnished by such Electing Holder or TWP, as
the case may be, to the Company or of the occurrence of any event in either case
as a result of which any prospectus relating to such Registration or Market
Making Registration, as applicable, contains or would contain an untrue
statement of a material fact regarding such Electing Holder or TWP or such
Electing Holder's or TWP's intended method of disposition of the Registrable
Shares or Market Making Securities, as applicable, or omits to state any
material fact regarding such Electing Holder or TWP or such Electing Holder's or
TWP's intended method of disposition of the Registrable Shares or Market Making
Securities, as applicable, required to be stated therein or necessary to make
statements therein not misleading in light of the circumstances then existing,
and promptly to furnish to the Company any additional information required to
correct and update any previously furnished information or required so that such
prospectus shall not contain, with respect to such Electing Holder or TWP or the
disposition of the applicable Registrable Shares or Market Making Securities, as
applicable, 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 light of the circumstances then existing.
Section 6. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Agreement, including (a) all Commission and any NASD registration, filing and
review fees and expenses, (b) all fees and expenses in connection with the
qualification of the Registrable Shares and the Market Making Securities, as
applicable, for offering and sale under the State securities and blue sky laws
referred to in Section 5(a)(xi) hereof and determination of their eligibility
for investment under the laws of such jurisdictions as any managing underwriters
or the Electing Holders or TWP may designate, including any fees and
disbursements of counsel for the Electing Holders, TWP or the underwriters in
connection with such qualification and determination, (c) all expenses relating
to the preparation, printing, production, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included
therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the expenses of preparing the Registrable Shares or
Market Making Securities, as applicable, for delivery and the expenses of
printing or producing any underwriting agreements, agreements among
underwriters, selling agreements and blue sky or legal investment memoranda and
all other documents in connection with the offering, sale or delivery of
Registrable Shares or Market Making Securities, as applicable, to be disposed of
(including certificates representing the Registrable Shares or the
-22-
Market Making Securities), as applicable, (d) messenger, telephone and delivery
expenses relating to the offering, sale or delivery of Registrable Shares or
Market Making Securities, as applicable, and the preparation of documents
referred in clause (c) above, (e) internal expenses (including all salaries and
expenses of the Company's officers and employees performing legal or accounting
duties), (f) fees, disbursements and expenses of counsel and independent
certified public accountants of the Company (including the expenses of any
opinions or "cold comfort" letters required by or incident to such performance
and compliance), (g) fees, disbursements and expenses of any "qualified
independent underwriter" engaged pursuant to Section 5(a)(xviii) hereof, (h)
fees, disbursements and expenses of one counsel for the Electing Holders
retained in connection with any Registration, as selected by the Majority
Holders and one counsel for TWP retained in connection with a Market Making
Registration, as selected by TWP; (i) fees, expenses and disbursements of any
other Persons, including special experts, retained by the Company in connection
with such registration (collectively, the "Registration Expenses"). To the
extent that any Registration Expenses are incurred, assumed or paid by any
holder of Registrable Shares, TWP or any placement or sales agent therefor or
underwriter thereof, the Company shall reimburse such Person for the full amount
of the Registration Expenses so incurred, assumed or paid promptly after receipt
of a request therefor. Notwithstanding the foregoing, the holders of the
Registrable Shares being registered or TWP, as applicable, shall pay agency fees
and commissions and underwriting discounts and commissions attributable to the
sale of the applicable Registrable Shares, or Common Stock and the fees and
disbursements of any counsel or other advisors or experts retained by such
holders (severally or jointly), other than the counsel and experts specifically
referred to above.
Section 7. Representations and Warranties.
The Company represents and warrants to, and agrees with, each Purchaser
each of the holders from time to time of Registrable Shares and TWP that:
(a) Each registration statement covering Registrable Shares or Market
Making Securities, as applicable, and each prospectus (including any preliminary
or summary prospectus) contained therein or furnished pursuant to Section 5(a)
hereof and any further amendments or supplements to any such registration
statement or prospectus, when it becomes effective or is filed with the
Commission, as the case may be, and, in the case of an underwritten offering of
Registrable Shares or Market Making Securities, as applicable, at the time of
the closing under the underwriting agreement relating thereto, will conform in
all material respects to the applicable requirements of the Securities Act and
the rules and regulations of the Commission thereunder and will not contain 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;
and at all times subsequent to the Effective Time when a prospectus would be
required to be delivered under the Securities Act, other than (A) from (i) such
time as a notice has been given to the Purchasers, the holders of Registrable
Shares or TWP, as applicable, pursuant to Section 5(a)(vii)(F) hereof until (ii)
such time as the Company furnishes an amended or supplemented prospectus
pursuant to Section 5(b) hereof, or (B) during any suspension of offering and
sale pursuant hereto, each such registration statement, and each prospectus
-23-
(including any preliminary or summary prospectus) contained therein or furnished
pursuant to Section 5(a) hereof, as then amended or supplemented, will conform
in all material respects to the applicable requirements of the Securities Act
and the rules and regulations of the Commission thereunder and will not contain
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 then existing; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by a holder of Registrable Shares or TWP, as applicable, expressly for
use therein.
(b) Any documents incorporated by reference in any prospectus referred to
in Section 7(a) hereof, when they become or became effective or are or were
filed with the Commission, as the case may be, will conform or conformed in all
material respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
Section 8. Indemnification.
(a) Indemnification by the Company. The Company agrees to indemnify and
------------------------------
hold harmless (i) each of the Electing Holders of Registrable Shares included in
a Registration Statement and TWP as holders of Market Making Securities included
in a Market Making Registration Statement and each Person who participates as a
placement or sales agent or as an underwriter in any offering or sale of such
Registrable Shares or Market Making Securities, as applicable, (ii) each Person,
if any, who controls (within the meaning of Section 15 or Section 20 of the
Exchange Act) any such Person referred to in clause (i) (any of the Persons
referred to in this clause (ii) being referred to herein as a "Controlling
Person") and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Person referred to in clause (i) or any such
Controlling Person (any such Person referred to in clause (i), (ii) or (iii)
referred to for purposes of this Section 8(a) and Sections 8(c) through 8(e) as
an "Indemnified Person"), against any losses, claims, damages or liabilities,
joint or several, to which or such Indemnified Person may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Secondary Offer Registration Statement, or any preliminary, final or summary
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 not misleading; and will reimburse each such Indemnified Person for any
legal and other expenses reasonably incurred by such Indemnified Person in
connection with investigating or defending any such action or claims as such
expenses are incurred; provided, however, that the Company shall not be liable
-------- -------
in any such case (i) to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any such Registration
Statement, or any preliminary, final or summary prospectus contained therein, or
any amendment or
-24-
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company by any Indemnified Person expressly for use therein or
(ii) from the use or delivery by such Indemnified Person, Controlling Person or
underwriter of a prospectus other than the most current prospectus made
available to such Holder, Controlling Person or underwriter by the Company.
(b) Indemnification by the Holders and any Agents and Underwriters in
-----------------------------------------------------------------
Connection with any Registration. The Company may require, as a condition to
--------------------------------
including any Registrable Share in any Registration Statement and to entering
into any underwriting agreement with respect thereto, that the Company shall
have received an undertaking reasonably satisfactory to it from each Electing
Holder of such Registrable Shares and from each underwriter named (if any) in
any such underwriting agreement, severally and not jointly, to indemnify and
hold harmless (i) the Company and all other holders of Registrable Shares, (ii)
each Controlling Person of any Person referred to in clause (i), and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Person referred to in clause (i) or any such Controlling Person (any
Person referred to in clause (i), (ii) or (iii), referred to for purposes of
this Section 8(b) and Sections 8(c) through 8(e) as an "Indemnified Person")
against any losses, claims, damages or liabilities, joint or several, to which
such Indemnified Person may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of a material fact contained in such Registration Statement, or any
preliminary, final or summary 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 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 made in such Registration
Statement, or any preliminary, final or summary prospectus contained therein, or
any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by such Indemnified Person
expressly for use therein; and will reimburse the Company for any legal and
other expenses reasonably incurred by the Company in connection with
investigating or defending any such actions or claims as such expenses are
incurred; provided, however, that the liability of any Electing Holder pursuant
-------- -------
to this subsection (b) shall not exceed the product of the number of Registrable
Shares sold by such Electing Holder and the initial offering price therefor as
set forth in the prospectus therefor.
(c) Notifications and Other Indemnification Procedures. Promptly after
--------------------------------------------------
receipt by an Indemnified Person (as defined under each of subsections (a) and
(b) of this Section 8) of notice of the commencement of any action, such
Indemnified Person shall, if a claim in respect thereof is to be made against an
indemnifying party under such clause, notify such indemnifying party in writing
of the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
Indemnified Person otherwise than under such subsection or to the extent it is
not prejudiced as a proximate result of such failure. In case any such action
is brought against any Indemnified Person and it shall notify an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party
-25-
similarly notified, to assume the defense thereof, with counsel satisfactory to
such Indemnified Person (who shall not, except with the consent of the
Indemnified Person, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such Indemnified Person of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
Indemnified Person under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such Indemnified
Person, in connection with the defense thereof other than reasonable costs of
investigation. Notwithstanding the foregoing, any Indemnified Person shall have
the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Person unless the Indemnified Person shall have been
advised by counsel that representation of the Indemnified Person by counsel
provided by the indemnifying party would be inappropriate due to actual or
potential conflicting interests between the indemnifying party and the
Indemnified Person, including situations in which there are one or more legal
defenses available to the Indemnified Person that are different from or
additional to those available to the indemnifying party; provided, however, that
-------- -------
the indemnifying party shall not, in connection with any one such action or
proceeding or separate but substantially similar actions or proceedings arising
out of the same general allegations, be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all Indemnified Parties,
except to the extent that local counsel, in addition to its regular counsel, is
required in order to effectively defend against such action or proceeding. No
indemnifying party shall, without the written consent of the Indemnified Person,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Person is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the Indemnified Person from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in this Section 8
------------
is unavailable to or insufficient to hold harmless an Indemnified Person under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and the Indemnified
Person on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. 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 on the one hand or the Indemnified Person on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The parties agree that it
would not be just and equitable if contributions pursuant to this subsection (d)
were determined by pro rata allocation (even if the Indemnified Persons were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this
-26-
subsection (d). The amount paid or payable by an Indemnified Person as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Electing Holder shall be required to
contribute any amount in excess of the amount by which the product of number of
Registrable Shares sold by such Electing Holder and the initial offering price
therefor as set forth in the prospectus therefor exceeds the amount of any
damages which such Electing Holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission, and
no underwriter or sales agent shall be required to contribute any amount in
excess of the amount by which the total price at which the shares of Common
Stock underwritten or placed by it and distributed to the public were offered to
the public exceeds the amount of any damages which such underwriter or sales
agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company and the Electing Holders under this
Section 9 shall be in addition to any liability which the Company and the
respective Electing Holders may otherwise have.
Section 9. Underwritten Offerings.
(a) Selection of Underwriters. If any of the Registrable Shares covered by
-------------------------
the Registration are to be sold pursuant to an underwritten offering, the
managing underwriter or underwriters thereof shall be designated by Majority
Holders, provided that such designated managing underwriter or underwriters is
--------
or are reasonably acceptable to the Company.
(b) Participation by Holders. Each holder of Registrable Shares hereby
------------------------
agrees with each other such holder that no such holder may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Shares on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
Section 10. Rule 144 and Rule 144A.
The Company covenants to the holders of Registrable Shares and the
Purchasers that to the extent it shall be required to do so under the Exchange
Act, the Company shall timely file the reports required to be filed by it under
the Exchange Act or the Securities Act (including the reports under Sections 13
and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144
adopted by the Commission under the Securities Act) and the rules and
regulations adopted by the Commission thereunder, shall make available to each
holder of Registrable
-27-
Shares and the Purchasers the information required by Rule 144A(d)(4), and shall
take such further action as any holder of Registrable Shares or the Purchasers
may reasonably request, all to the extent required from time to time to enable
such holder to sell Registrable Shares or the Purchasers to sell Common Stock
without registration under the Securities Act within the limitations of the
exemptions provided by Rule 144 or Rule 144A under the Securities Act, as such
Rules may be amended from time to time, or any similar or successor rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Shares or the Purchasers in connection with that holder's or the
Purchasers' sale pursuant to Rule 144 or Rule 144A, the Company shall deliver to
such holder or the Purchasers a written statement as to whether it has complied
with such requirements.
Section 11. Holdoff Agreement.
(a) The Company agrees not to effect any public sale or distribution of
equity securities of the Company, including any public sale pursuant to Rule 144
under the Securities Act, or any securities convertibles into or exchangeable or
exercisable for such securities, (a "Public Sale"), during the period commencing
-----------
30 days prior to and ending 90 days after the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration (except as part
of such underwritten registration or pursuant to registration on Form S-8 or any
successor form), unless the underwriters managing the offering otherwise agree.
(b) Each holder of Registrable Shares agrees not to effect any Public Sale
(and in the case of Investors and Purchasers, such holders agree not to effect a
distribution to their respective partners in connection with an underwritten
demand registration in which the Purchasers (in the case of Investors) or the
Investors (in the case of Purchasers) are participating under this Agreement,
provided that the party agreeing not to distribute shall have received notice of
such Registration at least 45 days prior to the effective date thereof) during
the period commencing 30 days prior to and ending 90 days after the effective
date of any underwritten registration for the account of the Company (except as
part of such underwritten registration or pursuant to registration on Form S-8
or any successor form) or any Demand Registration, unless, in any such case, the
underwriters managing the offering otherwise agree; provided that the holders of
Investors' Shares shall not be subject to the agreement set forth in this
subsection 11(b) until the first anniversary of the date hereof; provided
further that nothing in this subsection 11(b) shall be deemed to restrict any
distribution by the Investors or Purchasers to their respective partners of such
securities otherwise than as expressly set forth above or to restrict the sale
of such securities by the partners of the Investors or Purchasers after any such
distribution.
(c) The Company agrees to use its commercially reasonable efforts to cause
any underwriters managing an offering referred to in the Existing Registration
Agreement or otherwise to release the holders of Registrable Shares from any
resale restrictions managed by such underwriters with respect to such offerings
no later than and on terms no less favorable to the holders of Registrable
Shares than imposed on other holders of shares of Common Stock who are so
released from such resale restrictions.
-28-
Section 12. Miscellaneous.
(a) No Inconsistent Agreements. The Company represents, warrants,
--------------------------
covenants and agrees that it has not granted, and shall not grant, registration
rights with respect to Registrable Shares, Common Stock or any other securities
which would be inconsistent with the terms contained in this Agreement.
(b) Specific Performance. The parties hereto acknowledge that there would
--------------------
be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers, the holders from time to time of
the Registrable Shares and TWP may be irreparably harmed by any such failure,
and accordingly agree that the Purchasers, such holders and TWP, in addition to
any other remedy to which they may be entitled at law or in equity, shall be
entitled to compel specific performance of the respective obligations of the
Company under this Agreement in accordance with the terms and conditions of this
Agreement, in any court of the United States or any State thereof having
jurisdiction.
(c) Notices. All notices and communications provided for hereunder shall
-------
be in writing and sent (i) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid); or (ii) by registered or certified mail with return receipt
requested (postage prepaid); or (iii) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
If to the Purchasers:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners, L.P.,
TWP CEO Founders' Circle (AI), L.P.,
TWP CEO Founders' Circle (QP), L.P.,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners Employee Fund, L.P.,
TWP 2000 Co-Investment Fund, L.P.
c/o Thomas ▇▇▇▇▇▇ Capital Partners, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
RKB Capital, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-29-
with copies to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
If to the Company:
Optika Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President and Chief Financial Officer
with copies to:
E* Law Group
▇▇▇▇ ▇. ▇▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
and to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
If to any Investor or Founder:
At the address specified for such
Investor or Founder in the Existing
Registration Agreement.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
(d) Parties in Interest. All the terms and provisions of this Agreement
-------------------
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the parties hereto and the holders from time to time of the Registrable Shares
and the respective successors and assigns of the parties hereto and such
holders. In the event that any transferee of any holder of Registrable
-30-
Shares shall acquire Registrable Shares, in any manner, whether by gift,
bequest, purchase, operation of law or otherwise, such transferee shall, without
any further writing or action of any kind, be deemed a beneficiary hereof for
all purposes and such Registrable Shares shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Shares such
transferee shall be entitled to receive the benefits of, and be conclusively
deemed to have agreed to be bound by all of the applicable terms and provisions
of this Agreement. If the Company shall so request, any such successor, assign
or transferee shall agree in writing to acquire and hold the Registrable Shares
subject to all of the applicable terms hereof.
(e) Survival. The respective indemnities, agreements, representations,
--------
warranties and each other provision set forth in this Agreement or made pursuant
hereto shall remain in full force and effect regardless of any investigation (or
statement as to the results thereof) made by or on behalf of the Purchasers or
any holder of Registrable Shares, any director, officer or partner of the
Purchasers or such holder, any agent or underwriter or any director, officer or
partner thereof, or any Controlling Person of any of the foregoing, and shall
survive delivery of and payment for the Securities pursuant to the Purchase
Agreement and the transfer and registration of Common Stock by such holder or
the Purchasers.
(f) Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
-------------
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
(g) Waiver of Jury Trial. THE ISSUER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO
--------------------
A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OF
THE SECURITIES OR EXCHANGE NOTES.
(h) Submission to Jurisdiction. If any action, proceeding or litigation
--------------------------
shall be brought by the Purchasers or any holder of the Registrable Shares in
order to enforce any right or remedy under this agreement or any of the Shares,
the Company hereby consents and will submit, and will cause each of its
subsidiaries to submit, to the jurisdiction of any state or federal court of
competent jurisdiction sitting within the area comprising the Southern District
of New York on the date of this Agreement. The Company hereby irrevocably
waives any objection, including, but not limited to, any objection to the laying
of venue or based on the grounds of forum non conveniens, which it may now or
----- --- ----------
hereafter have to the bringing of any such action, proceeding or litigation in
such jurisdiction.
(i) Headings. The descriptive headings of the several Sections and
--------
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(j) Entire Agreement; Amendments. This Agreement and the other writings
----------------------------
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire understanding of the parties with respect to its subject matter.
This Agreement supersedes all prior agreements
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and understanding between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and the
holders of at least, in the case of an amendment that could reasonably be viewed
as adversely affecting the rights of the holders of (A) Purchasers' Shares, then
a majority in number of Purchasers' Shares and (B) Investors' Shares, then 70%
of the Investors' Shares and (C) Founders' Shares, then a majority of Founders'
Shares; provided, however, that any such amendment or waiver affecting solely
provisions of this Agreement relating to the Market Making Registration may be
effected by a written instrument duly executed solely by the Company and TWP.
Each holder of any Registrable Shares at the time or thereafter outstanding
shall be bound by any amendment or waiver effected pursuant to this Section
11(j), whether or not any notice, writing or marking indicating such amendment
or waiver appears on such Registrable Shares or is delivered to such holder.
(k) Inspection. For so long as this Agreement shall be in effect, this
----------
Agreement and a complete list of the names and addresses of all the holders of
Registrable Shares and the addresses of the Purchasers shall be made available
for inspection and copying on any business day to the Purchasers or any holder
of Registrable Shares for proper purposes only (which shall include any purpose
related to the rights of the holders of Registrable Shares under the Securities
and this Agreement) at the offices of the Company at the address thereof set
forth in Section 11(c) above.
(l) Counterparts. This agreement may be executed in any number of
------------
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
(m) Effective Date. This Agreement shall become effective as between the
--------------
Company, the Founders and the Investors upon the execution of the Agreement as
of such date (the "Effective Date") on which the Agreement (which has already
been executed by the Company) shall have been executed by Investors who hold at
least 70% of the Investors' Shares and Founders who hold at least a majority of
the Founders' Shares, whereupon this Agreement shall be binding upon all
Investors and Founders, whether or not they have executed this Agreement.
Notwithstanding anything to the contrary, regardless of whether or when the
Effective Date shall occur, this Agreement shall be a valid and binding
agreement of the Company and the Purchasers (and any subsequent of holder
Registrable Shares which are not Founders' Shares or Investors' Shares), and
until the Effective Date shall occur, this Agreement shall be deemed to exclude
all rights and obligations of the holders of Founders' Shares and Investors'
Shares. As of the Effective Date, with respect to Frontenac VI Limited
Partnership and JMI Equity Fund L.P. (the "Funds"), that certain Letter
Agreement, dated as of February 8, 2000, by and among the Company, the Funds and
the Purchasers shall terminate.
(n) Future Registration Rights. Except for the registration rights granted
--------------------------
hereunder, the Company will not grant registration rights as to any equity
securities of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, without the written
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consent of the holders of at least (A) a majority in number of Purchasers'
Shares and (B) 70% of the Investors' Shares unless (i) any such registration
rights that may be initiated at the demand of the holders of such rights (each
such holder a "New Investor") shall include in such demand Registrable Shares
requested to be included by holders of Purchasers' Shares and Investors' Shares
pro rata in accordance with the number of shares requested to be included
therein by each of the holders of Purchasers' Shares and Investors' Shares and
each of the New Investors, so long as the holders of a majority of the
Purchasers' Shares and 70% of the Investors' Shares agree to include on a pro
rata basis any shares requested to be included by such New Investor in any
Demand Registration of Registrable Shares initiated by either holders of
Purchasers' Shares or Investors' Shares under Section 2(a) herein (other than a
Demand Registration as to which the holders of Purchasers' Shares or Investors'
Shares, as the case may be, have made the election contemplated by clause (x) or
clause (y) of the second proviso to the first sentence of Section 2(e) not to
have any Investors' Shares or Purchasers' Shares, respectively, included therein
on a pro-rata basis), (ii) in the case of any such registration rights relating
to the registration of Common Stock for the account of the Company, the holders
of Registrable Shares hereunder shall have priority over the holders of any such
registration rights and (iii) any such registration rights granted shall not be
any more favorable to the holders of such registration rights as compared to, or
otherwise be inconsistent with, the rights granted to the holders of Purchasers'
Shares and Investors' Shares hereunder.
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Agreed to and accepted as of the date first above written.
OPTIKA INC.
By:________________________________
Name:
Title:
[Company's Signature Page - Registration Rights Agreement]
-1-
PURCHASERS
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▇▇▇▇▇▇ ▇▇▇▇▇▇ CAPITAL PARTNERS, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners LLC, its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners Group LLC, its managing member
By: __________________________________________
Name:
Title:
TWP CEO FOUNDERS' CIRCLE (AI), L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners LLC, its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners Group LLC, its managing member
By: __________________________________________
Name:
Title:
TWP CEO FOUNDERS' CIRCLE (QP), L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners LLC, its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners Group LLC, its managing member
By: __________________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇ CAPITAL PARTNERS EMPLOYEE FUND, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners LLC, its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners Group LLC, its managing member
By: __________________________________________
Name:
Title:
TWP 2000 CO-INVESTMENT FUND, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners LLC, its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners Group LLC, its managing member
By: __________________________________________
Name:
Title:
[Purchasers' Signature Page - Registration Rights Agreement]
-2-
PURCHASERS
----------
RKB CAPITAL, L.P.
By:__________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: General Partner
[Purchasers Signature Page - Registration Rights Agreement]
-3-
INVESTORS
---------
Frontenac VI Limited Partnership
By: Frontenac Company
Its: General Partner
By: _______________________________
Name:
Title:
JMI Equity Fund, L.P.
By: JMI Partners, L.P.
Its: General Partner
By: _______________________________
Name:
Title:
-4-
FOUNDERS:
--------
-5-
SCHEDULE A
SCHEDULE OF FOUNDERS
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
IPRS Asia (s) Pte Ltd
Intuit Development Limited
▇▇▇▇▇▇▇▇▇ Limited
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SCHEDULE B
SCHEDULE OF INVESTORS
Frontenac VI Limited Partnership
JMI Equity Fund, L.P.
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