EXHIBIT 5
---------
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
PSYCHIATRIC SOLUTIONS, INC.
JANUARY 6, 2003
TABLE OF CONTENTS
PAGE
SECTION 1. GENERAL.........................................................2
1.1 DEFINITIONS.....................................................2
SECTION 2. REGISTRATION....................................................4
2.1 LEGEND REMOVAL..................................................4
2.2 DEMAND REGISTRATION.............................................4
2.3 PIGGYBACK REGISTRATIONS.........................................5
2.4 FORM S-3 REGISTRATION...........................................6
2.5 EXPENSES OF REGISTRATION........................................8
2.6 OBLIGATIONS OF THE COMPANY......................................8
2.7 RESERVED.......................................................10
2.8 DELAY OF REGISTRATION; FURNISHING INFORMATION..................10
2.9 INDEMNIFICATION................................................11
2.10 ASSIGNMENT OF REGISTRATION RIGHTS..............................13
2.11 AMENDMENT OF REGISTRATION RIGHTS...............................13
2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS...................14
2.13 "MARKET STAND-OFF" AGREEMENT...................................14
2.14 RULE 144 REPORTING.............................................14
SECTION 3. RESERVED.......................................................15
SECTION 4. RIGHTS OF FIRST REFUSAL........................................15
4.1 SUBSEQUENT OFFERINGS...........................................15
4.2 EXERCISE OF RIGHTS.............................................15
4.3 ISSUANCE OF EQUITY SECURITIES..................................15
4.4 RESERVED.......................................................16
4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL............................16
4.6 EXCLUDED SECURITIES............................................16
SECTION 5. RESERVED.......................................................16
SECTION 6. MISCELLANEOUS..................................................17
6.1 GOVERNING LAW..................................................17
6.2 SURVIVAL.......................................................17
6.3 SUCCESSORS AND ASSIGNS.........................................17
6.4 SEVERABILITY...................................................17
6.5 AMENDMENT AND WAIVER...........................................17
6.6 DELAYS OR OMISSIONS............................................17
6.7 NOTICES........................................................18
6.8 ATTORNEYS' FEES................................................18
6.9 ENTIRE AGREEMENT...............................................18
6.10 TITLES AND SUBTITLES...........................................18
6.11 COUNTERPARTS...................................................18
6.12 LOCK-UP PROVISIONS.............................................18
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PSYCHIATRIC SOLUTIONS, INC.
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
THIS THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the
"AGREEMENT") is entered into as of the 6th day of January, 2003 by and among
PSYCHIATRIC SOLUTIONS, INC., a Delaware corporation formerly known as PMR
Corporation (the "COMPANY"), THE 1818 MEZZANINE FUND II, L.P. ("1818 FUND") and
CAPITALSOURCE HOLDINGS LLC ("CAPITALSOURCE") (1818 Fund and CapitalSource may be
referred to collectively as the "INVESTORS" and each individually an
"INVESTOR").
RECITALS
WHEREAS, Psychiatric Solutions Hospitals, Inc. (f/k/a Psychiatric
Solutions, Inc.) ("OLD PSI"), the Investors and other parties thereto are
parties to that certain Second Amended and Restated Investor Rights Agreement,
dated as of June 28, 2002 (as amended through the date hereof, the "PRIOR RIGHTS
AGREEMENT") pursuant to which Old PSI granted, among other things, certain
registration, information and first refusal rights to the parties;
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger (the "MERGER") between the Company, Old PSI and PMR Acquisition
Corporation dated August 5, 2002, Old PSI became a direct wholly owned
subsidiary of the Company;
WHEREAS, following the Merger, the parties determined it was
appropriate for the Company to replace Old PSI as a party to this Agreement;
WHEREAS, the Company and the Investors have agreed to amend the Prior
Rights Agreement to remove the restrictions on transfer contained in Section
2.1;
WHEREAS, the Company and the Investors acknowledge that all of the
rights and obligations of all of the parties to the Prior Rights Agreement
(other than the Company, Old PSI and the Investors) contained in the Prior
Rights Agreement have expired or been terminated; parties signing this Agreement
other than the Company, Old PSI and the Investors are signing this Agreement
solely in their capacity as "Investors" under the Prior Rights Agreement to
provide their consent to the amendment of the Prior Rights Agreement; and
WHEREAS, the Company, 1818 Fund, and CapitalSource desire to amend and
restate the Prior Rights Agreement according to the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, and for other good and valuable consideration the adequacy of
sufficiency of which are hereby acknowledged, the Company and each of the
Investors mutually agree as follows:
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SECTION 1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms
shall have the following respective meanings:
"1818 FUND SECURITYHOLDERS" means 1818 Fund and any other owner of
warrants issued pursuant to the 1818 Fund Purchase Agreement or shares of Series
A Convertible Preferred Stock of the Company, par value $0.01 per share (the
"SERIES A CONVERTIBLE PREFERRED STOCK") issued to 1818 Fund (or its permitted
assigns) pursuant to the Pipe Stock Purchase Agreement or shares of Common Stock
issued or issuable upon exercise of such warrants or upon conversion of such
shares of Series A Convertible Preferred Stock, and their respective successors
and assigns.
"1818 FUND PURCHASE AGREEMENT" means that certain Securities Purchase
Agreement between Old PSI and 1818 Fund dated as of June 28, 2002, as amended.
"CREDIT FACILITY" means the Revolving Credit and Term Loan Agreement,
dated as of November 30, 2001, by and among the Company, such other borrowers
signatory thereto and CapitalSource, as amended.
"COMMON STOCK" means the shares, par value $0.01 per share, of common
stock of the Company, and each other class of capital stock of the Company into
which such stock is reclassified or reconstituted.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FORM S-3" means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"HOLDER" means (i) any person owning of record Shares or Registrable
Securities that have not been sold to the public or (ii) any assignee of record
of such Registrable Securities in accordance with Section 2.10 hereof.
"INITIAL OFFERING" means the Company's first firm commitment
underwritten public offering of its Common Stock registered under the Securities
Act.
"PIPE REGISTRABLE SECURITIES" means "Registrable Securities" as defined
in the Pipe Registration Rights Agreement.
"PIPE REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of January 6, 2003 by and among the Company and the
purchasers named therein.
"PIPE STOCK PURCHASE AGREEMENT" means that certain Stock Purchase
Agreement dated as of January 6, 2003 by and among the Company, 1818 Fund and
the other purchasers named therein.
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"REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"REGISTRABLE SECURITIES" means (i) Common Stock issued or issuable upon
exercise of the warrants issued to CapitalSource pursuant to the Credit
Facility; (ii) Common Stock issued upon exercise of any warrants issued pursuant
to the 1818 Fund Purchase Agreement; (iii) Common Stock issued or issuable upon
conversion of the Shares and any other shares of Common Stock acquired by the
Holder; and (iv) any Common Stock issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
or in connection with a recapitalization, merger, consolidation or other
reorganization or otherwise of, such above-described securities. Notwithstanding
the foregoing, Registrable Securities shall not include any securities (x) sold
by a person to the public either pursuant to a registration statement or Rule
144 (unless the purchaser thereof receives "restricted securities" as defined in
Rule 144) or (y) sold in a private transaction in which the transferor's rights
under Section 2 of this Agreement are not assigned; provided, that clause (y)
shall not apply with respect to any transfer of shares of Common Stock described
in clause (ii) of the preceding sentence or pursuant to clause (iii) of the
preceding sentence (with respect to Common Stock issued upon conversion of the
Series A Convertible Preferred Stock) or pursuant to clause (iv) of the
preceding sentence to the extent related to the shares of Common Stock described
in clause (ii) or clause (iii).
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of shares
of Common Stock that are Registrable Securities and are (1) then issued and
outstanding or (2) issuable pursuant to then exercisable or convertible
securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Section 2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company and of its independent public accountants (including the
expenses of "cold comfort letters") and the reasonable fees and disbursements of
underwriters (other than Selling Expenses), reasonable fees and disbursements of
a single special counsel for the Holders not to exceed $20,000, blue sky fees
and expenses and the expense of any special audits incident to or required by
any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company).
"SEC" or "COMMISSION" means the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"SHARES" shall mean (i) the warrants issued to CapitalSource pursuant
to Credit Facility, (ii) any warrants issued pursuant to the 1818 Fund Purchase
Agreement, (iii) the Series A Convertible Preferred Stock issued to 1818 Fund
(or its permitted assigns) pursuant to the Pipe Stock Purchase Agreement and
(iv) any shares of Common Stock issued or issuable upon
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conversion or exercise of any of the foregoing, and any other shares of Common
Stock owned by a Holder, whether now owned or hereafter acquired.
SECTION 2. REGISTRATION.
2.1 LEGEND REMOVAL. The Company agrees to take all necessary
actions (including causing its transfer agent to take such necessary actions) to
arrange for the prompt issuance to each Investor (or any "Investor" under the
Prior Rights Agreement) of a replacement stock certificate not bearing any
restrictive legend relating to the restrictions on transfer contained in Section
2.1 of the Prior Rights Agreement upon presentment of any certificate
representing Shares hereunder or any "Shares" (as such term is defined under the
Prior Rights Agreement) that is imprinted with such a legend.
2.2 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 2.2, if
after the date hereof, the Company shall receive a written request from 1818
Fund, acting on behalf of one or more 1818 Fund Securityholders holding
Registrable Securities that the Company file a registration statement under the
Securities Act covering the registration of (i) at least twenty percent (20%) of
the then outstanding Registrable Securities held by the 1818 Fund
Securityholders or (ii) Registrable Securities having an aggregate offering
price to the public in excess of $5,000,000, then the Company shall (x) within
thirty (30) days of the receipt thereof, give written notice of such request to
all Holders and (y) subject to the limitations of this Section 2.2, use its best
efforts to effect, as soon as practicable, but not later than sixty (60) days,
the registration under the Securities Act of all Registrable Securities that the
Holders request to be registered, provided that no Registrable Securities (other
than those held by 1818 Fund Securityholders) shall be included in any such
registration.
(b) If 1818 Fund intends to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
and the Company shall include such information in the written notice referred to
in Section 2.2(a). In such event, the right of any Holder to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
1818 Fund and such Holder) to the extent provided herein. All Holders proposing
to distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by 1818 Fund (which underwriter or underwriters
shall be reasonably acceptable to the Company). Notwithstanding any other
provision of this Section 2.2, if the underwriter advises the Company that
marketing factors require a limitation of the number of securities to be
underwritten (including Registrable Securities) then the Company shall so advise
all Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares that may be included in the
underwriting shall be allocated to the Holders of such Registrable Securities on
a pro rata basis based on the number of Registrable Securities held by all such
Holders (including 1818 Fund); provided that, in no event, shall any Registrable
Securities (other than those held by 1818 Fund Securityholders) be
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included in any registration pursuant to Section 2.2(a). Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from
the registration.
(c) The Company shall not be required to effect a
registration pursuant to this Section 2.2:
(i) after the Company has effected two (2)
registrations pursuant to Section 2.2(a) for 1818 Fund, on behalf of the 1818
Fund Securityholders, and in each case such registrations have been declared or
ordered effective; provided, however, that a registration requested pursuant to
this Section 2.2 shall not be deemed to have been effected: (A) unless a
registration statement with respect thereto has become effective and remained
effective in compliance with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement until the earlier of (x) such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement and (y) 180 days after the effective date of such registration
statement; (B) if after it has become effective, such registration 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 Holders of Registrable Securities participating in such registration and
has not thereafter become effective; or (C) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection with
such registration are not satisfied or waived, other than by reason of a failure
on the part of the Holders of Registrable Securities participating in such
registration;
(ii) during the period starting with the date of
filing of, and ending on the date one hundred eighty (180) days following the
effective date of the registration statement pertaining to the Initial Offering;
provided that the Company makes reasonable good faith efforts to cause such
registration statement to become effective; or
(iii) if the Company shall furnish to Holders
requesting a registration statement pursuant to this Section 2.2, a certificate
signed by the Chairman of the Board stating that in the good faith judgment of
the Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such registration statement to be effected at
such time, in which event the Company shall have the right to defer such filing
for a period of not more than ninety (90) days after receipt of the request of
1818 Fund; provided that such right to delay a request shall be exercised by the
Company not more than once in any twelve (12) month period.
2.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders
of Registrable Securities in writing at least thirty (30) days prior to the
filing of any registration statement under the Securities Act for purposes of a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans or with respect to corporate reorganizations, acquisitions or other
transactions under Rule 145 of the Securities Act and any registration pursuant
to Section 2.2(a)) and will afford each such Holder an opportunity to include in
such registration statement all or part of such Registrable Securities held by
such Holder. Each Holder desiring to include in any such registration statement
all or any part of the Registrable Securities held by it shall, within fifteen
(15) days after receipt of the
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above-described notice from the Company, so notify the Company in writing, and
the Company will use its best efforts to cause to be included in such
registration all of the Registrable Securities which such Holder requests. Such
notice shall state the intended method of disposition of the Registrable
Securities by such Holder. If a Holder decides not to include all of its
Registrable Securities in any registration statement thereafter filed by the
Company, such Holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
(a) UNDERWRITING.
(i) If the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder to be included in a registration pursuant to this
Section 2.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company.
(ii) Notwithstanding any other provision of the
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the Holders; and third, to any
stockholder of the Company (other than a Holder) on a pro rata basis. Except as
may be required pursuant to the remainder of this subsection (ii), no such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting. In no event shall
the amount of securities of the selling Holders included in the registration be
reduced below thirty percent (30%) of the total amount of securities included in
such registration, unless such offering is the Initial Offering and such
registration does not include shares of any other selling stockholders, in which
event any or all of the Registrable Securities of the Holders may be excluded in
accordance with the first sentence of this subsection (ii). In no event will
shares of any other selling stockholder be included in such registration which
would reduce the number of shares which may be included by Holders without the
written consent of Holders of not less than a majority of the Registrable
Securities proposed to be sold in the offering.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Section 2.3 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration. The Company
shall give prompt written notice of its determination to terminate or withdraw
any such registration to each Holder of Registrable Securities participating in
such registration. The Registration Expenses of such terminated or withdrawn
registration shall be borne by the Company in accordance with Section 2.5
hereof.
2.4 FORM S-3 REGISTRATION. In case the Company shall receive from
any Holder or Holders of Registrable Securities a written request or requests
that the Company effect a
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registration on Form S-3 (or any successor to Form S-3) or any similar
short-form registration statement and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such Holder
or Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders
of Registrable Securities; and
(b) as soon as practicable, but not later than forty-five
(45) days, effect such registration and all such qualifications and compliances
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holder's or Holders' Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other Holder or Holders joining in such
request as are specified in a written request given within fifteen (15) days
after receipt of such written notice from the Company; provided, however, that
the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 (or any successor or similar form) is
not available for such offering by the Holders;
(ii) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than $1,000,000;
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chairman of the Board of Directors of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such Form S-3 registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than ninety (90) days after receipt of the
request of the Holder or Holders under this Section 2.4; provided, that such
right to delay a request shall be exercised by the Company not more than once in
any twelve (12) month period; or
(iv) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
(c) Subject to the foregoing, the Company shall file a
Form S-3 registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders, but not later than forty-five (45) days,
and shall keep such Form S-3 registration statement effective and updated from
the date such Form S-3 registration statement is declared effective until such
time as the Registrable Securities included in such registration statement cease
to be Registrable Securities.
(d) If the Holder or Holders of Registrable Securities
requesting registration pursuant to this Section 2.4 intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 2.4 and the Company shall include such information in the written
notice referred to in Section 2.4(a). In such event, the right of any Holder to
include its
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Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
such Holder and the Holder, or a majority in interest of the Holders, of
Registrable Securities requesting registration pursuant to this Section 2.4) to
the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Holder, or a majority in interest of the Holders, of
Registrable Securities requesting registration pursuant to this Section 2.4
(which underwriter or underwriters shall be reasonably acceptable to the
Company). Notwithstanding any other provision of this Section 2.4, if the
underwriter advises the Company that marketing factors require a limitation of
the number of securities to be underwritten (including Registrable Securities)
then the Company shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated, first, to the Holders of
such Registrable Securities on a pro rata basis based on the number of
Registrable Securities held by all such Holders (including the Holder or Holders
of Registrable Securities requesting registration pursuant to this Section 2.4)
and second, to any stockholder of the Company (other than a Holder) on a pro
rata basis. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(e) No registration requested pursuant to this Section
2.4 shall be deemed a "demand registration" pursuant to Section 2.2.
2.5 EXPENSES OF REGISTRATION. Except as specifically provided
herein, all Registration Expenses shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder, shall be borne
by the holders of the securities (including Registrable Securities) so
registered on a pro rata basis based on the number of shares so registered. The
Company shall not, however, be required to pay for expenses of any registration
proceeding begun pursuant to Section 2.2 or 2.4, the request of which has been
subsequently withdrawn by the 1818 Fund (in the case of Section 2.2) or the
Holder or Holders of Registrable Securities requesting registration pursuant to
Section 2.4 (in the case of Section 2.4) unless the withdrawal is based upon
material adverse information concerning the Company of which the 1818 Fund (in
the case of Section 2.2) or the Holder or Holders of Registrable Securities
requesting registration pursuant to Section 2.4 (in the case of Section 2.4)
were not aware at the time of such request. If the Holders are required to pay
the Registration Expenses, such expenses shall be borne by the holders of
securities (including Registrable Securities) requesting such registration in
proportion to the number of shares for which registration was requested. If the
Company is required to pay the Registration Expenses of a withdrawn offering,
then the Holders shall not forfeit their rights pursuant to Section 2.2 or
Section 2.4 to a demand registration.
2.6 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use all reasonable
best efforts to cause such registration statement to become effective, and, upon
the request of the Holders of a majority of the Registrable Securities
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registered thereunder, keep such registration statement effective for up to 180
days or, if earlier, until the Holder or Holders have completed the distribution
related thereto.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement.
(c) Furnish to the Holders such number of copies of the
registration statement (and each amendment and supplement thereto) and the
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use all reasonable best efforts to register and
qualify the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holders, and do any and all other acts and things that may be
necessary or desirable to enable the Holders to consummate the public sale or
other disposition in such states of the Registrable Securities owned by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter(s) of such offering. Each
Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement, provided that the Holders shall not be
obligated to enter into any such underwriting agreement if the indemnification
provisions thereof are more burdensome on such Holder than those contained
herein or if they are being asked to make representations and warranties about
the Company of any kind whatsoever except representations and warranties with
respect to the identity of such Holder, such Holder's intended method of
distribution, such Holder's good title to the Registrable Securities being sold,
the absence of any encumbrances with respect to the Registrable Securities being
sold, such Holder's authority to sell such Registrable Securities, or any other
representations required by applicable law.
(f) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state 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.
(g) Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities
9
becomes effective, (i) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
(h) As of the effective date of any registration
statement relating thereto, list all Registrable Securities covered by such
registration statement on each securities exchange on which similar securities
issued by the Company are then listed, and if not so listed, so long as the
Company meets the applicable listing standards, to be listed on the New York
Stock Exchange or the Nasdaq National Market.
(i) Provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered by each registration
statement from and after a date not later than the effective date of such
registration.
(j) Keep the Holders advised in writing as to the
initiation and progress of any registration under this Agreement, allow such
Holders and their counsel to participate in the preparation of the registration
statement and to have access to all relevant corporate records, documents and
information, and include in such registration statement such information as such
Holders may reasonable request.
(k) Cause representatives of the Company to participate
in any "road show" or "road shows" reasonably requested by any underwriter of an
underwritten or "best efforts" offering of any Registrable Securities.
(l) Otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and, if required,
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve (12) months, but not
more than eighteen (18) months, beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 promulgated thereunder, and promptly furnish to each such seller of
Registrable Securities a copy of any amendment or supplement to such
registration statement or prospectus.
2.7 RESERVED.
2.8 DELAY OF REGISTRATION; FURNISHING INFORMATION. (a) It shall be
a condition precedent to the obligations of the Company to take any action
pursuant to Section 2.2, 2.3 or 2.4 that the selling Holders shall furnish to
the Company such information regarding themselves, the Registrable Securities
held by them and the intended method of disposition of such securities as shall
be required to effect the registration of their Registrable Securities;
PROVIDED, that any such information shall be given or made by a selling Holder
without representation or warranty of any kind whatsoever except representations
with respect to the identity of such Holder, such Holder's
10
Registrable Securities and such Holder's intended method of distribution or any
other representations required by applicable law.
(b) The Company shall have no obligation with respect to
any registration requested pursuant to Section 2.2 or Section 2.4 if, due to the
operation of subsection 2.2(b), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in Section 2.2 or Section 2.4,
whichever is applicable.
2.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, members, agents,
affiliates, officers, directors and legal counsel of each Holder, any
underwriter (as defined in the Securities Act) for such Holder and each person,
if any, who controls such Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, or otherwise,
including, without limitation, the reasonable fees and expenses of legal counsel
(including those incurred in connection with a claim for indemnity hereunder)
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus, final
prospectus or summary prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities
law in connection with the offering covered by such registration statement; and
the Company will reimburse each such Holder, partner, member, agent, affiliate,
officer or director, underwriter or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided however,
that the indemnity agreement contained in this Section 2.9(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, member, officer, director,
underwriter or controlling person of such Holder.
(b) To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration, qualifications or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers,
and legal counsel and each person, if any, who controls the Company within the
11
meaning of the Securities Act, any underwriter and any other Holder selling
securities under such registration statement or any of such other Holder's
partners, directors or officers or any person who controls such Holder, against
any losses, claims, damages or liabilities to which the Company or any such
director, officer, controlling person, underwriter or other such Holder, or
partner, director, officer or controlling person of such other Holder may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will reimburse any legal
or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or other Holder, or partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; PROVIDED, HOWEVER,
that the indemnity agreement contained in this Section 2.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; PROVIDED FURTHER, that in no event shall the
liability of any Holder hereunder and any indemnity under this Section 2.9(b)
exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 2.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.9.
Notwithstanding the foregoing, in any action or proceeding in which both the
Company and an indemnified party is, or is reasonably likely to become, a party,
such indemnified party shall have the right to employ separate counsel at the
Company's expense and to control its own defense of such action or proceeding
if, in the reasonable opinion of counsel to such indemnified party, (a) there
are or may be legal defenses available to such indemnified party or to other
indemnified parties that are different from or additional to those available to
the Company or (b) any conflict or potential conflict exists between the Company
and such indemnified party that would make such separate representation
advisable; provided, however, that in no event shall the Company be required to
pay fees and
12
expenses under this Section 2.9 for more than one firm of attorneys in any
jurisdiction in any one legal action or group of related legal actions.
(d) If the indemnification provided for in this Section
2.9 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or liabilities
referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the Violation(s) that resulted
in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by a court of law by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; provided, that in no event shall any contribution by
a Holder hereunder exceed the proceeds from the offering received by such
Holder; provided, further, that each Holder's obligations to contribute as
provided in this Section 2.9(d) are several in proportion to the relative value
of their respective Registrable Securities covered by such registration
statement and not joint.
(e) The obligations of the Company and Holders under this
Section 2.9 shall survive completion of any offering of Registrable Securities
in a registration statement. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 2: (A) may
be transferred or assigned by a Holder (other than 1818 Fund Securityholder who
is a Holder) to a transferee or assignee of Registrable Securities which (i) is,
with respect to a Holder, a stockholder, subsidiary, parent, general partner,
limited partner, retired partner, member or former member or a liquidating trust
for the benefit of any such entity, or (ii) is a Holder's family member or trust
for the benefit of an individual Holder; and (B) shall be deemed to be
transferred automatically with any Registrable Security that is transferred by
an 1818 Fund Securityholder who is a Holder; PROVIDED, HOWEVER, that, in the
case of clauses (A) and (B), (x) the transferor shall, upon such transfer,
furnish to the Company written notice of the name and address of such transferee
or assignee and the securities with respect to which such registration rights
are being assigned and (y) such transferee shall agree to be subject to all
restrictions set forth in this Agreement.
2.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Section 2 may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and 1818 Fund. Any
amendment or waiver effected in accordance with this Section 2.11 shall be
13
binding upon each Holder and the Company. By acceptance of any benefits under
this Article II, Holders of Registrable Securities hereby agree to be bound by
the provisions hereunder.
2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date
of this Agreement, the Company shall not, without the prior written consent of
1818 Fund, enter into any agreement with any holder or prospective holder of any
securities of the company that would grant such holder registration rights
senior to or inconsistent with those granted to the Holders hereunder.
2.13 "MARKET STAND-OFF" AGREEMENT. If requested by the Company or
the representative of the underwriters of Common Stock (or other securities) of
the Company, each Holder shall not sell or otherwise transfer or dispose of any
Common Stock (or other securities) of the Company held by such Holder (other
than those included in the registration) for a period specified by the
representative of the underwriters not to exceed one hundred eighty (180) days
following the effective date of a registration statement of the Company filed
under the Securities Act, PROVIDED that:
(a) such agreement shall apply only to the Company's
Initial Offering; and
(b) all officers and directors of the Company and all
employees of the Company who are holders of at least one percent (1%) of the
Company's voting securities enter into similar agreements.
The obligations described in this Section 2.13 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of said one hundred eighty (180) day period.
The Company shall use its best efforts to obtain agreements not to sell from all
future holders of in excess of one percent (1%) of the Company's voting
securities which are not less favorable to the Company that the foregoing.
2.14 RULE 144 REPORTING. With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those
terms are understood and defined in SEC Rule 144 or any similar or analogous
rule promulgated under the Securities Act, at all times after the effective date
of the first registration filed by the Company for an offering of its securities
to the general public;
(b) File with the SEC in a timely manner, all reports and
other documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144 of
the Securities Act, and of the Exchange Act (at any
14
time after it has become subject to such reporting requirements); a copy of the
most recent annual or quarterly report of the Company; and such other reports
and documents as a Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing it to sell any such securities without
registration.
SECTION 3. RESERVED.
SECTION 4. RIGHTS OF FIRST REFUSAL
4.1 SUBSEQUENT OFFERINGS. Until the earlier of (x) June 28, 2007
and (y) the date 1818 Fund owns less than 50% of any shares of Common Stock
issued to 1818 Fund pursuant to the 1818 Fund Purchase Agreement (assuming
exercise of any warrants issued to 1818 Fund), each 1818 Fund Securityholder
shall have a right of first refusal to purchase its pro rata share of all Equity
Securities (as defined below) that the Company may, from time to time, propose
to sell and issue after the date of this Agreement, other than the Equity
Securities excluded by Section 4.6 hereof. Each 1818 Fund Securityholder's pro
rata share is equal to a percentage determined by dividing (x) the number of
shares of Common Stock (treating all Shares as if converted or exercised into
Common Stock) which each 1818 Fund Securityholder is deemed to be a holder of
immediately prior to the issuance of such Equity Securities to (y) the total
number of shares of outstanding Common Stock (treating all Shares as if
converted or exercised into Common Stock) immediately prior to the issuance of
the Equity Securities. The term "EQUITY SECURITIES" shall mean (i) any Common
Stock, Preferred Stock or other equity security of the Company, (ii) any
security convertible, with or without consideration, into any Common Stock,
Preferred Stock or other equity security (including any option to purchase such
a convertible security), (iii) any equity security carrying any warrant or right
to subscribe to or purchase any Common Stock, Preferred Stock or other equity
security or (iv) any such warrant or right.
4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any
Equity Securities, it shall give each 1818 Fund Securityholder written notice of
its intention, describing the Equity Securities, the price and the terms and
conditions upon which the Company proposes to issue the same. Each 1818 Fund
Securityholder shall have fifteen (15) days from the giving of such notice to
agree to purchase its pro rata share of the Equity Securities for the price and
upon the terms and conditions specified in the notice by giving written notice
to the Company and stating therein the quantity of Equity Securities to be
purchased. Notwithstanding the foregoing, the Company shall not be required to
offer or sell such Equity Securities to any 1818 Fund Securityholder who would
cause the Company to be in violation of applicable federal securities laws by
virtue of such offer or sale.
4.3 ISSUANCE OF EQUITY SECURITIES.
(a) If not all of the 1818 Fund Securityholders elect to
purchase their pro rata share of the Equity Securities, then the Company shall
promptly notify in writing the 1818 Fund Securityholders who do so elect and
shall offer such 1818 Fund Securityholders the right to acquire such
unsubscribed shares. The 1818 Fund Securityholders shall have fifteen (15) days
after receipt of such notice to notify the Company of their election to purchase
all or a portion thereof of the unsubscribed shares. If the 1818 Fund
Securityholders exercise in full the rights of first refusal, the closing of the
purchase of the Equity Securities subscribed for by the 1818 Fund
Securityholders under this Section 4 shall be held at the executive office of
the Company on the 30th day after the giving of the notice pursuant to Section
4.2 or Section 4.3, as the case may be, or at such other time and place the
parties to the transaction may agree. If the 1818 Fund
15
Securityholders fail to exercise in full the rights of first refusal, the
Company shall have ninety (90) days thereafter to sell the Equity Securities in
respect of which the 1818 Fund Securityholders' rights were not exercised, at a
price per share no less than ninety five percent (95%) of the price per share
specified in the notice delivered pursuant to Section 4.2 and upon other general
terms and conditions materially no more favorable to the purchasers thereof than
specified in the Company's notice to the 1818 Fund Securityholders pursuant to
Section 4.2 hereof. If the Company has not sold such Equity Securities within
ninety (90) days of the notice provided pursuant to Section 4.2, the Company
shall not thereafter issue or sell any Equity Securities, without first offering
such securities to the 1818 Fund Securityholders in the manner provided above.
(b) At the closing of the purchase of the Equity
Securities subscribed for by the 1818 Fund Securityholders under this Section 4,
the Company shall deliver certificates representing the Equity Securities, and
such Equity Securities shall be issued free and clear of all liens and
encumbrances (other than those attributable to actions by the purchasers
thereof) and the Company shall so represent and warrant, and further represent
and warrant (in addition to other customary representations and warranties) that
such Equity Securities shall be, upon issuance thereof to the 1818 Fund
Securityholders and after payment therefor, duly authorized, validly issued,
fully paid and non-assessable. Each 1818 Fund Securityholder purchasing Equity
Securities shall deliver at the closing payment in full in immediately available
funds for the Equity Securities purchased by him or it. At such closing all of
the parties to the transaction shall execute such additional documents as are
customary for transactions of this type.
4.4 RESERVED.
4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL. The rights of first
refusal of any 1818 Fund Securityholder under this Section 4 may be transferred
or assigned by any 1818 Fund Securityholder to any transferee or assignee of
Shares.
4.6 EXCLUDED SECURITIES. The rights of first refusal established
by this Section 4 shall have no application to any of the following Equity
Securities:
(a) any Equity Securities issued for consideration other
than cash pursuant to a merger, consolidation, acquisition or similar business
combination approved by the Board of Directors, including at least one member of
the Board of Directors designated by the Investors;
(b) shares of Common Stock issued in connection with any
stock split, stock dividend or recapitalization by the Company;
(c) warrants issued pursuant to the 1818 Fund Purchase
Agreement; and
(d) shares of Common Stock issued or issuable upon (i)
conversion of any shares of Series A Convertible Preferred Stock issued pursuant
to the Pipe Stock Purchase Agreement, or (ii) exercise of any warrants issued
pursuant to the 1818 Fund Purchase Agreement.
SECTION 5. RESERVED.
16
SECTION 6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Delaware as applied to agreements among
Delaware residents entered into and to be performed entirely within Delaware.
6.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Holder and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Shares or Registrable Securities from time to
time; provided, however, that prior to the receipt by the Company of adequate
written notice of the transfer of any Shares or Registrable Securities
specifying the full name and address of the transferee, the Company may deem and
treat the person listed as the holder of such shares in its records as the
absolute owner and holder of such shares for all purposes, including the payment
of dividends or any redemption price.
6.4 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
6.5 AMENDMENT AND WAIVER. Except as otherwise expressly provided,
this Agreement may be amended or modified only upon the written consent of the
Company and 1818 Fund.
(a) Except as otherwise expressly provided, the
obligations of the Company and the rights of the Holders under this Agreement
may be waived only with the written consent of 1818 Fund.
(b) Notwithstanding the foregoing, this Agreement may be
amended with only the written consent of the Company and 1818 Fund to include
additional purchasers of Shares as "INVESTORS," "HOLDERS" and parties hereto.
6.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be
17
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, by law, or otherwise afforded to Holders,
shall be cumulative and not alternative.
6.7 NOTICES. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (i) upon personal delivery to
the party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
party to be notified at the address as set forth on the signature pages hereof
or EXHIBIT A hereto or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.
6.8 ATTORNEYS' FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
6.9 ENTIRE AGREEMENT. This Agreement, together with the exhibits
hereto, is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, representations,
warranties or undertakings, other than those set forth herein or therein. This
Agreement, together with the exhibits hereto, supersedes all prior agreements
and understandings among the parties with respect to such subject matter,
including, without limitation, the Prior Rights Agreement.
6.10 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
6.11 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.
6.12 LOCK-UP PROVISIONS.
Notwithstanding anything contained in this Agreement to the contrary,
nothing contained in this Agreement shall be deemed in any way to supercede any
of the provisions contained in Section 4(1) of the Pipe Stock Purchase Agreement
with respect to the Series A Preferred Stock.
[THIS SPACE INTENTIONALLY LEFT BLANK]
18
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
COMPANY: INVESTORS:
PSYCHIATRIC SOLUTIONS, INC. CAPITALSOURCE HOLDINGS LLC
By: /s/ ββββ β. ββββββ
-----------------------------
ββββ β. ββββββ By:
Its: President ---------------------------------
Title:
OLD PSI:
PSYCHIATRIC SOLUTIONS
HOSPITALS, INC.
By: /s/ ββββ β. ββββββ
-----------------------------
ββββ β. ββββββ
Its: President
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-1
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
/s/ ββββ β. ββββββ
------------------------------------
ββββ β. ββββββ
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-2
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
βββββββ ASSOCIATES, LLC
By:
---------------------------------
Title:
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-3
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
THE 1818 MEZZANINE FUND II, L.P.
BY: βββββ BROTHERS ββββββββ & CO.,
ITS GENERAL PARTNER
By: /s/ ββββββ β. ββββββ
--------------------------------
Name: ββββββ β. ββββββ
Title: Managing Partner
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-4
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
F.C.A. VENTURE PARTNERS II, L.P.
BY: βββββββ ββ VENTURE CAPITAL GROUP,
LLC, GENERAL PARTNER
By:
----------------------------------
Name:
Title:
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-5
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
F.C.A. VENTURE PARTNERS I, L.P.
BY: DC INVESTMENTS LLC,
GENERAL PARTNER
By:
----------------------------------
Name:
Title:
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-6
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
OAK INVESTMENT PARTNERS VII,
LIMITED PARTNERSHIP
By:
----------------------------------
Name:
Title:
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-7
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
OAK VII AFFILIATES FUND,
LIMITED PARTNERSHIP
By:
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Name:
Title:
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-8
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
SOUTH PARK VENTURE PARTNERS, L.P.
By:
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Name:
Title:
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-9
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
SOUTH POINTE VENTURE PARTNERS, L.P.
By:
----------------------------------
Name:
Title:
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-10
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
ACACIA VENTURE PARTNERS, L.P.
By:
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Name:
Title:
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-11
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
INVESTORS:
CGJR HEALTH CARE SERVICES,
PRIVATE EQUITIES, L.P.
CGJR II, L.P.
CGJR/MF III, L.P.
BY: CGJR CAPITAL MANAGEMENT, INC.
AS GENERAL PARTNER OF
ALL 3 OF THE ENTITIES ABOVE
By:
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Name:
Title:
[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]
A-12