Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement dated as of May 4, 1999 (this
"Agreement") is made by and among ▇▇▇▇▇ Consulting, Inc., an Illinois
corporation (the "Corporation"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Evanisko"), ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("Bascobert") ("Evanisko",
"▇▇▇▇▇▇▇▇▇" and "Bascobert" collectively, the "Vertex Shareholders").
WHEREAS, pursuant to a Stock Purchase Agreement (the "Stock Purchase
Agreement") dated as of May 4, 1999, by and among the Corporation, Vertex
Partners, Inc., a Massachusetts corporation ("Vertex"), and the Vertex
Shareholders, the Corporation has agreed to acquire all of the outstanding
shares of common stock, par value $0.01 per share ("Vertex Common Stock"), of
Vertex held by the Vertex Shareholders in exchange for an aggregate of 1,512,373
shares of the Corporation's common stock, no par value ("Common Stock"); and
WHEREAS, as a condition of the sale of shares of Vertex Common Stock to the
Corporation, the Vertex Shareholders have required that the Corporation enter
into this Agreement to provide the Vertex Shareholders certain rights to
register their shares of Common Stock; and
WHEREAS, ▇▇▇▇▇ owns shares of the Corporation's Common Stock and the
Corporation wishes to provide ▇▇▇▇▇ rights to register his shares of Common
Stock;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
1.1 The term "Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations of the SEC issued thereunder, as
they may, from time to time, be in effect;
1.2 The term "Holder" means any Vertex Shareholder, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
("▇▇▇▇▇"), ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, any of the children of ▇▇▇▇▇, any trust
established for the benefit of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or any of the children of
▇▇▇▇▇, and any other person or entity holding Registrable Securities to whom the
registration rights granted in this Agreement have been transferred pursuant to
Section 11 hereof;
1.3 The terms "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; and
1.4 The term "Registrable Securities" means (1) the Common Stock
issued to the Vertex Shareholders pursuant to Section 1.2 of the Stock Purchase
Agreement; (2) the Common Stock issued to the Vertex Shareholders upon exercise
of options granted by the Corporation to the Vertex Shareholders; (3) the Common
Stock issued to the Vertex Stockholders pursuant to Article V of the Stock
Purchase Agreement; (4) Common Stock held by any other Holder; and (5) any
Common Stock of the Corporation issued as a dividend or other distribution with
respect to, or in exchange or in replacement of, such Common Stock. Any
Registrable Securities will cease to be such when (i) a registration statement
covering such Registrable Securities has been declared effective by the SEC and
such Registrable Securities have been disposed of pursuant to such effective
registration statement, (ii) such Registrable Securities are distributed to the
public pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (iii) such Registrable Securities may be resold without any
restriction under the Securities Act.
1.5 The term "SEC" means the Securities and Exchange Commission;
1.6 The term "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC issued thereunder, as they
may, from time to time, be in effect; and
1.7 The term "Vertex Shares" means (1) the Common Stock issued to the
Vertex Shareholders pursuant to Section 1.2 of the Stock Purchase Agreement; (2)
the Common Stock issued to the Vertex Shareholders upon exercise of options
granted by the Corporation to the Vertex Shareholders; (3) the Common Stock
issued to the Vertex Stockholders pursuant to Article V of the Stock Purchase
Agreement; and (4) any Common Stock of the Corporation issued as a dividend or
other distribution with respect to, or in exchange or in replacement of, such
Common Stock.
Capitalized terms used, but not otherwise defined, in this Agreement shall
have the meanings given to them in the Stock Purchase Agreement.
2. Corporation Registration. Subject to Section 6 of this Agreement, if
at any time, or from time to time, the Corporation determines to register any of
its Common Stock under the Securities Act in connection with the public offering
of such securities for its own account or for the accounts of other
stockholders, solely for cash on a form that would also permit the registration
of the Registrable Securities (other than on Form ▇-▇, ▇-▇ or any successor
forms thereto) the Corporation shall, each such time, promptly give each Holder
written notice of such determination. Upon the written request of any Holder
given within thirty (30) days after mailing of any such notice by the
Corporation, the Corporation shall use, subject to the limitations set forth in
Section 6.1, its commercially reasonable efforts to cause to be registered under
the Securities Act all of the Registrable Securities that each such Holder has
requested be registered. Notwithstanding the foregoing, no such notice need be
given of any determination by the Corporation to register any of its Common
Stock on Form S-3 (or any successor form thereto) under the Securities Act in
connection with any re-offering or re-sale of such securities by a stockholder
who or which received such securities in connection with any merger,
acquisition, consolidation or similar transaction involving the Corporation and
the Corporation
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shall not be under any obligation hereunder to include in any such registration
the Registrable Securities of any Holder.
3. Obligations of the Corporation. Whenever required under Section 2 to
use its commercially reasonable efforts to effect the registration of any
Registrable Securities, the Corporation shall, as expeditiously as reasonably
possible:
3.1 Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become and remain effective;
provided, however, that in connection with any proposed registration intended to
permit an offering of any securities from time to time (i.e., a so-called "shelf
registration"), the Corporation shall in no event be obligated to cause any such
registration to remain effective for more than one hundred eighty (180) days.
3.2 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 comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
3.3 Furnish to the Holders such numbers of copies of a 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.
3.4 Use its commercially reasonable 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 necessary for the
distribution of the securities covered by the registration statement, provided
that the Corporation 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, and further provided
that (anything in this Agreement to the contrary notwithstanding with respect to
the bearing of expenses) if any jurisdiction in which the securities shall be
qualified shall require that expenses incurred in connection with the qualifica
tion of the securities in that jurisdiction be borne by selling stockholders,
then such expenses shall be payable by selling stockholders pro rata, to the
extent required by such jurisdiction.
3.5 Provide a transfer agent for the Common Stock no later than the
effective date of the first registration of any Registrable Securities.
4. Furnish Information. It shall be a condition precedent to the
obligations of the Corporation to take any action pursuant to this Agreement
that the Holders shall furnish to the Corporation such information regarding
them, the Registrable Securities held by them, and the intended method of
disposition of such securities as the Corporation shall reasonably request and
as shall be required in connection with the action to be taken by the
Corporation.
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5. Corporation Registration Expenses. All expenses (excluding
underwriters' discounts and commissions) incurred in connection with a
registration pursuant to Section 2, including, without limitation, any
additional registration and qualification fees and any additional fees and
disbursements of counsel to the Corporation that result from the inclusion of
securities held by the Holders in such registration and the reasonable fees and
disbursements of one counsel for the selling Holders, shall be borne by the
Corporation; provided, however, that if the registration is of exclusively a
secondary offering, the Holders shall bear their proportionate share of the
expenses incurred in connection with any registration (provided all stockholders
registering shares thereunder bear their proportionate share of expenses),
except expenses which the Corporation would have incurred whether or not the
securities held by the Holders were included in such registration (including,
without limitation, the expense of preparing normal audited or unaudited
financial statements).
6. Underwriting Requirements.
6.1 In connection with any offering involving an underwriting of
shares being issued by the Corporation, the Corporation shall not be required to
include any Registrable Securities in such underwriting unless the Holders of
such Registrable Securities accept the terms of the underwriting as agreed upon
between the Corporation and the underwriters selected by it, and then only in
such quantity as will not, in the reasonable opinion of the underwriters,
jeopardize the success of the offering by the Corporation. Except as permitted
by the next succeeding sentence, if the total amount of securities that all
Holders request to be included in an underwritten offering exceeds the amount of
securities that the underwriters reasonably believe compatible with the success
of the offering, no other securities of any stockholder who is not a Holder
shall be included in such offering unless all securities which the Holders have
requested to be included are included, and the Corporation shall only be
required to include in the offering so many of the securities of the selling
Holders as the underwriters reasonably believe will not jeopardize the success
of the offering (the securities so included to be apportioned pro rata among the
selling Holders according to the total amount of securities owned by said
selling Holders, or in such other proportions as shall mutually be agreed to by
such selling Holders). Notwithstanding anything in this Agreement to the
contrary, (i) securities of a stockholder who is not a Holder may be included in
a registration of Common Stock under the Securities Act in connection with the
initial underwritten public offering of Common Stock ("Initial Public
Offering"), provided that the lesser of (x) 302,475 shares of Common Stock, or
(y) one-third (1/3rd) of the total number of shares of Common Stock to be sold
by selling stockholders in connection with the Initial Public Offering, are
included in such registration for the account of the Vertex Shareholders (such
lesser number of shares, the "Vertex IPO Portion"), and (ii) the Vertex
Shareholders may not sell shares of Common Stock in excess of the Vertex IPO
Portion pursuant to the Initial Public Offering.
6.2 With respect to any underwriting of shares, the Corporation shall
have the right to designate the managing underwriter or underwriters.
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7. Delay of Registration. No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
8. Indemnification. In the event any Registrable Securities are included
in a registration statement under this Agreement:
8.1 To the extent permitted by law, the Corporation will indemnify
and hold harmless each Holder requesting or joining in a registration, any
underwriter (as defined in the Securities Act) for it, and each person, if any,
who controls such Holder or underwriter within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which they 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 on any untrue or alleged untrue statement of any
material fact contained in such registration statement, including, without
limitation, any preliminary prospectus or final prospectus contained therein or
any amendments or supplements 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 or
arise out of any violation by the Corporation of any rule or regulation
promulgated under the Securities Act applicable to the Corporation and relating
to action or inaction required of the Corporation in connection with any such
registration; and will reimburse each such Holder, such 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 8.1 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 Corporation (which consent shall not be unreasonably withheld
or delayed) nor shall the Corporation 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 an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus, or amendments or supplements thereto,
in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder, underwriter or
controlling person.
8.2 To the extent permitted by law, each Holder requesting or joining
in a registration will indemnify and hold harmless the Corporation, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Corporation within the meaning of the
Securities Act, and any underwriter for the Corporation (within the meaning of
the Securities Act) against any losses, claims, damages or liabilities to which
the Corporation or any such director, officer, controlling person or underwriter
may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements 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
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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, preliminary prospectus or final prospectus,
or amendments or supplements thereto, in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and will reimburse the Corporation or any such director,
officer, controlling person or underwriter 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 8.2 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 such Holder (which consent shall
not be unreasonably withheld) and provided further that no Holder shall have any
liability under this Section 8.2 in excess of the net proceeds actually received
by such Holder in the relevant public offering.
8.3 Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 8, notify the indemnifying party in writing 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. The failure to notify an indemnifying party
promptly of the commencement of any such action, if prejudicial to his ability
to defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 8, but the omission so to notify the
indemnifying party will not relieve him of any liability that he may have to any
indemnified party otherwise than under this Section 8.
9. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Corporation to the public without
registration, the Corporation agrees that while it has a class of equity
securities registered under the Exchange Act, it will use its commercially
reasonable efforts to:
9.1 make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to ninety (90) days
after the effective date of the first registration statement under the
Securities Act covering an underwritten public offering filed by the
Corporation;
9.2 file with the SEC in a timely manner all reports and other
documents required of the Corporation under the Securities Act and the Exchange
Act; and
9.3 furnish to any Holder forthwith upon request a written statement
by the Corporation that it has complied with the reporting requirements of Rule
144 (at any time after ninety (90) days after the effective date of said first
registration statement filed by the Corporation), and the Exchange Act (at any
time after it has become subject to such reporting requirements), a copy of the
most recent annual or quarterly report of the Corporation, and such
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other reports and documents so filed by the Corporation as may be reasonably
requested in availing any such holder to take advantage of any rule or
regulation of the SEC permitting the selling of any such securities without
registration.
10. Limitations in Connection with Future Grants of Registration Rights.
Without the prior written consent of the Holder or Holders of a majority of the
then outstanding Vertex Shares, the Corporation shall not grant rights to cause
the Corporation to register any of its securities to any person or entity which
rights are senior to, or on a parity with, those of the Holders (it being
understood that any grant which may cause a reduction in the number of
Registrable Securities to be included in an underwritten public offering for the
account of the Vertex Shareholders shall be deemed to be senior to, or on a
parity with, the rights of the Holders).
11. Transfer of Registration Rights. The registration rights of any
Holder (and of any permitted transferee of any Holder or its permitted
transferees) under this Agreement with respect to any shares of Registrable
Securities may be transferred to any transferee who acquires (otherwise than in
a registered public offering) at least 50,000 of the Registrable Securities or
all Registrable Securities then held by the transferor; provided, however, that
the Corporation is given written notice by the Holder at the time of such
transfer stating the name and address of the transferee and identifying the
securities with respect to which the rights under this Agreement are being
assigned and the transferee executes a written instrument, in form and substance
reasonably satisfactory to the Corporation, agreeing to be bound by this
Agreement.
12. Mergers, Etc. The Corporation shall not, directly or indirectly,
enter into any merger, consolidation or reorganization in which the Corporation
shall not be the surviving corporation unless the proposed surviving corporation
shall, prior to such merger, consolidation or reorganization, agree in writing
to assume the obligations of the Corporation under this Agreement, and for that
purpose references hereunder to "Registrable Securities" shall be deemed to be
references to the securities which the Holders would be entitled to receive in
exchange for Registrable Securities under any such merger, consolidation or
reorganization; provided, however, that the provisions of this Agreement shall
not apply in the event of any merger, consolidation or reorganization in which
the Corporation is not the surviving corporation if the Holders of Registrable
Securities are entitled to receive in exchange therefor (i) cash, or (ii)
securities of the acquiring corporation which may be immediately sold to the
public without registration under the Securities Act.
13. Notices. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person, sent by facsimile transmission with
confirmation of receipt, or duly sent by first class registered or certified
mail, postage prepaid, addressed to such party at the address set forth below or
such other address as may hereafter be designated in writing by the addressee to
the addressor listing all parties:
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(i) if to the Corporation, to:
▇▇▇▇▇ Consulting, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ Liddell & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Vertex Shareholders, to
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
c/o Vertex Partners, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to ▇▇▇▇▇, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
c/▇ ▇▇▇▇▇ Consulting, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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14. Miscellaneous.
14.1 Entire Agreement; Effect on Prior Documents. The Agreement
contains the entire agreement of the parties concerning the subject matter
hereof, and supersedes all prior negotiations, commitments, agreements and
understandings, written or oral, between or among them concerning such subject
matter.
14.2 Amendments; Waivers. This Agreement may be amended, and
compliance with any provision of this Agreement may be omitted or waived, only
by the written agreement of the Corporation and the Holders of at least a
majority in voting power of the then-outstanding Vertex Shares.
14.3 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the substantive laws of the State of
Illinois without regard to its principles of conflicts of laws.
14.4 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14.5 Certain Matters of Construction. A reference to a Section shall
mean a Section in this Agreement unless otherwise expressly stated. The titles
and headings herein are for reference purposes only and shall not in any manner
limit the construction of this Agreement which shall be considered as a whole.
The words "include," "includes" and "including" when used herein shall be deemed
in each case to be followed by the words "without limitation." Whenever the
context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of names and pronouns
shall include the plural and vice-versa.
14.6 Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart shall be deemed to be an original
instrument, and all such counterparts shall together constitute but one
agreement.
[Remainder of the page intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as a contract under seal as of the date first above written.
▇▇▇▇▇ CONSULTING, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By:_____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Secretary
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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