Exhibit B
Registration Rights Agreement
1. SHELF REGISTRATION
(a) SHELF REGISTRATION. The Company shall, as promptly as practicable,
after April 15, 1997 file with the SEC a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415
covering all of the Purchased Stock (as hereinafter defined) (the
"Initial Shelf Registration"). The Company shall use its best efforts
to file with the SEC the Initial Shelf Registration within 30 days of
April 15, 1997 and shall use its best efforts to cause such Shelf
Registration to be declared effective under the Securities Act as
promptly as practicable thereafter. The Initial Shelf Registration
shall be on From S-1 or another appropriate form permitting
registration of such Purchased Stock for resales by holders in the
manner or manners designated by them (including, without limitation,
one or more underwritten offerings). The Company shall not permit any
securities other than the Purchased Stock to be included to any Shelf
Registration. The Company shall use its best efforts to keep the
Initial Shelf Registration continuously effective under the Securities
Act of 1933, as amended (the "Securities Act") until the date which is
36 months from the date of filing (the "Effectiveness Period") or such
shorter period ending when (i) all Purchased Stock covered by the
Initial Shelf Registration have been sold in the manner set forth and
as contemplated in the Initial Shelf Registration or (ii) a Subsequent
Shelf Registration covering all of the Purchased Stock has been
declared effective under the Securities Act.
(b) SUBSEQUENT SHELF REGISTRATION. If the Initial Shelf Registration or
any Subsequent Shelf Registration ceases to be effective for any
reasons at any time during the Effectiveness Period (other than
because of the sale of all of the securities registered thereunder),
the Company shall use its best efforts to obtain the prompt withdrawal
of any order suspending the effectiveness thereof, and in any event
shall within 30 days of such cessation of effectiveness amend the
Shelf Registration in a manner to obtain the withdrawal of the order
suspending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the
Purchased Stock (a "Subsequent Shelf Registration"). If a Subsequent
Shelf Registration is filed, the Company shall use its best efforts to
cause the Subsequent Shelf Registration to be declared effective as
soon as practicable after such filing and to keep such Subsequent
Shelf Registration continuously effective for a period equal to the
number of days in the Effectiveness Period less the aggregate number
of days during which the Initial Shelf Registration or any Subsequent
Shelf Registration was previously continuously effective. As used
herein, the term "Shelf Registration" means the Initial Shelf
Registration and any Subsequent Shelf Registration.
1
(c) SUPPLEMENTS AND AMENDMENTS. The Company shall promptly supplement and
amend any Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably
requested by the holders of a majority of the Purchased Stock covered
by such Shelf Registration or by any underwriter of such Purchased
Stock, in each case, with the Company's consent, which consent shall
not be unreasonably withheld or delayed.
2. REQUIRED REGISTRATION. Commencing upon the expiration of the 36 month
period specified in Section 1, if the Company shall receive a written
request therefor from any holder of the Purchased Stock not theretofore
registered under the Securities Act, and sold, the Company shall prepare
and file a registration statement under the Securities Act covering the
shares of Purchased Stock which are the subject of such request and shall
use its best efforts to cause such registration statement to become
effective. In addition, upon the receipt of such request, the Company
shall promptly give written notice to all other record holders (if any) of
shares of Purchased Stock not theretofore registered under the Securities
Act and sold that such registration is to be effected. The Company shall
include in such registration statement such shares of Purchased Stock for
which it has received written requests to registered by such other record
holders within 30 days after the delivery of the Company's written notice
to such other record holders. The Company shall be obligated to prepare,
file and cause to become effective only three registration statements
pursuant to this Section 2.
Without the written consent of the holders of a majority of the holders for
which registration has been requested pursuant to this paragraph 2, neither
the Company nor any other holder of securities of the Company may include
securities in such registration if in the good faith judgment of the
managing underwriter of such public offering the inclusion of such
securities would interfere with the successful marketing of the Purchased
Stock or require the exclusion of any portion of the Purchased Stock to be
registered.
3. INCIDENTAL REGISTRATION. Each time the Company shall determine to proceed
with the actual preparation and filing of a registration statement under
the Securities Act in connection with the proposed offer and sale for cash
of any of its securities by it or any of its security holders (other than a
registration statement on a form that does not permit the inclusion of
shares by its security holders), the Company will give written notice of
its determination to all record holders of Purchased Stock not theretofore
registered under the Securities Act and sold. Upon the written request of
a record holder of any shares of Purchased Stock given within 30 days after
receipt of any such notice from the Company, the Company will, except as
herein provided, cause all such shares of Purchased Stock, the record
holders of which have so requested registration thereof, to be included in
such registration statement, all to the extent requisite to permit the sale
or other disposition by the prospective seller or sellers of the Purchased
Stock to be so registered; provided, however, that nothing herein shall
prevent the Company from, at any time, abandoning or
2
delaying any such registration initiated by it; provided further,
however, that if the Company determines not to proceed with a registration
after the registration statement has been filed with the Commission and
the Company's decision not to proceed is primarily based upon the
anticipated public offering price of the securities to be sold by the
Company, the Company shall promptly complete the registration for the
benefit of those selling security holders who wish to proceed with a
public offering of their securities. If any registration pursuant to
this paragraph 3 shall be underwritten in whole or in part, the Company
may require that the Purchased Stock requested for inclusion pursuant
to this paragraph 3 be included in the underwriting on the same terms
and conditions as the securities otherwise being sold through the
underwriters. If in the good faith judgment of the managing underwriter
of a proposed underwritten public offering the inclusion of all of the
Purchased Stock originally covered by a request for registration would
reduce the number of shares to be offered by the Company or interfere
with the successful marketing of the shares of stock offered by the
Company, the number of shares of Purchased Stock otherwise to be included
in the underwritten public offering may be reduced pro rata (by number of
shares) among the holders thereof requesting such registration, provided,
however, that after any such required reduction the Purchased Stock to be
included in such offering, together with any shares to be included in such
offering that are being offered by other selling shareholders, shall
constitute at least 25% of the total number of shares to be included in
such offering. Those shares of Purchased Stock which are thus excluded
from the underwritten public offering shall be withheld from the market
by the holders thereof for a period, not to exceed 90 days, which the
managing underwriter reasonably determines if necessary in order to effect
the underwritten public offering.
4. REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions of paragraph 1, 2 or 3 hereof to effect the registration of
shares of Purchased Stock under the Securities Act, the Company will:
(a) prepare and file with the Commission a registration statement with
respect to such securities, and use its best efforts to cause such
registration statement to become and remain effective for such period
as may be reasonably necessary to effect the sale of such securities,
not to exceed (i) thirty-six months in the case of the Shelf
Registration specified in Section 1 and (ii) nine months with respect
to a registration statement not covered by Section 1;
(b) prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained
therein as may be necessary to keep such registration statement
effective for such period as may be reasonably necessary to effect the
sale of such securities, not to exceed (i) thirty-six months in the
case of the Shelf Registration specified in Section 1 and (ii) nine
months with respect to a registration statement not covered by Section
1;
3
(c) furnish to the security holders participating in such registration and
to the underwriters of the securities being registered such reasonable
number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such
underwriters may reasonably request in order to facilitate the public
offering of such securities;
(d) use its best efforts to register or qualify the securities covered by
such registration statement under such state securities or blue sky
laws of such jurisdictions as such participating holders may
reasonably request in writing within 20 days following the original
filing of such registration statement, except that the Company shall
not for any purpose be required to execute a general consent to
service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified.
(e) notify the security holders participating in such registration,
promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been
filed;
(f) notify such holders promptly of any request by the Commission for the
amending or supplementing of such registration statement or prospectus
or for additional information;
(g) prepare and file with the Commission, promptly upon the request of any
such holders, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such
holders (and concurred in by counsel for the Company), is required
under the Securities Act or the rules and regulations thereunder in
connection with the distribution of the Purchased Stock by such
holder;
(h) prepare and promptly file with the Commission and promptly notify such
holders of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct
any statements or omissions if, at the time when a prospectus relating
to such securities is required to be delivered under the Securities
Act, any event shall have occurred as the result of which any such
prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading;
(i) advise such holders, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the
initiation or threatening of any
4
proceeding for the purpose and promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if
such stop order should be issued;
(j) not file any amendment or supplement to such registration statement or
prospectus to which a majority in interest of such holders shall have
reasonably objected on the grounds that such amendment or supplement
does not comply in all material respects with the requirements of the
Securities Act or the rules and regulations thereunder, after having
been furnished with a copy thereof at least five business days prior
to the filing thereof, unless in the opinion of counsel for the
Company the filing of such amendment or supplement is reasonably
necessary to protect the Company from any liabilities under any
applicable federal or state law and such filing will not violate
applicable law; and
(k) at the request of any such holder, furnish: (i) an opinion, dated as
of the closing date, of the counsel representing the Company for the
purposes of such registration, addressed to the underwriters, if any,
and to the holder or holders making such request, covering such
matters as such underwriters and holder or holders may reasonably
request; and (ii) letters dated as of the effective date of the
registration statement and as of the closing date, from the
independent certified public accountants of the Company, addressed to
the underwriters, if any, and to the holder or holders making such
request, covering such matters as such underwriters and holder or
holders may reasonably request.
5. EXPENSES. With respect to each registration, the Company shall bear all
fees, costs and expenses including, without limitation,: all registration,
filing and NASD fees, printing expenses, fees and disbursements of counsel
and accountants for the Company, fees and disbursements of counsel for the
underwriter or underwriters of such securities (if the Company and/or
selling security holders are required to bear such fees and disbursements),
all internal Company expenses, all legal fees and disbursements and other
expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered or
qualified, and the premiums and other costs of policies of insurance
against liability (if any) arising out of such public offering and
underwriting discounts and commissions and transfer taxes relating to the
shares included in the offering by the selling security holders.
6. INDEMNIFICATION. In the event that any Purchased Stock is included in a
registration statement under paragraph 1, 2 or 3 hereof:
(a) The Company will indemnify and hold harmless each holder of shares of
Purchased Stock which are included in a registration statement
pursuant to the provisions of paragraph 1, 2 or 3 hereof, its
directors and officers, and any underwriter (as defined in the
Securities Act) for such holder and each person, if any, who controls
5
such holder or such underwriter within the meaning of the Securities
Act, from and against, and will reimburse such holder and each such
underwriter and controlling person with respect to, any and all loss,
damage, liability, cost and expense to which such holder or any such
underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading;
provided, however, that the Company will not be liable in any such
case to the extent that any such loss, damage, liability, cost or
expense arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity
with information furnished by such holder, such underwriter or such
controlling person in writing specifically for use in the preparation
thereof.
(b) Each holder of shares of Purchased Stock which are included in a
registration pursuant to the provisions of this paragraph 1, 2 or 3
hereof will indemnify and hold harmless the Company, its directors and
officers, any controlling person or any underwriter from and against,
and will reimburse the Company, its directors and officers, any
controlling person and any underwriter with respect to, any and all
loss, damage, liability, cost or expense to which the Company or any
controlling person and/or any underwriter may become subject under the
Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue or alleged
untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was so
made in reliance upon and in strict conformity with written
information furnished by such holder specifically for use in the
preparation thereof. Notwithstanding the foregoing, each holder's
liability for indemnification shall be limited to the amount of the
holder's original purchase price of the Purchased Stock.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) and (b) of this paragraph 6 of notice of
the commencement of any action involving the subject matter of the
foregoing indemnity provisions such indemnified party will, if a claim
thereof is to be made against the indemnifying party pursuant to the
provisions of said paragraph (a) or (b), promptly notify the
6
indemnifying party of the commencement thereof; but the omission to so
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than hereunder.
In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party shall have the right to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, provided, however, if the
defendants in any action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to
those available to the indemnifying party, or if there is a conflict
of interest which would prevent counsel for the indemnifying party
from also representing the indemnified party, the indemnified party or
parties shall have the right to select separate counsel to participate
in the defense of such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party
pursuant to the provisions of said paragraph (a) or (b) for any legal
or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnified party shall have employed
counsel in accordance with the proviso of the preceding sentence, (ii)
the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after the notice of the commencement of the action, or
(iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party.
7. SPECIAL DEFINITION. "Purchased Stock" shall mean the Company's Class A
Stock purchased pursuant to the Stock Purchase Agreement dated March 31,
1997, all Common Stock issued in exchange or substitution thereof, whether
or not such securities have in fact been issued, and the stock or other
securities of the Company issued in a stock split or reclassification of,
or a stock dividend or other distribution on or in substitution or exchange
for, or otherwise in connection with, any of the foregoing securities, or
in a merger or consolidation involving the Company or a sale of all or
substantially all of the Company's assets. Nothing in this paragraph
shall, however, be deemed to require the Company to register the Class A
Stock, it being understood that the securities actually being registered
are shares of Common Stock of the Company into which the Purchased Stock is
convertible.
7