EXHIBIT 10.25
REGISTRATION RIGHTS AGREEMENT IN FAVOR OF
THE HOLDERS OF REGISTABLE SECURITIES
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of January 13, 2003 by and among MAI Systems Corporation, a
Delaware corporation, and the holders of Registrable Securities (the "Holders")
signatory to this Agreement.
This Agreement is made pursuant to the Warrant Agreement and MAI
Amendment No. Three (the "Canyon Agreements") dated as of January 13, 2003 by
and among MAI Systems Corporation, the ("Company"), and the Holders pursuant to
which the Holders are acquiring certain shares of Common Stock of the Company
and may purchase other securities of the Company at a later date pursuant to a
Warrant Agreement of even date. In order to induce the Holders to purchase the
Registrable Securities, the Company has agreed to provide the registration
rights set forth in this Agreement for the benefit of the Holders. The execution
and delivery of this Agreement is called for in the MAI Amendment No. Three.
The parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the
following respective meanings:
(a) AFFILIATE of a specified Person means any other
Person that directly, or indirectly through one or more intermediates, controls,
is controlled by or is under common control with the Person specified, or who
holds or beneficially owns 50% or more of the equity interest in the Person
specified or 50% or more of the voting securities of the Person specified. A
managed account of a Person is also an Affiliate of such Person.
(b) COMMISSION means the Securities and Exchange
Commission.
(c) COMPANY means MAI Systems Corporation or any
successor to it or to its business.
(d) COMMON STOCK means (except where the context
otherwise indicates) the Common Stock of the Company, par value $0.01 per share,
as constituted on its original date of issue by the Company, and any capital
stock into which such Common Stock may thereafter be changed, and shall also
include (i) capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of any Common Stock upon any
reclassification thereof which is also not preferred as to dividends or
liquidation over any other class of stock of the Company and which is not
subject to redemption and (ii) shares of common stock of any successor
corporation, acquiring corporation or Constituent Corporation (as defined in the
Warrant Agreement).
(e) CONTINUOUSLY EFFECTIVE means, with respect to a
specified registration statement, that it shall not cease to be effective and
available for transfers of Registrable Securities thereunder for longer than any
forty-five (45) consecutive Business Days, during
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which time the Company shall not be permitted to call the Warrants, prior to the
Expiration Date.
(f) DEMAND REGISTRATION shall have the meaning set forth
in Section 2(c).
(g) DEMANDING HOLDERS shall have the meaning set forth in
Section 2(c).
(h) EXCHANGE ACT means the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.
(i) EXPIRATION DATE means the later of February 1, 2010,
approximately the seventh anniversary of the date of this Agreement, and the
date the Company's 11% Subordinated Notes, as amended, have been repaid in full.
(j) HOLDERS shall have the meaning set forth in the first
paragraph hereof.
(k) PERSON means any individual, corporation,
partnership, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or other agency or
political subdivision thereof.
(l) PIGGYBACK REGISTRATION shall have the meaning set
forth in Section 2(b)(i).
(m) REGISTRABLE SECURITIES means any shares of Common
Stock of the Company acquired pursuant to the Canyon Agreements or any Warrant
Shares (as defined below) which may be acquired and owned by a Holder, or any
securities received by a Holder in exchange for such securities, and any other
Shares of the Company held by the Holders on the date hereof or Shares received
in exchange therefor. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (x) such securities
shall have been disposed of pursuant to an effective registration statement, (y)
such securities shall have been transferred to any Person other than the Holders
pursuant to Rule 144 (or any successor provision) or shall be transferable
pursuant to paragraph (k) thereof (or any successor provision) under the
Securities Act, or (z) they shall have ceased to be held by the Holders or any
Affiliate of the Holders or any Transferee of the Holders or their Affiliates.
(n) REGISTRATION EXPENSES means all expenses incident to
the performance of or compliance with the registration rights granted herein,
including, without limitation, all registration, filing, listing and NASD fees,
all fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and expenses of the Company's counsel, the fees and expenses of one
counsel for the Selling Holders chosen by a majority vote of them, the fees and
expenses of the Company's independent public accountants, including the expenses
of any special audits or "cold comfort" letters required by or incident to such
performance and compliance.
(o) SECURITIES ACT means the Securities Act of 1933, as
amended, or any successor statute thereto, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder, all as the same shall
be in effect at the time.
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(p) SELLING HOLDERS means those Holders who have
requested registration pursuant to Section 2(b) hereof and who are selling
securities thereunder.
(q) SHARES means the Company's common stock, as
constituted on the date hereof, or any stock or other securities, for which such
common stock shall have been exchanged, or any stock or other securities
resulting from any reclassification of such Shares.
(r) TRANSFEREE shall mean the first holder of Registrable
Securities by a transfer from a Holder or an Affiliate of a Holder provided,
however, that a Person acquiring such Registrable Securities pursuant to a
transfer under an effective registration statement or pursuant to a sale under
Rule 144 shall not be a Transferee.
(s) VIOLATION shall have the meaning set forth in Section
6(a).
(t) CANYON AGREEMENTS means the Canyon Agreements, dated
as of January _____, 2003 between the Company and the Warrant Holders listed
therein.
(u) WARRANTS shall mean any warrants issued pursuant to
the Canyon Agreements.
(v) WARRANT SHARES shall mean the Shares of Company
Common Stock and other securities issuable upon exercise of the Warrants.
2. REGISTRATION RIGHTS.
(a) PIGGYBACK REGISTRATION RIGHTS. At any time after the
execution of this Agreement, if the Company proposes to register any Common
Stock for sale solely for cash, either for its own account or for the account of
a stockholder or stockholders (a "Company Registration"), then the Company shall
give the Holder written notice of its intention to do so and of the intended
method of sale (the "Registration Notice") not fewer than 15 days prior to the
anticipated filing date of the registration statement effecting such Company
Registration. The Holder may request inclusion of any Registrable Shares in such
Company Registration by delivering to the Company, within 10 days after receipt
of the Registration Notice, a written notice (the "Piggyback Notice") stating
the number of Registrable Shares proposed to be included and that such shares
are to be included in the Company Registration only on the same terms and
conditions as the shares of Common Stock otherwise being sold under such
Registration. The Company shall use its reasonable efforts to cause all
Registrable Shares specified in the Piggyback Notice to be included in the
Company Registration and any related offering, all to the extent requisite to
permit the sale by the Holder of such Registrable Shares in accordance with the
method of sale applicable to the other shares of Common Stock included in the
Company Registration.
(b) LIMITATIONS ON PIGGYBACK REGISTRATIONS. The Company's
obligation to include Registrable Shares in the Company Registration pursuant to
Section 2(a) shall be subject to the following limitations: The Company shall
not be obligated to include any Registrable Shares in a registration statement
(i) filed on Form S-4 or Form S-8 or such other similar successor forms then in
effect under the Securities Act, (ii) pursuant to which the Company is
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offering to exchange its own securities, or (iii) relating to dividend
reinvestment plans. There is no limit on the number of Piggyback Registrations
which may be requested hereunder.
(c) DEMAND REGISTRATION.
(i) If the Holders of at least 30% of the
Registrable Securities make a written request to the Company (the
"Demanding Holders"), the Company shall cause there to be filed with
the Commission a registration statement meeting the requirements of the
Securities Act (a "Demand Registration"), and each Demanding Holder
shall be entitled to have included therein all or such number of such
Demanding Holder's Registrable Securities, as the Demanding Holder
shall request in writing. Any request made pursuant to this Section2(c)
shall be addressed to the attention of the Secretary of the Company,
and shall specify the number of Registrable Securities to be
registered, the intended methods of disposition thereof and that the
request is for a Demand Registration pursuant to this Section 2(c).
(ii) Whenever the Company shall have received a
demand pursuant to Section 2(c) to effect the registration of any
Registrable Securities, the Company shall promptly give written notice
of such proposed registration to all Holders. Any Holder may, within
twenty (20) days after receipt of such notice, request in writing that
all of such Holder's Registrable Securities, or any portion thereof
designated by such Holder, be included in the registration.
(iii) Following receipt of a request for a Demand
Registration, the Company shall:
(1) File the registration statement
with the Commission as promptly as practicable, and
shall use the Company's best efforts to have the
registration declared effective under the Securities
Act as soon as reasonably practicable, in each
instance giving due regard to the need to prepare
current financial statements, conduct due diligence
and complete other actions that are reasonably
necessary to effect a registered public offering.
(2) Use the Company's best efforts to
keep the Demand Registration Statement Continuously
Effective for up to two hundred seventy (270) days or
until such earlier date as of which all the
Registrable Securities under the Demand Registration
Statement shall have been disposed of in the manner
described in the Registration Statement, or such
earlier time as the Company would not have any
obligation to include the Registrable Securities that
have not been disposed of in the manner described in
the Registration Statement. Notwithstanding the
foregoing, if for any reason the effectiveness of a
registration pursuant to this Section 2(c) is
suspended the foregoing period shall be extended by
the aggregate number of days of such suspension or
postponement.
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(iv) The Company shall be obligated to effect no
more than a total of one Demand Registration, and only if the Company
is then eligible to use Form S-3 or its equivalent, and if the
reasonably anticipated aggregate gross proceeds to the Holders shall
exceed $1,000,000. For purposes of the preceding sentence, the
registration shall not be deemed to have been effected (i) unless a
registration statement with respect thereto has become effective, (ii)
if after such registration statement has become effective, such
registration or the related offer, sale or distribution of Registrable
Securities thereunder is interfered with by any stop order, injunction
or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to the Selling Holders
and such interference is not thereafter eliminated. The Company shall
not be obligated to enter into an underwriting agreement in connection
with a Demand Registration hereunder. If the Company shall have
complied with its obligations under this Agreement, a right to a Demand
Registration pursuant to this Section 2(c) shall be deemed to have been
satisfied upon the earlier of (i) the date as of which all of the
Registrable Securities included therein shall have been disposed of
pursuant to the Registration Statement, and (ii) the date as of which
such Demand Registration shall have been Continuously Effective for a
period of two hundred seventy (270) days. Any Demand Registration
Statement which, after filing with the Commission is withdrawn by the
Holders, shall be deemed to have been effective in determining the
number of Demand Registrations the Company is obligated to effect
hereunder.
(d) REGISTRATION STATEMENT FORM. The Company may, if
permitted by law, effect any registration requested under Section 2 by the
filing of a registration statement on Form S-3 (or any successor or similar
short-form registration statement).
(e) EXPENSES. The Company shall pay all Registration
Expenses incurred in connection with the registration of Registrable Securities
pursuant to Section 2.
(f) EFFECTIVE REGISTRATION STATEMENT. The registration
requested pursuant to Section 2 shall not be deemed to have been effected unless
it has become effective with the Commission, provided, however, that a
registration which does not become effective after the Company has filed a
registration statement with respect thereto with the Commission solely by reason
of the Demanding Holders failing to proceed with the registration shall be
deemed to have been effected by the Company in satisfaction of the Company's
obligation to register Registrable Securities pursuant to a Demand Registration,
unless the Demanding Holders reimburse the Company for all of its costs and
expenses incurred in connection with such registration statement.
Notwithstanding the foregoing, a registration statement will not be deemed to
have been effected if (i) after it has become effective with the Commission,
such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or any court
proceeding for any reason other than a misrepresentation or omission by the
Holders or (ii) the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such registration are not
satisfied, other than by reason of some act or omission or failure to agree to
close by a Selling Holder.
(g) CONFLICTING INSTRUCTIONS FROM HOLDERS. (i) The
Company may rely and shall be protected in relying upon any resolution,
certificate, opinion, request, communication, demand, receipt or other paper or
document in good faith believed by it to be genuine and to
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have been signed or presented by the proper party or parties. The Company may
act in reliance upon the advice of its counsel in reference to any matter in
connection with this Agreement and shall not incur any liability for any action
taken in good faith in accordance with such advice.
(ii) In the event the Company receives
conflicting instructions regarding any action to be taken or withheld
hereunder, the Company may suspend further action relating to such
action until such time as the conflicting instructions are resolved by
the parties giving the same or until the Company is instructed to take
or withhold the requested action by a final order from which no appeal
may be taken issued by a court of competent jurisdiction.
3. REGISTRATION PROCEDURES.
(a) Whenever the Company is required to effect the
registration of any Registrable Securities under the Securities Act as provided
in Section 2, the Company, as expeditiously as possible and subject to the terms
and conditions herein, will:
(i) prepare and file with the Commission the
requisite registration statement to effect such registration and use
its best efforts to cause such registration to become effective;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement Continuously Effective and to comply with
the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement until such time
as all of such securities have been disposed of in accordance with the
intended methods of disposition by the Selling Holders thereof set
forth in such registration statement or, if earlier, until the
Expiration Date;
(iii) furnish to the Selling Holders such number
of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits),
such number of copies of the prospectus contained in such registration
statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, as the Selling Holders may reasonably request;
(iv) use its best efforts to register or qualify
all Registrable Securities covered by such registration statement under
such other United States state securities or blue sky laws of such
jurisdictions as the Selling Holders shall reasonably request, to keep
such registration statement qualification in effect for so long as such
registration remains in effect, and take any other action which may be
reasonably necessary or advisable to enable the Selling Holders to
consummate the disposition in such jurisdictions of the securities
owned by the Selling Holders, except that the Company shall not for any
such purpose be required to (a) qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for
the requirements of
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this subdivision (iv) be obligated to be so qualified, (b) subject
itself to taxation in any such jurisdiction or (c) consent to general
service of process in any such jurisdiction;
(v) immediately notify the Selling Holders 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 any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of the
Selling Holders promptly prepare and furnish to the Selling Holders a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made;
(vi) otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable,
an earnings statement covering the period of at least twelve months,
but not more than eighteen 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 not file any amendment or supplement to such
registration statement or prospectus to which the Selling Holders shall
have reasonably objected in writing on the grounds that such amendment
or supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder, having been furnished with a copy thereof (other than with
respect to a pricing amendment) at least two business days prior to the
filing thereof;
(vii) provide a transfer agent and registrar for
all Registrable Securities covered by such registration statement not
later than the effective date of such registration statement; and
(viii) use its best efforts to list all Registrable
Securities covered by such registration statement on any securities
exchange on which any of the Registrable Securities are then listed.
(b) As a condition of these Registration Rights, the
Company may require the Demanding Holders, at their own expense, to furnish the
Company with such information and undertakings regarding such Holders and the
distribution of such securities as the Company may from time to time reasonably
request in writing, and the Holders, by their execution hereof, agree to provide
such information and make such undertakings as are requested.
(c) The Selling Holders agree (A) that upon receipt of
any notice from the Company of the happening of any event of the kind described
in subdivision (vi) of Section 3(a), the Selling Holders will forthwith
discontinue their disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the Selling
Holders'
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receipt of the copies of the supplemented or amended prospectus contemplated by
subdivision (vi) of Section 3(a) and, if so directed by the Company, will
deliver to the Company all copies, other than permanent file copies, then in the
Selling Holders' possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice and (B) that they will
immediately notify the Company, at any time when a prospectus relating to the
registration of such Registrable Securities is required to be delivered under
the Securities Act, of the happening of any event as a result of which
information previously furnished by the Selling Holders to the Company for
inclusion in such prospectus contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made.
(d) Notwithstanding anything in this agreement to the
contrary, the Company will not be required to file such a registration statement
if it receives an opinion of counsel in form and substance reasonably
satisfactory to the Selling Holders, or counsel to the Selling Holders, to the
effect that the sale of the Registrable Securities in the manner contemplated by
the Selling Holders may be effected without registration regardless of the
identity or status of the buyer(s) of such Registrable Securities.
4. PREPARATION, REASONABLE INVESTIGATION.
In connection with the preparation and filing of each
registration statement under the Securities Act, the Company will give the
Selling Holders, the underwriters, if any, and their respective counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the reasonable opinion of the Selling Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
5. INDEMNIFICATION; CONTRIBUTION. If any Registrable Securities
are included in a registration statement under this Agreement:
(a) To the extent permitted by applicable law, the
Company shall indemnify and hold harmless each Selling Holder, each Person, if
any, who controls such Selling Holder within the meaning of the Securities Act,
and each officer, director, partner, and employee of such Selling Holder and
such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint or several), including reasonable attorneys'
fees and disbursements and expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or investigation,
or to which any of the foregoing Persons may become subject under the Securities
Act, the Exchange Act or other federal or state laws, insofar as such losses,
claims, damages, liabilities and expenses arise out of or are based upon any of
the following statements, omissions or violations (collectively a "Violation"):
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(i) Any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final 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 not misleading; or
(iii) Any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any applicable state
securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any applicable state securities
law; provided, however, that the indemnification required by this
Section 6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or expense 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 expense 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
to the Company by the indemnified party expressly for use in connection
with such registration; provided, further, that the indemnity agreement
contained in this Section 6 shall not apply to any underwriter to the
extent that any such loss is based on or arises out of an untrue
statement or alleged untrue statement of a material fact, or an
omission or alleged omission to state a material fact, contained in or
omitted from any preliminary prospectus if the final prospectus shall
correct such untrue statement or alleged untrue statement, or such
omission or alleged omission, and a copy of the final prospectus has
not been sent or given to such person at or prior to the confirmation
of sale to such person if such underwriter was under an obligation to
deliver such final prospectus and failed to do so. The Company shall
also indemnify underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the
distribution, their officers, directors, agents and employees and each
person who controls such persons (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) to the same
extent as provided above with respect to the indemnification of the
Selling Holders.
(b) To the extent permitted by applicable law, each
Selling Holder shall indemnify and hold harmless the Company, each of its
directors, each of its officers who shall have signed the registration
statement, each Person, if any, who controls the Company within the meaning of
the Securities Act, any other Selling Holder, any controlling Person of any such
other Selling Holder and each officer, director, partner, and employee of such
other Selling Holder and such controlling Person, against any and all losses,
claims, damages, liabilities and expenses (joint and several), including
reasonable attorneys' fees and disbursements and expenses of investigation,
incurred by such party pursuant to any actual or threatened action, suit,
proceeding or investigation, or to which any of the foregoing Persons may
otherwise become subject under the Securities Act, the Exchange Act or other
federal or state laws, insofar as such losses, claims, damages, liabilities and
expenses 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 Selling Holder
expressly for use in connection with such registration; provided, however, that
(x) the indemnification required by this Section 6(b) shall
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not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if settlement is effected without the consent of the
relevant Selling Holder of Registrable Securities, which consent shall not be
unreasonably withheld, and (y) in no event shall the amount of any indemnity
under this Section 6(b) exceed the gross proceeds from the applicable offering
received by such Selling Holder.
(c) Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified party
may make a claim under this Section 6, such indemnified party shall 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 at its own expense except as provided
below. The failure to deliver written notice to the indemnifying party within a
reasonable time following the commencement of any such action, if prejudicial to
its ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 6 but shall not relieve
the indemnifying party of any liability that it may have to any indemnified
party otherwise than pursuant to this Section 6. Any fees and expenses incurred
by the indemnified party (including any fees and expenses incurred in connection
with investigating or preparing to defend such action or proceeding) shall be
paid to the indemnified party, as incurred, within sixty (60) days of written
notice thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder, but in such event such amounts shall be refunded). Any such
indemnified party shall have the right to employ separate counsel in any such
action, claim or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be the expenses of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees and expenses
or (ii) the indemnifying party shall have failed to promptly assume the defense
of such action, claim or proceeding or (iii) the named parties to any such
action, claim or proceeding (including any impleaded parties) include both such
indemnified party and the indemnifying party, and such indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or in addition to those available to
the indemnifying party and that the assertion of such defenses would create a
conflict of interest such that counsel employed by the indemnifying party could
not faithfully represent the indemnified party (in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties
with respect to such action, claim or proceeding, in which event the
indemnifying party shall be obligated to pay the reasonable fees and expenses of
such additional counsel or counsels). No indemnifying party shall be liable to
an indemnified
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party for any settlement of any action, proceeding or claim without the written
consent of the indemnifying party, which consent shall not be unreasonably
withheld.
(d) If the indemnification required by this Section 6
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to in
this Section 6:
(i) The indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any Violation has been
committed by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such Violation. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
Section 6(a) and Section 6(b), any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation
or proceeding.
(ii) The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 6(d)(ii)
were determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable
considerations referred to in Section 6(d)(i). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(e) If indemnification is available under this Section 6,
the indemnifying parties shall indemnify each indemnified party to the full
extent provided in this Section 6 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 6(d).
(f) The obligations of the Company and the Selling
Holders of Registrable Securities under this Section 6 shall survive the
completion of any offering of Registrable Securities pursuant to a registration
statement under this Agreement, and otherwise.
6. COVENANTS OF THE COMPANY. The Company hereby agrees and
covenants as follows:
The Company shall file as and when applicable, on a timely
basis, all reports required to be filed by it under the Exchange Act. If the
Company is not required to file reports pursuant to the Exchange Act, upon the
request of any Holder of Registrable Securities, the Company shall make publicly
available the information specified in subparagraph (c)(2) of Rule
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144 of the Securities Act, and take such further action as may be reasonably
required from time to time and as may be within the reasonable control of the
Company, to enable the Holders to transfer Registrable Securities to a
Transferee without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act or any similar
rule or regulation hereafter adopted by the Commission.
7. MISCELLANEOUS.
7.1 SPECIFIC PERFORMANCE. The parties hereto acknowledge
that there may be no adequate remedy at law if any party fails to perform any of
its obligations hereunder and that each party may be irreparably harmed by any
such failure, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, may be entitled to
compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement.
7.2 NOTICES. All notices, requests, claims, demands,
waivers and other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when delivered by hand, if
delivered personally by courier, or three days after being deposited in the mail
(registered or certified mail, postage prepaid, return receipt requested) as
follows:
(i) The Holders at the addresses indicated on
the signature page hereof with a copy to Canyon Capital Management:
c/o Canyon Partners Incorporated
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
(ii) Company:
MAI Systems Corporation
0000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy No. (000) 000-0000
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
7.3 LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICT OF LAWS.
7.4 ATTORNEYS' FEES. In any action or proceeding brought
to enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees (including any fees incurred in any appeal) in
addition to its costs and expenses and any other available remedy.
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7.5 HEADINGS. The descriptive headings of the several
Sections and paragraphs of this Agreement are inserted for convenience only, and
do not constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
7.6 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
other writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and the
Holders. Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by an amendment or waiver authorized by this Section
8.6, whether or not any such Registrable Securities shall have been marked to
indicate such consent.
7.7 ASSIGNABILITY. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the parties
hereto provided, however, that the Registration Rights hereunder shall only be
available to the Holders, their Affiliates and to their Transferees.
7.8 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
7.9 VALIDITY, DUE AUTHORIZATION. By its execution hereof,
the Company represents and warrants that it has the corporate power to execute,
deliver and perform the terms and provisions of this Agreement and that it has
taken all appropriate and necessary corporate action to authorize the
transactions contemplated hereby and the execution, delivery and performance of
this Agreement.
MAI Systems Corporation
By: ________________________
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INVESTORS:
Canyon Value Realization Fund, L.P., Address:
a California limited partnership Canyon Value Realization Fund, L.P.
c/o Canyon Partners Incorporated
By: Canpartners Investments III, L.P., 0000 Xxxxxxxx Xxxxxxxxx
a California limited partnership, Suite 200
its general partner Xxxxxxx Xxxxx, XX 00000
By: Canyon Capital Advisors LLC, 310/247-2700 (O)
a Delaware limited liability 310/247-2701 (F)
company,
its general partner
By: Canpartners Incorporated,
a California corporation,
its general partner
By: ______________________
Name:
Title:
The Canyon Value Realization Fund Address:
(Cayman), Ltd. The Canyon Value Realization Fund
(Cayman), Ltd.
By: MeesPierson (Cayman) Limited, c/o MeesPierson (Cayman) Limited
its Administrator X.X. Xxx 0000
Xxxxxxx Xxxxxxxx Xxxxxx, Xxxxx 0
Xx. Xxx'x Drive
By: ______________________ Grand Cayman, B.W.I.
Name:
Title: 809/949-7942 (O)
809/949-8340 (F)
GRS Partners II Address:
By: Grosvenor Capital Management L.P., GRS Partners II
its Administrator c/o Grosvenor Capital Management,
L.P.
000 Xxxx Xxxxxx Xxxxx
By: Grosvenor Capital Management, Inc., Suite 1600
its general partner Xxxxxxx, Xxxxxxxx 00000
By: ________________________ 312/263-7777 (O)
Name: 312/782-4759 (F)
Title:
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CPI Securities L.P., Address:
a California limited partnership CPI Securities L.P.
c/o Canyon Partners Incorporated
By: Canpartners Incorporated, 0000 Xxxxxxxx Xxxxxxxxx
a California corporation, Suite 200
its general partner Xxxxxxx Xxxxx, XX 00000
310/247-2700 (O)
By: ________________________ 310/247-2701 (F)
Name:
Title:
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