Exhibit 4.2
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement ("THIS
AGREEMENT") is entered into as of June 30, 2000 by and between
Xxxxxxxx.xxx, Inc., a Delaware corporation (the "COMPANY"), the investors
listed on Exhibit A (the "ORIGINAL INVESTORS"), the purchasers of shares of
the Company's Series E Preferred Stock and Series E-1 Preferred Stock
listed on Exhibit A as the "SERIES E INVESTORS" (the "SERIES E INVESTORS")
and the recipients of shares of the Company's Common Stock listed on
Exhibit B (the "NEW INVESTORS") (the Original Investors, the Series E
Investors and the New Investors are referred to herein collectively as the
"INVESTORS") and all shares of Common Stock held by the Investors are
referred to herein as the "SHARES."
A. Pursuant to the Amended and Restated Investors' Rights Agreement,
dated as of February 19, 1999, by and between the Company and the Original
Investors, the Original Investors were granted certain information,
registration and first refusal rights (the "FIRST RIGHTS AGREEMENT").
B. The Series E Investors and the Company entered into a Preferred
Stock Purchase Agreement dated October 14, 1999, pursuant to which the
Series E Investors agreed to purchase the Series E and E-1 Preferred Stock,
and a Second Amended and Restated Registration Rights Agreement dated
October 14, 1999 providing the Original Investors and the Series E
Investors certain information, registration and first refusal rights (the
"SECOND RIGHTS AGREEMENT"), which amended and superseded the First Rights
Agreement.
C. The Company, the Original Investors, the Series E Investors and
the New Investors desire to enter into this Agreement in order to amend,
restate and replace their rights and obligations under the Second Rights
Agreement with the rights and obligations set forth in this Agreement.
Section 7.1 of the Second Rights Agreement provides that the Second Rights
Agreement may be amended by the written consent of the Company, the holders
of a majority of the "Registrable Securities" (as defined in Section 1.6 of
the Second Rights Agreement) and the holders of a majority of the "Series E
Registrable Securities" (as defined in Section 1.12 of the Second Rights
Agreement), and the undersigned parties to this Agreement hold a majority
of such Registrable Securities and a majority of such Series E Registrable
Securities.
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
1.1 "AFFILIATE" means with regard to a particular person or
entity, another person or entity which controls, is controlled by or is
under common control with such person or entity, including in the case of
an Investor, persons and entities under common management with such
Investor.
1.2 "COMMISSION" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act.
1.3 "HOLDER" shall mean each Investor holding Registrable
Securities or securities convertible into Registrable Securities and any
person holding such securities to whom the rights under this Agreement have
been transferred in accordance with Section 4.9 hereof.
1.4 "INITIATING HOLDERS" shall mean (a) any Holder or Holders
who in the aggregate hold at least 75% of the Registrable Securities, (b)
any Holder or Holders who in the aggregate hold at least 60% of the Series
E Registrable Securities, or (c) any Holder or Holders who in the aggregate
hold Novation Registrable Securities having a current market value of at
least $30 million.
1.5 "PREFERRED STOCK" shall mean all previously issued and
outstanding shares of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock and Series E-1 Preferred Stock that were converted to Common Stock
upon the Company's initial public offering.
1.6 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 the effectiveness of such registration statement.
1.7 "REGISTRABLE SECURITIES" means shares of Common Stock of
the Company (i) issued or issuable upon conversion of the Preferred Stock
(the "CONVERSION STOCK") and (ii) issued or issuable with respect to, or in
exchange for or in replacement of the Conversion Stock or other Registrable
Securities, (iii) issued or issuable with respect to, or in exchange for or
in replacement of other securities convertible into or exercisable for
Preferred Stock upon any stock split, stock dividend, recapitalization, or
similar event, (iv) issued to the former stockholders of Pharos
Technologies, Inc., (the "PHAROS INVESTORS") in connection with its
acquisition by the Company, (v) issued to the former stockholders of U.S.
LifeLine, Inc. (the "USL INVESTORS") in connection with its acquisition by
the Company, (vi) issued to the former stockholders of EquipMD, Inc., (the
"EMI INVESTORS") in connection with its acquisition by the Company, and
(vii) issued to, or issuable upon exercise of warrants issued to, VHA,
Inc., a Delaware corporation ("VHA") or University Healthsystem Consortium,
an Illinois corporation ("UHC") in connection with the commercial agreement
among Neoforma, Novation, LLC, a Delaware limited liability company
("NOVATION"), Healthcare Purchasing Partners International, LLC, a Delaware
limited liability company, VHA and UHC (the "NOVATION REGISTRABLE
Securities"), excluding: (A) any shares of Common Stock that have been sold
to or through a broker, dealer, market maker or underwriter in a public
distribution or a public securities transaction or redeemed by the Company
in accordance with its Certificate of Incorporation, (B) any shares of
Common Stock of the Company (or Preferred Stock or other securities
convertible or exercisable therefor) that have been sold in violation of
this Agreement, and (C) all shares of Common Stock of the Company (or
Preferred Stock or other securities convertible or exchangeable therefor)
described in clause (i), (ii), (iii), (iv), (v), (vi) or (vii) of this
Section 1.6 held by a Holder that can, in the opinion of counsel to the
Company, be sold by such Holder in a three-month period without
registration under the Securities Act pursuant to Rule 144.
1.8 "REGISTRATION EXPENSES" shall mean all expenses, except as
otherwise stated below, incurred by the Company in complying with Sections
4.1, 4.2 and 4.3 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, fees and disbursement of one
counsel to the Holders, blue sky fees and expenses, 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).
1.9 "RESTRICTED SECURITIES" shall mean Registrable Securities
held by the Original Investors, the Series E Investors, the Pharos
Investors and the USL Investors. For the avoidance of doubt, "Restricted
Securities" does not include the Novation Registrable Securities.
1.10 "SECURITIES ACT" shall mean the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
1.11 "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
1.12 "SELLING EXPENSES" shall mean all underwriting discounts,
selling commissions and stock transfer taxes, if any, applicable to the
securities registered by the Holders.
1.13 "SERIES E REGISTRABLE SECURITIES" means the shares of
Common Stock (i) issued or issuable upon conversion of the Series E
Preferred Stock or Series E-1 Preferred Stock (ii) issued or issuable with
respect to, or in exchange for or in replacement of such Common Stock or
(iii) issued or issuable with respect to, or in exchange for or in
replacement of other securities convertible into or exercisable for such
Preferred Stock upon any stock split, stock dividend, recapitalization, or
similar event.
2. Transferability.
2.1 Restrictions on Transferability. The Restricted
Securities shall not be sold, assigned, transferred or pledged (except
those existing or proposed pledges disclosed to the Company prior to the
date of this Agreement) except upon the conditions specified in this
Section 2, which conditions are intended to ensure compliance with the
provisions of the Securities Act. Investors proposing to transfer
Restricted Securities will cause any proposed purchaser, assignee,
transferee, or pledgee of Restricted Securities held by such Investors to
agree to take and hold such securities subject to the provisions and upon
the conditions specified in this Section 2.
2.2 Restrictive Legend. Each certificate representing (i) the
Restricted Securities and (ii) any other securities issued in respect of
the Restricted Securities upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall (unless
otherwise permitted by the provisions of Section 2.3 below) be stamped or
otherwise imprinted with a legend in the following form (in addition to
any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SHARES MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR
RULE.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS, INCLUDING TRANSFERABILITY AND VOTING, AS
SET FORTH IN THE REGISTRATION RIGHTS AGREEMENT, A COPY OF WHICH
MAY BE OBTAINED FROM THE COMPANY.
The Investors and Holders of Restricted Securities consent to
the Company making a notation on its records and giving instructions to any
transfer agent regarding the Restricted Securities in order to implement
the restrictions on transfer established in this Section 2.
2.3 Notice of Proposed Transfers. The holder of each
certificate representing Restricted Securities by acceptance thereof agrees
to comply in all respects with the provisions of this Section 2.3. Prior to
any proposed sale, assignment, transfer or pledge of any Restricted
Securities (other than (i) a transfer not involving a change in beneficial
ownership, or (ii) in transactions involving the distribution without
consideration of Restricted Securities by an Investor which is a
partnership to any of its partners, or retired partners, or to the estate
of any of its partners or retired partners, (iii) a transfer to an
Affiliate, an affiliated fund, partnership or Company, which is not a
competitor of the Company, subject to compliance with applicable securities
laws, or (iv) transfers in compliance with Rule 144, so long as the Company
is furnished with satisfactory evidence of compliance with such Rule),
unless there is in effect a registration statement under the Securities Act
covering the proposed transfer, the holder thereof shall give written
notice to the Company of such holder's intention to effect such transfer,
sale, assignment or pledge. Each such notice shall describe the manner and
circumstances of the proposed transfer, sale, assignment or pledge in
sufficient detail, and shall be accompanied by either of the following, at
such holder's expense: (i) a written opinion of legal counsel who shall,
and whose legal opinion shall, be reasonably satisfactory to the Company
addressed to the Company, to the effect that the proposed transfer of the
Restricted Securities may be effected without registration under the
Securities Act, or (ii) a "no action" letter from the Commission to the
effect that the transfer of such securities without registration will not
result in a recommendation by the staff of the Commission that action be
taken with respect thereto, whereupon the holder of such Restricted
Securities shall be entitled to transfer such Restricted Securities in
accordance with the terms of the notice delivered by the holder to the
Company. Each certificate evidencing the Restricted Securities transferred
as above provided shall bear, except if such transfer is made pursuant to
Rule 144, the appropriate restrictive legend set forth in Section 2.2
above, except that such certificate shall not bear such restrictive legend
if in the opinion of counsel for such holder and in the reasonable opinion
of the Company such legend is not required in order to establish compliance
with any provision of the Securities Act.
2.4 Removal of Restrictions on Transfer of Restricted
Securities. Any legend referred to in Section 2.2 hereof stamped on a
certificate evidencing (i) the Restricted Securities or (ii) any other
securities issued in respect of the Restricted Securities upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar
event and the stock transfer instructions and record notations with respect
to such security shall be removed and the Company shall issue a certificate
without such legend to the holder of such security if such security is
registered under the Securities Act, or if such holder provides the Company
with an opinion of counsel (which may be counsel for the Company)
reasonably acceptable to the Company to the effect that a public sale or
transfer of such security may be made without registration under the
Securities Act or (iii) such holder provides the Company with reasonable
assurances, which may, at the option of the Company, include an opinion of
counsel satisfactory to the Company, that such security can be sold
pursuant to Section (k) of Rule 144 under the Securities Act.
3. [Intentionally Omitted].
4. Registration Rights.
4.1 Requested Registration.
(a) Requested Registration. If the Company shall receive
from the Initiating Holders a written request that the Company file a
registration statement for (i) at least 75% of the Registrable Securities,
(ii) at least 60% of the Series E Registrable Securities, or (iii) Novation
Registrable Securities having a current market value of at least $30
million, and in the case of clause (i) or (ii) the aggregate gross proceeds
of which registration would equal or exceed $20,000,000 (any such notice,
an "INITIATION NOTICE"), then the Company will:
(A) within ten days of the receipt by the Company
of the Initiation Notice, give written notice of the proposed registration,
qualification or compliance to all other Holders (the notice in this
Section 4.1(a)(i) and in Section 4.2(a)(i), each called the "REGISTRATION
NOTICE"); and
(B) use its best efforts to effect, as soon as
practicable and in any event within ninety (90) days after receipt of the
Initiation Notice, such registration, qualification or compliance
(including, without limitation, appropriate qualification under applicable
blue sky or other state securities laws and appropriate compliance with
applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested and as
would permit or facilitate the sale and distribution of all or such portion
of such Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request
received by the Company within 20 days after receipt of the Registration
Notice from the Company;
Provided, however, that the Company shall not be obligated to take
any action to effect any such registration, qualification or compliance
pursuant to this Section 4.1:
(1) Prior to January 24, 2001.
(2) 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;
(3) During the period starting with the
date sixty (60) days prior to the Company's estimated date of filing of any
registration statement for the securities of the Company, and ending
(except as provided below) on the date six (6) months immediately following
the effective date of any registration statement pertaining to securities
of the Company, provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective, and, provided, further, that the standstill period in this
clause (3) shall not apply to a registration regarding a transaction
described in subsection (a) of Rule 145 as promulgated under the Securities
Act ("RULE 145") or with respect to securities issued or issuable under an
employee benefit plan or other similar plan or agreement;
(4) After the Company has effected two (2)
such registrations requested by holders of at least 60% of the Series E
Initiating Holders, three (3) such registrations requested by holders of
the Novation Registrable Securities, and two (2) additional registrations
pursuant to this Section 4.1(a), and such registrations have been declared
or ordered effective. The Company shall not be obligated to effect more
than one such registration requested by the holders of the Novation
Registrable Securities in any twelve month period.
(5) If the Company shall furnish to such
Holders a certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its stockholders for a registration statement
to be filed in the near future, then the Company's obligation to use its
best efforts to register, qualify or comply under this Section 4.1 shall be
deferred for a period not to exceed ninety (90) days from the date of
receipt of written request from the Initiating Holders; provided, however,
that the Company shall not exercise such right more than once in any twelve
(12) month period.
(b) Underwriting. The Company shall have the right to
select one or more underwriters to manage a registration under Section 4.1,
subject to the approval of the holders of a majority of the Registrable
Securities requesting registration, which will not be unreasonably
withheld, conditioned or delayed. If the registration described in the
Registration Notice is a registered public offering involving an
underwriting, the Company shall so advise the Holders as a part of the
Registration Notice. In such event, the right of any Holder to registration
pursuant to Section 4.1 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting
by the Company. The Company will not include in any registration under
Section 4.1 any securities other than Registrable Securities and securities
to be registered for offering and sale on behalf of the Company without the
prior written consent of the holders of a majority of the Registrable
Securities requesting registration. If the managing underwriter(s) advise
the Company in writing that in their opinion the number of Registrable
Securities and, if permitted hereunder, other securities in such offering,
exceeds the number of Registrable Securities and other securities, if any,
that can be sold in an orderly manner in such offering within a price range
acceptable to the holders of a majority of the Registrable Securities
initially requesting registration, the Company will include in such
registration, prior to the inclusion of any securities that are not
Registrable Securities, the number of Registrable Securities requested to
be included that in the opinion of such underwriters can be sold in an
orderly manner within the price range of such offering, pro rata among the
respective holders thereof on the basis of the number of Registrable
Securities that each such holder has requested the Company to include in
such registration.
If any Holder of Registrable Securities disapproves of the
terms of the underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company, the managing underwriter and the Initiating
Holders. The Registrable Securities and/or other securities so withdrawn
shall also be withdrawn from registration, and such Registrable Securities
shall not be transferred in a public distribution prior to one hundred
eighty (180) days after the effective date of such registration, or such
other shorter period of time as the underwriters may require.
4.2 Company Registration.
(a) Notice of Registration. If at any time or from time
to time the Company shall determine to register any of its securities,
either for its own account or the account of a security holder or holders,
other than (i) a registration with respect to securities issued or to be
issued in an employee benefit plan or other similar plan or agreement, (ii)
a registration relating solely to a transaction described in Rule 145,
(iii) a registration on any form which does not permit registration of
securities of the Company for secondary sales or (iv) a registration
pursuant to Section 4.1 hereof, the Company will:
(i) promptly give to each Holder the Registration
Notice; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in
a written request or requests, made within ten (10) days after receipt of
the Registration Notice from the Company, by any Holder.
(b) Underwriting. If the registration described in the
Registration Notice is a registered public offering involving an
underwriting, the Company shall so advise the Holders as a part of the
Registration Notice. In such event, the right of any Holder to registration
pursuant to Section 4.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting
by the Company. Notwithstanding any other provision of this Section 4.2, if
the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten and all shares of any
other selling stockholders (other than Holders of Registrable Securities)
have first been excluded from such registration, the managing underwriter
may limit the Registrable Securities and other securities to be distributed
through such underwriting; provided, however, that (i) no such reduction
shall reduce the number of Registrable Securities (other than Series E
Registrable Securities and Novation Registrable Securities) included in the
registration below fifteen percent (15%) of the total amount of securities
included in such registration ("AVAILABLE 15% SHARES"); (ii) no such
reduction shall reduce the number of shares of Series E Registrable
Securities included in the registration below twelve percent (12%) of the
total amount of securities included in such registration ("AVAILABLE SERIES
E SHARES"); and (iii) no such reduction shall reduce the number of shares
of Novation Registrable Securities held by VHA and UHC, respectively,
included in such registration below fifteen percent (15%) (in the case of
VHA) and five percent (5%) (in the case of UHC) of the total amount of
securities included in such registration in the case of the first and
second such underwritten offerings after the issuance of the Novation
Registrable Securities or reduce the number of shares of Novation
Registrable Securities below nine and one-half percent (9.5%) (in the case
of VHA) and three and one-half percent (3.5%) (in the case of UHC) of the
total number of securities included in any subsequent registration
("AVAILABLE NOVATION SHARES"), provided, further that for purposes of
allocating the number of Registrable Securities (other than Series E
Registrable Securities and Novation Registrable Securities) that may be
included in the aggregate number of Registrable Securities (other than
Series E Registrable Securities and Novation Registrable Securities)
constituting the Available 15% Shares, the registration and underwriting
shall be allocated such that each Holder is allowed to include in the
registration and underwriting the portion of the Available 15% Shares as is
equal to (x) the number of Registrable Securities (other than Series E
Registrable Securities and Novation Registrable Securities) which such
Holder timely proposed to include in such registration divided by (y) the
number of Registrable Securities (other than Series E Registrable
Securities and Novation Registrable Securities) which all Holders thereof
timely proposed to include in such registration; provided, further that for
purposes of allocating the number of shares of Series E Registrable
Securities that may be included in the aggregate number of shares of Series
E Registrable Securities constituting the Available Series E Shares, the
registration and underwriting shall be allocated such that each Holder is
allowed to include in the registration and underwriting the portion of the
Available Series E Shares that is equal to (x) the number of shares of
Series E Registrable Securities which such Holder timely proposed to
include in such registration divided by (y) the number of Series E
Registrable Securities which all Holders thereof timely proposed to include
in such registration; provided, further that for purposes of allocating the
number of Novation Registrable Securities that may be included in the
aggregate number of shares of Novation Registrable Securities constituting
the Available Novation Shares, the registration and the underwriting shall
be allocated such that each Holder is allowed to include the portion of
Available Novation Shares that is equal to (x) the number of shares of
Novation Registrable Securities which such Holder timely proposed to
include in such registration divided by (y) the number of Novation
Registrable Securities which all Holders thereof timely proposed to include
in such registration. The Company shall so advise all Holders distributing
their securities through such underwriting of such limitation and the
number of Registrable Securities that may be included in the registration
and underwriting shall be allocated to individual Holders timely requesting
participation in such registration under Section 4.2(a), (i) so that, as
nearly as practicable, the participation of each such Holder in the number
of shares made available to the Holders by the underwriters is, subject to
the preceding sentence, in proportion to (x) the number of Registrable
Securities which such Holder timely proposed to include in such
registration to (y) the number of Registrable Securities which all Holders
timely proposed to include in such registration, or (ii) in such other
manner as shall be agreed to by the Company and such Holders of the
Registrable Securities proposed to be included in such registration;
provided, however, that the number of Registrable Securities to be included
in such underwriting shall not be reduced unless all other securities
subject to registration rights are first entirely excluded from such
underwriting. No Registrable Securities excluded from the underwriting by
reason of the underwriter's marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company or the underwriters may round the number of
shares allocated to any Holder to the nearest 100 shares.
If any Holder disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice to the Company and
the managing underwriter. Any Registrable Securities and/or other
securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration, and shall not be transferred in a public
distribution prior to one-hundred (180) days after the effective date of
such registration, or such other shorter period of time as the underwriters
may require.
(c) Right to Terminate Registration. The Company shall
have the right to terminate or withdraw any registration initiated by it
under this Section 4.2 prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration. The Registration Expenses of such withdrawn registration
shall be borne by the Company in accordance with Section 4.4 hereof.
4.3 Registration on Form S-3.
(a) If the holders of at least one percent (1%) of the
Registrable Securities then outstanding or any holder of Series E
Registrable Securities or any holder of Novation Registrable Securities
shall request that the Company file a registration statement on Form S-3
(or any successor form to Form S-3 or any similar short form registration
statement), for a public offering of Registrable Securities, the reasonably
anticipated aggregate price to the public of which would equal or exceed
$1,000,000 and the Company is a registrant entitled to use Form S-3 to
register the Registrable Securities for such an offering (or such successor
or similar form), the Company shall use its best efforts to cause such
Registrable Securities to be registered on such form for the offering and
to cause such Registrable Securities to be qualified in such jurisdictions
as the Holder or Holders may reasonably request; provided, however, that
the Company shall not be required to effect more than one (1) registration
(which has been declared effective) pursuant to this Section 4.3 in any
twelve (12) month period for each of the Holders of the Registrable
Securities, the Series E Registrable Securities, and the Novation
Registrable Securities held by UHC, respectively, and the Company shall not
be required to effect more than two (2) registrations (which have been
declared effective) pursuant to this Section 4.3 in any twelve (12) month
period for the Holders of the Novation Registrable Securities held by VHA.
The provisions of Section 4.1(b) shall be applicable to each registration
initiated under this Section 4.3.
(b) Notwithstanding the foregoing, the Company shall not
be obligated to take any action pursuant to this Section 4.3: (i) in any
particular jurisdiction in which the Company would be required to qualify
to do business or execute a general consent to service of process in
effecting such registration, qualification or compliance; (ii) if the
Company, within ten (10) days of the receipt of the request of the
initiating Holders, gives notice of its bona fide intention to effect the
filing of a registration statement with the Commission within ninety (90)
days of receipt of such request (other than with respect to a registration
statement relating to a Rule 145 transaction, or an offering with respect
to securities issue are issuable under an employee benefit plan or other
similar plan or agreement); (iii) during the period starting with the date
ninety (90) days prior to the Company's estimated date of filing of, and
ending on the date six (6) months immediately following, the effective date
of any registration statement pertaining to securities of the Company
(other than a registration of securities in a Rule 145 transaction or with
respect to securities issued or issuable with respect to an employee
benefit plan or similar plan or arrangement), provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or (iv) if the Company shall
furnish to such Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors it would
be seriously detrimental to the Company or its stockholders for
registration statements to be filed in the near future, then the Company's
obligation to use its best efforts to file a registration statement shall
be deferred for a period not to exceed ninety (90) days from the receipt of
the request to file such registration by such Holder; provided, however,
that the Company shall not exercise such right more than once in any twelve
(12) month period.
4.4 Expenses of Registration. All Registration Expenses
incurred in connection with all registrations pursuant to Section 4.2, in
connection with all demand registrations under Section 4.1, and in
connection with the first three (3) S-3 registrations under Section 4.3 by
each of the Series E Registrable Securities and the Novation Registrable
Securities, respectively, shall be borne by the Company. All Selling
Expenses relating to securities registered on behalf of the Holders shall
be borne by the holders of securities included in such registration pro
rata with the Company and among each other on the basis of the number of
shares so registered. Notwithstanding the foregoing sentence, if a
registration proceeding begun pursuant to Section 4.1 or 4.3 is
subsequently withdrawn by the Holders, either (a) if Holders of all of the
Registrable Securities to have been registered agree, then the Holders of
the Registrable Securities to have been registered shall bear all such
Registration Expenses pro rata on the basis of the number of shares to have
been registered, or (b) if all such Holders do not agree, then the
Initiating Holders will forfeit their right to one registration pursuant to
such section, and the Company shall bear such Registration Expenses.
Notwithstanding the foregoing, however, if at the time of the withdrawal,
the Holders have learned of a material adverse change in the condition,
business or prospects of the Company from that known to the Initiating
Holders at the time of their request, of which the Company had received
notice prior to the time of the request, then the Holders shall not be
required to pay any of said Registration Expenses or to forfeit the right
to one demand registration or S-3 registration, as the case may be, and the
Company shall pay the same.
4.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Section 4, the Company will keep each Holder advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense 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 at least one
hundred eighty (180) days or until the earlier time that the distribution
described in the Registration Statement has been completed, provided that
before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to the counsel selected by
the holders of a majority of the Registrable Securities covered by such
registration statement copies of all such documents proposed to be filed,
which documents will be subject to the review of such counsel;
(b) Prepare and file with the Commission 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.
(c) Furnish to the 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) Furnish, at the request of any Holder requesting
registration of Registrable Securities on the date such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Section 4, (i) an opinion, dated such date,
of 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, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a
letter dated such date, from the independent accountants of the Company, in
form and substance as is customarily given by independent accountants to
underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of
Registrable Securities.
(e) Use its best efforts to register and qualify the
securities covered by such registration statement under such other
securities or Blue Sky laws of such U.S. jurisdiction as shall be
reasonably requested by the Holders, provided that the Company shall not be
required in connection therein 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.
(f) 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 of such offering.
(g) 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.
(h) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which
similar securities issued by the Company are then listed and to be
qualified for trading on each system on which similar securities issued by
the Company are from time to time qualified.
(i) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for
all such Registrable Securities, in each case not later than the effective
date of such registration.
(j) make available for inspection by any underwriter
participating in any disposition pursuant to such registration statement
and any attorney, accountant or other agent retained by any such
underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information reasonably
requested by any such underwriter, attorney, accountant or agent in
connection with such registration statement;
(k) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission,
and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months beginning with the first day of the Company's first full calendar
quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(l) permit any holder of Registrable Securities that
might be deemed, in the sole and exclusive judgment of such holder, to be
an underwriter or a controlling person of the Company, to participate in
the preparation of such registration or comparable statement and to require
the insertion therein of material, furnished to the Company in writing,
that in the reasonable judgment of such holder and its counsel and the
Company's counsel should be included; and
(m) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending
the qualification of any Registrable Securities included in such
registration statement for sale in any jurisdiction, the Company will use
its reasonable efforts promptly to obtain the withdrawal of such order.
If any such registration or comparable statement refers to any holder by
name or otherwise as the holder of any securities of the Company and if, in
the sole and exclusive judgment of such holder, such holder is or might be
deemed to be a controlling person of the Company, such holder shall have
the right to require (a) the inclusion in such registration statement of
language, in form and substance reasonably satisfactory to such holder, to
the effect that the holding of such securities by such holder is not to be
construed as a recommendation by such holder of the investment quality of
the Company's securities covered thereby and that such holding does not
imply that such holder will assist in meeting any future financial
requirements of the Company, or (b) in the event that such reference to
such holder by name or otherwise is not required by the Securities Act or
any similar federal statute then in force, the deletion of the reference to
such holder.
4.6 Indemnification.
(a) The Company will indemnify each Holder, each of its
officers, directors, partners and legal counsel, and each person
controlling such Holder within the meaning of Section 15 of the Securities
Act and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against
all expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any of the
following (each a "Violation"):
(i) any untrue statement (or alleged untrue
statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or
(ii) any 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 or any federal or
state law applicable to the Company in connection with any such
registration, qualification or compliance;
and the Company will reimburse each such Holder, each of its officers,
directors, partners, and legal counsel and each person controlling such
Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such expense
claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, loss,
damage, liability or action arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder, controlling person
or underwriter and stated to be specifically for use therein, and provided
further, that the indemnity agreement contained in this Section 4.6(a)
shall not apply to amounts paid in settlement of any such expense, claim,
loss, damage, liability or action if such settlement is effected without
the consent of the Company, which consent shall not be unreasonably
withheld.
(b) Each Holder will, if Registrable Securities held by
such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each
of its directors, officers, and legal counsel, each underwriter, if any, of
the Company's securities covered by such a registration statement, each
person who controls the Company within the meaning of Section 15 of the
Securities Act, and each other Holder, each of its officers, directors,
partners and legal counsel and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, against all expenses,
claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any Violation that is contained in written
information furnished to the Company by an instrument duly executed by such
Holder and stated to be specifically for use in such registration, and will
reimburse the Company, such Holders, such directors, officers, persons,
underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
expense, claim, loss, damage, liability or action. Notwithstanding the
foregoing, the liability of each Holder under this Section 4.6(b) shall be
limited in an amount equal to the net proceeds received by such Holder of
Registrable Securities sold as contemplated herein, provided, however, that
the indemnity agreement contained in this Section 4.6(b) shall not apply to
amounts paid in settlement of any such expense loss, claim, damage,
liability or action if such settlement is effected without the consent of
the Holder, which consent shall not be unreasonably withheld.
(c) Each party entitled to indemnification under this
Section 4.6 (the "INDEMNIFIED PARTY") shall give notice to the party
required to provide indemnification (the "INDEMNIFYING PARTY") promptly
after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall conduct the
defense of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such party's expense,
and provided, further, that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 4 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such
action, and provided, further, that the Indemnifying Party shall not assume
the defense for matters as to which there is a conflict of interest or as
to which such parties assert separate and different defenses but shall bear
the expense of such defense nevertheless.
(d) If the indemnification provided for in this Section
4.6 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any expense, loss, liability, claim,
damage, or action referred to therein, then the Indemnifying Party, in lieu
of indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
expense, loss, liability, claim, damage, or action 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
statements or omissions that resulted in such expense, loss, liability,
claim, damage, or action as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined 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 and access to information. Notwithstanding the foregoing,
in no event shall the contribution by a Holder under this Section 4.6(d)
exceed the net proceeds from the offering received by such Holder, unless
such Holder's liability resulted from willful misconduct by such Holder and
no person guilty of fraudulent misrepresentation under Section 11(f) of the
Securities Act shall be entitled to contribution from a person who was not
guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and Holders under this
Section 4.6 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 4, and otherwise.
4.7 Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities
held by them and the distribution proposed by such Holder or Holders as
shall be required in connection with any registration, qualification or
compliance referred to in this Section 4.
4.8 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may at
any time permit the sale of the Restricted Securities, and the Novation
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 Rule 144 under the Securities Act.
(b) File with the Commission in a timely manner all
reports and other documents required of the Company under the Securities
Act and the Exchange Act;
(c) Furnish to the Investor, so long as such Investor
owns any Restricted Securities or Novation Registrable Securities,
forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of
the Company and other information in the possession of or reasonably
obtainable by the Company as an Investor may reasonably request in availing
itself of any rule or regulation of the Commission allowing an Investor to
sell any such securities without registration.
(d) Take such actions as are necessary to enable the
Holders to utilize Form S-3 pursuant to Section 4.3 for the sale of
Registrable Securities.
4.9 Transfer of Registration Rights. The rights to cause the
Company to register securities granted Holders under Sections 4.1, 4.2 and
4.3 may be assigned by a Holder to (i) a transferee or assignee who
acquires at least (or after such transfer will hold an aggregate of)
250,000 Registrable Securities (or 215,000 shares of Series E Registrable
Securities or Novation Registrable Securities), (ii) another Holder of
Registrable Securities who already possesses registration rights, (iii) a
transferee or assignee of Registrable Securities acquiring 10% or more of
the outstanding stock of the Company, (iv) a transferee of Registrable
Securities which is a subsidiary, parent, partner, limited partner, retired
partner, shareholder or Affiliate of a Holder; (v) to a transferee of
Registrable Securities who is a Holder's family member or which is a trust
for the benefit of such Holder or (vi) in the case of Novation Registrable
Securities, patrons, affiliates, members, shareholders, partners or
controlled facilities of a shareholder, partner or member, of VHA or UHC;
provided, however, the Company is, within a reasonable time after such
transfer, furnished with 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 provided, further, that such
assignment shall be effective only if immediately following such transfer
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.
4.10 [Intentionally Omitted]
4.11 Termination of Registration Rights. No Holder shall be
entitled to exercise any right provided for in this Section 4 after the
earlier of (i) September 30, 2005; or (ii) the time when all Registrable
Securities held by such Holder can, in the opinion of counsel to the
Company, be sold by a Holder in a three-month period without registration
under the Securities Act pursuant to Rule 144.
4.12 No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities that
grants registration rights that are inconsistent with or violate the rights
granted to the holders of Registrable Securities in this Agreement.
Notwithstanding anything to the contrary herein, the Company may grant
registration rights in connection with bank financings, lease lines,
corporate partnering transactions, business acquisitions of or by the
Company or to entities with which the Company has a business relationship,
provided (a) such grant is not motivated primarily by equity financing
needs and (b) such grant is approved by the Board of Directors (with the
director appointed by the Series E Registrable Securities concurring in the
case of any change to the rights that are specific to the Series E
Registrable Securities, and with the director appointed from either
Novation or VHA concurring in the case of any change to the rights that are
specific to the Novation Registrable Securities). Persons granted
registration rights pursuant to the preceding sentence may become parties
to part 4 of this Agreement with the consent of the Company.
4.13 Adjustments Affecting Registrable Securities. The Company
will not take any action, or permit any change to occur, with respect to
its securities for the purpose of materially and adversely affecting the
ability of the holders of Registrable Securities to include such
Registrable Securities in a registration undertaken pursuant to this
Agreement, provided that this Section 4.13 shall not apply to actions or
changes with respect to the Company's business, balance sheet, earnings or
revenue or with respect to equity, debt or acquisition transactions
involving the Company.
5. [Intentionally Omitted]
6. [Intentionally Omitted]
7. General Provisions.
7.1 Amendment and Waiver. Any term of 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), but only with the written consent of the Company and the
holders of a majority of the shares of the Registrable Securities and (i)
in the case of any change to the rights granted specifically to the Holders
of Series E Registrable Securities, the Holders of a majority in interest
of Series E Registrable Securities; and (ii) in the case of any change to
the rights granted specifically to the Holders of Novation Registrable
Securities, the Holders of a majority of the Novation Registrable
Securities held by VHA and a majority of the Novation Registrable
Securities held by UHC; provided, however, that no amendment may adversely
affect an individual Holder differently than other similarly situated
Holders without the consent of such Holder, and provided, further, that no
retroactive amendments may be made without the approval of all parties
hereto. Any amendment or waiver effected in accordance with this Section
7.1 shall be binding upon each holder of any Registrable Securities at the
time outstanding, each future holder of all such securities and the
Company.
7.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Delaware without reference to
choice of law provisions thereof. In connection with any litigation under
this Agreement, the parties hereto waive any right they may otherwise have
to request trial by jury.
7.3 Successors and Assigns. Except as otherwise expressly
provided, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties.
7.4 Severability. In case any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be
unenforceable, this Agreement shall continue in full force and effect
without said provision; provided, however, that no such severability shall
be effective if it materially changes the economic benefit of this
Agreement to any party.
7.5 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively
given upon (a) personal delivery or (b) one business day after transmission
by facsimile to the other party to be notified with confirmation of receipt
or deposit with a nationally recognized overnight courier, or (c) three
business days after deposit with the United States Post Office, by first
class mail, postage prepaid, addressed: (i) if to the Investors, at the
Investors' address as set forth on Exhibit A or Exhibit B hereto, or at
such other address as the Investors shall have furnished to the Company in
writing, or (ii) if to the Company, at its current address or at such other
address as the Company shall have furnished to the Investors in writing.
7.6 Counterparts. This Agreement may be executed in any number
of counterparts, each of which is an original, and all of which together
shall constitute one instrument.
7.7 Reorganization. The provisions of this Agreement shall
apply to any shares or other securities resulting from any stock split or
reverse split, stock dividend, reclassification, subdivision, consolidation
or reorganization of any shares or other equity securities of the Company
and to any shares or other securities of the Company or of any successor
company that may be received by any of the parties hereto by virtue of
their respective ownership of any shares of Common Stock of the Company.
7.8 Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically and to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for
specific performance and for other injunctive relief in order to enforce or
prevent violation of the provisions of this Agreement.
7.9 Further Assurances. Each party to this Agreement hereby
covenants and agrees, without the necessity of any further consideration,
to execute and deliver any and all such further documents and take any and
all such other actions as may be reasonably necessary or appropriate to
carry out the intent and purposes of this Agreement and to consummate the
transactions contemplated hereby.
7.10 Entire Agreement. This Agreement constitutes the entire
agreement of the parties concerning the subject matter hereof and
supersedes the Second Rights Agreement and the registration rights
previously granted by the Company to the Pharos Investors and the USL
Investors, each of which is hereby terminated as of the date of this
Agreement.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
COMPANY: INVESTORS (Entity):
XXXXXXXX.XXX, INC.
___________________________________
(Printed Entity Name Here)
By: ________________________________
Xxxxxxxxx X. Xxxxxxxxxx
Chief Financial Officer and By: _______________________________
Secretary
Name: _____________________________
Title: ____________________________
INVESTORS (Individual):
___________________________________
Signature Here
___________________________________
Printed Name Here
[SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
