Exhibit 99.2
INVESTOR'S RIGHTS AGREEMENT
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THIS INVESTOR'S RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of May 30, 2000, by and among Cypress Financial Services, Inc., a Nevada
corporation (the "Company"), and FBR Financial Fund II, L.P., a Delaware limited
partnership (the "Investor").
The parties hereby agree as follows:
SECTION 1
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Definitions
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1.1 Certain Definitions. As used in this Agreement, the following terms
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shall have the meanings set forth below:
(a) "Affiliate" shall mean with respect to any Person, any
Person which directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person.
(b) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act.
(c) "Common Stock" shall mean the common stock of the Company,
par value $0.001 per share.
(d) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar successor federal statute and the rules
and regulations thereunder, all as the same shall be in effect from time to
time.
(e) "Holder" shall mean the Investor and any holder of
Registrable Securities to whom the registration rights conferred by this
Agreement have been transferred in compliance with Section 2.10 hereof.
(f) "Initiating Holders" shall mean any Holder or Holders who in
the aggregate hold not less than fifty percent (50%) of the then
outstanding Registrable Securities.
(g) "Other Shares" shall mean other securities of the Company
with registration rights.
(h) "Other Stockholders" shall mean persons other than Holders
who, by virtue of agreements with the Company, are entitled to include
their securities in certain registrations hereunder.
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(i) "Person" shall mean an individual, a corporation, a
partnership, a limited liability company, a trust or an unincorporated
organization or any other entity or organization.
(j) "Registrable Securities" shall mean (i) the Shares and (ii)
any Common Stock issued as a dividend or other distribution with respect to
or in exchange for or in replacement of the shares referenced in clause (i)
above; provided, however, that Registrable Securities shall not include any
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shares of Common Stock which have (x) previously been registered, (y) been
sold to the public or (z) been sold to a transferee in a transaction in
which the transferor's registration rights were not assigned.
(k) The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the
effectiveness of such registration statement.
(l) "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company,
blue sky fees and expenses, expenses of any regular or special audits
incident to or required by any such registration and reasonable fees and
disbursements of up to $10,000 for a single counsel for the selling
Holders, but shall not include the compensation of regular employees of the
Company (which compensation shall be paid in any event by the Company) and
Selling Expenses.
(m) "Rule 144" shall mean Rule 144 as promulgated by the
Commission under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule that may be promulgated by the
Commission.
(n) "Rule 145" shall mean Rule 145 as promulgated by the
Commission under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule that may be promulgated by the
Commission.
(o) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to
time.
(p) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities.
(q) "Common Stock Purchase Agreement" shall mean the Common
Stock Purchase Agreement of even date herewith entered into between the
Company and the Investor.
(r) "Shares" shall mean the Common Stock issued pursuant to the
Common Stock Purchase Agreement.
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SECTION 2
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Registration Rights
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2.1 Requested Registration.
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(a) Request for Registration. If the Company shall receive from
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Initiating Holders at any time or times not earlier than twelve (12) months
after the date of this Agreement a written request that the Company effect a
registration with respect to Registrable Securities, the Company will:
(i) promptly give written notice of the proposed registration to all
other Holders; and
(ii) as soon as practicable, use its best efforts to effect such
registration (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other
state securities laws, and appropriate compliance with the Securities Act)
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 twenty (20) days after such written
notice from the Company is effective in accordance with Section 3.5 hereof.
The Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 2.1:
(A) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such registration, qualification, or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act;
(B) Except as provided in the last sentence of Section 2.1(b),
after the Company has initiated two (2) such registrations pursuant to
this Section 2.1(a) (counting for these purposes only (i) a
registration which has been declared or ordered effective and pursuant
to which securities have been sold and (ii) registrations which have
been withdrawn by the Holders as to which the Holders have not elected
to bear the Registration Expenses pursuant to Section 2.3 hereof and
would, absent such election, have been required to bear such
expenses); or
(C) during the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of filing of,
and ending on a date one hundred eighty (180) days after the effective
date of, a Company-initiated registration; provided that the Company
is actively employing in good faith all reasonable efforts to cause
such registration statement to become effective.
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(b) Deferment. Subject to the foregoing clauses (A) through (C), the
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Company shall file a registration statement covering the Registrable Securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Initiating Holders; provided, however, that if
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(i) in the good faith judgment of the Board of Directors of the Company, such
registration would be seriously detrimental to the Company and the Board of
Directors of the Company concludes, as a result, that it is essential to defer
the filing of such registration statement at such time and (ii) the Company
furnishes to such Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company for such registration
statement to be filed in the near future and that it is, therefore, essential to
defer the filing of such registration statement, then the Company shall have the
right to defer such filing for the period during which such filing would be
seriously detrimental, provided that the Company may not defer the filing for a
period of more than ninety (90) days after receipt of the request of the
Initiating Holders, and, provided further, that the Company shall not defer its
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obligation in this manner more than once in any twelve-month period.
The registration statement filed pursuant to the request of the Initiating
Holders may not include other securities of the Company (except for securities
with respect to which registration rights have been granted prior to the date of
this Agreement) unless the written request of the Initiating Holders has been
obtained. If written consent is not obtained, the Company may nevertheless
include other securities in such registration; provided, however, that if the
amount of Registrable Securities actually sold is less than the amount of
Registrable Securities requested to be so registered by the Initiating Holders,
then the Initiating Holders shall have a subsequent demand registration right or
rights, pursuant to this Section 2.1, with respect to any Registrable Securities
requested to be registered but not successfully sold.
(c) Underwriting. If the Initiating Holders intend to distribute the
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Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section 2.1 and the Company shall include such information in the written notice
referred to in Section 2.1(a). The right of any Holder to registration pursuant
to Section 2.1 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder with respect to such participation and
inclusion) to the extent provided herein. A Holder may elect to include in such
underwriting all or a part of such Holder's Registrable Securities.
(d) Procedures. If other Persons shall request inclusion in any
registration pursuant to Section 2.1, the Initiating Holders shall, on behalf of
all Holders, offer to include such securities in the underwriting and may
condition such offer on such other Person's acceptance of the further applicable
provisions of this Section 2 (including Section 2.11). The Company shall
(together with all Holders and other Persons proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders, which underwriters are reasonably acceptable to the Company.
Notwithstanding any other provision of this Section 2.1, if the representative
of the underwriters advises the Initiating Holders in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
number of shares to be included in the
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underwriting or registration shall be allocated as set forth in Section 2.12
hereof. If a Person who has requested inclusion in such registration as provided
above does not agree to the terms of any such underwriting, such Person shall be
excluded therefrom by written notice from the Company, the underwriter or the
Initiating Holders. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration. If
shares are so withdrawn from the registration and if the number of shares to be
included in such registration was previously reduced as a result of marketing
factors pursuant to this Section 2.1(d), then the Company shall offer to all
Holders and other Persons who have retained rights to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such shares
to be allocated among such Holders and other Persons requesting additional
inclusion in accordance with Section 2.12.
2.2 Company Registration.
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(a) Registration. If the Company shall determine to register any of
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its securities either for its own account or the account of a security holder or
holders (other than pursuant to Section 2.1 or 2.4 hereof), other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a Rule 145 transaction, or a registration on any registration
form that does not permit secondary sales, the Company will:
(i) promptly give to each Holder written notice thereof; and
(ii) use its best efforts to include in such registration (and any
related qualification under blue sky laws or other compliance), except as
set forth in Section 2.2(b) below, and in any underwriting involved
therein, all of such Holder's Registrable Securities specified in a written
request or requests received by the Company within twenty (20) days after
the written notice from the Company described in clause (i) above is given.
Such written request may specify all or a part of a Holder's Registrable
Securities.
(b) Underwriting. If the registration of which the Company gives
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notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.2(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 2.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders of securities of the Company
with registration rights to participate therein distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Company.
Notwithstanding any other provision of this Section 2.2, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitations set forth below) exclude all
Registrable Securities from, or limit the number of Registrable Securities to be
included in, the registration and underwriting. If such registration is a
Company-initiated
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registered offering of the Company's securities to the general public, the
Company may limit, to the extent so advised by the underwriters, the amount of
securities to be included in the registration by the Company's stockholders
(including the Holders); provided, however, that the aggregate value of
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Registrable Securities to be included in such registration by Holders may not be
so reduced to less than thirty-five percent (35%) of the total amount of such
securities included in such registration without the consent of at least two-
thirds (2/3) of the Holders. The Company shall so advise all Holders and other
stockholders requesting registration pursuant to this Section 2.2, and the
number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated first to the Company for
securities being sold for its own account (subject to the foregoing provisions
of this paragraph) and thereafter as set forth in Section 2.12. If any Person
does not agree to the terms of any such underwriting, he shall be excluded
therefrom by written notice from the Company or the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
If shares are so withdrawn from the registration and if the number of
shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all Persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such shares
to be allocated among the Persons requesting additional inclusion in accordance
with Section 2.12 hereof.
(c) Right to Terminate Registration. The Company shall have the right
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to terminate or withdraw any registration initiated by it under this Section 2.2
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration. The Registration Expenses
and Selling Expenses, if any, of such withdrawn registration shall be borne by
the Company.
2.3 Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to
Sections 2.1, 2.2 or 2.4 hereof shall be borne by the Company; provided,
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however, that if the Holders bear the Registration Expenses for any registration
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proceeding begun pursuant to Section 2.1 and subsequently withdrawn by the
Holders registering shares therein, such registration proceeding shall not be
counted as a requested registration pursuant to Section 2.1 hereof; and
provided, further, that in the event Holders withdraw a registration begun
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pursuant to Section 2.1 and such withdrawal is based upon material adverse
information relating to the Company that is different from the information known
or available (upon request from the Company or otherwise) to the Holders
requesting registration at the time of their request for registration under
Section 2.1, such registration shall not be treated as a counted registration
for purposes of Section 2.1 hereof, even though the Holders do not bear the
Registration Expenses for such registration. All Selling Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 2.1, 2.2 and 2.4 hereof shall be borne by the holders of such
securities pro rata on the basis of the number of shares of securities so
registered on their behalf.
2.4 Registration on Form S-3.
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(a) In addition to the rights contained in the foregoing provisions
of this Section 1, the Holders of Registrable Securities shall have the right to
request registrations on Form S-3 (such requests shall be in writing and shall
state the number of shares of Registrable Securities to be disposed of and the
intended methods of disposition of such shares by such Holder or Holders);
provided, however, that the Company shall not be obligated to effect any such
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registration if, in a given twelve-month period, the Company has effected one
(1) such registration in any such period.
(b) If a request complying with the requirements of Section 2.4(a)
hereof is delivered to the Company, the provisions of Sections 2.1(a)(i) and
(ii) and Section 2.1(b) hereof shall apply to such registration. If the
registration is for an underwritten offering, the provisions of Sections 2.1(c)
and 2.1(d) hereof shall also apply to such registration.
2.5 Registration Procedures. In the case of each registration effected by
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the Company pursuant to Section 2, the Company will keep each Holder advised in
writing as to the initiation of each registration and as to the completion
thereof. At its expense, the Company will use its best efforts to:
(a) Prepare and file with the Commission a registration statement on
any form for which the Company then qualifies or which counsel for the Company
shall deem appropriate and which form shall be available for the sale of the
Registrable Securities in accordance with the intended method of distribution
thereof, and use its best efforts to cause such registration statement to become
effective; provided that before filing a registration statement or prospectus or
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any amendments or supplements thereto, the Company will (i) furnish to counsel
selected by the Holders 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 and (ii) notify each
Holder of Registrable Securities of any stop order issued or threatened by the
Commission or any state regulatory authority and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered;
(b) Keep such registration effective for a period of one hundred
twenty (120) days or until the Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs; provided, however, that (i) such 120-day period shall be extended for a
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period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company and (ii) in the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 120-day period shall be extended,
if necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that Rule 415, or any successor rule
under the Securities Act, permits an offering on a continuous or delayed basis;
and provided further, that applicable rules under the Securities Act governing
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the obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment that (x) includes any prospectus required by Section
10(a)(3) of the Securities Act or (y) reflects facts or events representing a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be included
in (x) and (y) above to be contained in periodic reports filed pursuant to
Section 13 or 15(d) of the Exchange Act in the registration statement;
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(c) 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;
(d) Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as a Holder
from time to time may reasonably request;
(e) Use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any Holder reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
Holder, provided that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (e), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(f) Use its best efforts to cause the Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the Holder or Holders thereof
to consummate the disposition of such Registrable Securities;
(g) Notify each Holder of such Registrable Securities 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 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, in light of the
circumstances under which they were made, not misleading, and the Company will
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein, or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(h) Use its best efforts to cause all such Registrable Securities to
be listed on each securities exchange on which similar securities issued by the
Company are then listed (or, if none are so listed, on each securities exchange
requested by the holders of a majority of the Registrable Securities and Other
Shares covered by the applicable registration statement), in each case provided
that the applicable listing requirements are satisfied;
(i) In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 2.1 hereof, the Company will
enter into an underwriting agreement reasonably necessary to effect the offer
and sale of Common Stock, provided such underwriting agreement contains
customary underwriting provisions and provided further that if the underwriter
so requests, the underwriting agreement will contain customary contribution
provisions;
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(j) Use its best efforts to obtain an opinion letter from the
Company's legal counsel in customary form and covering such matters of the type
customarily covered by opinion letters as the holders of a majority of the
Registrable Securities and Other Shares being sold reasonably request;
(k) Use its best efforts to take all other steps necessary to effect
the registration of the Registrable Securities covered by the registration
statement contemplated hereby; and
(l) 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 a
period of twelve (12) months, beginning within three (3) months 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.
2.6 Indemnification.
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(a) The Company (i) will indemnify each of its officers, directors
and partners, legal counsel, and accountants, each Holder and each Person who
controls such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Section 2, and each underwriter, if any, and each
Person who controls any such underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages and liabilities
(or actions, proceedings or settlements in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any 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 any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and (ii)
will reimburse each of its officers, directors, partners, legal counsel and
accountants, each such Holder and each Person who controls 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 and defending or settling any such 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 expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein. It is agreed that the indemnity agreement
contained in this Section 2.6(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company (which consent has not been
unreasonably withheld).
(b) Each Holder will, if Registrable Securities held by him are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel and accountants, each underwriter, if any, of
the Company's securities covered by such registration statement, each
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Person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, each other such Holder and Other
Stockholders, and each of their officers, directors and partners, and each
Person controlling such Holder or Other Stockholders, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company and such
Holders, Other Stockholders, directors, officers, partners, legal counsel and
accountants, Persons, underwriters, or control Persons for any legal or any
other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder expressly for use in such registration statement,
prospectus, offering circular or other document; provided, however, that the
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obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld); and provided
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further, that such Holder will not be liable under this Section 2.6(b) for any
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losses, costs, damages or expenses exceeding the gross proceeds received by
Holder in such registration or offering.
(c) Each party entitled to indemnification under this Section 2.6
(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 any litigation resulting
therefrom, 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
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Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2.6, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party
(which consent shall not be unreasonably withheld), consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(d) If the indemnification provided for in this Section 2.6 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
herein, 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 loss, liability, claim, damage or expense
in such
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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 hand, in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense 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, access to information and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
2.7 Information by Holder. Each Holder of Registrable Securities shall
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furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Section 2.
2.8 Limitations on Registration of Issues of Securities. From and after
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the date of this Agreement, the Company shall not, without the prior written
consent of a majority in interest of the Holders, enter into any agreement with
any holder or prospective holder of any securities of the Company giving such
holder or prospective holder any registration rights, unless the terms of such
agreement provide that such registration rights are subordinate to the
registration rights granted to the Holders hereunder.
2.9 Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission that may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its best efforts to:
(a) make and keep public information regarding the Company available,
as those terms are understood and defined in Rule 144 under the Securities Act,
at all times from and after ninety (90) days following the effective date of the
first registration under the Securities Act filed by the Company for an offering
of its securities to the general public;
(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
at any time after it has become subject to such reporting requirements; and
(c) so long as a Holder owns any Registrable Securities, furnish to
the Holder forthwith upon written request (i) a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 (at any time
from and after ninety (90) days following the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), the Securities Act and the Exchange Act (at any time after
it has become subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company and (iii) such other reports
and documents so filed as a Holder may
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reasonably request in availing itself of any rule or regulation of the
Commission allowing a holder to sell any such securities without registration.
2.10 Transfer or Assignment of Registration Rights. The rights to cause
---------------------------------------------
the Company to register securities granted to a Holder by the Company under this
Section 2 may be transferred or assigned by a Holder only to a transferee or
assignee (a) who acquires at least 100,000 shares of Registrable Securities (as
adjusted for any stock splits, dividends and the like), (b) who is a Holder of
Registrable Securities and already possesses such registration rights or (c)
that is a shareholder, member, partner, officer, director of a Holder or a
partnership, corporation, limited liability company or other organization which
is controlled by, controls or is under common control with a Holder or its
permitted transferees; provided that the Company is given written notice at the
time of or within a reasonable time after said transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
securities with respect to which such registration rights are being transferred
or assigned, and, provided, further, that the transferee or assignee assumes the
obligations of such Holder under this Section 2.
2.11 "Market Stand-Off" Agreement. In respect of any underwritten public
---------------------------
offering by the Company, each Holder hereby agrees that such Holder shall not
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by such Holder (other than those included in the
registration) during a reasonable and customary period of time as agreed to by
the Company and the underwriters, not to exceed the greater of (a) one hundred
eighty (180) days following the effective date of the registration statement of
the Company filed under the Securities Act in respect of such offering and (b)
such other period of time as agreed to by holders of a majority of the then
outstanding Shares, provided that:
(i) all officers and directors of the Company and all other Persons
with registration rights (whether or not pursuant to this Agreement) enter
into similar agreements; and
(ii) any discretionary waiver or termination of the restrictions of
any such agreement by the Company or representatives of the underwriters
shall apply to Holders on a pro rata basis together with any holder of
--- ----
securities other than a Holder.
Each Holder agrees to execute and deliver such other agreements as may be
reasonably requested by the Company or the underwriter which are consistent with
the foregoing or which are necessary to give further effect thereto. The
obligations described in this Section 2.11 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares (or securities) subject to the foregoing restriction
until the end of such period.
2.12 Allocation of Registration Opportunities. In any circumstance in
----------------------------------------
which all of the Registrable Securities and Other Shares requested to be
included in a registration on behalf of the Holders or other selling
stockholders cannot be so included as a result of limitations of the aggregate
number of shares of Registrable Securities and Other Shares that may be so
included, the number of shares of Registrable Securities and Other Shares that
may be so included shall be
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reduced pro rata amongst all Holders and other selling stockholders on the basis
of the number of shares of Registrable Securities to be included in such
registration, assuming conversion; provided, however, so that such allocation
-------- -------
shall not operate to reduce the aggregate number of Registrable Securities and
Other Shares to be included in such registration, if any Holder or other selling
stockholders does not request inclusion of the maximum number of shares of
Registrable Securities and Other Shares allocated to him pursuant to the above-
described procedure, the remaining portion of his allocation shall be
reallocated among those requesting Holders and other selling stockholders whose
allocations did not satisfy their requests, and this procedure shall be repeated
until all the shares of Registrable Securities and Other Shares which may be
included in the registration on behalf of the Holders and other selling
stockholders have been so allocated. The Company shall not limit the number of
Registrable Securities or Other Shares to be included in a registration pursuant
to this Agreement in order to include shares held by stockholders with no
registration rights or to include other shares of stock issued to employees,
officers, directors or consultants, or, with respect to registrations under
Section 2.1 or 2.4 hereof, in order to include in such registration securities
registered for the Company's own account.
2.13 Termination of Registration Rights. The right of any Holder to
----------------------------------
request registration or inclusion in any registration pursuant to Section 2.1,
2.2 or 2.4 hereof shall terminate on such date as all shares of Registrable
Securities held or entitled to be held upon conversion by such Holder may
immediately be sold under Rule 144 during any three (3)-month period.
SECTION 3
---------
Miscellaneous
-------------
3.1 Aggregation of Stock. All Registrable Securities held or acquired by
--------------------
affiliated entities or Persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
3.2 Governing Law. This Agreement shall be governed in all respects by the
-------------
laws of the State of California, without regard to the conflicts of law
principles thereof.
3.3 Successors and Assigns. Except as otherwise expressly provided herein,
----------------------
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
3.4 Entire Agreement; Amendment; Waiver. This Agreement (including the
-----------------------------------
schedules and exhibits hereto) constitutes the full and entire understanding and
agreement between the parties hereto with regard to the subjects hereof and
thereof. Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated, except by a written instrument signed by the Company
and the Holders of at least fifty percent (50%) of the Registrable Securities;
and any such amendment, waiver, discharge or termination shall be binding on all
the Holders, but in no event shall the obligation of any Holder hereunder be
materially increased, except upon the written consent of such Holder.
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3.5 Notices, Etc. All notices and other communications required or
-------------
permitted hereunder shall be in writing and shall be sent by confirmed telex or
facsimile, mailed by United States first-class mail, postage prepaid, or
delivered personally addressed by hand or special courier (a) if to a Holder, as
indicated below the Holder's signature hereto, or at such other address as such
Holders or permitted assignee shall have furnished to the Company in writing, or
(b) if to the Company, at 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, or
at such other address as the Company shall have furnished to each Holder in
writing. All such notices and other written communications shall be effective
(i) if sent by confirmed telex or facsimile, on the day sent if sent during
normal business hours of the recipient and, if not, on the next business day,
(ii) if mailed, five (5) days after mailing and (iii) if delivered, upon
delivery.
3.6 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to any Holder, upon any breach or default of the
Company under this Agreement shall impair any such right, power or remedy of
such Holder nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any Holder of any breach or default under this Agreement or any
waiver on the part of any Holder of any provisions or conditions of this
Agreement must be made in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any Holder, shall be cumulative and
not alternative.
3.7 Rights; Severability. Unless otherwise expressly provided herein, any
--------------------
Holder's rights hereunder are several rights, not rights jointly held with any
of the other Holders. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
3.8 Information Confidential. Each Holder acknowledges that the
------------------------
information received by such Holder pursuant hereto may be confidential and for
such Holder's use only, and such Holder will not use such confidential
information in violation of the Exchange Act or reproduce, disclose or
disseminate such information to any other Person (other than such Holder's
employees or agents having a need to know the contents of such information, and
such Holder's attorneys), except in connection with the exercise of rights under
this Agreement, unless the Company has made such information available to the
public generally or such Holder is required to disclose such information by a
governmental body.
3.9 Titles and Subtitles. The titles of the paragraphs and subparagraphs
--------------------
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
3.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Investor's Rights
Agreement effective as of the day and year first above written.
-14-
CYPRESS FINANCIAL SERVICES, INC.
By: __________________________________________
Name:_________________________________________
Title:________________________________________
FBR FINANCIAL FUND II, L.P.
By: FBR Financial Fund Management, L.L.C.,
Title: General Partner
By: Friedman, Billings, Xxxxxx
Investment Management, Inc.
Title: Managing Member
By: __________________________________________
Name:_________________________________________
Title:________________________________________
Address: 0000 00/xx/ Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
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