REGISTRATION RIGHTS AGREEMENT
Dated as of , 1995
relating to
21,000 Shares of Common Stock
and
94,000 Shares of Common Stock which will be issued upon
Conversion of 94 Shares of Series A Preferred Stock
by and between
Orion Acquisition Corp. I
and
The Several Shareholders listed on Schedule A hereto
This Registration Rights Agreement (the "Agreement") is made
and entered into as of , 1995, by and between Orion Acquisition Corp I, a
Delaware corporation (the "Company") and The Several Shareholders listed on
Schedule A attached hereto (the "Shareholders") who have purchased 21,000
shares of the Common Stock of the Company and 94 Shares of Series A Preferred
Stock which are convertible into 94,000 shares of common stock ("Shares") in
private transactions. As an inducement to the Shareholders to purchase the
Shares, the Company has agreed to provide the registration rights set forth in
this Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized
following meanings:
Act: The Securities Act of 1933, as amended.
Business Combination: A merger, exchange of capital stock,
asset acquisition or other business combination between the Company and an
operating business.
Closing Date: The date on which a Business Combination is
consummated.
Commission: The Securities and Exchange Commission.
Common Stock: The voting Common Stock, par value $.01 per
share, of the Company.
Effectiveness Target Date: As defined in Section 4.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Holders: As defined in Section 2(b) hereof.
NASD: National Association of Securities Dealers, Inc.
Offering Memorandum: The Offering Memorandum, dated
October , 1993, and all amendments and supplements thereto, relating to
the Shares and prepared by the Company.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
Prospectus: The prospectus included in the Registration
Statement (as defined herein), as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of the
Transfer Restricted Securities (as defined herein) covered by the Registration
Statement and by all other amendments and supplements to the prospectus,
including post-effective amendments, and all material which may be
incorporated by reference into such prospectus.
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Record Holders: Holders of Transfer Restricted Securities as
set forth on the books and records of the Company on the Closing Date.
Registration Statement: As defined in Section 3(a) hereof.
Transfer Restricted Securities: Each Share of Common Stock
of the Company until such Shares (i) have been effectively registered under
the Securities Act and disposed of in accordance with the Registration
Statement covering it, (ii) are distributed to the public pursuant to Rule 144
or (iii) may be sold or transferred pursuant to Rule 144(k) (or any similar
provisions then in force) under the Securities Act or otherwise.
Underwriter: Any Underwriter, placement agent, selling
broker, dealer manager, qualified independent Underwriter or similar
securities industry professional.
Underwritten Registration or Underwritten Offering: An
offering in which securities of the Company are sold to an Underwriter or with
the assistance of such Underwriter for reoffering to the public on a firm
commitment or best efforts basis.
SECTIONS 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled
to the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTRATION
(a) The Company shall cause to filed with the Commission on
or prior to 75 days after the Closing Date, a registration statement under the
Act (the "Registration Statement") on Form S-1 to cover resales of Transfer
Restricted Securities by the Holders thereof who satisfy certain conditions
relating to the provision of information in connection with the Registration
Statement. The Holders of such Transfer Restricted Securities shall have
provided the representations required pursuant to Section 3(g) hereof. The
Company shall use its best efforts to cause such Registration Statement to be
declared effective by the Commission on or prior to 150 days after the Closing
Date. The Company further agrees to use its best efforts to prevent the
happening of any event that would cause the Registration Statement to contain
a material misstatement or omission or to be not effective and usable for
resale of the Transfer Restricted Securities during the period that such
Registration Statement is required to be effective and usable.
Upon the occurrence of any event that would cause the
Registration Statement (i) to contain a material misstatement or omission or
(ii) to be not effective and usable for resale of Transfer Restricted
Securities during the period that such Registration Statement is required to
be effective and usable, the Company shall promptly as reasonably practicable
file an
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amendment to the Registration Statement, in the case of clause (i), correcting
any such misstatement or omission, and in the case of either clause (i) or
(ii), use its best efforts to cause such amendment to be declared effective
and such Registration Statement to become usable as soon as practicable
thereafter.
(b) None of the Company nor any of its security holders
(other than the Holders of Transfer Restricted Securities in such capacity)
shall have the right to include any of the Company's securities in the
Registration Statement.
(c) If holder of a majority of the shares of Common Stock to
be registered in the Registration Statement so elect, an offering of Transfer
Restricted Securities pursuant to the Registration Statement may be effected
in the form of an Underwriting Offering. In such event, and if the Underwriter
advises the Company and the Holders of such Transfer Restricted Securities in
writing that in their opinion the amount of Transfer Restricted Securities
proposed to be sold in such offering exceeds the amount of Transfer Restricted
Securities which can be sold in such offering, there shall be included in such
Underwritten Offering the amount of such Transfer Restricted Securities which
in the opinion of such Underwriters can be sold, and such amount or number of
shares shall be allocated pro rata among the Holders of such Transfer
Restricted Securities, as the case may be, requested to be included by such
Holders. The Holders of the Transfer Restricted Securities to be registered
shall pay all underwriting discounts and commissions of such Underwriters.
(d) If any of the Transfer Restricted Securities covered by
the Registration Statement are to be sold in an Underwritten Offering, the
Underwriter(s) that will administer the offering will be selected by the
Holders of a majority of the shares of Common Stock, provided, however, that
such Underwriter(s) shall be reasonably satisfactory to the Company.
(e) Each Holder whose Transfer Restricted Securities are
covered by a Registration Statement filed pursuant to this Section 3 agrees,
upon the request of the Underwriter(s) in any Underwritten Offering, not to
effect any public sale or distribution of securities of the Company of the
same class as the securities included in such Registration Statement,
including a sale pursuant to Rule 144 under the Act (except as part of such
registration), during the 10-day period prior to, and during the 90-day period
beginning on, the closing date of any Underwritten Offering made pursuant to
such Registration Statement, to the extent timely notified in writing by such
Underwriter(s); provided, however, that each Holder of Transfer Restricted
Securities shall be subject to the hold-back restrictions of this Section 3(e)
only once during the term of this Agreement.
The foregoing provisions of this Section 3(e) shall also
apply to any Holder of Transfer Restricted Securities if such Holder is
prevented by applicable statute or regulation from entering into any such
agreement; provided, however, that any such Holder shall undertake, in its
request to participate in any such Underwritten Offering, not to effect any
public or sale or distribution of any of its Transfer Restricted Securities
commencing on the date of sale of Transfer Restricted Securities unless it has
provided 90 days written notice of such sale or distribution to the
Underwriter(s).
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(f) The Company agrees (i) not to effect any public or
private offer, sale or distribution of Securities of the same quality and
nature of the Transfer Restricted Securities to be registered in an
Underwritten Offering including a sale pursuant to Regulation D under the Act,
during the 10-day period prior to, and during the 90-day period beginning on,
the closing date of each Underwritten Offering made pursuant to the
Registration Statement, to the extent timely notified in writing by the
Underwriter(s) (except as part of such registration, if permitted), unless the
Underwriter(s) shall consent in writing to a shorter period of time; provided,
however, that the foregoing provisions of this Section 3(f)(i) shall not be
applicable during the 180 days following the termination of any such period in
connection with an Underwritten Offering made pursuant to the Registration
Statement and, provided, further, that any such agreement shall permit (A) the
issuance by the Company of any shares of Common Stock issued to employees of
the Company or any of its Subsidiaries or to any other eligible person
pursuant to any employee stock option plan, stock ownership plan, stock bonus
plan, stock compensation plan, stock purchase plan or dividend reinvestment
plan of the Company in effect on the date of such Underwritten Offering, (B)
the issuance by the Company of Common Stock upon the conversion of securities,
or the exercise of options or warrants, outstanding at the date of such
Underwritten Offering, and (c) the issuance by the Company of Common Stock in
one or more private placements not to exceed in aggregate 5% of the fully
diluted outstanding Common Stock of the Company as of the date of such
Underwritten Offering solely in exchange for property other than cash; and
(ii) to cause each holder of its privately placed subordinated debt, Common
Stock and any security convertible into or exchangeable or exercisable for
subordinated debt or Common Stock purchased from the Company at any time on or
after the date of this Agreement to agree not to effect any public sale or
distribution of any such securities during such period, including a sale
pursuant to Rule 144 under the Act (except as part of such Underwritten
Offering, if permitted).
(g) No Holder of Transfer Restricted Securities may include
any of its Transfer Restricted Securities in any Registration Statement
pursuant to this Agreement unless such Holder furnishes to the Company in
writing, within 10 business days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with
any Registration Statement or Prospectus or preliminary Prospectus included
therein.
SECTION 4. LIQUIDATED DAMAGES
If (i) the Registration Statement is not filed with the
Commission on or prior to 75 days after the Closing Date, (ii) the
Registration Statement has not been declared effective by the Commissioner
within 150 days after the Closing Date (the "Effectiveness Target Date"), or
(iii) the Registration Statement is filed and declared effective but shall
thereafter cease to be effective or useable for resale without being succeeded
immediately by any additional Registration Statement filed and declared
effective (each such event referred to in clause (i) through (iii), a
"Registration Default"), the Company will pay liquidated damages to each
Holder of Transfer Restricted Securities who has complied with such Holder's
obligations under this Agreement, during the first 90-day period immediately
following the occurrence of such Registration Default in an amount equal to
$.01 per week per share (subject to adjustment in the event of stock splits,
stock recombinations, stock dividends and the like) of Common Stock
constituting Transfer Restricted Securities held by such Holder. The amount of
the liquidated
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damages will increase by an additional $.01 per week per share (subject to
adjustment as set forth above) of Common Stock constituting Transfer
Restricted Securities for each subsequent 90 day period until the applicable
Registration Statement is filed and the applicable Registration Statement is
declared effective, or the Registration Statement again becomes effective, as
the case may be, up to a maximum amount of liquidated damages of $.05 per week
per share (subject to adjustment as set forth above) of Common Stock
constituting Transfer Restricted Securities. All accrued liquidated damages
shall be paid to Record Holders by wire transfer of immediately available
funds or by Federal funds check by the Company on each Damages Payment Date.
Following the cure of a Registration Default, liquidated damages will cease to
accrue with respect to such Registration Defaults. No Liquidated Damages shall
be payable with respect to any week commencing three years or more after the
Closing Date.
All of the Company's obligations set forth in the preceding
paragraph which are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
security shall have been satisfied in full.
SECTION 5. REGISTRATION PROCEDURES
In connection with the Registration Statement, the Company
will use its best efforts to effect such registration to permit the sale of
the Transfer Restricted Securities being sold in accordance with the intended
method or methods of distribution or disposition thereof, and pursuant thereto
the Company will as expeditiously as possible;
(a) prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of distribution
thereof and shall include all financial statements; cooperate and assist in
any filings required to be made with the NASD and use its reasonable best
efforts to cause such Registration Statement to become effective and approved
by such government agencies or authorities as may be necessary to enable the
selling Holders to consummate the disposition of such Transfer Restricted
Securities; provided, however, that before filing a Registration Statement or
any Prospectus, or any amendments or supplements (other than documents
incorporated by reference after the initial filing of the Registration
Statement), the Company will furnish to the Holders and the Underwriter(s), if
any, copies of all such documents proposed to be filed, and the Company will
not file any Registration Statement or amendment thereto or any Prospectus or
supplement thereto which (i) the Underwriter(s), if any, shall reasonably
object or (ii) if there are no Underwriters, Holders of a majority of the
shares of Common Stock so registered in the Registration Statement shall
reasonably object, in such case within five business days after the receipt
thereof. A Holder or Underwriter, if any, shall be deemed to have reasonably
objected to such filing if the Registration Statement, amendment, Prospectus
or supplement, as applicable, as proposed to be filed contains a material
misstatement or omission which misstatement or omission is specifically
identified to the Company in writing within such five business days;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep the Registration
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Statement effective for the applicable period set forth in Section 3(a)
hereof, or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply
fully with the applicable provisions of Rules 424 and 430A under the Act in a
timely manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration Statement
or supplement to the Prospectus;
(c) if requested by the Holders of Transfer Restricted
Securities being sold in an Underwritten Offering or the Underwriter(s)
thereof, promptly incorporate in a Prospectus supplement or post-effective
amendment such information as such Underwriter(s) and the Holders of Transfer
Restricted Securities being sold agree should be included therein relating to
the plan of distribution of the Transfer Restricted Securities, including,
without limitation, information with respect to the principal amount of
Transfer Restricted Securities being sold to such Underwriter(s), the purchase
price being paid therefor and with respect to any other terms of the offering
of the Transfer Restricted Securities to be sold in such offering; and make
all required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
(d) advise the Underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in writing,
(i) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to the Registration Statement or
any post-effective amendment thereto, when the same has become effective, (ii)
of any request by the Commission for amendments the Registration Statement or
any amendments or supplements to the Prospectus or for additional information
relating thereto, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act or of
the suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (iv) if at
any time the representations and warranties of the Company contemplated by
paragraph (m)(i) below cease to be true and correct, and (v) of the existence
of any fact and the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company
shall use their best efforts to obtain the withdrawal or lifting of such order
at earliest possible time;
(e) promptly following the filing of any document that is to
be incorporated by reference into the Registration Statement or the Prospectus
(after initial filing of the
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Registration Statement), provide copies of such document to the Holders;
(f) furnish to each Holder and each of the Underwriter(s),
if any, without charge, at least one copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto, including all
documents incorporated by reference therein and all exhibits (excluding
exhibits incorporated therein by reference unless requested by such Holder);
(g) deliver to each selling Holder and each of the
Underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons may reasonably request; the Company consents to the
use of the Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the Underwriter(s), if any, in connection with the
public offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto;
(h) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the Underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or Underwriter(s)
may request and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Registration Statement; provided, however, that the
Company shall not be required (i) to register or qualify as a foreign
corporation where it is now so qualified, (ii) to take any action that would
subject it to the service or process in suits, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction where
it is not so subject, or (iii) to take any action that would subject it to
taxation in any jurisdiction in an amount greater it would be so subject
without having taken such action;
(i) cooperate with the selling Holders and the
Underwriter(s), if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends; and enable such Transfer Restricted
Securities to be in such denominations and registered in such names as the
Holders or the Underwriter(s), if any, may request at least two business days
prior to any sale or Transfer Restricted Securities made by such
Underwriter(s);
(j) use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the Underwriter(s), if
any, to consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (h) above;
(k) if any fact or event contemplated by clause (d)(v) above
shall exist or have occurred, prepare a supplement or post-effective amendment
to the Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted Securities,
the Prospectus will not contain an untrue statement of a material fact or omit
to state any material
8
fact necessary to make the statements therein not misleading;
(l) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration Statement and
provide the transfer agent for the Common Stock with printed certificates for
the Transfer Restricted Securities;
(m) enter in such agreements (including an underwriting
agreement) and take all such other actions in connection therewith as may
reasonably be required in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to the Registration Agreement, in
connection with an Underwritten Registration, and (i) make such
representations and warranties to the Holders and the Underwriter(s), in form,
substance arid scope as they may reasonably request and as are customarily
made by issuers to Underwriters in primary Underwritten Offerings and covering
matters including, but not limited to, those set forth in an underwriting
agreement; (ii) obtain opinions of counsel to the Company and updates thereof
in customary form and covering matters reasonably requested by the
Underwriter(s) of the type customarily covered in legal opinions to
Underwriters in connection with primary underwritten offerings addressed to
each selling Holder and the Underwriter requesting the same and covering the
matters as may be reasonably requested by such Holders and Underwriters; (iii)
obtain "cold comfort" letters and updates thereof from the Company's
independent certified public accountants addressed to the selling Holders of
Transfer Restricted Securities and Underwriters requesting the same, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters to Underwriters in connection with primary
underwritten offerings; (iv) set forth in full or incorporate by reference in
the underwriting agreement the indemnification provisions and procedures of
Section 7 hereof with respect to all parties to be indemnified pursuant to
said Section; and (v) deliver such documents and certificates as may be
reasonably requested by the Holders of the Transfer Restricted Securities
being sold or the Underwriter(s) of such Underwritten Offering to evidence
compliance with clause (i) above and with any customary conditions contained
in the underwriting agreement entered into by the Company pursuant to this
clause (m). The above shall be done at each closing under such underwriting
agreement, as and to the extent required thereunder.
(n) make available at reasonable times and in a reasonable
manner for inspection by a representative of the Holders of the Transfer
Restricted Securities, any Underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney or accountant
retained by such selling Holders or any of the Underwriters, all financial and
other records, pertinent corporate documents and properties of the Company and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Holder, Underwriter, attorney or
accountant in connection with such Registration Statement subsequent to the
filing thereof and prior to its effectiveness, provided, however, that such
representatives, attorneys or accountants shall agree to keep confidential
(which agreement shall be confirmed in writing in advance to the Company if
the Company shall so request) all information, records or documents made
available to such persons which is not otherwise available to the general
public unless disclosure of such records, information or documents is required
by court or administrative order (of which the Company shall have been given
prior notice and an opportunity to defend) after the exhaustion of all appeals
therefrom, and to use such information obtained pursuant to this provision
only in connection with the transaction for
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which such information was obtained, and not for any other purpose;
(o) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated
earnings statement (which need not be audited) for the twelve-month period (i)
commencing at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to Underwriters in a firm or best efforts Underwritten
Offering or (ii) if not sold to Underwriters in such an offering, beginning
with the first month of the Company's first fiscal quarter commencing after
the effective date of the Registration Statement;
(p) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement at the
earliest possible moment;
(q) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange or quotation
system on which similar securities issued by the Company are then listed if
requested by the Holders of a majority in aggregate principal amount of such
Transfer Restricted Securities or the Underwriters, if any;
(r) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies, if so
requested by the Holders of a majority in aggregate principal amount of such
Transfer Restricted Securities or the Underwriters, if any; and
(s) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by any
Underwriter (including any "qualified independent Underwriter" that is
required to be retained in accordance with the rules and regulations of the
NASD).
Each Holder as to which any Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
Each Holder agrees by acquisition of such Transfer
Restricted Securities that, upon receipt of any notice from the Company of the
existence of any fact of the kind described in Section 5(d)(v) hereof, such
Holder will forthwith discontinue disposition of Transfer Restricted
Securities until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) hereof, or until it is advised
in writing (the "Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings
which are incorporated by reference in the Prospectus. If so directed by the
Company, each Holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Transfer Restricted Securities current at the
time of receipt of such notice. In the event the Company shall give any such
notice, the time period regarding the effectiveness of the Registration
Statement set forth in Section 3(a) hereof shall be extended by the number of
days during the period from and including the date of the giving of such
notice pursuant to Section 5(d)(v) hereof to and including the date when each
selling Holder covered by such Registration
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Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 5(k) hereof or shall have received the
Advice.
SECTION 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless
whether a Registration Statement becomes effective, including without
limitation:
(i) all registration and filing fees and expenses
(including filings made with the NASD);
(ii) fees and expenses of compliance with federal
securities or state blue sky laws;
(iii) expenses of printing including, without
limitation, expenses of printing or engraving certificates for the Transfer
Restricted Securities and of printing prospectuses), messenger and delivery
service and telephone;
(iv) reasonable fees and disbursements of counsel for
the Company and for the Holders of the Transfer Restricted Securities (subject
to the provisions of Section 5(b) hereof);
(v) fees and disbursements of all independent certified
public accountants of the Company (including the expenses of any special audit
and "cold comfort" letters required by or incident to such performance);
(vi) fees and expenses associated with any NASD filing
required to be made in connection with the Registration Statement, including,
if applicable, the fees and expenses of any "qualified independent
Underwriter" (and its counsel) that is required to be retained in accordance
with the rules and regulations of the NASD; and
(vii) fees and expenses of listing the Transfer
Restricted Securities on any securities exchange or quotation system in
accordance with Section 5(m) hereof. All such expenses being herein called
"Registration Expense."
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting dues), the expenses of any annual
audit, rating agency fees and the fees and expenses of any Person, including
special experts, retained by the Company. The Holders of Transfer Restricted
Securities shall bear the expense of any broker's commission or Underwriters'
discount or commission.
(b) In connection with the Registration Statement, the
Company will reimburse the Holders of Transfer Restricted Securities being
registered pursuant to such Registration Statement for the fees and
disbursements of not more than one counsel chosen by the Holders
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of a majority of the shares of Common Stock to be included in such
Underwritten Offering. Notwithstanding the provisions of this Section 6, each
Holder of Transfer Restricted Securities shall pay all registration expenses
to the extent required by applicable law.
SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each
Holder (each such Holder an "Indemnified Holder") and in the case of an
Underwritten Offering, each Underwriter participating in the distribution
(each such Underwriter an "Indemnified Underwriter") and each person that
controls each Indemnified Holder or Indemnified Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and agents,
employees, officers and directors or any such controlling person of any
Indemnified Holder or Indemnified Underwriter from and against any and all
losses, claims, damages, judgments, liabilities and expenses (including the
reasonable fees and expenses of counsel and other expenses in connection with
investigating, defending or settling any such action or claim) as they are
incurred arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary Prospectus or arising
out of or based upon 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, except (i) the Company shall not be liable
to any Indemnified Holder or Indemnified Underwriter in any such case insofar
as such losses, claims, damages, judgments, liabilities or expenses arise out
of, or are based upon any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to such Indemnified
Holder or Indemnified Underwriter furnished in writing by such Indemnified
Holder or Indemnified Underwriter to the Company expressly for use therein and
(ii) the Company shall not be liable to any Indemnified Holder or Indemnified
Underwriter under the indemnity agreement in this Section 7(a) with respect to
any preliminary Prospectus to the extent that any such loss, claim, damage,
judgment, liability or expense results solely from the fact that any
Indemnified Holder or Indemnified underwriter sold Transfer Restricted
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus as then amended or
supplemented, if the Company has previously furnished sufficient copies
thereof to the Indemnified Holder or Indemnified Underwriter.
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(b) If any action or proceeding (including any governmental
or regulatory investigation or proceeding) shall be brought or asserted
against any Indemnified Holder or Indemnified Underwriter with respect to
which indemnity may be sought against the Company pursuant to this Section
7(b), such Indemnified Holder or Indemnified Underwriter shall promptly notify
the Company in writing, and the Company shall have the right to assume the
defense thereof, including the employment of counsel reasonably satisfactory
of such Indemnified Holder or Indemnified Underwriter and payment of all fees
and expenses; provided, however, that the omission so to notify the Company
shall not relieve the Company from any liability that they may have to any
Indemnified Holder or Indemnified Underwriter (except to the extent that the
Company is materially prejudiced or otherwise forfeits substantive rights or
defenses by reason of such failure). An Indemnified Holder or Indemnified
Underwriter shall have the right to employ separate counsel in any such action
or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Holder or
Indemnified Underwriter, unless (i) the Company agrees in writing to pay such
fees and expenses, (ii) the Company has failed promptly to assume the defense
and employ counsel satisfactory to the Indemnified Holder or Indemnified
Underwriter or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both the Indemnified Holder or
Indemnified Underwriter and the Company and such Indemnified Holder and
Indemnified Underwriter shall have been advised in writing by its counsel that
representation of them and the Company by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or
not such representation has been proposed) due to actual or potential
differing interests between them (in which case the Company shall not have the
right to assume the defense of such action on behalf of such Indemnified
Holder or Indemnified Underwriter). It is understood that the Company shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for such Indemnified Holders or Indemnified Underwriters, which firm
shall be designated in writing by the Holders of the majority of the number of
shares of Common Stock, as the case may be, on behalf of, and that all such
fees and expenses shall be reimbursed as they are incurred. The Company shall
not be liable for any settlement of any such action effected without the
written consent of the Company, but if settled with the written consent of the
Company, or if there is a final judgment with respect thereto, the Company
agrees to indemnify and hold harmless each Indemnified Holder or Indemnified
Underwriter from and against any loss or Liability by reason of such
settlement or judgment. The Company shall not, without the prior written
consent of each Indemnified Holder or Indemnified Underwriter affected
thereby, effect any settlement of any pending or threatened proceeding in
which such Indemnified Holder or Indemnified Underwriter has sought indemnity
hereunder, unless such settlement includes an unconditional release of such
Indemnified Holder or Indemnified Underwriter from all liability arising out
of such action, claim, litigation or proceeding.
(c) Each Indemnified Holder and Indemnified Underwriter
agrees to indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement and any person controlling the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, the "Company Indemnified Parties") to the same extent as the
foregoing indemnity from the Company to any Indemnified Holder or Indemnified
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Underwriter, but only with respect to information relating to each Indemnified
Holder or Indemnified Underwriter furnished to the Company in writing by each
Indemnified Holder or Indemnified Underwriter, respectively, expressly for use
in the Registration Statement, Prospectus (or any amendment of supplement
thereto), or any preliminary Prospectus. In case any action shall be brought
against any Company Indemnified Party based on the Registration Statement,
Prospectus (or any amendment of supplement), or any preliminary Prospectus and
in respect of which indemnification may be sought against each Indemnified
Holder and Indemnified Underwriter pursuant to this Section 7(c), each
Indemnified Holder and Indemnified Underwriter shall have the rights and
duties given to the Company by Section 7(a) (except that if the Company shall
have assumed the defense thereof, each Indemnified Holder and Indemnified
Underwriter may, but shall not be required to employ separate counsel therein
and participate in the defense thereof and the fees and expenses of such
counsel shall be at the expense of the Indemnified Holder or Indemnified
Underwriter) and the Company Indemnified Parties shall have the rights and
duties given to the Indemnified Holders or Indemnified Underwriters by Section
7(b).
(d) If the indemnification provided for in this Section 7 is
unavailable to any party entitled to indemnification pursuant to Section 7(a)
or 7(c), then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, judgments,
liabilities and expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and each
Indemnified Holder or Indemnified Underwriter on the other from the offering
of the Transfer Restricted Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and each
Indemnified Holder or Indemnified Underwriter on the other in connection with
the statements or omissions which resulted in such losses, claims, damages,
judgments, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and each Indemnified Holder or Indemnified Underwriter on the other hand shall
be deemed to be in the same proportions as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
net discounts and commissions received by each Indemnified Holder or
Indemnified Underwriter, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company on the one hand and
each Indemnified Holder and Indemnified Underwriter on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the
one hand or by each Indemnified Holder and Indemnified Underwriter on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company and each Indemnified Holder and Indemnified
Underwriter agree that it would not be just and equitable if contribution
pursuant to Section 7(d) were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in Section 7(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses referred to
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in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not found guilty of such
fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in
this Section 7 are in addition to any liability. that any indemnifying party
may otherwise have to any indemnified party.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as
any of the shares of Common Stock that are Transfer Restricted Securities
remain outstanding and during any period in which the Company is not subject
to Section 13 or 15(d) of the Exchange Act, to make available to the
Shareholders of the shares of such Common Stock in connection with any sale
thereof and any prospective purchaser of such Common Stock from such
Shareholders, the information required by Rule 144A(d)(4) under the Act in
order to permit resales of such Transfer Restricted Securities pursuant to
Rule 144A.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements, (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements and (c) furnishes the Company in writing information
in accordance with Section 3(g) and agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
any person controlling the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act as contemplated by Section 7(c).
SECTION 10. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
Underwriter(s) that will administer the offering will be selected by the
Holders of the Transfer Restricted Securities included in such offering in the
manner specified in Section 3(c); provided, however, that such Underwriters
must be reasonably satisfactory to the Company.
SECTION 11. MISCELLANEOUS
(a) Remedies. Each Holder or Transfer Restricted Securities,
in addition to being entitled to exercise all rights provided herein, and as
provided in the Purchase Agreement and granted by law, including recovery of
damages, will be entitled to specific performance of
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such Holder's rights under this Agreement. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of
a breach by it of the provisions of this Agreement and hereby agrees to waive
the defense in any action for specific performance that a remedy at law would
be adequate.
(b) No Inconsistent Agreements. The Company will not on or
after the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders of
Transfer Restricted Securities in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders or Transfer
Restricted Securities hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the Holders of the Company's
securities under any other agreements.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company has obtained the written
consent of Holders of a majority of the Holders of the shares of Common Stock
constituting Transfer Restricted Securities affected by such amendment,
modification, supplement, waiver or departure. Notwithstanding the foregoing,
a waiver or consent to departure from the provisions hereof that relates
exclusively to the rights of Holders of Transfer Restricted Securities whose
securities are being sold pursuant to such Registration Statement and that
does not directly or indirectly affect the rights of other Holders of Transfer
Restricted Securities shall be valid only with the written consent of Holders
of at least 66-2/3% of the Transfer Restricted Securities being sold, in each
case calculated in accordance with the provisions of Section 3(e).
(d) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery;
(i) if to a Holder of Transfer Restricted
Securities, at the address set forth on the records of the Company, with a
copy to the Registrar, and
(ii) if to the Company at the principal offices of
the Company; and
(iii) if to the Shareholders, initially at each
address as set forth on Schedule A hereto and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and
on the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
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(e) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided.
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder of Transfer Restricted Securities
unless and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder; and provided further that nothing herein shall be
deemed to permit any assignment, transfer or any disposition of Transfer
Restricted Securities, in any manner, whether by operation of law or
otherwise, such Transfer Restricted Securities shall be held subject to all of
the terms of this Agreement and by taking and holding such Transfer Restricted
Securities such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof.
(f) Counterparts. This Agreement may be executed in any
number of counterparts by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE AND PROCEDURAL LAWS OF THE STATE
OF NEW JERSEY, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(j) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
ORION ACQUISITION CORP. I
By:_______________________________
Arthur H. Goldberg, Chairman
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SHAREHOLDERS:
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