EXHIBIT 10.2
REGISTRATION UNDER THE SECURITIES ACT.
1. REGISTRATION FOR REGISTRABLE SECURITIES UNDERLYING OPTIONS OR UNITS.
The Company agrees to file a "shelf" registration statement, providing
for the registration of, and the sale on a continuous or delayed basis
by the Executive in accordance with the methods of distribution
specified by the Executive and consistent with the terms and
provisions hereof, of Registrable Securities (as defined in Paragraph
6 hereof) pursuant to Rule 415 under the Securities Act of 1933, as
amended (the "Securities Act"), and/or any similar rule that may be
adopted by the Securities and Exchange Commission (the "Commission")
as soon as practicable following the request of the Executive, and to
use its commercially reasonable best efforts to cause such
registration statement to be declared effective by the Commission
under the Securities Act as soon as practicable following such filing.
The Company further agrees to use its commercially reasonable best
efforts to maintain the effectiveness of such registration statement
or registration statements until the securities registered thereunder
cease to be Registrable Securities.
2. REGISTRATION PROCEDURES. In connection with any shelf registration
statement contemplated hereby, the following provisions shall apply:
(a) The Company shall furnish to the Executive, prior to the
filing thereof with the Commission, a copy of such shelf registration statement
and each amendment thereto and each amendment or supplement, if any, to the
prospectus included therein and, subject to Paragraph 1 above, shall use its
best efforts to reflect in each such document, when so filed with the
Commission, such comments as the Executive reasonably may propose; provided,
however, that the Company shall not be obligated to include in any such shelf
registration statement, prospectus, prospectus supplement or amendment to such
shelf registration statement any requested information that is unreasonable in
scope taking into account the Company's most recent prospectus or prospectus
supplement used in connection with a primary or secondary offering of equity
securities by the Company and the Company's periodic reports under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Company shall take such action as may be necessary so that
(i) such shelf registration statement and any amendment thereto and any
prospectus forming part thereof and any amendment or supplement thereto (and
each report or other document incorporated therein by reference in each case)
complies in all material respects with the Securities Act, the Exchange Act and
the respective rules and regulations thereunder, (ii) such shelf registration
statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and (iii) such prospectus forming part of any shelf registration statement, and
any amendment or supplement to such prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements, in the light of the circumstances under which they were
made, not misleading.
(c) The Company shall advise the Executive:
(i) when such shelf registration statement and any amendment
thereto has been filed with the Commission and when such shelf
registration statement or any post-effective amendment thereto has become
effective;
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(ii) of any request by the Commission for amendments or
supplements to such shelf registration statement or the prospectus
included therein or for additional information.
(iii) of the issuance by the Commission of any stop order
suspending effectiveness of such shelf registration statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities included
in such shelf registration statement for sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
(v) upon the receipt of a Request for Sale under paragraph 2(f),
of the existence of any circumstances or the happening of any events that
would require the making of any changes in such shelf registration
statement or the prospectus so that, as of such date, such shelf
registration statement and the prospectus would not contain an untrue
statement of a material fact and would not omit to state a material fact
required to be stated therein or necessary to make the statements therein
(in the case of the prospectus, in light of the circumstances under which
they were made) not misleading (which advice shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite
changes have been made).
(d) The Company shall use its commercially reasonable best efforts
to prevent the issuance, and if issued to obtain the withdrawal, of any order
suspending the effectiveness of such shelf registration statement at the
earliest possible time.
(e) The Company shall furnish to the Executive, without charge, as
many copies of the prospectus (including each preliminary prospectus) included
in such shelf registration statement and any amendment or supplement thereto as
the Executive may reasonably request; and the Company consents (except during
the continuance of any event described in Paragraph 2(c)(iii), (iv) (limited to
the jurisdiction of such suspension) or (v) above) to the use of the prospectus
and any amendment or supplement thereto by the Executive in connection with the
offering and sale of the Registrable Securities covered by the prospectus and
any amendment or supplement thereto until such time as the Securities so covered
cease be Registrable Securities.
(f) The Executive shall notify the Company in writing of his
intention to sell securities registered pursuant to any registration statement
filed pursuant to Paragraph 1 above (any such notice, a "Request for Sale") not
less than 10 days prior to the proposed Trade Date of any such sale, which
Request for Sale shall include a request from the Executive or (if applicable) a
managing underwriter to prepare and file an amendment or supplement to such
shelf registration statement or the prospectus contained therein. "Trade Date"
shall mean the date the Executive enters into any underwriting, agency or other
purchase agreement or understanding for the sale of, or otherwise agrees to
sell, securities registered pursuant to such registration statement. No such
notification shall obligate the Executive to consummate any such sale.
(g) Prior to any offering of Registrable Securities pursuant to
such shelf registration statement, the Company shall register or qualify or
cooperate with the Executive in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as the Executive reasonably
requests in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the Registrable
Securities covered by such shelf registration statement; provided, however, that
in no event shall the Company be obligated to (i) qualify as a foreign
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corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to so qualify but for this Paragraph 2(g) or (ii) file any
general consent to service of process in any jurisdiction where it is not as of
the date hereof so subject.
(h) The Company shall cooperate with the Executive to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to such shelf registration statement free of any
restrictive legends and in such permitted denominations and registered in such
names the Executive may request in connection with the sale of Registrable
Securities pursuant to such shelf registration statement.
(i) Subject to Paragraph 8 below, upon the occurrence of any event
contemplated by Paragraph 2(c)(v) above, the Company shall promptly prepare a
post-effective amendment to such shelf registration statement or an amendment or
supplement to the related prospectus or file any other required document so
that, as thereafter delivered to purchasers of the Registrable Securities
included therein, the prospectus will not include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If the Company notifies the Executive of the occurrence of
any event contemplated by Paragraphs 2(c)(iii), (iv) (limited to the
jurisdiction of such suspension) or (v) above or of a delay pursuant to
Paragraph 8 below, the Executive shall suspend the use of the prospectus and any
proposed sales of securities registered pursuant to such registration statement
until the requisite changes to the prospectus have been made or the Company has
notified the Executive that the reason for such delay no longer exists, as the
case may be and the Executive has received copies of a supplemented or amended
prospectus which is no longer defective.
(j) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders or otherwise provide in accordance with
Section 11(a) of the Securities Act as soon as practicable after the effective
date of such shelf registration statement an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act.
(k) The Company may require the Executive to furnish to the
Company such information regarding the Executive and the distribution of such
Registrable Securities as may be required by applicable law or regulation for
inclusion in such shelf registration statement.
(l) The Company shall, if requested, promptly include or
incorporate in a prospectus supplement or post-effective amendment to such shelf
registration statement, such information as the managing underwriters reasonably
agree should be included therein and to which the Company does not reasonably
object and shall make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after they are notified of the
matters to be included or incorporated in such prospectus supplement or
post-effective amendment; PROVIDED, HOWEVER, that the Company shall not be
obligated to include in any such prospectus supplement or post-effective
amendment to such shelf registration statement any requested information that is
unreasonable in scope taking into account the Company's most recent prospectus
or prospectus supplement used in connection with a primary or secondary offering
of equity securities by the Company and the Company's periodic reports under the
Exchange Act.
(m) The Company shall enter into such customary agreements
(including an underwriting agreement in customary form in the event of an
underwritten offering as set forth in Paragraph 7 below) to take all other
appropriate actions in order to expedite or facilitate the registration and the
disposition of the Registrable Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures
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substantially identical to those set forth in Paragraph 5 below with respect
to the underwriters and controlling persons of the underwriters.
(n) The Company shall:
(i) make reasonably available for inspection by the Executive, any
underwriter participating in any disposition pursuant to such shelf
registration statement, and any attorney, accountant or other agent
retained by the Executive or any such underwriter all relevant financial
and other records, pertinent corporate documents and properties of the
Company and its subsidiaries;
(ii) cause the Company's officers, directors and employees to make
reasonably available for inspection all relevant information reasonably
requested by the Executive or any such underwriter, attorney, accountant
or agent in connection with any shelf registration statement, in each
case, as is customary for similar due diligence examinations; provided,
however, that any information that is designated in writing by the
Company, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by the Executive or any such
underwriter, attorney, accountant or agent, unless such disclosure is
made in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third
party without an accompanying obligation of confidentiality;
(iii) make such representations and warranties to the Executive
and the managing underwriters, if any, in form, substance and scope as
are customarily made by the Company to underwriters in primary
underwritten offerings and covering matters including, but not limited
to, those set forth in Paragraph 4 below;
(iv) obtain opinions of counsel to the Company (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory
to the managing underwriters, if any) addressed to the Executive and
underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings; provided, however, that the
Company shall not be obligated to obtain such opinions in connection with
any sale (other than in an underwritten offering) of securities by the
Executive more than twice during any 12 consecutive month period;
(v) obtain "cold comfort" letters from the independent public
accountants of the Company addressed to the Executive and the
underwriters, if any, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with primary
underwritten offerings; provided, however, that the Company shall not be
obligated to obtain such letters in connection with any sale (other than
in an underwritten offering) of securities by the Executive more than
twice during any 12 consecutive month period or, if applicable accounting
procedures and practices do not permit the rendering of such "cold
comfort" letter in an offering of the type being effected; and
(vi) deliver such documents and certificates as may be reasonably
requested by managing underwriters, if any, and in accordance with
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
(o) The Company shall use its commercially reasonable best efforts
to take all other steps necessary to effect the registration, offering and sale
of the Registrable Securities covered by such shelf registration statement
contemplated hereby.
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(p) Executive shall not, during any period in which of any his
Registrable Securities are included in any effective registration statement,
effect any stabilization or other transactions or engage in any stabilization or
other activity in connection with equity securities of the Company in
contravention of Rule 10b-7, Regulation M, or Rule 10b-2 under the Exchange Act.
Executive shall furnish each broker through whom Executive offers Registrable
Securities such number of copies of the prospectus as the broker may require and
otherwise comply with the prospectus delivery requirements under the Securities
Act.
3. EXPENSES. The Company agrees to pay all Registration Expenses in connection
with any registration pursuant to Paragraph 1 above.
4. REPRESENTATIONS. The Company represents and warrants to, and agrees with,
the Executive that:
(a) Any registration statement and each prospectus contained
therein filed pursuant to Paragraph 1 above and any further amendments or
supplements to any such registration statement or prospectus, when it becomes
effective or is filed with the Commission and, in the case of an underwritten
offering of Registrable Securities, at the time of the closing under the
underwriting agreement relating thereto, will conform in all material respects
to the requirements of the Securities Act and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
set forth in a questionnaire (or any other written information) furnished to the
Company by the Executive.
(b) Any documents incorporated by reference in any Prospectus
referred to in Paragraph 3(a) above, when they become or became effective or are
or were filed with the Commission, as the case may be, will conform or conformed
in all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and none of such documents will contain or
contained an untrue statement of a material fact or will omit or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) No person has been or shall be granted registration rights
inconsistent with this Agreement; provided, however, that the Company may permit
any registration statement filed pursuant hereto to include securities of
securityholders other than the Executive. Notwithstanding the foregoing, the
Company agrees that no other securityholder of the Company shall be granted any
"piggyback" rights with respect to any underwritten offering of securities being
made by the Executive in accordance with the terms hereof.
5. INDEMNIFICATION
(a) Upon the registration of the Registrable Securities pursuant
to a registration statement filed as contemplated by Paragraph 1 hereof (a
"Registration Statement"), the Company shall, and it hereby agrees to, indemnify
and hold harmless the Executive against any losses, claims, damages or
liabilities to which the Executive may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
(pending or threatened) in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
such Registration Statement under which such Registrable Securities were
registered under the Securities Act, or any prospectus contained therein or
furnished by the Company to the Executive, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not
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misleading, and the Company shall, and it hereby agrees to, reimburse the
Executive for any legal or other expenses reasonably incurred by him in
connection with investigating or defending any such action or claim;
provided, however, that the Company shall not be liable to the Executive in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement
or prospectus, or amendment or supplement, in reliance upon and in conformity
with any written information (including without limitation, any
questionnaire) furnished to the Company by the Executive expressly for use
therein or from the failure of the Executive to comply with the prospectus
delivery requirements or other applicable provisions of the securities laws.
(b) The Company may require, as a condition to filing any
Registration Statement, that the Company shall have received an undertaking
reasonably satisfactory to it from the Executive to (i) indemnify and hold
harmless the Company, its directors, officers who sign any Registration
Statement, each person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, and
any other holder of Common Stock that are included in such Registration
Statement against any losses, claims, damages or liabilities to which the
Company or such other persons may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement, or
any prospectus contained therein or furnished by the Company to any such holder
or underwriter, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished in writing
to the Company by the Executive expressly for use therein (including, without
limitation, any questionnaire), and (ii) reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim;
(c) Promptly after receipt by an indemnified party under Paragraph
5(a) or (b) above of written notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party pursuant to the indemnification provisions of or contemplated
by this Paragraph 5, notify such indemnifying party in writing of the
commencement of such action; but the omission to so notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Paragraph 5(a) or (b) above, and then only to the extent that
the indemnifying party is actually prejudiced thereby. In case any such action
shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, such indemnifying party shall be
entitled to participate therein and (unless the indemnified party reasonably
concludes that such representation would involve a conflict of interest), to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, such indemnifying party shall not be liable to such indemnified
party for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from
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all liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act,
by or on behalf of any indemnified party. An indemnifying party will not be
liable for any settlement of any action or claim effected without its written
consent (which shall not be unreasonably withheld).
(d) Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Paragraph 5(a) or (b) are unavailable
to or insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and the indemnified
party in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or by such indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Paragraph 5(d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Paragraph 5(d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
6. DEFINITIONS.
(a) "Registrable Securities" shall mean (i) the 500,000 shares of
Common Stock issuable upon exercise of the Additional Company Stock Options to
be granted by the Company to the Executive pursuant to Section 3.2 of the
Agreement and (ii) the 1,250,000 shares of Common Stock issuable under the
Additional Restricted Units to be granted to the Executive pursuant to Section
3.3 of the Agreement, and in each case, any securities issued as a distribution
on or acquired upon exercise of rights distributed with respect to such shares
of Common Stock (collectively with the Common Stock, the "Securities"); provided
that such Securities shall cease to be Registrable Securities when such
Securities (x) have been sold or otherwise transferred by the Executive, whether
pursuant to an effective registration statement or otherwise, or (y) have become
eligible for sale pursuant to Rule 144(k) (or any similar provision then in
force) under the Securities Act.
(b) "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with its obligations hereunder, including
without limitation, (i) all Commission and any NASD registration and filing fees
and expenses, (ii) all fees and expenses in connection with the qualification of
the Registrable Securities for offering and sale under the State securities and
blue sky laws of such States as may be reasonably requested by the Executive
(provided, however, that nothing herein shall require the Company to qualify as
a foreign corporation in any jurisdiction where it would not otherwise be
required to qualify but for such qualification, to consent to general service of
process or taxation in any such jurisdiction or to make any changes to the
Company's certificate of incorporation or bylaws, (iii) all expenses relating to
the preparation, printing, distribution and reproduction of any registration
statement required to be filed as contemplated herein, each prospectus included
therein or prepared for distribution, each amendment or supplement to the
foregoing,
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the certificates representing the Securities and all other documents relating
there, (iv) messenger and delivery expenses, (v) internal expenses
(including, without limitation, all salaries and expenses of the Company
officers and employees performing legal or accounting duties), (vi) fees,
disbursements and expenses of counsel and independent certified public
accountants of the Company and (vii) reasonable fees, disbursements and
expenses of one counsel for the Executive retained in connection with such
registration and reasonable fees and disbursements of underwriters and
distribution participants customarily paid by the issuer. To the extent that
any Registration Expenses are incurred, assumed or paid by the Executive, the
Company shall reimburse the Executive for the full amount of the Registration
Expenses so incurred, assumed or paid promptly after receipt of a request
therefor. Notwithstanding the foregoing, the Executive shall pay all agency
fees and commissions and underwriting discounts and commissions and the legal
and other fees of underwriters, if any, resulting from any failure by
Executive to consummate an underwritten offering or not covered by clause
(vii), if any, attributable to the sale of such Registrable Securities and
the fees and disbursements of any counsel or other advisors or experts
retained by the Executive or underwriters, other than those specifically
referred to above.
7. UNDERWRITTEN OFFERING. The Executive, if he so desires, may sell
Registrable Securities in an underwritten offering. In any such
underwritten offering, the investment banker or bankers and manager or
managers that will administer the offering will be selected by, and
the underwriting arrangements with respect thereto will be approved by
the Executive; provided, however, that (i) such investment bankers and
managers and underwriting arrangements must be reasonably satisfactory
to the Company, such satisfaction not to be unreasonably withheld,
(ii) the Company shall not be obligated to arrange for more than one
underwritten offering during any consecutive twelve-month period or
more than a total of five underwritten offerings and (iii) each
underwritten offering shall include at least the lesser of (x) $5
million in value of Registrable Securities, or (y) 750,000 shares of
Common Stock (or the equivalent thereof), or (z) the balance of the
Executive's Registrable Securities. In connection with any such
underwritten offering of securities, the Company will agree to
customary restrictions on the ability of the Company to sell
securities substantially similar to the Registrable Securities for a
period not to exceed 90 days from the date of the related prospectus
supplement.
8. SUSPENSION. Notwithstanding anything contained herein, upon receipt of
a Request for Sale or for registration from the Executive or a
managing underwriter, the Company may delay the filing of any such
registration statement or amendment or supplement if the Company in
good faith has a valid business reason for such delay, including
without limitation (i) that the filing of such amendment or supplement
would require the Company to include therein material information that
has not theretofore been made public and which the Company is not then
prepared to disclose or (ii) that the offering and sale of Registrable
Securities by the Executive at such time will adversely affect any
offering by the Company, as the case may be, of its securities or any
material acquisition or financing transaction then contemplated or
pending. In connection with any public offering of its securities by
the Company, Executive shall enter into such "Lock up" or other
agreements restricting his sales of securities of the Company for such
reasonable periods not to exceed 180 days as the lead underwriters may
require.
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