Exhibit 4.2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
among
AMN HEALTHCARE SERVICES, INC.,
HWH CAPITAL PARTNERS, L.P.,
HWH NIGHTINGALE PARTNERS, L.P.,
HWP NIGHTINGALE PARTNERS II, L.P.,
HWP CAPITAL PARTNERS II, L.P.,
STEVEN FRANCIS,
THE FRANCIS FAMILY TRUST DATED MAY 24, 1996
and
BANCAMERICA CAPITAL INVESTORS SBIC I, L.P.
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Dated: November 16, 2001
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TABLE OF CONTENTS
Page
1. Definitions............................................................................... 1
2. General; Securities Subject to this Agreement............................................. 5
(a) Grant of Rights.................................................................. 5
(b) Registrable Securities........................................................... 5
(c) Holders of Registrable Securities................................................ 5
3. Demand Registration....................................................................... 5
(a) Request for Demand Registration.................................................. 5
(b) Incidental or "Piggy-Back" Rights with Respect to a Demand Registration.......... 6
(c) Effective Demand Registration.................................................... 7
(d) Expenses......................................................................... 7
(e) Underwriting Procedures.......................................................... 7
(f) Selection of Underwriters........................................................ 8
4. Incidental or "Piggy-Back" Registration................................................... 8
(a) Request for Incidental Registration.............................................. 8
(b) Expenses......................................................................... 9
5. Form S-3 Registration..................................................................... 9
(a) Request for a Form S-3 Registration.............................................. 9
(b) Form S-3 Underwriting Procedures................................................. 9
(c) Limitations on Form S-3 Registrations............................................ 10
(d) Expenses......................................................................... 11
(e) No Demand Registration........................................................... 11
6. Holdback Agreements....................................................................... 11
(a) Restrictions on Public Sale by Designated Holders................................ 11
(b) Restrictions on Public Sale by the Company....................................... 11
7. Registration Procedures................................................................... 12
(a) Obligations of the Company....................................................... 12
(b) Seller Information............................................................... 15
(c) Notice to Discontinue............................................................ 15
(d) Registration Expenses............................................................ 16
8. Indemnification; Contribution............................................................. 16
(a) Indemnification by the Company................................................... 16
(b) Indemnification by Designated Holders............................................ 17
(c) Conduct of Indemnification Proceedings........................................... 17
(d) Contribution..................................................................... 18
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Page
9. Rule 144.................................................................................. 19
10. Miscellaneous............................................................................. 19
(a) Recapitalizations, Exchanges, etc................................................ 19
(b) No Inconsistent Agreements....................................................... 19
(c) Remedies......................................................................... 20
(d) Amendments and Waivers........................................................... 20
(e) Notices.......................................................................... 20
(f) Successors and Assigns; Third Party Beneficiaries................................ 22
(g) Counterparts..................................................................... 22
(h) Headings......................................................................... 23
(i) Governing Law.................................................................... 23
(j) Severability..................................................................... 23
(k) Rules of Construction............................................................ 23
(l) Entire Agreement................................................................. 23
(m) Further Assurances............................................................... 23
(n) Other Agreements................................................................. 23
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated November 16,
2001, among AMN Healthcare Services, Inc., a Delaware corporation (formerly
known as AMN Holdings, Inc.) (the "Company"), HWH Capital Partners, L.P., a
Delaware limited partnership ("HWH Capital Partners"), HWH Nightingale Partners,
L.P., a Delaware limited partnership ("HWH Nightingale"), HWP Capital Partners
II, L.P., a Delaware limited partnership ("HWP Capital Partners II"), HWP
Nightingale Partners II, L.P., a Delaware limited partnership ("HWP Nightingale
II" and together with HWH Capital Partners, HWH Nightingale and HWP Capital
Partners II, the "HWP Stockholders"), Steven Francis and Gayle Francis, as
Trustees of the Francis Family Trust dated May 24, 1996 (the "Trust"), Steven
Francis ("Francis" and together with the Trust, the "Francis Stockholders") and
BancAmerica Capital Investors SBIC I, L.P. ("BancAmerica").
WHEREAS, the Company intends to consummate an Initial Public Offering
(as hereinafter defined);
WHEREAS, the parties hereto desire to provide for, among other things,
the grant of registration rights with respect to the Registrable Securities (as
hereinafter defined) in contemplation of such Initial Public Offering (as
hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" shall mean any Person who is an "affiliate" as defined in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Approved Underwriter" has the meaning set forth in Section 3(f) of
this Agreement.
"BancAmerica" has the meaning set forth in the preamble to this
Agreement.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
2
"Closing Price" means, with respect to the Registrable Securities, as
of the date of determination, (a) if the Registrable Securities are listed on a
national securities exchange, the closing price per share of a Registrable
Security on such date published in The Wall Street Journal (National Edition)
or, if no such closing price on such date is published in The Wall Street
Journal (National Edition), the average of the closing bid and asked prices on
such date, as officially reported on the principal national securities exchange
on which the Registrable Securities are then listed or admitted to trading; or
(b) if the Registrable Securities are not then listed or admitted to trading on
any national securities exchange but are designated as national market system
securities by the NASD, the last trading price per share of a Registrable
Security on such date; or (c) if there shall have been no trading on such date
or if the Registrable Securities are not designated as national market system
securities by the NASD, the average of the reported closing bid and asked prices
of the Registrable Securities on such date as shown by The Nasdaq Stock Market,
Inc. (or its successor) and reported by any member firm of The New York Stock
Exchange, Inc. selected by the Company; or (d) if none of (a), (b) or (c) is
applicable, a market price per share determined in good faith by the Board of
Directors or, if such determination is not satisfactory to the Designated Holder
for whom such determination is being made, by a nationally recognized investment
banking firm selected by the Company and such Designated Holder, the expenses
for which shall be borne equally by the Company and such Designated Holder. If
trading is conducted on a continuous basis on any exchange, then the closing
price shall be at 4:00 P.M. New York City time.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Company or any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.
"Company" has the meaning set forth in the preamble to this Agreement.
"Company Underwriter" has the meaning set forth in Section 4(a) of this
Agreement.
"Demand Registration" has the meaning set forth in Section 3(a) of this
Agreement.
"Designated Holder" means each of the HWP Stockholders, the Francis
Stockholders and BancAmerica and any transferee of any of them to whom
Registrable Securities have been transferred in accordance with Section 10(f) of
this Agreement, other than a transferee to whom Registrable Securities have been
transferred pursuant to a Registration Statement under the Securities Act or
Rule 144 or Regulation S under the Securities Act (or any successor rule
thereto).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
3
"Francis" has the meaning set forth in the preamble to this Agreement.
"Francis Stockholders" has the meaning set forth in the preamble to
this Agreement.
"Holders' Counsel" has the meaning set forth in Section 7(a)(i) of this
Agreement.
"HWH Capital Partners" has the meaning set forth in the preamble to
this Agreement.
"HWP Capital Partners II" has the meaning set forth in the preamble to
this Agreement.
"HWH Nightingale" has the meaning set forth in the preamble to this
Agreement.
"HWP Nightingale II" has the meaning set forth in the preamble to this
Agreement.
"HWP Stockholders" has the meaning set forth in the preamble to this
Agreement.
"Incidental Registration" has the meaning set forth in Section 4(a) of
this Agreement.
"Indemnified Party" has the meaning set forth in Section 8(c) of this
Agreement.
"Indemnifying Party" has the meaning set forth in Section 8(c) of this
Agreement.
"Initial Public Offering" means the initial public offering of the
shares of Common Stock of the Company pursuant to an effective Registration
Statement filed under the Securities Act.
"Initiating Holders" has the meaning set forth in Section 3(a) of this
Agreement.
"Inspector" has the meaning set forth in Section 7(a)(vii) of this
Agreement.
"IPO Effectiveness Date" means the date upon which the Company
consummates the Initial Public Offering.
"Liability" has the meaning set forth in Section 8(a) of this
Agreement.
4
"Market Price" means, on any date of determination, the average of the
daily Closing Price of the Registrable Securities for the immediately preceding
thirty (30) days on which the national securities exchanges are open for
trading; provided, however, that if the Closing Price is determined pursuant to
clause (d) of the definition of Closing Price, the "Market Price" means such
Closing Price on the date of determination.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, limited liability company, government (or an
agency or political subdivision thereof) or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.
"Records" has the meaning set forth in Section 7(a)(vii) of this
Agreement.
"Registrable Securities" means each of the following: (a) any and all
shares of Common Stock now or hereafter owned by the Designated Holders or
issued or issuable upon conversion of any convertible securities or exercise of
any warrants or options held by any of the Designated Holders and (b) any shares
of Common Stock issued or issuable to any of the Designated Holders with respect
to the Registrable Securities by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise and any shares of Common Stock or voting
common stock issuable upon conversion, exercise or exchange thereof.
"Registration Expenses" has the meaning set forth in Section 7(d) of
this Agreement.
"Registration Statement" means a Registration Statement filed pursuant
to the Securities Act.
"Rights Agreement" has the meaning set forth in Section 10(l) of this
Agreement.
"S-3 Initiating Holders" has the meaning set forth in Section 5(a) of
this Agreement.
"S-3 Registration" has the meaning set forth in Section 5(a) of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Stockholders Agreement" has the meaning set forth in Section 10(l) of
this Agreement.
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"Trust" has the meaning set forth in the preamble to this Agreement.
"Valid Business Reason" has the meaning set forth in Section 3(a) of
this Agreement.
2. General; Securities Subject to this Agreement.
(a) Grant of Rights. The Company hereby grants
registration rights to the Designated Holders upon the terms and conditions set
forth in this Agreement.
(b) Registrable Securities. For the purposes of this
Agreement, Registrable Securities held by any Designated Holder will cease to be
Registrable Securities, when (i) a Registration Statement covering such
Registrable Securities has been declared effective under the Securities Act by
the Commission and such Registrable Securities have been disposed of pursuant to
such effective Registration Statement, (ii) (x) the entire amount of the
Registrable Securities held by any Designated Holder may be sold in a single
sale, in the opinion of counsel satisfactory to the Company and such Designated
Holder, each in their reasonable judgment, without any limitation as to volume
pursuant to Rule 144 (or any successor provision then in effect) under the
Securities Act and (y) such Designated Holder owns less than one percent (1%) of
the outstanding shares of Common Stock on a fully diluted basis or (iii) the
Registrable Securities are proposed to be sold or distributed by a Person not
entitled to the registration rights granted by this Agreement.
(c) Holders of Registrable Securities. A Person is deemed
to be a holder of Registrable Securities whenever such Person owns of record
Registrable Securities, or holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities
whether or not such acquisition or conversion has actually been effected. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company may act
upon the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities. Registrable Securities issuable
upon exercise of an option or upon conversion of another security shall be
deemed outstanding for the purposes of this Agreement.
3. Demand Registration.
(a) Request for Demand Registration. The HWP Stockholders
as a group, acting through HWH Capital Partners or its written designee, or
BancAmerica may make a written request to the Company to register (the party
making such request, the "Initiating Holders"), and the Company shall register,
under the Securities Act (other than pursuant to a Registration Statement on
Form S-4 or S-8 or any successor thereto) (a "Demand Registration"), the number
of Registrable Securities stated in such request; provided, however, that the
Company shall not be obligated to effect (x) more than five such Demand
Registrations requested by the HWP Stockholders and more than one such Demand
Registration requested by BancAmerica, (y) a Demand Registration if the
6
Initiating Holders, together with the Designated Holders (other than the
Initiating Holders) which have requested to register securities in such
registration pursuant to Section 3(b), propose to sell their Registrable
Securities at an aggregate price (calculated based upon the Market Price of the
Registrable Securities on the date of filing of the Registration Statement with
respect to such Registrable Securities) to the public of less than $5,000,000
and (z)(i) in the case of a Demand Registration requested by the HWP
Stockholders, any such Demand Registration commencing prior to 180 days after
the IPO Effectiveness Date or (ii) in the case of a Demand Registration
requested by BancAmerica, any such Demand Registration commencing prior to one
year after the IPO Effectiveness Date. For purposes of the preceding sentence,
two or more Registration Statements filed in response to one demand shall be
counted as one Demand Registration. If the Board of Directors, in its good faith
judgment, determines that any registration of Registrable Securities should not
be made or continued because it would materially interfere with any material
financing, acquisition, corporate reorganization or merger or other material
transaction involving the Company (a "Valid Business Reason"), the Company may
(x) postpone filing a Registration Statement relating to a Demand Registration
until such Valid Business Reason no longer exists, but in no event for more than
(i) forty-five (45) days in the case of a Demand Registration requested by the
HWP Stockholders and (ii) nine (9) months in the case of a Demand Registration
requested by BancAmerica, and (y) in case a Registration Statement has been
filed relating to a Demand Registration, the Company, upon the approval of a
majority of the Board of Directors, may cause such Registration Statement to be
withdrawn and its effectiveness terminated or may postpone amending or
supplementing such Registration Statement (in which case, if the Valid Business
Reason no longer exists or if more forty-five (45) days (in the case of a Demand
Registration requested by the HWP Stockholders) or nine (9) months (in the case
of a Demand Registration requested by BancAmerica) have passed since such
withdrawal or postponement, the Initiating Holders may request a new Demand
Registration). The Company shall give written notice of its determination to
postpone or withdraw a Registration Statement and of the fact that the Valid
Business Reason for such postponement or withdrawal no longer exists, in each
case, promptly after the occurrence thereof. Notwithstanding anything to the
contrary contained herein, the Company may not postpone or withdraw a filing
under this Section 3(a) more than once in any eighteen (18) month period. Each
request for a Demand Registration by the Initiating Holders shall state the
amount of the Registrable Securities proposed to be sold and the intended method
of disposition thereof.
(b) Incidental or "Piggy-Back" Rights with Respect to a
Demand Registration. Each of the Designated Holders (other than Initiating
Holders which have requested a registration under Section 3(a)) may offer its or
his Registrable Securities under any Demand Registration pursuant to this
Section 3. Within five (5) days after the receipt of a request for a Demand
Registration from an Initiating Holder, the Company shall (i) give written
notice thereof to all of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3(a)) and (ii) subject to
Section 3(e), include in such registration all of the Registrable Securities
held by such Designated Holders from whom the Company has received a written
request for inclusion therein within ten (10) days of the receipt by such
Designated Holders of such written notice referred to in clause (i) above. Each
such request by such Designated
7
Holder shall specify the number of Registrable Securities proposed to be
registered. The failure of any Designated Holder to respond within such 10-day
period referred to in clause (ii) above shall be deemed to be a waiver of such
Designated Holder's rights under this Section 3(b) with respect to such Demand
Registration. Any Designated Holder may waive its rights under this Section 3(b)
prior to the expiration of such 10-day period by giving written notice to the
Company, with a copy to the Initiating Holders. If a Designated Holder sends the
Company a written request for inclusion of part or all of such Designated
Holder's Registrable Securities in a registration, such Designated Holder shall
not be entitled to withdraw or revoke such request without the prior written
consent of the Company in its sole discretion unless, (i) as a result of facts
or circumstances arising after the date on which such request was made relating
to the Company or to market conditions, such Designated Holder reasonably
determines that participation in such registration would have a material adverse
effect on such Designated Holder or (ii) if the Closing Price declines by more
than forty percent (40%) from the date the Initiating Holders requested such
Demand Registration.
(c) Effective Demand Registration. The Company shall use
its commercially reasonable efforts to cause any such Demand Registration to
become and remain effective not later than sixty (60) days after it receives a
request under Section 3(a) hereof. A registration shall not constitute a Demand
Registration until it has become effective and remains continuously effective
for the lesser of (i) the period during which all Registrable Securities
registered in the Demand Registration are sold or (ii) 120 days; provided,
however, that a registration shall not constitute a Demand Registration if (x)
after such Demand Registration has become effective, such registration or the
related offer, sale or distribution of Registrable Securities thereunder is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason not
attributable to the Initiating Holders and such interference is not thereafter
eliminated or (y) the conditions specified in the underwriting agreement, if
any, entered into in connection with such Demand Registration are not satisfied
or waived, other than by reason of a failure by the Initiating Holder.
(d) Expenses. The Company shall pay all Registration
Expenses in connection with a Demand Registration, whether or not such Demand
Registration becomes effective.
(e) Underwriting Procedures. If the Company or the
Initiating Holders so elect, the Company shall use its commercially reasonable
efforts to cause such Demand Registration to be in the form of a firm commitment
underwritten offering and the managing underwriter or underwriters selected for
such offering shall be the Approved Underwriter selected in accordance with
Section 3(f). In connection with any Demand Registration under this Section 3
involving an underwritten offering, none of the Registrable Securities held by
any Designated Holder making a request for inclusion of such Registrable
Securities pursuant to Section 3(b) hereof shall be included in such
underwritten offering unless such Designated Holder accepts the terms of the
offering as agreed upon by the Company, the Initiating Holders and the Approved
Underwriter, and then only in such quantity as set forth below. If the Approved
Underwriter advises the
8
Company that the aggregate amount of such Registrable Securities requested to be
included in such offering is sufficiently large to have a material adverse
effect on the success of such offering, then the Company shall include in such
registration, to the extent of the amount that the Approved Underwriter believes
may be sold without causing such material adverse effect, first, such number of
Registrable Securities of the Initiating Holders and any Designated Holder
participating in the offering pursuant to the terms of Section 3(b), which
Registrable Securities shall be allocated pro rata among such Initiating Holders
and Designated Holders, based on the number of Registrable Securities held by
each such Initiating Holder or Designated Holder, as the case may be, second,
any other securities of the Company requested by holders thereof to be included
in such registration, which such securities shall be allocated pro rata among
such stockholders, based on the number of the Company's securities held by each
such stockholder, and third, securities offered by the Company for its own
account.
(f) Selection of Underwriters. If any Demand Registration
or S-3 Registration, as the case may be, of Registrable Securities is in the
form of an underwritten offering, the Company shall select and obtain an
investment banking firm of national reputation to act as the managing
underwriter of the offering (the "Approved Underwriter"); provided, however,
that the Approved Underwriter shall, in any case, also be approved by the
Initiating Holders or S-3 Initiating Holders, as the case may be, such approval
not to be unreasonably withheld.
4. Incidental or "Piggy-Back" Registration.
(a) Request for Incidental Registration. At any time
after the IPO Effectiveness Date, if the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering by the Company
for its own account (other than a Registration Statement on Form S-4 or S-8 or
any successor thereto) or for the account of any stockholder of the Company
other than the Designated Holders, then the Company shall give written notice of
such proposed filing to each of the Designated Holders at least twenty (20) days
before the anticipated filing date, and such notice shall describe the proposed
registration and distribution and offer such Designated Holders the opportunity
to register the number of Registrable Securities as each such Designated Holder
may request (an "Incidental Registration"). The Company shall use its
commercially reasonable efforts (within twenty (20) days of the notice provided
for in the preceding sentence) to cause the managing underwriter or underwriters
in the case of a proposed underwritten offering (the "Company Underwriter") to
permit each of the Designated Holders who have requested in writing to
participate in the Incidental Registration to include its or his Registrable
Securities in such offering on the same terms and conditions as the securities
of the Company or the account of such other stockholder, as the case may be,
included therein. In connection with any Incidental Registration under this
Section 4(a) involving an underwritten offering, the Company shall not be
required to include any Registrable Securities in such underwritten offering
unless the Designated Holders thereof accept the terms of the underwritten
offering as agreed upon between the Company, such other stockholders, if any,
and the Company Underwriter, and then only in such quantity as set forth below.
If the Company Underwriter determines that the registration of all or part of
the securities that have been requested to
9
be included would materially adversely affect the success of such offering, then
the Company shall be required to include in such Incidental Registration, to the
extent of the amount that the Company Underwriter believes may be sold without
causing such material adverse effect, first, all of the securities to be offered
for the account of the Company and second, any other securities of the Company
requested by stockholders to be included in such offering (including the
Designated Holders), which such securities shall be allocated pro rata among the
stockholders participating in the offering based on the number of the Company's
securities held by each such stockholder.
(b) Expenses. The Company shall bear all Registration
Expenses in connection with any Incidental Registration pursuant to this Section
4, whether or not such Incidental Registration becomes effective.
5. Form S-3 Registration.
(a) Request for a Form S-3 Registration. The Company will
use its commercially reasonable efforts to file all required reports under the
Exchange Act in order to qualify for the use of Form S-3 under the Securities
Act; provided, that this covenant shall not require the Company to remain a
reporting company under the Exchange Act if the Company shall have determined to
enter into a merger, acquisition, going private transaction or similar
transaction. Upon the Company becoming eligible for use of Form S-3 (or any
successor form thereto) under the Securities Act in connection with a public
offering of its securities, in the event that the Company shall receive from one
or more of the HWP Stockholders, acting through HWH Capital Partners or its
written designee (the "S-3 Initiating Holders"), a written request that the
Company register, under the Securities Act on Form S-3 (or any successor form
then in effect) (an "S-3 Registration"), all or a portion of the Registrable
Securities owned by such S-3 Initiating Holders, the Company shall give written
notice of such request to all of the Designated Holders (other than S-3
Initiating Holders which have requested an S-3 Registration under this Section
5(a)) at least ten (10) days before the anticipated filing date of such Form
S-3, and such notice shall describe the proposed registration and offer such
Designated Holders the opportunity to register the number of Registrable
Securities as each such Designated Holder may request in writing to the Company,
given within ten (10) days after their receipt from the Company of the written
notice of such registration. With respect to each S-3 Registration, the Company
shall, subject to Section 5(b), (i) include in such offering the Registrable
Securities of the S-3 Initiating Holders and the Designated Holders (who have
requested in writing to participate in such registration on the same terms and
conditions as the Registrable Securities of the S-3 Initiating Holders included
therein) and (ii) use its commercially reasonable efforts to cause such
registration pursuant to this Section 5(a) to become and remain effective as
soon as practicable.
(b) Form S-3 Underwriting Procedures. If the S-3
Initiating Holders so elect, the Company shall use its commercially reasonable
efforts to cause such S-3 Registration pursuant to this Section 5 to be in the
form of a firm commitment underwritten offering and the managing underwriter or
underwriters selected for such offering shall be the Approved Underwriter
selected in accordance with Section 3(f).
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In connection with any S-3 Registration under Section 5(a) involving an
underwritten offering, the Company shall not be required to include any
Registrable Securities in such underwritten offering unless the Designated
Holders thereof accept the terms of the underwritten offering as agreed upon
between the Company, the Approved Underwriter and the S-3 Initiating Holders,
and then only in such quantity as set forth below. If the Approved Underwriter
believes that the registration of all or part of the Registrable Securities
which the S-3 Initiating Holders and the other Designated Holders have requested
to be included would materially adversely affect the success of such public
offering, then the Company shall be required to include in the underwritten
offering, to the extent of the amount that the Approved Underwriter believes may
be sold without causing such material adverse effect, first, such number of
Registrable Securities of the S-3 Initiating Holders and any Designated Holder
participating in the offering pursuant to the terms of Section 5(a) hereof,
which such Registrable Securities shall be allocated pro rata among such S-3
Initiating Holders and Designated Holders, based on the number of Registrable
Securities held by each such S-3 Initiating Holder or Designated Holder, as the
case may be, second, any other securities of the Company requested by holders
thereof to be included in such registration, which such securities shall be
allocated pro rata among such stockholders, based on the number of the Company's
securities held by each such stockholder, and third, securities offered by the
Company for its own account.
(c) Limitations on Form S-3 Registrations. If the Board
of Directors has a Valid Business Reason, the Company may (x) postpone filing a
Registration Statement relating to a S-3 Registration until such Valid Business
Reason no longer exists, but in no event for more than forty-five (45) days
following the request and (y) in case a Registration Statement has been filed
relating to a S-3 Registration, the Company, upon the approval of a majority of
the Board of Directors, may cause such Registration Statement to be withdrawn
and its effectiveness terminated or may postpone amending or supplementing such
Registration Statement (in which case, if the Valid Business Reason no longer
exists or if more than forty-five (45) days have passed since such withdrawal or
postponement, the S-3 Initiating Holder may request the prompt amendment or
supplement of such Registration Statement or a new S-3 Registration). The
Company shall give written notice of its determination to postpone or withdraw a
Registration Statement and of the fact that the Valid Business Reason for such
postponement or withdrawal no longer exists, in each case, promptly after the
occurrence thereof. Notwithstanding anything to the contrary contained herein,
the Company may not postpone or withdraw a filing, under either this Section or
Section 3(a), due to a Valid Business Reason more than once in any twelve (12)
month period. In addition, the Company shall not be required to effect any
registration pursuant to Section 5(a), (i) within ninety (90) days after the
effective date of any other Registration Statement of the Company (other than a
Registration Statement on Form S-4 or S-8 or any successor thereto), (ii) if
Form S-3 is not available for such offering by the S-3 Initiating Holders or
(iii) if the S-3 Initiating Holders, together with the Designated Holders (other
than S-3 Initiating Holders which have requested an S-3 Registration under
Section 5(a)) registering Registrable Securities in such registration, propose
to sell their Registrable Securities at an aggregate price (calculated based
upon the Market Price of the Registrable Securities on the date of filing of the
Form S-3 with respect to such Registrable Securities) to the public of less than
$5,000,000.
11
(d) Expenses. The Company shall bear all Registration
Expenses in connection with any S-3 Registration pursuant to this Section 5,
whether or not such S-3 Registration become effective.
(e) No Demand Registration. No registration requested by
any Designated Holder pursuant to this Section 5 shall be deemed a Demand
Registration pursuant to Section 3.
6. Holdback Agreements.
(a) Restrictions on Public Sale by Designated Holders.
Any Designated Holder selling Registrable Securities pursuant to a Registration
Statement under Sections 3, 4 or 5 of this Agreement, to the extent (i)
requested (A) by the Company, the Initiating Holders or the S-3 Initiating
Holders, as the case may be, in the case of a non-underwritten public offering
and (B) by the Approved Underwriter or the Company Underwriter, as the case may
be, in the case of an underwritten public offering and (ii) all of the Company's
executive officers, directors and holders in excess of one percent (1%) of its
outstanding capital stock execute agreements identical to those referred to in
this Section 6(a), agrees (x) not to effect any public sale or distribution of
any Registrable Securities or of any securities convertible into or exchangeable
or exercisable for such Registrable Securities, including a sale pursuant to
Rule 144 under the Securities Act, or offer to sell, contract to sell (including
without limitation any short sale), grant any option to purchase or enter into
any hedging or similar transaction with the same economic effect as a sale any
Registrable Securities and (y) not to make any request for a Demand Registration
or S-3 Registration under this Agreement, during the period beginning on the
fifteenth (15th) day prior to the expected effective date (as determined by the
Company, which shall notify the Designated Holders of such date in writing) of
such Registration Statement and ending on the ninetieth (90th) day following the
actual effective date of such Registration Statement, or such shorter period, if
any, mutually agreed upon by such Designated Holder and the requesting party
(except as part of such registration). No Designated Holder of Registrable
Securities subject to the foregoing restrictions shall be released from any
obligation under any agreement, arrangement or understanding entered into
pursuant to this Section 6(a) unless all other Designated Holders of Registrable
Securities subject to the same obligation are also released. Further, to the
extent that any Designated Holder is subject to any trading restriction policy,
or other similar policy, adopted by the Board of Directors, such Designated
Holder shall comply with the applicable restrictions of such policy.
(b) Restrictions on Public Sale by the Company. The
Company agrees not to effect any public sale or distribution of any of its
securities, or any securities convertible into or exchangeable or exercisable
for such securities (except pursuant to registrations on Form S-4 or S-8 or any
successor thereto), during the period beginning on the fifteenth (15th) day
prior to the expected effective date (as determined by the Company) of any
Registration Statement in which the Designated Holders of Registrable Securities
are participating and ending on the earlier of (i) the date on which all
Registrable Securities registered on such Registration Statement are sold and
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(ii) 90 days after the actual effective date of such Registration Statement
(except as part of such registration).
7. Registration Procedures.
(a) Obligations of the Company. Whenever registration of
Registrable Securities has been requested pursuant to Section 3, Section 4 or
Section 5 of this Agreement, the Company shall use its commercially reasonable
efforts to effect the registration and sale of such Registrable Securities in
accordance with the intended method of distribution thereof as quickly as
practicable, and in connection with any such request, the Company shall, as
expeditiously as possible:
(i) prepare and file with the Commission (as
promptly as practicable, but in any event not later than sixty (60) days after
receipt of a request to file a Registration Statement with respect to
Registrable Securities) 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 such Registrable Securities in
accordance with the intended method of distribution thereof, and cause such
Registration Statement to become effective; provided, however, that (x) before
filing a Registration Statement or prospectus or any amendments or supplements
thereto, the Company shall provide counsel selected by the Designated Holders
holding a majority of the Registrable Securities being registered in such
registration ("Holders' Counsel") and any other Inspector (as hereinafter
defined) with an opportunity to review and comment on such Registration
Statement and each prospectus included therein (and each amendment or supplement
thereto) to be filed with the Commission, subject to such documents being under
the Company's control, and (y) the Company shall notify the Holders' Counsel and
each seller of Registrable Securities of any stop order issued or threatened by
the Commission and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered;
(ii) prepare and file with the Commission such
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective for the lesser of (x) 120 days (except in the case of a
registration filed pursuant to Rule 415 of the Securities Act or any successor
rule or regulation) and (y) such shorter period which will terminate when all
Registrable Securities covered by such Registration Statement have been sold,
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement;
(iii) furnish to each seller of Registrable
Securities such number of copies of such Registration Statement, each amendment
and supplement thereto (in each case including all exhibits thereto), and the
prospectus included in such Registration Statement (including each preliminary
prospectus) and any prospectus filed under Rule 424 under the Securities Act as
each such seller may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such seller;
13
(iv) register or qualify such Registrable
Securities under such other securities or "blue sky" laws of such jurisdictions
as any seller of Registrable Securities may reasonably request, and to continue
such qualification in effect in such jurisdiction for as long as permissible
pursuant to the laws of such jurisdiction, or for as long as any such seller
requests or until all of such Registrable Securities are sold, whichever is
shortest, and do any and all other acts and things which may be reasonably
necessary or advisable to enable any such seller to consummate the disposition
in such jurisdictions of the Registrable Securities owned by such seller;
provided, however, that the Company shall not be required to (x) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 7(a)(iv), (y) subject itself to
taxation in any such jurisdiction or (z) consent to general service of process
in any such jurisdiction;
(v) notify each seller of Registrable Securities
at any time when a prospectus relating thereto is required to be delivered under
the Securities Act, upon discovery that, or upon 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 shall promptly prepare a supplement or amendment to such prospectus and
furnish to each seller of Registrable Securities a reasonable number of copies
of such supplement to or an amendment of such prospectus as may be necessary so
that, after delivery to the purchasers of such Registrable Securities, such
prospectus shall 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;
(vi) enter into and perform customary agreements
(including an underwriting agreement in customary form with the Approved
Underwriter or Company Underwriter, if any, selected as provided in Section 3,
Section 4 or Section 5, as the case may be) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities, including causing its officers to participate in "road
shows" and other information meetings organized by the Approved Underwriter or
Company Underwriter;
(vii) make available at reasonable times for
inspection by any seller of Registrable Securities, any managing underwriter
participating in any disposition of such Registrable Securities pursuant to a
Registration Statement, Holders' Counsel and any attorney or accountant retained
by any such seller or any managing underwriter (each, an "Inspector" and
collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's and its
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspector in connection with such Registration Statement. Records that
the Company determines, in good faith, to be confidential and which it notifies
the Inspectors are confidential shall
14
not be disclosed by the Inspectors (and the Inspectors shall confirm their
agreement in writing in advance to the Company if the Company shall so request)
unless (x) the disclosure of such Records is necessary, in the Company's
judgment, to avoid or correct a misstatement or omission in the Registration
Statement, (y) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction after exhaustion of all
appeals therefrom or (z) the information in such Records was known to the
Inspectors on a non-confidential basis prior to its disclosure by the Company or
has been made generally available to the public. Each seller of Registrable
Securities agrees that it shall, upon learning that disclosure of such Records
is sought in a court of competent jurisdiction, give notice to the Company and
allow the Company, at the Company's expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(viii) if such sale is pursuant to an underwritten
offering, obtain a "cold comfort" letters dated the effective date of the
Registration Statement and the date of the closing under the underwriting
agreement from the Company's independent public accountants in customary form
and covering such matters of the type customarily covered by "cold comfort"
letters as the managing underwriter reasonably requests;
(ix) furnish, at the request of any seller of
Registrable Securities on the date such securities are delivered to the
underwriters for sale pursuant to such registration or, if such securities are
not being sold through underwriters, on the date the Registration Statement with
respect to such securities becomes effective, an opinion, dated such date, of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the seller making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as the underwriters, if any, and such seller may
reasonably request and are customarily included in such opinions;
(x) comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable but no later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement covering a
period of twelve (12) months beginning after the effective date of the
Registration Statement, in a manner which satisfies the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(xi) cause all such Registrable Securities to be
listed on each securities exchange on which similar securities issued by the
Company are then listed, provided that the applicable listing requirements are
satisfied;
(xii) cooperate with each seller of Registrable
Securities and each underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD;
15
(xiii) use its commercially reasonable 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 reasonably necessary by virtue of the business and operations of the
Company to enable the seller or sellers of Registrable Securities to consummate
the disposition of such Registrable Securities;
(xiv) keep each seller of Registrable Securities
advised as to all material developments of any registration under Sections 3, 4
or 5 hereunder;
(xv) provide officers' certificates and other
customary closing documents; and
(xvi) take all other steps reasonably necessary to
effect the registration of the Registrable Securities contemplated hereby and
reasonably cooperate with the holders of such Registrable Securities to
facilitate the disposition of such Registrable Securities pursuant thereto.
(b) Seller Information. The Company may require each
seller of Registrable Securities as to which any registration is being effected
to furnish, and such seller shall furnish, to the Company such information
required to be included in such Registration Statement by applicable securities
laws or otherwise necessary or desirable in connection with the disposition of
such Registrable Securities as the Company may from time to time reasonably
request in writing. If any seller of Registrable Securities fails to provide
such information required to be included in such Registration Statement by
applicable securities laws or otherwise necessary or desirable in connection
with the disposition of such Registrable Securities in a timely manner after
written request therefor, the Company may exclude such seller's Registrable
Securities from a registration under Sections 3, 4 or 5 hereof.
(c) Notice to Discontinue. Each Designated Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 7(a)(v), such Designated Holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Designated Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 7(a)(v) and, if so directed by the Company, such Designated Holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Designated Holder's possession, of the
prospectus covering such Registrable Securities which is current at the time of
receipt of such notice. If the Company shall give any such notice, the Company
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement (including, without limitation,
the period referred to in Section 7(a)(ii)) by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 7(a)(v) to and including the date when sellers of such Registrable
Securities under such Registration Statement shall have received the copies of
the supplemented or amended prospectus contemplated by and meeting the
requirements of Section 7(a)(v).
16
(d) Registration Expenses. The Company shall pay all
expenses arising from or incident to its performance of, or compliance with,
this Agreement, including, without limitation, (i) Commission, stock exchange
and NASD registration and filing fees, (ii) all fees and expenses incurred in
complying with securities or "blue sky" laws (including reasonable fees, charges
and disbursements of counsel to any underwriter incurred in connection with
"blue sky" qualifications of the Registrable Securities as may be set forth in
any underwriting agreement), (iii) all printing, messenger and delivery expenses
and (iv) the fees, charges and expenses of counsel to the Company and of its
independent public accountants and any other accounting fees, charges and
expenses incurred by the Company (including, without limitation, any expenses
arising from any "cold comfort" letters or any special audits incident to or
required by any registration or qualification), regardless of whether such
Registration Statement is declared effective. All of the expenses described in
the preceding sentence of this Section 7(d) are referred to herein as
"Registration Expenses." The Designated Holders of Registrable Securities sold
pursuant to a Registration Statement shall bear the expense of any broker's
commission or underwriter's discount or commission relating to registration and
sale of such Designated Holders' Registrable Securities and shall bear the fees
and expenses of their own counsel.
8. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Designated Holder, its partners, directors,
officers, affiliates, members, employees and each Person who controls (within
the meaning of Section 15 of the Securities Act) such Designated Holder from and
against any and all losses, claims, damages, liabilities and expenses
(including, but not limited to, reasonable costs and expenses of legal counsel
or otherwise arising from any investigation, action or proceeding, whether
commenced or threatened, in respect to any of the foregoing) (each, a
"Liability" and collectively, "Liabilities"), arising out of or based upon any
untrue, or allegedly untrue, statement of a material fact contained in any
Registration Statement, prospectus or preliminary prospectus or notification or
offering circular (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) 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 under
the circumstances such statements were made, except insofar as such Liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission contained in such Registration Statement,
preliminary prospectus or final prospectus in reliance and in conformity with
information concerning such Designated Holder furnished in writing to the
Company by such Designated Holder expressly for use therein, including, without
limitation, the information furnished to the Company pursuant to Section 8(b).
The Company shall also provide customary indemnities to any underwriters of the
Registrable Securities, their officers, directors and employees and each Person
who controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders of Registrable Securities.
17
(b) Indemnification by Designated Holders. In connection
with any Registration Statement in which a Designated Holder is participating
pursuant to Section 3, Section 4 or Section 5 hereof, each such Designated
Holder shall promptly furnish to the Company in writing such information with
respect to such Designated Holder as the Company may reasonably request or as
may be required by law for use in connection with any such Registration
Statement or prospectus and all information required to be disclosed in order to
make the information previously furnished to the Company by such Designated
Holder not materially misleading or necessary to cause such Registration
Statement not to omit a material fact with respect to such Designated Holder
necessary in order to make the statements therein not misleading. Each
Designated Holder agrees severally to indemnify and hold harmless the Company,
the other Designated Holders who participate in the Registration Statement, any
underwriter retained by the Company and each Person who controls the Company,
the other Designated Holders who participate in the Registration Statement or
such underwriter (within the meaning of Section 15 of the Securities Act) to the
same extent as the foregoing indemnity from the Company to the Designated
Holders (including indemnification of their respective partners, directors,
officers, members and employees), but only to the extent that Liabilities arise
out of or are based upon a statement or alleged statement or an omission or
alleged omission that was made in reliance upon and in conformity with
information with respect to such Designated Holder furnished in writing to the
Company by such Designated Holder expressly for use in such Registration
Statement or prospectus, including, without limitation, the information
furnished to the Company pursuant to this Section 8(b); provided, however, that
the total amount to be indemnified by such Designated Holder pursuant to this
Section 8(b) shall be limited to the net proceeds received by such Designated
Holder in the offering to which the Registration Statement or prospectus
relates.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification or contribution hereunder (the "Indemnified Party")
agrees to give prompt written notice to the indemnifying party (the
"Indemnifying Party") after the receipt by the Indemnified Party of any written
notice of the commencement of any action, suit, proceeding or investigation or
threat thereof made in writing for which the Indemnified Party intends to claim
indemnification or contribution pursuant to this Agreement; provided, however,
that the failure so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of any Liability that it may have to the Indemnified Party
hereunder (except to the extent that the Indemnifying Party is materially
prejudiced or otherwise forfeits substantive rights or defenses by reason of
such failure). If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party shall be entitled
to participate in and, to the extent it may wish, jointly with any other
Indemnifying Party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it and reasonably satisfactory to such
Indemnified Party. Each Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be paid by the Indemnified Party
unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying
Party fails to assume the defense of such action with counsel reasonably
satisfactory to the Indemnified Party or (iii) the named parties to any such
action (including any impleaded parties) include
18
both the Indemnifying Party and the Indemnified Party and such parties have been
advised by such counsel that either (x) representation of such Indemnified Party
and the Indemnifying Party by the same counsel would be inappropriate under
applicable standards of professional conduct or (y) there may be one or more
legal defenses available to the Indemnified Party which are different from or
additional to those available to the Indemnifying Party. In any of such cases,
the Indemnifying Party shall not have the right to assume the defense of such
action on behalf of such Indemnified Party, it being understood, however, that
the Indemnifying Party shall not be liable for the reasonable fees and expenses
of more than one separate firm of attorneys (in addition to any local counsel)
for all Indemnified Parties and all such expenses shall be reimbursed as
incurred. No Indemnifying Party shall be liable for any settlement entered into
without its written consent, which consent shall not be unreasonably withheld.
No Indemnifying Party shall, without the consent of such Indemnified Party,
effect any settlement of any pending or threatened proceeding in respect of
which such Indemnified Party is a party and indemnity has been sought hereunder
by such Indemnified Party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability for claims that are the
subject matter of such proceeding. Notwithstanding the foregoing, if at any time
an Indemnified Party shall have requested the Indemnifying Party to reimburse
the Indemnified Party for fees and expenses of counsel as contemplated by this
Section 8, the Indemnifying Party agrees that it shall be liable for any
settlement of any proceeding effected without the Indemnifying Party's written
consent if (i) such settlement is entered into more than thirty (30) business
days after receipt by the Indemnifying Party of the aforesaid request and (ii)
the Indemnifying Party shall not have reimbursed the Indemnified Party in
accordance with such request or contested the reasonableness of such fees and
expenses prior to the date of such settlement.
(d) Contribution. If the indemnification provided for in
this Section 8 from the Indemnifying Party is unavailable to an Indemnified
Party hereunder or insufficient to hold harmless an Indemnified Party in respect
of any Liabilities referred to herein, 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 Liabilities in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions which resulted in
such Liabilities, as well as any other relevant equitable considerations. The
relative faults of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the Liabilities referred to above shall be deemed to include, subject
to the limitations set forth in Sections 8(a), 8(b) and 8(c), any legal or other
fees, charges or expenses reasonably incurred by such party in connection with
any investigation or proceeding; provided that the total amount to be
contributed by any Designated Holder shall be limited to the net proceeds
received by such Designated Holder in the offering.
19
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(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 the immediately preceding paragraph.
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.
9. Rule 144. The Company covenants that from and after the IPO
Effectiveness Date it shall (a) file any reports required to be filed by it
under the Exchange Act and (b) take such further action as each Designated
Holder may reasonably request (including providing any information necessary to
comply with Rule 144 under the Securities Act), all to the extent required from
time to time to enable such Designated Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such rule may
be amended from time to time, or Regulation S under the Securities Act or (ii)
any similar rules or regulations hereafter adopted by the Commission. The
Company shall, upon the request of any Designated Holder, deliver to such
Designated Holder a written statement as to whether it has complied with such
requirements.
10. Miscellaneous.
(a) Recapitalizations, Exchanges, etc. The provisions of
this Agreement shall apply to the full extent set forth herein with respect to
(i) the shares of Common Stock, (ii) any and all shares of voting common stock
of the Company into which the shares of Common Stock are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, the shares of Common Stock and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof. The Company
shall cause any successor or assign (whether by merger, consolidation, sale of
assets or otherwise) to enter into a new registration rights agreement with the
Designated Holders on terms substantially the same as this Agreement as a
condition of any such transaction.
(b) No Inconsistent Agreements. The Company hereby
represents and warrants that it has not previously entered into any agreement
granting registration rights to any Person with respect to any securities of the
Company except as set forth in the Rights Agreement and the Stockholders
Agreement. The Company shall not enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Designated
Holders in this Agreement or grant any additional registration rights to any
Person or with respect to any securities that are not Registrable Securities
that provides for the priority in registration of such securities over the
Registrable Securities held by the Designated Holders or which rights are
otherwise inconsistent with the rights granted in this Agreement.
20
(c) Remedies. The Designated Holders, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, shall be entitled to specific performance of their 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 in any action for specific
performance the defense that a remedy at law would be adequate.
(d) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless consented to in writing by the Company and Designated
Holders holding more than 50% of the Registrable Securities; provided, however,
that (i) no amendment, modification, supplement, waiver or consent to depart
from the provisions hereof shall be effective if such amendment, modification,
supplement, waiver or consent to depart from the provisions hereof materially
and adversely affects the substantive rights or obligations of one Designated
Holder, or group of Designated Holders, without a similar and proportionate
effect on the substantive rights or obligations of all Designated Holders,
unless each such disproportionately affected Designated Holder consents in
writing thereto; (ii) any amendment with respect to Sections 6(a), 10(d) or
10(f) hereof shall require the written consent of each Designated Holder; (iii)
to the extent that it in any way affects the Demand Registration rights of
BancAmerica, any amendment to Section 3(a) shall require the written consent of
BancAmerica; and (iv) to the extent that it in any way affects the Incidental
Registration rights of the Francis Stockholders, any amendment to Section 3(b)
(but not including an amendment, waiver or consent to any other provision of
Section 3 that may affect the rights provided in Section 3(b)) and the first and
second sentences of Section 4(a) shall require the written consent of the
Francis Stockholders.
(e) Notices. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be made by registered or certified first-class mail, return receipt
requested, telecopier, courier service or personal delivery:
(i) if to the Company:
AMN Healthcare Services, Inc.
12235 El Camino Real, Suite 200
San Diego, CA 92130
Telecopy: (877) 282-0384
Attention: Susan R. Nowakowski
21
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Telecopy: (212) 757-3990
Attention: John C. Kennedy, Esq.
(ii) if to the HWP Stockholders:
c/o Haas Wheat & Partners, L.P.
300 Crescent Court
Suite 1700
Dallas, TX 75201
Telecopy: (214) 871-8317
Attention: Douglas D. Wheat
(iii) if to BancAmerica:
BancAmerica Capital Investors SBIC I, L.P.
Bank of America Corporate Center
100 North Tryon Street, 25th Floor
Charlotte, NC 28255
Telecopy: (704) 386-6432
Attention: Walker L. Poole
with a copy to:
Kennedy Covington Lobdell & Hickman, L.L.P.
100 North Tryon Street
Suite 4200
Charlotte, NC 28202
Telecopy: (704) 331-7598
Attention: Henry W. Flint, Esq.
(iv) if to the Francis Stockholders:
c/o AMN Healthcare Services, Inc.
12235 El Camino Real, Suite 200
San Diego, California 92130
Telecopy: (858) 792-0299
Attention: Steven C. Francis
All such notices, demands and other communications shall be deemed to
have been duly given when delivered by hand, if personally delivered; one (1)
Business Day after delivered by courier, if delivered by commercial courier
service; five (5) Business Days after being deposited in the mail, postage
prepaid, if mailed; and one
22
(1) Business Day after receipt is mechanically acknowledged, if telecopied. Any
party may by notice given in accordance with this Section 10(e) designate
another address or Person for receipt of notices hereunder.
(f) Successors and Assigns; Third Party Beneficiaries.
This Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of the parties hereto as hereinafter provided. The Demand
Registration rights, incidental registration rights and the S-3 Registration
rights and the other rights of the HWP Stockholders hereunder may be (i) with
respect to any Registrable Security that is transferred to an Affiliate of the
HWP Stockholders (or if any of the HWP Stockholders is a partnership, limited
liability company or corporation, to any such partner, member or stockholder
thereof), transferred to such Affiliate (or such partner, member or stockholder)
and (ii) with respect to any Registrable Security that is transferred in all
cases to a non-Affiliate of the HWP Stockholders, transferred only if the
transferee receives in one transaction or series of related transactions
Registrable Securities representing at least five percent (5%) of the Common
Stock outstanding on the date of such transaction (or the first transaction in a
series of transactions). The Demand Registration rights and incidental
registration rights and the other rights of BancAmerica hereunder may be (i)
with respect to any Registrable Security that is transferred to an Affiliate of
BancAmerica (or if BancAmerica is a partnership, limited liability company or
corporation, to any such partner, member or stockholder thereof), transferred to
such Affiliate (or such partner, member or stockholder) and (ii) with respect to
any Registrable Security that is transferred in all cases to a non-Affiliate of
BancAmerica, transferred only if the transferee receives in one transaction or
series of related transactions Registrable Securities representing at least five
percent (5%) of the Common Stock outstanding on the date of such transaction (or
the first transaction in a series of transactions). The incidental or
"piggy-back" registration rights of the Francis Stockholders contained in
Sections 3, 4 and 5 hereof and the other rights of the Francis Stockholders
hereunder may be (i) with respect to any Registrable Security that is
transferred to the estate of Francis or an Affiliate of the Francis Stockholders
(or if any of the Francis Stockholders is a partnership, limited liability
company or corporation, to any such partner, member or stockholder thereof),
transferred to such estate or Affiliate (or such partner, member or stockholder)
and (ii) with respect to any Registrable Security that is transferred in all
cases to a non-Affiliate of the Francis Stockholder, transferred only if the
transferee receives in one transaction or series of related transactions
Registrable Securities representing at least five percent (5%) of the Common
Stock outstanding on the date of such transaction (or the first transaction in a
series of transactions). All of the obligations of the Company hereunder shall
survive any such transfer. Except as provided in Section 8, no Person other than
the parties hereto and their successors and permitted assigns is intended to be
a beneficiary of this Agreement.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and 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.
23
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
(j) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired.
(k) Rules of Construction. Unless the context otherwise
requires, references to sections or subsections refer to sections or subsections
of this Agreement.
(l) 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 no restrictions,
promises, representations, warranties or undertakings, other than those set
forth or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter. This
Agreement supersedes and replaces the Rights Agreement, dated as of November 19,
1999, among the Company, the HWP Stockholders and BancAmerica (the "Rights
Agreement") and Section 4 of the Stockholders Agreement, dated as of November
19, 1999, among the Company, the HWP Stockholders and the Francis Stockholders
(the "Stockholders Agreement"). The Rights Agreement and Section 4 of the
Stockholders Agreement are hereby terminated and have no further force and
effect.
(m) Further Assurances. Each of the parties shall execute
such documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
(n) Other Agreements. Nothing contained in this Agreement
shall be deemed to be a waiver of, or release from, any obligations any party
hereto may have under, or any restrictions on the transfer of Registrable
Securities or other securities of the Company imposed by, any other agreement.
[Remainder of page intentionally left blank]
24
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Registration Rights Agreement on the date first written above.
AMN HEALTHCARE SERVICES, INC.
By: /s/ Steven Francis
--------------------------------------------
Name: Steven Francis
Title: President and Chief Executive Officer
HWH CAPITAL PARTNERS, L.P.
By: HWH, L.P., its General Partner
By: HWH Incorporated, its General Partner
By: /s/ Douglas D. Wheat
----------------------------------------
Name: Douglas D. Wheat
Title: President
HWH NIGHTINGALE PARTNERS, L.P.
By: HWH NIGHTINGALE, L.P., its General Partner
By: HWH NIGHTINGALE, L.L.C., its General Partner
By: /s/ Douglas D. Wheat
----------------------------------------
Name: Douglas D. Wheat
Title: Managing Member
HWP CAPITAL PARTNERS II, L.P.
By: HWP II, L.P., its General Partner
By: HWP II, LLC, its General Partner
By: /s/ Douglas D. Wheat
----------------------------------------
Name: Douglas D. Wheat
Title: Managing Member
25
HWP NIGHTINGALE PARTNERS II, L.P.
By: HWP Nightingale II, L.P., its General Partner
By: HWP Nightingale II, LLC, its General Partner
By: /s/ Douglas D. Wheat
-----------------------------------------
Name: Douglas D. Wheat
Title: Managing Member
BANCAMERICA CAPITAL INVESTORS SBIC I, L.P.
By: BANCAMERICA CAPITAL
MANAGEMENT SBIC I, LLC, its General Partner
By: BancAmerica Capital Management I L.P., its
sole member
By: BACM I GP, LLC, its General Partner
By: /s/ Walker L. Poole
---------------------------------------------
Name: Walker L. Poole
Title: Managing Director
/s/ Steven Francis
-------------------------------------------------
Steven Francis, as Trustee of the Francis
Family Trust dated May 24, 1996
/s/ Gayle Francis
-------------------------------------------------
Gayle Francis, as Trustee of the Francis
Family Trust dated May 24, 1996
/s/ Steven Francis
-------------------------------------------------
Steven Francis