Exhibit 10.2

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) dated as of
August 17, 2005 by and among SoftBrands, Inc., a Delaware corporation (the
“Company”), Capital Resource Partners IV, L.P., a Delaware limited partnership
(“CRP”) and ABRY Mezzanine Partners IV, L.P., a Delaware limited partnership
(“ABRY” and together with CRP, the “Investors”).

 

WHEREAS, Info-Quest SA, a corporation organized under the laws of Greece
(“Info-Quest”) and the Company entered into that certain Investor Agreement,
dated as of May 15, 2002, whereby the Company granted Info-Quest certain
registration, participation and other rights with respect to the shares of
Common Stock of the Company held by Info-Quest (as amended by that certain
Amendment No. 1, dated November 26, 2002 and that certain Amendment No. 2, dated
April 5, 2005, the “Info-Quest Agreement”);

 

WHEREAS, the Investors propose to purchase from the Company 18,000 shares of the
Company’s Series C Convertible Preferred Stock, par value $0.01 per share (the
“Series C Shares”) and warrants to purchase 1,200,000 shares of Common Stock of
the Company (the “Series C Warrants”) pursuant to a Series C Preferred Stock and
Warrant Purchase Agreement dated as of the date hereof (as amended, restated or
modified from time to time, the “Purchase Agreement”) by and among the Company
and the Investors;

 

WHEREAS, CRP and the Company entered into that certain Investors’ Rights
Agreement, dated as of November 26, 2002, as amended by that certain Amendment
No. 1, dated August 18, 2004 (the “Original Agreement”) whereby the Company
granted CRP certain rights with respect to certain Equity Securities of the
Company held by CRP;

 

WHEREAS, the Company and CRP desire to amend and restate the Original Agreement
in its entirety to allow for ABRY to share in such rights and to amend certain
of such rights and to set forth certain understandings and agreements, all as
more fully set forth herein; and

 

WHEREAS, the execution and delivery of this Agreement are conditions precedent
to the transactions contemplated by the Purchase Agreement.

 

NOW, THEREFORE, in consideration of the premises, as an inducement to ABRY to
consummate the transactions contemplated by the Purchase Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company hereby covenants and agrees with the Investors
as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1                                      Certain Definitions.  As used
in this Agreement, the following terms shall have the following respective
meanings:

 

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 “ABRY Registrable Securities” means any shares of Common Stock issued or
issuable to ABRY, including shares of Common Stock issuable upon exercise of the
Series C Warrants or upon conversion of the Series C Shares issued pursuant to
the Purchase Agreement.

 

“Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person and with
respect to any Person that is an investment fund, the term Affiliate shall also
include any investment fund now or hereafter existing which is controlled by or
under common control with one or more general partners of such Person, where
“control” means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through the ownership of voting
securities, contract or otherwise.

 

“Commission” means the United States Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.

 

“Common Stock” means (i) the Company’s Common Stock, par value $0.01 per share,
as authorized on the date of this Agreement, (ii) any other capital stock of any
class or classes (however designated) of the Company, authorized on or after the
date hereof, the holders of which shall have the right, without limitation as to
amount per share, either to all or to a share of the balance of current
dividends and liquidating distributions after the payment of dividends and
distributions on any shares entitled to preference in the payment thereof, and
the holders of which shall ordinarily, in the absence of contingencies, be
entitled to vote for the election of a majority of directors of the Company
(even though the right so to vote has been suspended by the happening of such a
contingency), and (iii) any other securities into which or for which any of the
securities described in (i) or (ii) above may be converted or exchanged pursuant
to a plan of recapitalization, reorganization, merger, sale of assets or
otherwise.

 

“CRP Purchase Agreement” means that certain Senior Subordinated Secured Note and
Warrant Purchase Agreement, by and between the Company and Capital Resource
Partners IV, L.P. dated November 26, 2002 and amended on September 30, 2003,
August 18, 2004 and September 30, 2004.

 

“CRP Registrable Securities” means the shares of Common Stock issuable
(i) pursuant to the CRP Warrants (ii) upon conversion of the Series B Shares
issued to CRP pursuant to the CRP Purchase Agreement and (iii) upon conversion
of the Series C Shares issued to CRP pursuant to the Purchase Agreement.

 

“CRP Warrants” means those certain warrants to purchase shares of Common Stock
issued to CRP pursuant to the CRP Purchase Agreement and the Purchase Agreement.

 

“Equity Security” means (a) any capital stock or other equity security, or
ownership interests (including limited liability company, partnership and joint
venture interests), (b) any security directly or indirectly convertible into or
exchangeable for any capital shares or other equity security or security
containing any profit participation features, (c) any warrants, options or other
rights, directly or indirectly, to subscribe for or to purchase any capital
shares, other equity security or security containing any profit participation
features or directly or indirectly to subscribe for or to purchase any security
directly or indirectly convertible into or

 

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exchangeable for any capital shares or other equity security or security
containing profit participation features or (d) any share appreciation rights,
phantom share rights or other similar rights.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.

 

“Majority ABRY Holders” means, at any time, the holders of a majority of the
ABRY Registrable Securities outstanding at such time.

 

“Majority CRP Holders” means, at any time, the holders of a majority of the CRP
Registrable Securities outstanding at such time.

 

“Person” means an individual, a corporation, a partnership, limited liability
company, a joint venture, a trust, an unincorporated organization, a government
and any agency or political subdivision thereof.

 

“Registrable Securities” means, collectively, the CRP Registrable Securities and
the ABRY Registrable Securities.  As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when they have been
(i) distributed to the public pursuant to an offering registered under the
Securities Act, (ii)  sold to the public through a broker, dealer or market
maker in compliance with Rule 144, or (iii) repurchased by the Company.  For
purposes of this Agreement, a Person shall be deemed to be a holder of
Registrable Securities, and the Registrable Securities shall be deemed to be in
existence, whenever such Person has the right to acquire directly or indirectly
such Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected, and such Person shall be entitled to exercise the
rights of a holder of Registrable Securities hereunder.

 

“Registration Expenses” means the expenses so described in Section 2.4.

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the Commission promulgated
thereunder, all as the same shall be in effect at the time.

 

“Series B Shares” means the Series B Convertible Preferred Stock, $0.01 par
value per share, of the Company.

 

ARTICLE II
REGISTRATION RIGHTS

 

Section 2.1                                      Demand Registrations.

 

(A)                                  AT ANY TIME (I) IN THE CASE OF THE HOLDERS
OF CRP REGISTRABLE SECURITIES, THAT THE COMPANY IS OR BECOMES SUBJECT TO
SECTION 13 OR SECTION 15(D) OF THE EXCHANGE ACT, AND (II) IN THE CASE OF THE
HOLDERS OF ABRY REGISTRABLE SECURITIES, ON OR AFTER THE EARLIER OF (X) TWO

 

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YEARS FROM THE DATE HEREOF AND (Y) THE DATE UPON WHICH THE PRICE FOR THE COMMON
STOCK HAS REACHED $[     ](1), PER SHARE, EACH OF THE MAJORITY CRP HOLDERS AND
THE MAJORITY ABRY HOLDERS, AS APPLICABLE, MAY CAUSE THE COMPANY, BY DELIVERY OF
WRITTEN NOTICE TO THE COMPANY, TO REGISTER UNDER THE SECURITIES ACT ALL OR ANY
PORTION OF THE CRP REGISTRABLE SECURITIES OR ABRY REGISTRABLE SECURITIES, AS THE
CASE MAY BE, IN THE MANNER SPECIFIED IN SUCH NOTICE AND UPON RECEIPT OF SUCH
NOTICE THE COMPANY SHALL PROMPTLY DELIVER NOTICE OF SUCH REQUEST TO ALL PERSONS
HOLDING REGISTRABLE SECURITIES, INCLUDING EACH PERSON PARTY TO THIS AGREEMENT
WHO HAS THE RIGHT TO ACQUIRE REGISTRABLE SECURITIES, WHO SHALL THEN HAVE THIRTY
(30) DAYS TO NOTIFY THE COMPANY IN WRITING OF THEIR DESIRE TO BE INCLUDED IN
SUCH REGISTRATION.  THE COMPANY WILL USE ITS BEST EFFORTS TO EXPEDITIOUSLY
EFFECT THE REGISTRATION OF ALL REGISTRABLE SECURITIES REQUESTED TO BE INCLUDED
IN SUCH REGISTRATION UNDER THE SECURITIES ACT, BUT ONLY TO THE EXTENT PROVIDED
FOR IN THE FOLLOWING PROVISIONS OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT THE
COMPANY SHALL NOT BE REQUIRED TO EFFECT REGISTRATION PURSUANT TO A REQUEST UNDER
THIS SECTION 2.1(A): (I) MORE THAN (A) TWO (2) TIMES FOR THE HOLDERS OF THE CRP
REGISTRABLE SECURITIES AS A GROUP AND (B) MORE THAN TWO (2) TIMES FOR THE
HOLDERS OF THE ABRY REGISTRABLE SECURITIES AS A GROUP; (II) IN ANY PARTICULAR
JURISDICTION IN WHICH THE COMPANY WOULD BE REQUIRED TO EXECUTE A GENERAL CONSENT
TO SERVICE OF PROCESS IN EFFECTING SUCH REGISTRATION, UNLESS THE COMPANY IS
ALREADY SUBJECT TO SERVICE IN SUCH JURISDICTION AND EXCEPT AS MAY BE REQUIRED
UNDER THE SECURITIES ACT; OR (III) IF THE HOLDERS OF REGISTRABLE SECURITIES
INITIALLY REQUESTING SUCH REGISTRATION PROPOSE TO DISPOSE OF SHARES OF
REGISTRABLE SECURITIES THAT MAY BE IMMEDIATELY REGISTERED ON FORM S-3 PURSUANT
TO A REQUEST MADE PURSUANT TO SECTION 2.8 BELOW; AND PROVIDED FURTHER, THAT A
REGISTRATION PURSUANT TO A REQUEST UNDER THIS SECTION 2.1(A) SHALL BE NOT BE
COUNTED TOWARD THE MAXIMUM NUMBER OF TWO (2) REGISTRATIONS FOR THE HOLDERS OF
CRP REGISTRABLE SECURITIES OR THE HOLDERS OF THE ABRY REGISTRABLE SECURITIES, IN
THE EVENT THE COMPANY FAILS TO EFFECTIVELY REGISTER ALL OF THE REGISTRABLE
SECURITIES AS TO WHICH REGISTRATION HAS BEEN REQUESTED.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, NO REQUEST MAY BE MADE UNDER THIS
SECTION 2.1(A) WITHIN 180 DAYS AFTER THE EFFECTIVE DATE OF A REGISTRATION
STATEMENT FILED BY THE COMPANY COVERING A FIRM COMMITMENT UNDERWRITTEN PUBLIC
OFFERING IN WHICH THE INVESTORS SHALL HAVE BEEN ENTITLED TO JOIN PURSUANT TO
SECTION 2.2 OR SECTION 2.8 AND IN WHICH THERE SHALL HAVE BEEN EFFECTIVELY
REGISTERED ALL REGISTRABLE SECURITIES AS TO WHICH REGISTRATION SHALL HAVE BEEN
REQUESTED.

 

(B)                                 WHENEVER A REQUESTED REGISTRATION PURSUANT
TO SECTION 2.1(A) IS FOR AN UNDERWRITTEN OFFERING, ONLY REGISTRABLE SECURITIES
WHICH ARE TO BE INCLUDED IN THE UNDERWRITING MAY BE INCLUDED IN THE
REGISTRATION, AND, IF THE MANAGING UNDERWRITER OF SUCH OFFERING DETERMINES IN
GOOD FAITH THAT THE NUMBER OF REGISTRABLE SECURITIES SO INCLUDED WHICH ARE TO BE
SOLD BY THE HOLDERS OF THE REGISTRABLE SECURITIES SHOULD BE LIMITED DUE TO
MARKET CONDITIONS, THE HOLDERS OF REGISTRABLE SECURITIES TO BE INCLUDED IN SUCH
UNDERWRITING AND REGISTRATION SHALL SHARE PRO RATA IN THE NUMBER OF SUCH
REGISTRABLE SECURITIES BEING UNDERWRITTEN AND REGISTERED FOR THEIR ACCOUNT, SUCH
SHARING TO BE BASED ON THE NUMBER OF ALL REGISTRABLE SECURITIES HELD BY SUCH
HOLDERS, RESPECTIVELY; PROVIDED, THAT IN NO EVENT SHALL THE HOLDERS OF
REGISTRABLE SECURITIES ENTITLED TO PARTICIPATE IN SUCH REGISTRATION PURSUANT TO
SECTION 2.1(A) HAVE THE NUMBER OF REGISTRABLE SECURITIES WHICH ARE TO BE
INCLUDED IN SUCH UNDERWRITING AND REGISTRATION REDUCED OR LIMITED

 

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(1)                                  Will be an amount equal to 2.67x the
Initial Conversion Price.

 

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(INCLUDING PURSUANT TO SECTION 2.2 HEREOF) UNTIL THE HOLDERS WHO HAVE A
CONTRACTUAL, INCIDENTAL “PIGGY BACK” RIGHT TO INCLUDE SECURITIES IN THE
REGISTRATION STATEMENT AND WHO HAVE REQUESTED INCLUSION PURSUANT TO SUCH RIGHT
HAVE THE NUMBER OF SECURITIES REQUESTED TO BE INCLUDED IN SUCH REGISTRATION
STATEMENT REDUCED TO ZERO (0).  WHENEVER A REQUESTED REGISTRATION PURSUANT TO
SECTION 2.1 IS FOR AN UNDERWRITTEN PUBLIC OFFERING, THE HOLDERS OF A MAJORITY OF
THE REGISTRABLE SECURITIES INITIATING REGISTRATION, SUBJECT TO THE APPROVAL OF
THE COMPANY (WHICH APPROVAL WILL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR
DELAYED), MAY DESIGNATE THE MANAGING UNDERWRITER(S) OF SUCH OFFERING.  THE
COMPANY MAY NOT CAUSE ANY OTHER REGISTRATION OF SECURITIES FOR SALE FOR ITS OWN
ACCOUNT (OTHER THAN IN CONNECTION WITH THE REGISTRATION OF EQUITY SECURITIES
ISSUED OR ISSUABLE PURSUANT TO AN EMPLOYEE STOCK OPTION, STOCK PURCHASE, STOCK
BONUS OR SIMILAR PLAN OR PURSUANT TO A MERGER, EXCHANGE OFFER OR TRANSACTION OF
THE TYPE SPECIFIED IN RULE 145(A) UNDER THE SECURITIES ACT) TO BECOME EFFECTIVE
LESS THAN 90 DAYS AFTER THE EFFECTIVE DATE OF ANY REGISTRATION REQUIRED PURSUANT
TO THIS SECTION 2.1.

 

(C)                                  IF AT THE TIME OF ANY REQUEST TO REGISTER
REGISTRABLE SECURITIES PURSUANT TO SECTION 2.1(A) THE COMPANY IS PREPARING OR
WITHIN THIRTY (30) DAYS THEREAFTER INTENDS TO COMMENCE TO PREPARE A REGISTRATION
STATEMENT FOR A PUBLIC OFFERING (OTHER THAN IN CONNECTION WITH THE REGISTRATION
OF EQUITY SECURITIES ISSUED OR ISSUABLE PURSUANT TO AN EMPLOYEE STOCK OPTION,
STOCK PURCHASE, STOCK BONUS OR SIMILAR PLAN OR PURSUANT TO A MERGER, EXCHANGE
OFFER OR TRANSACTION OF THE TYPE SPECIFIED IN RULE 145(A) UNDER THE SECURITIES
ACT) WHICH IN FACT IS FILED AND BECOMES EFFECTIVE WITHIN NINETY (90) DAYS AFTER
THE REQUEST AND THE COMPANY HAS COMPLIED WITH THE PROVISIONS OF SECTION 2.2
HEREOF, OR IS ENGAGED IN ANY ACTIVITY WHICH, IN THE GOOD FAITH DETERMINATION OF
THE COMPANY’S BOARD OF DIRECTORS, WOULD BE ADVERSELY AFFECTED BY THE REQUESTED
REGISTRATION TO THE MATERIAL DETRIMENT OF THE COMPANY, THEN THE COMPANY MAY AT
ITS OPTION DIRECT THAT SUCH REQUEST BE DELAYED FOR A PERIOD NOT IN EXCESS OF
FOUR MONTHS FROM THE EFFECTIVE DATE OF SUCH OFFERING OR THE DATE OF COMMENCEMENT
OF SUCH OTHER ACTIVITY, AS THE CASE MAY BE, SUCH RIGHT TO DELAY A REQUEST TO BE
EXERCISED BY THE COMPANY NOT MORE THAN ONCE IN ANY TWO YEAR PERIOD.  NOTHING IN
THIS SECTION 2.1(C) SHALL PRECLUDE A HOLDER OF REGISTRABLE SECURITIES FROM
ENJOYING REGISTRATION RIGHTS WHICH IT MIGHT OTHERWISE POSSESS UNDER SECTION 2.2
HEREOF.  IF  THE COMPANY HAS EXERCISED ITS RIGHT TO DELAY A REGISTRATION
PURSUANT TO THIS SECTION AND THE HOLDERS OF REGISTRABLE SECURITIES WITHDRAW THE
DEMAND FOR SUCH REGISTRATION, SUCH WITHDRAWN DEMAND SHALL NOT BE COUNTED AS A
DEMAND UNDER THIS SECTION 2.1.

 

Section 2.2                                      Piggyback Registration.  If the
Company at any time proposes to register any of its securities under the
Securities Act (including pursuant to a demand of any stockholder of the Company
exercising registration rights) for sale to the public (other than in connection
with the registration of equity securities issued or issuable pursuant to an
employee stock option, stock purchase, stock bonus or similar plan or pursuant
to a merger, exchange offer or transaction of the type specified in
Rule 145(a) under the Securities Act), each such time it will give written
notice to all holders of the outstanding Registrable Securities of its intention
to do so not less than twenty (20) days prior to the filing of a registration
statement in respect of such securities.  Upon the written request of any of
such holders of the Registrable Securities given within twenty (20) days after
receipt by such holder of such notice, the Company will, subject to the limits
contained in this Section 2.2, use its reasonable efforts to cause all such
Registrable Securities of said requesting holders to be registered under the
Securities Act and qualified for sale under any state blue sky law, all to the
extent requisite to permit such sale or other disposition by such holder of the
Registrable Securities so registered; provided, however, that if

 

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the Company is advised in writing in good faith by any managing underwriter of
the Company’s securities being offered in a public offering pursuant to such
registration statement that the amount to be sold by persons other than the
Company (collectively, “Selling Stockholders”) is greater than the amount which
can be offered without adversely affecting the offering, the Company may reduce
the amount offered for the accounts of Selling Stockholders (including such
holders of shares of Registrable Securities) to a number deemed satisfactory by
such managing underwriter provided that no reduction shall be made in the amount
of Registrable Securities offered for the accounts of the holders of Registrable
Securities unless such reduction is imposed pro rata with respect to all
securities whose holders have a contractual right to include such securities in
the registration statement as to which inclusion has been requested pursuant to
such right; and provided, further, that there is first excluded from such
registration statement all shares of Common Stock sought to be included therein
by (i) any officer or employee of the Company or any subsidiary of the Company,
(ii) any holder thereof not having any such contractual, incidental registration
rights, and (iii) any holder thereof having contractual, incidental registration
rights subordinated and junior to the rights of the holders of Registrable
Securities.  For purposes of this Section 2.2, holders of Registrable Securities
(as defined in the Info-Quest Agreement) shall be deemed to have contractual
incidental registration rights or “piggyback” registration rights that rank on a
par with holders of Registrable Securities and the holders of any securities
issued in connection with those certain warrants to purchase shares of Common
Stock of the Company issued to MHT Securities, L.P., Founders Equity
Securities, Inc. and Silicon Valley Bank shall be deemed to have contractual,
incidental registration rights subordinated and junior to the rights of the
holders of Registrable Securities.

 

Section 2.3                                      Registration Procedures.  If
and whenever the Company is required by the provisions of this Agreement to
effect the registration of any of its securities under the Securities Act, the
Company will, as expeditiously as possible:

 

(I)                                     PREPARE AND FILE WITH THE COMMISSION A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES AND USE ITS REASONABLE
BEST EFFORTS TO CAUSE SUCH REGISTRATION STATEMENT TO BECOME AND REMAIN
EFFECTIVE; PROVIDED, HOWEVER, THAT NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT, THE COMPANY SHALL NOT IN ANY EVENT BE REQUIRED TO USE ITS REASONABLE
BEST EFFORTS TO MAINTAIN THE EFFECTIVENESS OF ANY SUCH REGISTRATION STATEMENT
FOR A PERIOD IN EXCESS OF NINE (9) MONTHS;

 

(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 AND TO COMPLY WITH THE PROVISIONS OF THE SECURITIES ACT WITH
RESPECT TO THE SALE OR OTHER DISPOSITION OF ALL SECURITIES COVERED BY SUCH
REGISTRATION STATEMENT WHENEVER THE SELLER OR SELLERS OF SUCH SECURITIES SHALL
DESIRE TO SELL OR OTHERWISE DISPOSE OF THE SAME, BUT ONLY TO THE EXTENT PROVIDED
IN THIS AGREEMENT;

 

(III)                               FURNISH TO EACH SELLER AND THE UNDERWRITERS,
IF ANY, SUCH NUMBER OF COPIES OF SUCH REGISTRATION STATEMENT, AND ANY AMENDMENT
THERETO, ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN, THE PROSPECTUS,
INCLUDING A PRELIMINARY PROSPECTUS, IN CONFORMITY WITH THE REQUIREMENTS OF THE
SECURITIES ACT, AND SUCH OTHER DOCUMENTS AS SUCH SELLER OR ANY UNDERWRITER MAY
REASONABLY REQUEST IN ORDER TO FACILITATE THE PUBLIC SALE OR OTHER DISPOSITION
OF THE SECURITIES OWNED BY SUCH SELLER;

 

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(IV)                              USE REASONABLE BEST EFFORTS TO REGISTER OR
QUALIFY THE SECURITIES COVERED BY SUCH REGISTRATION STATEMENT UNDER SUCH OTHER
SECURITIES OR STATE BLUE SKY LAWS OF SUCH JURISDICTIONS AS EACH SELLER SHALL
REASONABLY REQUEST, AND DO ANY AND ALL OTHER ACTS AND THINGS WHICH MAY BE
NECESSARY UNDER SUCH SECURITIES OR BLUE SKY LAWS TO ENABLE SUCH SELLER TO
CONSUMMATE THE PUBLIC SALE OR OTHER DISPOSITION IN SUCH JURISDICTIONS OF THE
SECURITIES OWNED BY SUCH SELLER, EXCEPT THAT THE COMPANY SHALL NOT FOR ANY SUCH
PURPOSE BE REQUIRED TO QUALIFY TO DO BUSINESS AS A FOREIGN CORPORATION IN ANY
JURISDICTION WHEREIN IT IS NOT SO QUALIFIED;

 

(V)                                 WITHIN A REASONABLE TIME BEFORE EACH FILING
OF THE REGISTRATION STATEMENT OR PROSPECTUS OR AMENDMENTS OR SUPPLEMENTS
THERETO, FURNISH TO THE COUNSEL SELECTED BY THE HOLDERS OF A MAJORITY OF THE
REGISTRABLE SECURITIES INITIATING SUCH REGISTRATION COPIES OF SUCH DOCUMENTS
PROPOSED TO BE FILED WHICH SHALL BE SUBJECT TO THE REASONABLE APPROVAL OF EACH
SUCH COUNSEL;

 

(VI)                              USE ITS REASONABLE EFFORTS TO FURNISH TO EACH
PROSPECTIVE SELLER A SIGNED COUNTERPART, ADDRESSED TO THE PROSPECTIVE SELLER, OF
(A) AN OPINION OF COUNSEL FOR THE COMPANY, DATED THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT, AND (B) A “COMFORT” LETTER SIGNED BY THE INDEPENDENT
PUBLIC ACCOUNTANTS WHO HAVE CERTIFIED THE COMPANY’S FINANCIAL STATEMENTS
INCLUDED IN THE REGISTRATION STATEMENT, COVERING SUBSTANTIALLY THE SAME MATTERS
WITH RESPECT TO THE REGISTRATION STATEMENT (AND THE PROSPECTUS INCLUDED THEREIN)
AND (IN THE CASE OF THE ACCOUNTANTS’ LETTER) WITH RESPECT TO EVENTS SUBSEQUENT
TO THE DATE OF THE FINANCIAL STATEMENTS, AS ARE CUSTOMARILY COVERED (AT THE TIME
OF SUCH REGISTRATION) IN OPINIONS OF THE COMPANY’S COUNSEL AND IN ACCOUNTANTS’
LETTERS DELIVERED TO THE UNDERWRITERS IN UNDERWRITTEN PUBLIC OFFERINGS OF
SECURITIES;

 

(VII)                           IMMEDIATELY NOTIFY EACH SELLING HOLDER OF
REGISTRABLE SECURITIES, SUCH SELLING HOLDER’S COUNSEL AND ANY UNDERWRITER OF ANY
EVENT WHICH MAKES ANY STATEMENT MADE IN THE REGISTRATION STATEMENT OR RELATED
PROSPECTUS UNTRUE OR WHICH REQUIRES THE MAKING OF ANY CHANGES IN SUCH
REGISTRATION STATEMENT OR PROSPECTUS SO THAT THEY WILL NOT CONTAIN ANY 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 THE LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE NOT MISLEADING; AND, AS PROMPTLY AS
PRACTICABLE THEREAFTER, PREPARE AND FILE WITH THE COMMISSION AND FURNISH A
SUPPLEMENT OR AMENDMENT TO SUCH PROSPECTUS SO THAT, AS THEREAFTER DELIVERABLE TO
THE PURCHASERS OF SUCH REGISTRABLE SECURITIES, SUCH PROSPECTUS WILL NOT CONTAIN
ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT
NECESSARY TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES
UNDER WHICH THEY WERE MADE, NOT MISLEADING;

 

(VIII)                        PREVENT THE ISSUANCE OF ANY ORDER SUSPENDING THE
EFFECTIVENESS OF A REGISTRATION STATEMENT, AND IF ONE IS ISSUED OBTAIN THE
WITHDRAWAL OF ANY ORDER SUSPENDING THE EFFECTIVENESS OF A REGISTRATION STATEMENT
AT THE EARLIEST POSSIBLE MOMENT;

 

(IX)                                IF REQUESTED BY THE MANAGING UNDERWRITER OR
UNDERWRITERS (IF ANY), ANY SELLING HOLDER, OR SUCH SELLING HOLDER’S COUNSEL,
PROMPTLY INCORPORATE IN A PROSPECTUS SUPPLEMENT OR POST-EFFECTIVE AMENDMENT SUCH
INFORMATION AS SUCH PERSON REASONABLY REQUESTS TO BE INCLUDED THEREIN,
INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO THE SECURITIES BEING SOLD BY SUCH
SELLING HOLDER TO SUCH UNDERWRITER OR UNDERWRITERS, THE PURCHASE PRICE BEING
PAID THEREFOR BY SUCH UNDERWRITER OR UNDERWRITERS AND WITH RESPECT TO ANY OTHER
TERMS OF AN UNDERWRITTEN OFFERING

 

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OF THE SECURITIES TO BE SOLD IN SUCH OFFERING, AND PROMPTLY MAKE ALL REQUIRED
FILINGS OF SUCH PROSPECTUS SUPPLEMENT OR POST-EFFECTIVE AMENDMENT;

 

(X)                                   MAKE AVAILABLE TO EACH SELLING HOLDER, ANY
UNDERWRITER PARTICIPATING IN ANY DISPOSITION PURSUANT TO A REGISTRATION
STATEMENT, AND ANY ATTORNEY, ACCOUNTANT OR OTHER AGENT OR REPRESENTATIVE
RETAINED BY ANY SUCH SELLING HOLDER OR UNDERWRITER ALL FINANCIAL AND OTHER
RECORDS, PERTINENT CORPORATE DOCUMENTS AND PROPERTIES OF THE COMPANY AS SHALL BE
REASONABLY NECESSARY TO ENABLE THEM TO EXERCISE THEIR DUE DILIGENCE
RESPONSIBILITY, AND CAUSE THE COMPANY’S OFFICERS, DIRECTORS AND EMPLOYEES TO
SUPPLY ALL INFORMATION REQUESTED BY ANY SUCH PERSON IN CONNECTION WITH SUCH
REGISTRATION STATEMENT OR DUE DILIGENCE RESPONSIBILITY;

 

(XI)                                PROVIDE A TRANSFER AGENT AND REGISTRAR FOR
ALL SUCH REGISTRABLE SECURITIES NOT LATER THAN THE EFFECTIVE DATE OF SUCH
REGISTRATION STATEMENT;

 

(XII)                             ENTER INTO ANY CUSTOMARY ARRANGEMENTS
(INCLUDING UNDERWRITING AGREEMENTS IN CUSTOMARY FORM) AND TAKE ALL SUCH OTHER
ACTIONS AS THE SELLING HOLDER OR UNDERWRITERS, IF ANY, REQUEST IN ORDER TO
EXPEDITE OR FACILITATE THE DISPOSITION OF SUCH REGISTRABLE SECURITIES (INCLUDING
EFFECTING A STOCK SPLIT OR COMBINATION OF SHARES);

 

(XIII)                          OTHERWISE USE ITS BEST EFFORTS TO COMPLY WITH
ALL APPLICABLE RULES AND REGULATIONS OF THE COMMISSION RELATING TO SUCH
REGISTRATION AND THE DISTRIBUTION OF THE SECURITIES BEING OFFERED (INCLUDING,
WITHOUT LIMITATION, REGULATION M, WITH RESPECT TO WHICH THE COMPANY SHALL ALSO
USE ITS BEST EFFORTS TIMELY TO APPRISE EACH HOLDER OF ANY BIDS AND PURCHASES BY
THE COMPANY, AND OF ANY KNOWN BIDS AND PURCHASES BY EACH “AFFILIATED PURCHASER”
(AS DEFINED IN REGULATION M) OF THE COMPANY, THAT WOULD IN THE OPINION OF THE
COMPANY BE PROHIBITED UNDER REGULATION M IN CONNECTION WITH A “DISTRIBUTION” (AS
SO DEFINED) BY SUCH HOLDER) AND MAKE GENERALLY AVAILABLE TO ITS SECURITY HOLDERS
EARNING STATEMENTS SATISFYING THE PROVISIONS OF SECTION 11(A) OF THE SECURITIES
ACT, NO LATER THAN 60 DAYS AFTER THE END OF ANY 12-MONTH PERIOD (OR 90 DAYS, IF
SUCH PERIOD IS A FISCAL YEAR) COMMENCING AT THE END OF ANY FISCAL QUARTER IN
WHICH THE REGISTRABLE SECURITIES ARE SOLD TO UNDERWRITERS IN A FIRM COMMITMENT
OR BEST EFFORTS UNDERWRITTEN OFFERING, OR, IF NOT SOLD TO UNDERWRITERS IN SUCH
AN OFFERING, BEGINNING WITH THE FIRST MONTH OF THE COMPANY’S FIRST FISCAL
QUARTER COMMENCING AFTER THE EFFECTIVE DATE OF SUCH REGISTRATION STATEMENT,
WHICH EARNING STATEMENTS SHALL COVER SUCH 12-MONTH PERIODS;

 

(XIV)                         OTHERWISE COOPERATE WITH THE UNDERWRITER(S), THE
COMMISSION AND OTHER REGULATORY AGENCIES AND TAKE ALL ACTIONS AND EXECUTE AND
DELIVER OR CAUSE TO BE EXECUTED AND DELIVERED ALL DOCUMENTS NECESSARY TO EFFECT
THE REGISTRATION OF ANY SECURITIES UNDER THIS AGREEMENT;

 

(XV)                            DURING THE PERIOD WHEN THE PROSPECTUS IS
REQUIRED TO BE DELIVERED UNDER THE SECURITIES ACT, PROMPTLY FILE ALL DOCUMENTS
REQUIRED TO BE FILED WITH THE COMMISSION PURSUANT TO SECTIONS 13(A), 13(C), 14,
OR 15(D) OF THE EXCHANGE ACT; AND

 

(XVI)                         USE ITS REASONABLE BEST EFFORTS TO CAUSE THE
REGISTRABLE SECURITIES COVERED BY SUCH REGISTRATION STATEMENT TO BE LISTED ON
THE SECURITIES EXCHANGE OR QUOTED ON THE QUOTATION SYSTEM ON WHICH THE COMMON
STOCK OF THE COMPANY IS THEN LISTED OR QUOTED.

 

8

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Section 2.4                                      Expenses.  All expenses
incurred in effecting the registrations provided for in Section 2.1, Section 2.2
and Section 2.8, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company and
fees of one counsel for all of the selling holders of Registrable Securities
(chosen by the holders of a majority of the Registrable Securities initiating
each such registration), underwriting expenses (other than fees, commissions or
discounts attributable to the sale of the Registrable Securities), expenses of
any audits incident to or required by any such registration and expenses of
complying with the securities or blue sky laws of any jurisdictions pursuant to
Section 2.3(iv) hereof (all of such expenses referred to as “Registration
Expenses”), shall be paid by the Company; provided, that if an offering pursuant
to any registration commenced pursuant to Section 2.1 or Section 2.2 is
abandoned by the holders of Registrable Securities or Info-Quest, respectively
(other than by reason of adverse information pertaining to the Company’s
business affairs or financial position, as opposed to stock market conditions,
unknown to the holders of Registrable Securities or Info-Quest prior to the
commencement of such registration proceedings, in which event the Company shall
bear all Registration Expenses), the holders of Registrable Securities or
Info-Quest, respectively, shall bear any costs incurred by the Company in
conjunction with such registration.  In either event, the number of
registrations to which the holders of Registrable Securities is entitled
pursuant to Section 2.1 or Section 2.2, respectively, shall not be reduced
thereby.

 

Section 2.5                                      Indemnification.  (a)  The
Company shall indemnify and hold harmless each seller of Registrable Securities
(including partners and shareholders of such persons), each underwriter (as
defined in the Securities Act), and each other Person who participates in the
offering of such securities and each other Person, if any, who controls (within
the meaning of the Securities Act) such seller, underwriter or participating
Person (individually and collectively the “Indemnified Person”) against any
losses, claims, damages or liabilities (collectively the “liability”), joint or
several, to which such Indemnified Person may become subject under the
Securities Act or any other statute or at common law, insofar as such liability
(or action in respect thereof) arises out of or is based upon (i) any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereto,
or (ii) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading.  Except as otherwise provided in Section 2.5(d), the Company shall
reimburse each such Indemnified Person in connection with investigating or
defending any such liability; provided, however, that the Company shall not be
liable to any Indemnified Person in any such case to the extent that any such
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary or final prospectus, or amendment or supplement thereto in reliance
upon and in conformity with information furnished in writing to the Company by
such Person specifically for use therein, or upon such statement or omission
therein based on the authority of an expert within the meaning of that term as
defined in the Securities Act (but only if the Company had no reasonable ground
to believe, and did not believe, that the statements made on the authority of an
expert were untrue or that there was an omission to state a material fact); and
provided further, that the Company shall not be required to indemnify any Person
against any liability arising from any untrue or misleading statement or
omission contained in any preliminary prospectus if such deficiency is corrected
in the final

 

9

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prospectus or for any liability which arises out of the failure of any Person to
deliver a prospectus as required by the Securities Act regardless of any
investigation made by or on behalf of such Indemnified Person and shall survive
transfer of such securities by such seller.

 

(B)                                 EACH HOLDER OF ANY REGISTRABLE SECURITIES
SHALL, BY ACCEPTANCE THEREOF, INDEMNIFY AND HOLD HARMLESS EACH OTHER HOLDER OF
ANY REGISTRABLE SECURITIES, THE COMPANY, ITS DIRECTORS AND OFFICERS, EACH
UNDERWRITER AND EACH OTHER PERSON, IF ANY, WHO CONTROLS THE COMPANY OR SUCH
UNDERWRITER (INDIVIDUALLY AND COLLECTIVELY ALSO THE “INDEMNIFIED PERSON”),
AGAINST ANY LIABILITY, JOINT OR SEVERAL, TO WHICH ANY SUCH INDEMNIFIED PERSON
MAY BECOME SUBJECT UNDER THE SECURITIES ACT OR ANY OTHER STATUTE OR AT COMMON
LAW, INSOFAR AS SUCH LIABILITY (OR ACTIONS IN RESPECT THEREOF) ARISES OUT OF OR
IS BASED UPON (I) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF ANY
MATERIAL FACT CONTAINED, ON THE EFFECTIVE DATE THEREOF, IN ANY REGISTRATION
STATEMENT UNDER WHICH SECURITIES WERE REGISTERED UNDER THE SECURITIES ACT AT THE
REQUEST OF SUCH HOLDER, ANY PRELIMINARY PROSPECTUS OR FINAL PROSPECTUS CONTAINED
THEREIN, OR ANY AMENDMENT OR SUPPLEMENT THERETO, OR (II) ANY OMISSION OR ALLEGED
OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR
NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING, IN THE CASE OF (I) AND
(II) TO THE EXTENT, BUT ONLY TO THE EXTENT, THAT SUCH UNTRUE STATEMENT OR
ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION WAS MADE IN SUCH
REGISTRATION STATEMENT, PRELIMINARY OR FINAL PROSPECTUS, AMENDMENT OR SUPPLEMENT
THERETO IN RELIANCE UPON AND IN CONFORMITY WITH INFORMATION FURNISHED IN WRITING
TO THE COMPANY BY SUCH HOLDER SPECIFICALLY FOR USE THEREIN, AND THEN ONLY TO THE
EXTENT THAT SUCH UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR
ALLEGED OMISSION BY THE HOLDER WAS NOT BASED ON THE AUTHORITY OF AN EXPERT AS TO
WHICH THE HOLDER HAD NO REASONABLE GROUND TO BELIEVE, AND DID NOT BELIEVE, THAT
THE STATEMENT MADE ON THE AUTHORITY OF SUCH EXPERT WAS UNTRUE OR THAT THERE WAS
AN OMISSION TO STATE A MATERIAL FACT.  SUCH HOLDER SHALL REIMBURSE ANY
INDEMNIFIED PERSON FOR ANY LEGAL FEES INCURRED IN INVESTIGATING OR DEFENDING ANY
SUCH LIABILITY; PROVIDED, HOWEVER, THAT SUCH HOLDER’S OBLIGATIONS HEREUNDER
SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE PROCEEDS TO SUCH HOLDER OF THE
REGISTRABLE SECURITIES SOLD IN ANY SUCH REGISTRATION; AND PROVIDED FURTHER,
HOWEVER, THAT NO HOLDER OF REGISTRABLE SECURITIES SHALL BE REQUIRED TO INDEMNIFY
ANY PERSON AGAINST ANY LIABILITY ARISING FROM ANY UNTRUE OR MISLEADING STATEMENT
OR OMISSION CONTAINED IN ANY PRELIMINARY PROSPECTUS IF SUCH DEFICIENCY IS
CORRECTED IN THE FINAL PROSPECTUS OR FOR ANY LIABILITY WHICH ARISES OUT OF THE
FAILURE OF ANY PERSON TO DELIVER A PROSPECTUS AS REQUIRED BY THE SECURITIES ACT.

 

(C)                                  INDEMNIFICATION SIMILAR TO THAT SPECIFIED
IN SECTION 2.5(A) AND (B) SHALL BE GIVEN BY THE COMPANY AND EACH HOLDER OF ANY
REGISTRABLE SECURITIES (WITH SUCH MODIFICATIONS AS MAY BE APPROPRIATE) WITH
RESPECT TO ANY REQUIRED REGISTRATION OR OTHER QUALIFICATION OF THE REGISTRABLE
SECURITIES UNDER ANY FEDERAL OR STATE LAW OR REGULATION OF GOVERNMENTAL
AUTHORITY OTHER THAN THE SECURITIES ACT.

 

(D)                                 IN THE EVENT THE COMPANY, ANY HOLDER OR
OTHER PERSON RECEIVES A COMPLAINT, CLAIM OR OTHER NOTICE OF ANY LIABILITY OR
ACTION, GIVING RISE TO A CLAIM FOR INDEMNIFICATION UNDER SECTION 2.5(A),
SECTION 2.5(B) OR SECTION 2.5(C), THE PERSON CLAIMING INDEMNIFICATION UNDER SUCH
PARAGRAPHS SHALL PROMPTLY NOTIFY THE PERSON AGAINST WHOM INDEMNIFICATION IS
SOUGHT OF SUCH COMPLAINT, NOTICE, CLAIM OR ACTION, AND SUCH INDEMNIFYING PERSON
SHALL HAVE THE RIGHT TO INVESTIGATE AND DEFEND ANY SUCH LOSS, CLAIM, DAMAGE,
LIABILITY OR ACTION.  THE PERSON CLAIMING INDEMNIFICATION SHALL HAVE THE RIGHT
TO EMPLOY SEPARATE COUNSEL IN ANY SUCH ACTION AND TO PARTICIPATE IN THE DEFENSE
THEREOF BUT THE FEES AND EXPENSES OF SUCH

 

10

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COUNSEL SHALL NOT BE AT THE EXPENSE OF THE PERSON AGAINST WHOM INDEMNIFICATION
IS SOUGHT (UNLESS THE INDEMNIFYING PARTY FAILS TO PROMPTLY DEFEND, IN WHICH CASE
THE FEES AND EXPENSES OF SUCH SEPARATE COUNSEL SHALL BE BORNE BY THE PERSON
AGAINST WHOM INDEMNIFICATION IS SOUGHT).  IN NO EVENT SHALL A PERSON AGAINST
WHOM INDEMNIFICATION IS SOUGHT BE OBLIGATED TO INDEMNIFY ANY PERSON FOR ANY
SETTLEMENT OF ANY CLAIM OR ACTION EFFECTED WITHOUT THE INDEMNIFYING PERSON’S
PRIOR WRITTEN CONSENT.

 

(E)                                  CONTRIBUTION.

 

(I)                                     IF THE INDEMNIFICATION PROVIDED FOR IN
THIS SECTION 2.5 FROM THE INDEMNIFYING PARTY IS UNAVAILABLE TO AN INDEMNIFIED
PARTY HEREUNDER IN RESPECT OF ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
EXPENSES REFERRED TO THEREIN, THEN THE INDEMNIFYING PARTY, IN LIEU OF
INDEMNIFYING SUCH INDEMNIFIED PARTY, SHALL CONTRIBUTE TO THE AMOUNT PAID OR
PAYABLE BY SUCH INDEMNIFIED PARTY AS A RESULT OF SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR EXPENSES IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT THE
RELATIVE FAULT OF THE INDEMNIFYING PARTY AND INDEMNIFIED PARTIES IN CONNECTION
WITH THE ACTIONS THAT RESULTED IN SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
EXPENSES, AS WELL AS ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS; PROVIDED,
HOWEVER, THAT IN NO EVENT SHALL THE LIABILITY OF ANY HOLDER OR REGISTRABLE
SECURITIES FOR CONTRIBUTION UNDER THIS SECTION 2.5(E) EXCEED THE PROCEEDS
RECEIVED BY SUCH HOLDER FROM THE SALE OF REGISTRABLE SECURITIES UNDER THE
APPLICABLE REGISTRATION STATEMENT.  THE RELATIVE FAULT OF SUCH INDEMNIFYING
PARTY AND INDEMNIFIED PARTIES 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 PARTIES, 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 LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND EXPENSES REFERRED TO ABOVE SHALL BE DEEMED TO INCLUDE, SUBJECT
TO THE LIMITATIONS SET FORTH ABOVE, ANY LEGAL OR OTHER FEES OR EXPENSES
REASONABLY INCURRED BY SUCH PARTY IN CONNECTION WITH ANY INVESTIGATION OR
PROCEEDING.

 

(II)                                  THE PARTIES HERETO AGREE THAT IT WOULD NOT
BE JUST AND EQUITABLE IF CONTRIBUTION PURSUANT TO THIS SECTION 2.5(E) WERE
DETERMINED BY PRO RATA ALLOCATION OR BY ANY OTHER METHOD OF ALLOCATION THAT DOES
NOT TAKE ACCOUNT OF THE EQUITABLE CONSIDERATIONS REFERRED TO IN 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.

 

(III)                               IF INDEMNIFICATION IS AVAILABLE UNDER THIS
SECTION 2.5, THE INDEMNIFYING PARTIES SHALL INDEMNIFY EACH INDEMNIFIED PARTY TO
THE FULL EXTENT PROVIDED IN SECTION 2.5(A) AND SECTION 2.5(B) HEREOF WITHOUT
REGARD TO THE RELATIVE FAULT OF SAID INDEMNIFYING PARTY OR INDEMNIFIED PARTY OR
ANY OTHER EQUITABLE CONSIDERATION PROVIDED FOR IN THIS SECTION 2.5(E).

 

Section 2.6                                      Compliance with Rule 144.  In
the event that the Company (i) registers a class of securities under Section 12
of the Exchange Act or (ii) shall commence to file reports under Section 13 or
15(d) of the Exchange Act, thereafter, at the request of any holder of the
Registrable Securities who proposes to sell the Registrable Securities in
compliance with Rule 144

 

11

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of the Commission, the Company shall forthwith file with the Commission such
information as is required under the Exchange Act for so long as there are
holders of Registrable Securities and, in such event, the Company shall take all
actions as may be required as a condition to the availability of Rule 144 under
the Securities Act (or any comparable successor rules).

 

Section 2.7                                      Consent to be Bound.  Each
subsequent holder of Registrable Securities must consent in writing to be bound
by the terms and conditions of this Agreement in order to acquire the rights
granted pursuant to this Agreement.

 

Section 2.8                                      Form S-3.  After the first
public offering of its securities registered under the Securities Act, the
Company shall use its best efforts to qualify and remain qualified to register
securities on Form S-3 (or any successor form) under the Securities Act.  The
holders of the Registrable Securities shall have the right to request any number
of registrations on Form S-3 (such requests shall be in writing and shall state
the number of shares of Registrable Securities to be disposed of and the
intended method of disposition of such shares by such holder or holders).  The
Company shall not be required to effect a registration pursuant to this
Section 2.8 if, in the good faith judgment of the Company, such registration
will hinder or interfere with a concurrent or proposed security issuance of, or
acquisition by, the Company or if the holder or holders requesting registration
propose to dispose of shares of the Registrable Securities having an aggregate
disposition price (before deduction of underwriting discounts and expenses of
sale) of less than $500,000.  This Section shall not be interpreted to restrict
the Company from acquiring its own shares or to require the Company to sell its
own shares.  The Company shall give notice to all holders of the Registrable
Securities of the receipt of a request for registration pursuant to this
Section 2.8 and shall provide a reasonable opportunity for other holders of
Registrable Securities to participate in the registration.  The Company shall
not permit to be registered in any such registration under this Section 2.8 any
Equity Securities of the Company which are not Registrable Securities unless the
holders of Registrable Securities are able to register and sell all Registrable
Securities which they desire to register and sell in such registration.  Subject
to the foregoing, the Company will use its best efforts, in each case, to effect
promptly the registration of all shares of the Registrable Securities on
Form S-3 to the extent requested by the holder or holders thereof for purposes
of disposition.

 

Section 2.9                                      Assignability of Registration
Rights.  Subject to Section 2.7 hereof, the registration rights set forth in
this Agreement are assignable to each assignee as to each share of Registrable
Securities conveyed in accordance herewith who agrees in writing to be bound by
the terms and conditions of this Agreement.  The term “seller” as used in this
Agreement refers to a holder of the Registrable Securities selling such shares.

 

Section 2.10                                Rights Which May Be Granted to
Subsequent Investors.  Without the written consent of the Majority ABRY Holders
and Majority CRP Holders the Company shall not grant subsequent registration
rights to third parties superior or equal to the registration rights granted
pursuant to this Agreement so long as any of the registration rights under this
Agreement remain in effect.

 

Section 2.11                                Damages.  The Company recognizes and
agrees that each holder of Registrable Securities will not have an adequate
remedy if the Company fails to comply with the terms and provisions of this
Agreement and that damages will not be readily ascertainable, and

 

12

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the Company expressly agrees that, in the event of such failure, it shall not
oppose an application by any holder of Registrable Securities or any other
Person entitled to the benefits of this Agreement requiring specific performance
of any and all provisions hereof or enjoining the Company from continuing to
commit any such breach of this Agreement.

 

Section 2.12                                Information.  It shall be a
condition precedent to the obligations of the Company to register any
Registrable Securities of any selling holder pursuant to this Section 2 that
such holder shall furnish to the Company, in writing, such information regarding
itself, the Registrable Securities held by it, and the intended method of
disposition of such securities as shall be legally required to effect the
registration of such holder’s Registrable Securities.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Section 3.1                                      Representations and Warranties
of the Company.  The Company represents and warrants to the Investors as
follows:

 

(A)                                  THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT BY THE COMPANY HAVE BEEN DULY AUTHORIZED BY ALL REQUISITE
CORPORATE ACTION AND WILL NOT VIOLATE ANY PROVISION OF LAW, ANY ORDER OF ANY
COURT OR OTHER AGENCY OF GOVERNMENT, THE CERTIFICATE OF INCORPORATION OR BY-LAWS
OF THE COMPANY OR ANY PROVISION OF ANY INDENTURE, AGREEMENT OR OTHER INSTRUMENT
TO WHICH IT OR ANY OR ITS PROPERTIES OR ASSETS IS BOUND, CONFLICT WITH, RESULT
IN A BREACH OF OR CONSTITUTE (WITH DUE NOTICE OR LAPSE OF TIME OR BOTH) A
DEFAULT UNDER ANY SUCH INDENTURE, AGREEMENT OR OTHER INSTRUMENT OR RESULT IN THE
CREATION OR IMPOSITION OF ANY LIEN, CHARGE OR ENCUMBRANCE OF ANY NATURE
WHATSOEVER UPON ANY OF THE PROPERTIES OR ASSETS OF THE COMPANY.

 

(B)                                 THIS AGREEMENT HAS BEEN DULY AND VALIDLY
EXECUTED AND DELIVERED BY THE COMPANY AND CONSTITUTES THE LEGAL, VALID AND
BINDING OBLIGATION OF THE COMPANY, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.

 

ARTICLE IV
MISCELLANEOUS

 

Section 4.1                                      Miscellaneous.

 

(A)                                  ALL NOTICES, REQUESTS, DEMANDS AND OTHER
COMMUNICATIONS PROVIDED FOR HEREUNDER SHALL BE IN WRITING AND MAILED (BY FIRST
CLASS REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID), SENT BY EXPRESS OVERNIGHT
COURIER SERVICE OR ELECTRONIC FACSIMILE TRANSMISSION (WITH A COPY BY MAIL), OR
DELIVERED TO THE APPLICABLE PARTY AT THE ADDRESSES INDICATED BELOW:

 

If to the Company:

 

Softbrands, Inc.

Two Meridian Crossing

Suite 800

Minneapolis, Minnesota  55423

Attention:  David Latzke

Facsimile No.:  (612) 851-6280

 

13

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With a copy to:

 

Dorsey & Whitney LLP

50 South Street, Suite 1500

Minneapolis, Minnesota  55402

Attention:  Thomas Martin, Esq.

Facsimile No.:  (612) 340-7800

 

If to CRP:

 

Capital Resource Partners

85 Merrimac Street

Suite 200

Boston, Massachusetts  02114

Attention:  Robert Ammerman

Telecopy No.:  (617) 723-9819

 

With a copy to:

 

Choate Hall & Stewart LLP

Two International Place

Boston, Massachusetts 02110

Attn: Andrew E. Taylor, Jr., Esq.

Facsimile No.: (617) 248-4000

 

If to ABRY:

 

c/o ABRY Partners, LLC

111 Huntington Avenue

30th Floor

Boston, Massachusetts 02199

Attn:  John Hunt

Facsimile No.:  (617) 859-9879

 

With a copy to:

 

Kirkland & Ellis LLP

Citigroup Center

153 East 53rd Street

New York, NY  10022-4675

Attention:  Joshua N. Korff

Facsimile No.:  (212) 446-6460

 

If to any other holder of Registrable Securities:

 

at such holder’s address for notice as set forth
in the books and records of the Company,

 

14

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or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the other parties complying as to delivery
with the terms of this subsection (a).  All such notices, requests, demands and
other communications shall, when mailed or otherwise sent be effective (i) two
days after being deposited in the mails or (ii) one day after being deposited
with the express overnight courier service or sent by electronic facsimile
transmission (with receipt confirmed), respectively, addressed as aforesaid.

 

(B)                                 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE.

 

(C)                                  THIS AGREEMENT MAY BE EXECUTED IN TWO OR
MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

(D)                                 IF ANY PROVISION OF THIS AGREEMENT SHALL BE
HELD TO BE ILLEGAL, INVALID OR UNENFORCEABLE, SUCH ILLEGALITY, INVALIDITY OR
UNENFORCEABILITY SHALL ATTACH ONLY TO SUCH PROVISION AND SHALL NOT IN ANY MANNER
AFFECT OR RENDER ILLEGAL, INVALID OR UNENFORCEABLE ANY OTHER PROVISION OF THIS
AGREEMENT, AND THIS AGREEMENT SHALL BE CARRIED OUT AS IF ANY SUCH ILLEGAL,
INVALID OR UNENFORCEABLE PROVISION WERE NOT CONTAINED HEREIN.

 

Section 4.2                                      Amendments.  The provisions of
this Agreement may be amended, and the Company may take any action herein
prohibited or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the Majority CRP Holders
and the Majority ABRY Holders.  For the purposes of this Agreement and all
agreements executed pursuant hereto, no course of dealing between or among any
of the parties hereto and no delay on the part of any party hereto in exercising
any rights hereunder shall operate as a waiver of the rights hereof  and
thereof.

 

Section 4.3                                      Termination.  This Agreement
shall terminate at such time as the holders of Registrable Securities are able
to sell, within any three month period, all of the Registrable Securities
pursuant to Rule 144 under the Securities Act.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Investors’ Rights
Agreement to be duly executed as of the date first set forth above.

 

 

SOFTBRANDS, INC.

 

 

 

 

 

By:

/s/ David G. Latzke

 

 

 

Name:  David G. Latzke

 

 

Title:

Senior Vice President, Chief Financial
Officer and Secretary

 

 

 

 

 

ABRY MEZZANINE PARTNERS, L.P.

 

 

 

 

 

By:

ABRY MEZZANINE INVESTORS, L.P.,

 

 

Its General Partner

 

 

 

 

 

By:

ABRY MEZZANINE HOLDINGS LLC,

 

 

Its General Partner

 

 

 

 

 

By:

/s/ John Hunt

 

 

 

Name: John Hunt

 

 

Title: Partner

 

 

 

 

 

CAPITAL RESOURCE PARTNERS IV, L.P.,

 

 

 

 

 

By:

CRP PARTNERS IV, L.L.C.,

 

 

its General Partner

 

 

 

 

 

By:

/s/ Robert Ammerman

 

 

 

Name: Robert Ammerman

 

 

Title: Managing Member

 

 

 

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