Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of this 19th day of May, 2003 by and among Onyx Software Corporation, a
Washington corporation (the "Company"), the investors identified on the
signature pages affixed hereto and the Permitted Transferees (as such term is
defined in Section 9.1 of the Purchase Agreement) of such investors who have
executed an Instrument of Adherence in the form attached hereto as Appendix I
(each an "Investor" and collectively the "Investors").
The parties hereby agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" means, with respect to any person, any other person which
directly or indirectly controls, is controlled by, or is under common control
with, such person.
"Antidilution Warrants" means warrants to purchase shares of Common Stock
issued pursuant to Section 7.6 of the Purchase Agreement.
"Business Day" means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of business.
"Common Stock" shall mean the Company's common stock, par value $0.01 per
share, and any securities into which such shares may hereinafter be
reclassified.
"Person" means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of business entity.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Purchase Agreement" shall mean the Purchase Agreement, dated May 19, 2003
among the Company and the investors party thereto.
"Register," "registered" and "registration" refer to a registration made
by preparing and filing a Registration Statement or similar document in
compliance with the 1933 Act (as defined below), and the declaration or ordering
of effectiveness of such Registration Statement or document.
"Registrable Securities" shall mean the shares of Common Stock issuable
(i) pursuant to the Purchase Agreement, (ii) upon the exercise of the Warrants,
if any, (iii) upon the exercise of the Antidilution Warrants, if any, and (ii)
issuable with respect to or in exchange for Registrable Securities; provided,
that, a security shall cease to be a Registrable Security upon (A) sale pursuant
to a Registration Statement or Rule 144 under the 1933 Act, or (B) such security
becoming eligible for sale by the Investors pursuant to Rule 144(k).
"Registration Statement" shall mean any registration statement of the
Company filed under the 1933 Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement, amendments
and supplements to such Registration Statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such
Registration Statement.
"Required Investors" means the Investors holding a majority of the
Registrable Securities.
"SEC" means the U.S. Securities and Exchange Commission.
"SSF" means Special Situations Fund III, L.P.
"SSF Investor means any of the following: Special Situations Fund III,
L.P., Special Situations Cayman Fund, L.P., Special Situations Private Equity
Fund, L.P., Special Situations Technology Fund, L.P. and their respective
Permitted Transferees.
"1933 Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"Warrants" means warrants to purchase shares of Common Stock issued
pursuant to the Purchase Agreement, the form of which is attached to the
Purchase Agreement as Exhibit A.
2. Registration.
(a) Registration Statements.
(i) Promptly following the closing of the purchase and sale of
the securities under the Purchase Agreement (the "Closing Date") but no later
than thirty (30) days after the Closing Date (the "Filing Deadline"), the
Company shall prepare and file with the SEC one Registration Statement on Form
S-3 (or, if Form S-3 is not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of the Registrable Securities), covering the resale of the Registrable
Securities in an amount at least equal to the number of shares of Common Stock
necessary to permit the exercise in full of the Warrants issued on the Closing
Date. Such Registration Statement also shall cover, to the extent allowable
under the 1933 Act and the rules promulgated thereunder (including Rule 416),
such indeterminate number of additional shares of Common Stock resulting from
stock splits, stock dividends or similar transactions with respect to the
Registrable Securities. The Company shall use its reasonable best efforts to
obtain, from each Person who now has piggyback registration rights, a waiver of
those rights with respect to the Registration Statement; provided, however,
that, for any Person who has not waived his, her or its piggyback registration
rights with respect to the Registration Statement, all of the shares for which
such Person has piggyback registration rights may be included in the
Registration Statement. The Registration Statement (and amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall be
provided in accordance with Section 3(c) to the Investors and their counsel
prior to its filing or other submission. If a Registration Statement covering
the Registrable Securities is not filed with the SEC on or prior to the Filing
Deadline, the Company will make pro rata payments to each SSF Investor, as
liquidated damages and not as a penalty, in an amount equal to 1.5% of
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the aggregate amount invested by such SSF Investor for each 30-day period or pro
rata for any portion thereof following the date by which such Registration
Statement should have been filed for which no Registration Statement is filed
with respect to the Registrable Securities. Such payments shall be in partial
compensation to the SSF Investors, and shall not constitute the SSF Investors'
exclusive remedy for such events. Such payments shall be made to each SSF
Investor in cash.
(ii) Additional Registrable Securities. Upon the occurrence of
any event specified in the Purchase Agreement that triggers the requirement to
issue Antidilution Warrants (a "Trigger Date"), the Company shall prepare and
file with the SEC one or more Registration Statements on Form S-3 (or, if Form
S-3 is not then available to the Company, on such form of registration statement
as is then available), or amend the Registration Statement filed pursuant to
clause (i) above, if such Registration Statement has not previously been
declared effective, to effect a registration for resale of those shares of
Common Stock issuable upon exercise of the Antidilution Warrants held by the SSF
Investors (such shares, the "Additional Shares"), but only to the extent the
Additional Shares are not at the time covered by an effective Registration
Statement. Such Registration Statement shall be filed as soon as commercially
reasonable after the Trigger Date, but no later than thirty (30) days after such
Trigger Date, and also shall cover, to the extent allowable under the 1933 Act
and the rules promulgated thereunder (including Rule 416), such indeterminate
number of additional shares of Common Stock resulting from stock splits, stock
dividends or similar transactions with respect to the Additional Shares. The
Company shall use its reasonable best efforts to obtain from each person who now
has piggyback registration rights a waiver of those rights with respect to such
Registration Statement; provided, however, that, for any Person who has not
waived his, her or its piggyback registration rights with respect to the
Registration Statement, all of the shares for which such Person has piggyback
registration rights may be included in any Registration Statement filed to cover
the resale of the Additional Shares. The Registration Statement (and each
amendment or supplement thereto and each request for acceleration of
effectiveness thereof) shall be provided in accordance with Section 3(c) to the
SSF Investors and their counsel prior to its filing or other submission. If a
Registration Statement covering the Additional Shares is required to be filed
under this Section 2(a)(ii) and is not filed with the SEC within thirty (30)
days after the relevant Trigger Date, the Company shall pay to each SSF
Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5%
of the aggregate exercise price of the affected Antidilution Warrants for each
30-day period or pro rata for any portion thereof following the date by which
such Registration Statement should have been filed for which no Registration
Statement is filed with respect to the Additional Shares. Such payments shall be
in partial compensation to the SSF Investors, and shall not constitute the SSF
Investors' exclusive remedy for such events. Such payments shall be made to each
SSF Investor in cash.
(b) Expenses. The Company will pay all expenses associated
with each registration, including filing and printing fees, counsel and
accounting fees and expenses, costs associated with clearing the Registrable
Securities for sale under applicable state securities laws and listing fees, but
excluding the fees and disbursements of counsel to the Investors and discounts,
commissions, fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals with respect to the Registrable Securities
being sold.
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(c) Effectiveness.
(i) The Company shall use commercially reasonable efforts to
have the Registration Statement declared effective as soon as practicable. The
Company shall notify the Investors by facsimile or e-mail as promptly as
practicable, and in any event, within twenty-four (24) hours, after any
Registration Statement is declared effective and shall simultaneously provide
the Investors with copies of any related Prospectus to be used in connection
with the sale or other disposition of the securities covered thereby. If (A)(x)
a Registration Statement covering the Registrable Securities is not declared
effective by the SEC within ninety (90) days after the Closing Date, or (y) a
Registration Statement covering Additional Shares is not declared effective by
the SEC within ninety (90) days following the Trigger Date relating to the
Additional Shares covered thereby, or (B) after a Registration Statement has
been declared effective by the SEC, sales cannot be made pursuant to such
Registration Statement either because (i) a post-effective amendment relating to
the Registration Statement has either not been filed with the SEC or been
declared effective by the SEC, (ii) the Registration Statement is the subject of
a pending or threatened stop order, (iii) the Company has suspended the use of
such Registration Statement or Prospectus pursuant to this Agreement and such
suspension has not been lifted, or (iv) the use of the Registration Statement or
any related Prospectus would require that the information contained or
incorporated therein be amended, supplemented or updated and the Company has not
provided the SSF Investors with an amended, supplemented or updated Registration
Statement or Prospectus which, if applicable, has been declared effective by the
SEC and which may be used to effect sales, but excluding the inability of any
SSF Investor to sell the Registrable Securities covered thereby due to market
conditions and except as excused pursuant to subparagraph (ii) below, then the
Company will make pro rata payments to each SSF Investor, as liquidated damages
and not as a penalty, in an amount equal to 1.5% of the aggregate amount
invested by such SSF Investor (or, in the case of a Registration Statement
covering resale of any Additional Shares, 1.5% of the aggregate exercise price
of the Antidilution Warrants giving rise to such obligation) for each 30-day
period or pro rata for any portion thereof following the date by which such
Registration Statement should have been effective (the "Blackout Period"). Such
payments shall be in partial compensation to the SSF Investors, and shall not
constitute the SSF Investors' exclusive remedy for such events. The amounts
payable as liquidated damages pursuant to this paragraph shall be paid monthly
within three (3) Business Days of the last day of each month following the
commencement of the Blackout Period until the termination of the Blackout
Period. Such payments shall be made to each SSF Investor in cash.
(ii) For not more than thirty (30) consecutive days or for a
total of not more than sixty (60) days in any twelve (12) month period, the
Company may delay the disclosure of material nonpublic information concerning
the Company, by suspending the use of any Prospectus included in any
registration contemplated by this Section containing such information, the
disclosure of which at the time is not, in the good faith opinion of the
Company, in the best interests of the Company (an "Allowed Delay"); provided,
that the Company shall promptly (a) notify the Investors in writing of the
existence of (but in no event, without the prior written consent of an Investor
and an effective confidentiality agreement, shall the Company disclose to such
Investor any of the facts or circumstances regarding) material non-public
information giving rise to an Allowed Delay, and (b) advise the Investors in
writing to cease all sales under the Registration Statement until the end of the
Allowed Delay.
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3. Company Obligations. The Company will use commercially reasonable
efforts to effect the registration of the Registrable Securities in accordance
with the terms hereof, and pursuant thereto the Company will, as expeditiously
as possible:
(a) use commercially reasonable efforts to cause such
Registration Statement to become effective and to remain continuously effective
for a period that will terminate upon the earlier of (i) the date on which all
Registrable Securities covered by such Registration Statement as amended from
time to time, have been sold, and (ii) the date on which all Registrable
Securities covered by such Registration Statement may be sold pursuant to Rule
144(k);
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement and the Prospectus as
may be necessary to keep the Registration Statement effective for the period
specified in Section 3(a) and to comply with the provisions of the 1933 Act and
the 1934 Act with respect to the distribution of all of the Registrable
Securities covered thereby;
(c) provide copies to and permit one counsel designated by SSF
to review each Registration Statement and all material amendments and
supplements thereto no fewer than three (3) Business Days prior to their filing
with the SEC and not file any document to which such counsel reasonably objects;
(d) furnish to the Investors and one counsel designated by SSF
(i) promptly after the same is filed with the SEC or received by the Company
(but not later than two (2) Business Days after the filing date, receipt date or
sending date, as the case may be), one (1) copy of any Registration Statement
and any amendment thereto, each preliminary prospectus and Prospectus and each
amendment or supplement thereto, and each letter written by or on behalf of the
Company to the SEC or the staff of the SEC, and each item of correspondence from
the SEC or the staff of the SEC, in each case relating to such Registration
Statement (other than any portion of any thereof which contains information for
which the Company has sought confidential treatment), and (ii) such number of
copies of a Prospectus, including a preliminary prospectus, and all amendments
and supplements thereto and such other documents as each Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor that are covered by the related Registration Statement;
(e) use commercially reasonable efforts to (i) prevent the
issuance of any stop order or other suspension of effectiveness and, (ii) if
such order is issued, obtain the withdrawal of any such order at the earliest
possible moment;
(f) prior to any public offering of Registrable Securities,
use commercially reasonable efforts to register or qualify or cooperate with the
Investors and their counsel in connection with the registration or qualification
of such Registrable Securities for offer and sale under the securities or blue
sky laws of such jurisdictions requested by the Investors and do any and all
other commercially reasonable acts or things necessary or advisable to enable
the distribution in such jurisdictions of the Registrable Securities covered by
the Registration Statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction
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where it would not otherwise be required to qualify but for this Section 3(h),
(ii) subject itself to general taxation in any jurisdiction where it would not
otherwise be so subject but for this Section 3(f), or (iii) file a general
consent to service of process in any such jurisdiction;
(g) use commercially reasonable efforts to cause all
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange, interdealer quotation system or other market on which
similar securities issued by the Company are then listed;
(h) immediately notify the Investors, at any time when a
Prospectus relating to Registrable Securities is required to be delivered under
the 1933 Act, upon discovery that, or upon the happening of any event as a
result of which, the Prospectus included in a Registration Statement, as then in
effect, includes 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 not misleading in light of the circumstances then existing, and at the
request of any such holder, promptly prepare and furnish to such holder a
reasonable number of copies of a supplement to or an amendment of such
Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and
(i) otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC under the 1933 Act and the
1934 Act, take such other actions as may be reasonably necessary to facilitate
the registration of the Registrable Securities hereunder; and make available to
its security holders, as soon as reasonably practicable, but not later than the
Availability Date (as defined below), an earnings statement covering a period of
at least twelve (12) months, beginning after the effective date of each
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for
the purpose of this subsection 3(k), "Availability Date" means the 45th day
following the end of the fourth fiscal quarter that includes the effective date
of such Registration Statement, except that, if such fourth fiscal quarter is
the last quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter).
(j) With a view to making available to the Investors the
benefits of Rule 144 (or its successor rule) and any other rule or regulation of
the SEC that may at any time permit the Investors to sell shares of Common Stock
to the public without registration, the Company covenants and agrees to: (i)
make and keep public information available, as those terms are understood and
defined in Rule 144, until the earlier of (A) six months after such date as all
of the Registrable Securities may be resold pursuant to Rule 144(k) or any other
rule of similar effect or (B) such date as all of the Registrable Securities
shall have been resold; (ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the 1934 Act; and (iii)
furnish to each Investor upon request, as long as such Investor owns any
Registrable Securities, (A) a written statement by the Company that it has
complied with the reporting requirements of the 1934 Act, (B) a copy of the
Company's most recent Annual Report on Form 10-K or Quarterly Report on Form
10-Q, and (C) such other information as may be
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reasonably requested in order to avail such Investor of any rule or regulation
of the SEC that permits the sale of any such Registrable Securities without
registration.
4. Due Diligence Review; Information. The Company shall make available,
during normal business hours, for inspection and review by the Investors,
advisors to and representatives of the Investors (who may or may not be
affiliated with the Investors and who are reasonably acceptable to the Company),
all financial and other records, all SEC Filings (as defined in the Purchase
Agreement) and other filings with the SEC, and all other corporate documents and
properties of the Company as may be reasonably necessary for the purpose of such
review, and cause the Company's officers, directors and employees, within a
reasonable time period, to supply all such information reasonably requested by
the Investors or any such representative, advisor or underwriter in connection
with such Registration Statement (including, without limitation, in response to
all questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of the
Registration Statement for the sole purpose of enabling the Investors and such
representatives and advisors and their respective accountants and attorneys to
conduct initial and ongoing due diligence with respect to the accuracy of such
Registration Statement, including the documents incorporated by reference
therein.
The Company shall not disclose material nonpublic information to the Investors,
or to advisors to or representatives of the Investors, unless prior to
disclosure of such information the Company identifies such information as being
material nonpublic information and provides the Investors, such advisors and
representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review and any Investor wishing to obtain such
information enters into an appropriate confidentiality agreement with the
Company with respect thereto.
5. Obligations of the Investors.
(a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Agreement that each selling
Investor shall complete the Registration Statement Questionnaire attached hereto
as Appendix II, and shall furnish to the Company such other information
regarding it and the securities held by it as the Company shall reasonably
request and as shall be required in order to effect any registration by the
Company pursuant to this Agreement.
(b) Each Investor, by its acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of a Registration
Statement hereunder, unless such Investor has notified the Company in writing of
its election to exclude all of its Registrable Securities from such Registration
Statement.
(c) Each Investor agrees that, upon receipt of any notice from
the Company of either (i) the commencement of an Allowed Delay pursuant to
Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h)
hereof, such Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until the Investor's receipt of the copies of the supplemented or
amended prospectus filed with the SEC and declared effective and, if so directed
by the Company, the Investor shall deliver to the Company (at the expense of the
Company) or destroy
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(and deliver to the Company a certificate of destruction) all copies in the
Investor's possession of the Prospectus covering the Registrable Securities
current at the time of receipt of such notice.
6. Indemnification.
(a) Indemnification by the Company. The Company will indemnify
and hold harmless each Investor and its officers, directors, members, employees
and agents, successors and assigns, and each other person, if any, who controls
such Investor within the meaning of the 1933 Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof; (ii) any blue sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Registrable
Securities under the securities laws thereof (any such application, document or
information herein called a "Blue Sky Application"); (iii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; (iv) any violation
by the Company or its agents of any rule or regulation promulgated under the
1933 Act applicable to the Company or its agents and relating to action or
inaction required of the Company in connection with such registration; or (v)
any failure to register or qualify the Registrable Securities included in any
such Registration in any state where the Company or its agents has affirmatively
undertaken or agreed in writing that the Company will undertake such
registration or qualification on an Investor's behalf and will reimburse such
Investor, and each such officer, director or member and each such controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such case
if and to the extent that any such loss, claim, damage or liability arises out
of or is based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished by
such Investor or any such controlling person in writing specifically for use in
such Registration Statement or Prospectus or (ii) an untrue statement or alleged
untrue statement or omission in the Registration Statement or any prospectus
that is corrected in any subsequent amendment or supplement to the Registration
Statement or prospectus that was delivered to the selling Investor a reasonable
time before the pertinent sale or sales by the selling Investor and which the
Company advised the Investor in writing must be used in lieu of any prior
prospectus or amendment or supplement thereto that had previously been provided
to the Investor.
(b) Indemnification by the Investors. In connection with any
registration pursuant to the terms of this Agreement, each Investor will furnish
to the Company in writing such information as the Company reasonably requests
concerning the holders of Registrable Securities or the proposed manner of
distribution for use in connection with any Registration Statement or Prospectus
and agrees, severally but not jointly, to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its directors, officers,
employees, stockholders and each person who controls the Company (within the
meaning of the 0000 Xxx) against any losses, claims, damages, liabilities and
expense (including reasonable attorney fees)
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resulting from any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement or Prospectus
or preliminary prospectus or amendment or supplement thereto or necessary to
make the statements therein not misleading, to the extent, but only to the
extent that such untrue statement or omission is either (i) contained in any
information furnished in writing by such Investor to the Company specifically
for inclusion in such Registration Statement or Prospectus or amendment or
supplement thereto or (ii) corrected in any subsequent amendment or supplement
to the Registration Statement or prospectus that was delivered to the selling
Investor a reasonable time before the pertinent sale or sales by the selling
Investor and which the Company advised the Investor in writing must be used in
lieu of any prior prospectus or amendment or supplement thereto that had
previously been provided to the Investor. In no event shall the liability of an
Investor be greater in amount than the dollar amount of the proceeds (net of all
expense paid by such Investor in connection with any claim relating to this
Section 6 and the amount of any damages such holder has otherwise been required
to pay by reason of such untrue statement or omission) received by such Investor
upon the sale of the Registrable Securities included in the Registration
Statement giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any person
entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided, however,
that any person entitled to indemnification hereunder shall have the right to
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such person unless
(a) the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person or (c) in the reasonable
judgment of any such person, based upon written advice of its counsel, a
conflict of interest exists between such person and the indemnifying party with
respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such person); and
provided, further, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall
materially adversely affect the indemnifying party in the defense of any such
claim or litigation. It is understood that the indemnifying party shall not, in
connection with any proceeding in the same jurisdiction, be liable for fees or
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of such claim or litigation. The indemnity agreement contained in
this Section 6 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of those indemnifying parties against which the request for indemnity is
being made (which consent shall not be unreasonably withheld).
(d) Contribution. If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold
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it harmless, other than as expressly specified therein, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the 1933 Act shall be entitled to contribution from any person not
guilty of such fraudulent misrepresentation. In no event shall the contribution
obligation of a holder of Registrable Securities be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such holder in
connection with any claim relating to this Section 6 and the amount of any
damages such holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission) received by it upon
the sale of the Registrable Securities giving rise to such contribution
obligation.
6A. Certain Covenants.
(a) Reports. So long as the Company is obligated to maintain
the effectiveness of a Registration Statement hereunder, the Company will
furnish to the Investors such information relating to the Company and its
subsidiaries as from time to time may reasonably be requested by such Investors;
provided, however, that the Company shall not disclose material nonpublic
information to the Investors, or to advisors to or representatives of the
Investors, unless prior to disclosure of such information the Company identifies
such information as being material nonpublic information and provides the
Investors, such advisors and representatives with the opportunity to accept or
refuse to accept such material nonpublic information for review and any Investor
wishing to obtain such information enters into an appropriate confidentiality
agreement with the Company with respect thereto.
(b) No Conflicting Agreements. So long as the Company is
obligated to maintain the effectiveness of a Registration Statement hereunder,
the Company will not take any action, enter into any agreement or make any
commitment that would conflict or interfere in any material respect with the
obligations to the Investors under this Agreement or the other Transaction
Documents (as such term is defined in the Purchase Agreement).
(c) Nasdaq Listing. So long as the Company is obligated to
maintain the effectiveness of a Registration Statement hereunder, the Company
will use commercially reasonable efforts to continue the listing and trading of
its Common Stock on the Nasdaq National Market System and, in accordance,
therewith, will use commercially reasonable efforts to comply in all respects
with the Company's reporting, filing and other obligations under the bylaws or
rules of such market or exchange, as applicable.
7. Miscellaneous.
(a) Amendments and Waivers. This Agreement may be amended only
by a writing signed by the Company and the Required Investors. 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 shall have obtained the written consent
to such amendment, action or omission to act, of the Required Investors.
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(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase
Agreement.
(c) Assignments and Transfers by Investors. The provisions of
this Agreement shall be binding upon and inure to the benefit of the Investors
and their respective successors and assigns. An Investor may transfer or assign,
in whole or from time to time in part, to one or more Permitted Transferees its
rights hereunder in connection with the transfer of Registrable Securities by
such Investor to such person, provided that such Investor complies with all laws
applicable thereto and provides written notice of assignment to the Company in
the form of Appendix I hereto promptly after such assignment is effected.
(d) Assignments and Transfers by the Company. This Agreement
may not be assigned by the Company (whether by operation of law or otherwise)
without the prior written consent of the Required Investors, provided, however,
that the Company may assign its rights and delegate its duties hereunder to any
surviving or successor corporation in connection with a merger or consolidation
of the Company with another corporation, or a sale, transfer or other
disposition of all or substantially all of the Company's assets to another
corporation, without the prior written consent of the Required Investors, after
notice duly given by the Company to each Investor.
(e) Benefits of the Agreement. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
(f) Counterparts; Faxes. 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. This Agreement may
also be executed via facsimile, which shall be deemed an original.
(g) Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(h) Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.
(i) Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required
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to carry out the transactions contemplated hereby and to evidence the
fulfillment of the agreements herein contained.
(j) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(k) Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York without regard to the choice of law principles thereof. Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
-12-
IN WITNESS WHEREOF, the parties have executed this Agreement or caused their
duly authorized officers to execute this Agreement as of the date first above
written.
The Company: ONYX SOFTWARE CORPORATION
By: /s/ XXXXX X. XXXXX
-------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and Chief Financial
Officer
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The Investors: SPECIAL SITUATIONS FUND III, L.P.
By: /s/ XXXXX X. GREENHOUSE
-------------------------------------------------
Name: Xxxxx X. Greenhouse
Title: General Partner
SPECIAL SITUATIONS CAYMAN FUND, L.P.
By: /s/ XXXXX X. GREENHOUSE
-------------------------------------------------
Name: Xxxxx X. Greenhouse
Title: General Partner
SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.
By: /s/ XXXXX X. GREENHOUSE
-------------------------------------------------
Name: Xxxxx X. Greenhouse
Title: General Partner
SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.
By: /s/ XXXXX X. GREENHOUSE
-------------------------------------------------
Name: Xxxxx X. Greenhouse
Title: General Partner
[other investors]
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APPENDIX I
INSTRUMENT OF ADHERENCE
Reference is hereby made to that certain Registration Rights Agreement,
dated as of May 19, 2003, between Onyx Software Corporation, a Washington
corporation (the "Company"), and the Investors party thereto, as amended and in
effect from time to time (the "Registration Rights Agreement"). Capitalized
terms used herein without definition shall have the respective meanings ascribed
thereto in the Registration Rights Agreement.
The undersigned, in order to become the owner or holder of [___________
shares][warrants to purchase ________ shares] of common stock, par value $0.01
per share (the "Common Stock"), of the Company, hereby agrees that, from and
after the date hereof, the undersigned has become a party to the Registration
Rights Agreement, and is entitled to all of the benefits under, and is subject
to all of the obligations, restrictions and limitations set forth in, the
Registration Rights Agreement. This Instrument of Adherence shall take effect
and shall become a part of the Registration Rights Agreement immediately upon
execution.
Signature:
-----------------------------------
Name:
-----------------------------
Title:
-----------------------------------
APPENDIX II
ONYX SOFTWARE CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the Registration
Statement, please state your or your organization's name exactly as it
should appear in the Registration Statement:
2. Please provide the number of securities that you or your organization will
own immediately after Closing, including those Shares purchased by you or
your organization pursuant to the Purchase Agreement, warrants issued to
you or your organization pursuant to the Purchase Agreement, and those
securities purchased by you or your organization through other
transactions:
Purchased Shares:
---------------------------------------------------------
Warrants:
-----------------------------------------------------------------
Other Shares of Common Stock:
---------------------------------------------
3. Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its
affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
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