EXHIBIT 99.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
February 13, 2002, by and among divine, inc., a Delaware corporation (the
"Corporation"), and Comerica Bank-California, successor by merger to Imperial
Bank (the "Holder").
RECITALS
A. The Corporation, divine RWT, Inc., an Illinois corporation and
wholly-owned subsidiary of the Corporation ("Merger Sub"), RWT Corporation, an
Illinois corporation ("RWT"), and certain stockholders of RWT have entered into
that certain Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), pursuant to which Merger Sub shall be merged with and into
RWT (the "Merger").
B. In connection with, and as an express condition to the consummation of
the Merger, the Corporation and the Holder have entered into that certain
Settlement, Release and Termination Agreement, dated as of the date hereof (the
"Settlement Agreement"), pursuant to which the Holder shall receive at the
Closing 769,231 shares of Class A Common Stock of the Corporation (the
"Shares").
C. It is a condition precedent to the consummation of the Merger and the
transactions contemplated by the Settlement Agreement that the Corporation and
the Holder enter into this Agreement; and
D. The Corporation and the Holder desire to enter into this Agreement.
AGREEMENTS
In consideration of the premises and the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. As used in this Agreement:
"Class A Common Stock" means the Class A Common Stock, $0.001 par value per
share of the Corporation.
"Closing" has the meaning set forth in the Merger Agreement.
"Commission" means the United States Securities and Exchange Commission or
any successor thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute, as the same shall be in effect from time to time.
"Person" means an individual, corporation, partnership, limited liability
company, limited partnership, syndicate, person (including, without limitation,
a "Person" as defined in Section
13(d)(3) of the Exchange Act), trust, association or entity or government,
political subdivision, agency or instrumentality of a government.
"Public Offering" means any offering by the Corporation of its equity
securities to the public pursuant to an effective registration statement under
the Securities Act.
"Registrable Shares" means at any time (i) any Shares then outstanding;
(ii) any shares of Class A Common Stock then outstanding which were issued as,
or were issued directly or indirectly upon the conversion or exercise of other
securities issued as, a dividend or other distribution with respect or in
replacement of any Shares; and (iii) any shares of Class A Common Stock then
issuable directly or indirectly upon the conversion or exercise of other
securities which were issued as a dividend or other distribution with respect to
or in replacement of any shares referred to in (i) or (ii); provided, however,
that Registrable Shares shall not include any shares (a) which have been
disposed of pursuant to an effective registration statement under the Securities
Act, (b) sold or otherwise transferred in a transaction in which the rights
under the provisions of this Agreement have not been assigned, or (c) which have
been sold under Rule 144. For purposes of this Agreement, a Person will be
deemed to be a holder of Registrable Shares whenever such Person has the
then-existing right to acquire such Registrable Shares (by conversion or
otherwise), whether or not such acquisition actually has been effected.
"Rule 144" means Rule 144 (including Rule 144(k)) of the Commission under
the Securities Act or any similar provision then in force under the Securities
Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, as the same shall be in effect from time to time.
2. MANDATORY REGISTRATION.
(a) Within forty-five (45) days after the Closing, the Corporation shall
file with the Commission, a registration statement on Form S-3, which shall
register, either by themselves or together with other shares of Class A Common
Stock, the Registrable Shares for resale. The Corporation, with the assistance
of the Holder as reasonably requested by the Corporation, shall promptly respond
to any Commission comments on such registration statement and shall otherwise
use commercially reasonable efforts to cause such registration statement to be
declared effective as soon as practicable.
(b) The Corporation shall comply with all applicable provisions of and
rules under the Securities Act and state securities laws in the preparation and
filing of such registration statement. Without limiting the foregoing, the
Corporation shall ensure that such registration statement does not, as of its
effective date, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading (provided that the Corporation shall not be
responsible for the accuracy or completeness of any information relating to the
Holder or furnished by the Holder in writing for inclusion in such registration
statement).
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3. REGISTRATION PROCEDURES. The Corporation will use commercially
reasonable efforts to effect the registration of the Registrable Shares and,
pursuant thereto, the Corporation will as expeditiously as reasonably possible:
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Shares and use commercially reasonable efforts
to cause such registration statement to become and remain effective for a
period of eighteen (18) months;
(b) the Corporation shall include a "Plan of Distribution" section in the
prospectus contained in such registration statement and indicate therein
that selling stockholders may offer the Registrable Shares from time to
time in open market transactions (which may include block transactions) or
otherwise in the over-the-counter market through the Nasdaq National
Market, in private transactions or in any other manner of distribution
reasonably requested by the selling stockholders and permitted by law and
that the selling stockholders may effect such transactions by selling the
shares to or through broker-dealers or in underwritten offerings or as
otherwise reasonably requested by the selling stockholders and permitted by
law.
(c) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus(es) used in connection
therewith as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Shares
covered by such registration statement;
(d) furnish to the Holder such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus(es)
included in such registration statement (including each preliminary
prospectus) and such other documents the Holder may reasonably request in
order to facilitate the disposition of the Registrable Shares owned by the
Holder;
(e) notify the Holder, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, contains an untrue statement of a material
fact or omits any fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made, and,
at the request of the Holder, the Corporation will promptly prepare and
file with the Commission a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Shares,
such prospectus will not contain any untrue statement of a material fact or
omit to state any fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made (and
the Holder shall suspend the use of the prospectus until the requisite
changes thereto have been made);
(f) use commercially reasonable efforts to cause all such Registrable
Shares to be listed on each securities exchange or market on which the
Common Stock is then listed;
(g) use commercially reasonable efforts to cause such Registrable Shares
to be registered with or approved by such other governmental agencies or
authorities as may be
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necessary to consummate the disposition of such Registrable Shares;
(h) provide a transfer agent and registrar for all such Registrable Shares
not later than the effective date of such registration statement;
(i) enter into such customary agreements (and take such other actions as
are reasonably required) in order to expedite or facilitate the disposition
of such Registrable Shares;
(j) advise the Holder, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose and promptly
use all reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if any such stop order shall be issued (and, if such
stop order shall be issued, the Holder shall suspend the use of the
prospectus until it shall be withdrawn); and
(k) notwithstanding any provision of this Section 3 to the contrary, the
Corporation shall not be required to amend or supplement a prospectus if
(i) such amendment or supplement would require the Corporation to disclose
a material financing, acquisition or other transaction then being pursued
by the Corporation and the Corporation shall determine in good faith that
such disclosure is not in the best interests of the Corporation or would
materially interfere with such transaction or (ii) the Corporation shall
determine in good faith that there is a valid business purpose or reason
for suspending the use of such prospectus in accordance with Section 3(d)
hereof instead of making such amendment or supplement; provided that, in
either case, the suspension of the use of such prospectus shall be for a
reasonable period not to exceed sixty (60) days in any one (1) year period.
4. HOLDER'S COVENANTS.
(a) The Holder shall furnish to the Corporation in writing such
information relating to it as the Corporation may reasonably request in writing
in connection with the preparation of such registration statement, and the
Holder agrees to notify the Corporation as promptly as reasonably practicable of
any inaccuracy or change in information it has previously furnished to the
Corporation or of the happening of any event, in either case as a result of
which any prospectus relating to such registration contains an untrue statement
of a material fact regarding the Holder or the distribution of such Registrable
Shares or omits to state any material fact regarding the Holder or the
distribution of such Registrable Shares required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and to promptly furnish to the Corporation any
additional information required to correct and update any previously furnished
information or required such that such prospectus shall not contain, with
respect to the Holder or the distribution of such Registrable Shares, 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.
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(b) The Holder agrees that, upon receipt of any notice from the
Corporation of the happening of any event of the kind described in Section 3(d),
(i) or (j) hereof, the Holder will forthwith discontinue disposition of such
Registrable Shares covered by such registration statement or prospectus until
the Holder's receipt of the copies of the supplemental or amended prospectus
relating to such registration statement or prospectus, or until the Holder is
advised in writing by the Corporation that the use of the applicable prospectus
may be resumed, and has received copies of any additional or supplemental
filings which are incorporated by reference in such prospectus, and, if so
directed by the Corporation, the Holder will deliver to the Corporation all
copies, other than permanent file copies then in the Holder's possession, of the
prospectus covering the Registrable Shares current at the time of receipt of
such notice provided, that in any case, the suspension of the use of such
prospectus shall be for a reasonable period not to exceed sixty (60) days in any
one year period. Notwithstanding the foregoing, the Holder may from time to time
dispose of the Registrable Shares without using or delivering such prospectus in
connection therewith under Rule 144 or any other exemption from the requirement
of the use and delivery of a prospectus to potential buyers of securities in
connection with such disposition.
5. REGISTRATION EXPENSES.
5.1. CORPORATION'S EXPENSES. All expenses incident to the Corporation's
performance of or compliance with this Agreement, including without limitation
all registration and filing fees, fees and expenses of compliance with
securities, listing fees, printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for the Corporation and all independent
certified public accountants and other Persons retained by the Corporation (all
such expenses being herein called "Registration Expenses") shall be borne by the
Corporation.
5.2. HOLDER'S EXPENSES. Notwithstanding anything to the contrary contained
herein, the Holder shall bear and pay all transfer taxes applicable to the
Registrable Shares sold for such Holder's account and all fees and disbursements
of counsel such Holder retains in connection with the registration of
Registrable Shares.
6. INDEMNIFICATION.
6.1. BY THE CORPORATION. The Corporation agrees to indemnify, to the
fullest extent permitted by law, the Holder and any other holder of Registrable
Shares participating in the registration, and each of their managers, officers
and directors and each Person who controls such holders (within the meaning of
the Securities Act) against all losses, claims, damages, liabilities and
expenses (including without limitation, attorneys' fees) ("Liabilities") caused
by any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus, or any amendment
thereof or supplement thereto, or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Corporation by such holder expressly for
use therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Corporation has furnished such holder with a sufficient number of copies of the
same. The payments required by this Section 6.1 will be made periodically during
the course of the investigation or defense, as and when bills are received or
expenses incurred.
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6.2. BY THE HOLDER. In connection with any registration statement in which
the Holder or another holder of Registrable Shares is participating, each such
holder shall furnish to the Corporation in writing such information and
affidavits as the Corporation reasonably requests relating to information about
the holder for use in connection with any such registration statement or
prospectus and, to the fullest extent permitted by law, shall indemnify the
Corporation, its directors and officers and each Person who controls the
Corporation (within the meaning of the Securities Act) against any Liabilities
resulting from any untrue or alleged untrue statement of material fact contained
in the registration statement, prospectus or preliminary prospectus, or any
amendment thereof or supplement thereto, or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission related to such holder and is contained in any information
or affidavit so furnished in writing by such holder specifically for use in such
registration statement; provided that the obligation to indemnify will be
several, not joint and several, among such holders of Registrable Shares, and
the liability of each such holder of Registrable Shares under this Section 6
shall be limited to the net amount received by such holder from the sale of
Registrable Shares pursuant to such registration statement.
6.3. PROCEDURE. Any Person entitled to indemnification hereunder shall (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification, provided any such failure shall not relieve
the indemnifying party of liability hereunder, except to the extent that the
indemnifying party is prejudiced or injured by such failure, and (ii) unless in
such indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
6.4. CONTRIBUTION. To the extent any indemnification by an indemnifying
party provided for in this Section 6 is prohibited or limited by law, 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 Liabilities in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party in connection with the
statements or omissions which resulted in such Liabilities, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of material fact or omission or
alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
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The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.4 were determined solely by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
6.5. SURVIVAL. The indemnification and contribution provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling Person of such indemnified party and will survive the transfer of
securities.
7. COMPLIANCE WITH RULE 144. At the request of the Holder if it proposes
to sell securities in compliance with Rule 144 of the Commission, the
Corporation will (i) forthwith furnish to the Holder, upon request, a written
statement of compliance with the filing requirements of the Commission as set
forth in Rule 144, as such rule may be amended from time to time, and (ii) use
its reasonable best efforts to make available to the public and the Holder such
information as will enable the Holder to make sales pursuant to Rule 144.
8. MISCELLANEOUS.
8.1. OTHER REGISTRATION RIGHTS. The Corporation may hereafter grant to any
Person or Persons the right to request the Corporation to register any equity
securities of the Corporation, or any securities convertible or exchangeable
into or exercisable for such securities, without the prior written consent of
the holders of the Registrable Shares.
8.2. ASSIGNMENT OF REGISTRATION RIGHTS. The registration rights of the
Holder under this Agreement with respect to any Registrable Shares may be
assigned to any Person who acquires such Registrable Shares; PROVIDED that (a)
the Holder shall give the Corporation written notice at or prior to the time of
such assignment stating the name and address of the assignee and identifying the
shares with respect to which the rights under this Agreement are being assigned;
(b) such assignee shall agree in writing, in form and substance reasonably
satisfactory to the Corporation, to be bound to the same extent and in the same
capacity as the Holder by the provisions of this Agreement; and (c) such
assignee acknowledges, immediately following such assignment, the further
disposition of such securities by such assignee is restricted under the
Securities Act.
8.3. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
all covenants and agreements contained in this Agreement by or on behalf of any
of the parties hereto will bind and inure to the benefit of the respective
permitted successors and assigns of the parties hereto, whether so expressed or
not.
8.4. SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
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8.5. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
inserted for convenience of reference only and do not constitute a part of, and
shall not be utilized in interpreting, this Agreement.
8.6. NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given (a) when delivered by hand; (b) when sent by telecopier, provided that a
copy is mailed by U.S. certified mail, return receipt requested; (c) three (3)
days after being sent by Certified U.S. Mail, return receipt requested; or (d)
one (1) day after deposit with a nationally recognized overnight delivery
service, in each case to the appropriate addresses and telecopier numbers set
forth below (or to such other addresses and telecopier numbers as a party may
designate by notice to the other parties):
If to the Corporation, to:
divine, inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy No. (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No. (000) 000-0000
If to the Holder, to:
Comerica Bank-California
Attention: _____________
Telecopy No. _____________
8.7. GOVERNING LAW. All questions concerning the construction, validity and
interpretation of this Agreement, and the performance of the obligations imposed
by this Agreement, shall be governed by the laws of the State of Delaware
applicable to contracts made and wholly to be performed in that state.
8.8. AMENDMENTS AND WAIVERS. The provisions of this Agreement may be
amended upon the written agreement of the Corporation and the Holder. Any
waiver, permit, consent or approval of any kind or character on the part of any
holders of any provision or condition of this
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Agreement must be made in writing and shall be effective only to the extent
specifically set forth in writing.
8.9. FINAL AGREEMENT. This Agreement, constitutes the complete and final
agreement of the parties concerning the matters referred to herein and
supersedes all prior agreements and understandings.
8.10. EXECUTION. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument.
8.11. NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be used against any party.
Remainder of Page Intentionally Left Blank
Signature Page Follows.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
divine, inc.
By: /s/ AUTHORIZED SIGNATORY
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Its:
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COMERICA BANK-CALIFORNIA
By: /s/ AUTHORIZED SIGNATORY
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Its:
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