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REGISTRATION RIGHTS AGREEMENT
among
BINDVIEW DEVELOPMENT CORPORATION
and
XXXXX X. XXXXXXXXXX
Dated: November 7, 1997
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TABLE OF CONTENTS
Page
1. Definitions...........................................................1
2. General: Securities Subject to this Agreement........................3
(a) Grant of Rights.............................................3
(b) Registrable Securities......................................3
(c) Holders of Registrable Securities...........................3
3. Demand Registration...................................................3
(a) Request for Demand Registration.............................3
(b) Incidental or "Piggy-Back" Rights with Respect to a Demand
Registration................................................4
(c) Effective Demand Registration...............................4
(d) Expenses....................................................4
(e) Underwriting Procedures.....................................5
(f) Selection of Underwriters...................................5
4. Incidental or "Piggy-Back" Registration...............................5
(a) Request for Incidental Registration.........................5
(b) Expenses....................................................6
5. Form S-3 Registration.................................................6
(a) Request for a Form S-3 Registration.........................6
(b) Form S-3 Underwriting Procedures............................6
(c) Limitations on Form S-3 Registrations.......................7
(d) Expenses....................................................7
(e) No Demand Registration......................................7
6. Holdback Agreements...................................................7
(a) Restrictions on Public Sale by Designated Holders...........7
(b) Restrictions on Public Sale by the Company..................8
7. Registration Procedures...............................................8
(a) Obligations of the Company..................................8
(b) Seller information.........................................11
(c) Notice to Discontinue......................................11
(d) Registration Expenses......................................11
8. Indemnification: Contribution.......................................12
(a) Indemnification by the Company.............................12
(b) Indemnification by Designated Holders......................12
(c) Conduct of Indemnification Proceedings.....................12
(d) Contribution...............................................13
9. Rule 144.............................................................13
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Page
10. Miscellaneous........................................................13
(a) Recapitalizations, Exchanges, etc..........................14
(b) No Inconsistent Agreements.................................14
(c) Remedies...................................................14
(d) Amendments and Waivers.....................................14
(e) Notices....................................................14
(f) Successors and Assigns.....................................15
(g) Third Party Beneficiaries..................................15
(h) Counterparts...............................................15
(i) Headings...................................................16
(j) Governing Law..............................................16
(k) Severability...............................................16
(l) Entire Agreement...........................................16
(m) Further Assurances.........................................16
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated November 7, 1997 (this
"Agreement"), among BindView Development Corporation, a Texas corporation (the
"Company") and Xxxxx X. Xxxxxxxxxx ("Plantowsky").
This Agreement is made in connection with the issue and sale by the
Company to Plantowsky of a warrant (the "Warrant") to purchase, subject to the
terms and conditions thereof, an aggregate of up to 175,000 shares of Common
Stock.
WHEREAS, in order to induce Plantowsky, the Company has agreed to grant
registration rights with respect to the Registrable Securities (as hereinafter
defined) as set forth in this Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement the following terms have the
meanings indicated:
"Affiliate" shall mean, with respect to any Person, any other Person
who is an "affiliate" as defined in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
"Approved Underwriter" has the meaning set forth in Section 3(f) of
this Agreement.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in the State of Texas are authorized or required
by law or executive order to close.
"Common Stock" has the meaning assigned to such term in the recital
to this Agreement. "Common Stock" shall also include any other equity securities
of the Company into which such securities are converted, reclassified,
reconstituted or exchanged.
"Company" has the meaning assigned to such term in the recital to
this Agreement.
"Company Underwriter" has the meaning set forth in Section 4(a) of
this Agreement.
"Demand Registration" has the meaning set forth in Section 3(a) of
this Agreement.
"Designated Holder" means each of the Plantowsky Shareholders and any
transferee of any of them to whom Registrable Securities have been transferred
in accordance with the provisions of the Shareholders' Agreement and Section
9(f) of this Agreement, other than a transferee to whom such securities have
been transferred pursuant to a registration statement under the Securities Act
or Rule 144 or Regulation S under the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Holders' Counsel" has the meaning set forth in Section 7(a)(i) of
this Agreement.
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"Incidental Registration" has the meaning set forth in Section 4(a)
of this Agreement.
"Indemnified Party" has the meaning set forth in Section 8(c) of this
Agreement.
"Indemnifying Party" has the meaning set forth in Section 8(c) of
this Agreement.
"Initial Public Offering" means an underwritten initial public
offering pursuant to an effective Registration Statement filed under the
Securities Act covering the offer and sale of shares of Common Stock for the
account of the Company.
"Initiating Holder" has the meaning set forth in Section 3(a) of this
Agreement.
"Inspector" has the meaning set forth in Section 7(a)(vii) of this
Agreement.
"IPO Effectiveness Date" means the date upon which the Company
commences its Initial Public Offering.
"NASD" has the meaning set forth in Section 7(a)(xii) of this
Agreement.
"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, limited liability company, government (or an
agency or political subdivision thereof) or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.
"Plantowsky" has the meaning assigned to such term in the recital to
this Agreement.
"Plantowsky Shareholders" means Plantowsky and any Permitted
Transferee (as defined in the Shareholders' Agreement) thereof to which
Registrable Securities are transferred in accordance with Section 2.2 of the
Shareholders' Agreement.
"Records" has the meaning set forth in Section 7(a)(vii) of this
Agreement.
"Registrable Securities" means each of the following: (a) any and all
shares of Common Stock owned or acquired after the date hereof by the Designated
Holders or issued or issuable upon exercise of the Warrants, including, without
limitation, any additional shares of Common Stock issuable upon conversion or
exercise of any warrants or options acquired by any of the Designated Holders
after the date hereof, (b) any other shares of Common Stock acquired or owned by
any of the Designated Holders prior to the IPO Effectiveness Date, or acquired
or owned by any of the Designated Holders after the IPO Effectiveness Date if
such Designated Holder is an Affiliate of the Company and (c) any shares of
Common Stock issued or issuable to any of the Designated Holders with respect to
shares of Common Stock by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise and shares of Common Stock issuable upon conversion,
exercise or exchange thereof.
"Registration Expenses" has the meaning set forth in Section 7(d) of
this Agreement.
"Registration Statement" means a registration statement filed
pursuant to the Securities Act.
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"SEC" means the Securities and Exchange Commission or any similar
agency then having jurisdiction to enforce the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Shareholders' Agreement" means the Shareholders' Agreement, dated
October 16, 1997, among the Company and the shareholders that are signatories
thereto.
2. General: Securities Subject to this Agreement.
(a) Grant of Rights. Company hereby grants registration rights to the
Plantowsky Shareholders upon the terms and conditions set forth in this
Agreement.
(b) Registrable Securities. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities when (i) a
registration statement covering such Registrable Securities has been declared
effective under the Securities Act by the SEC and such Registrable Securities
have been disposed of pursuant to such effective registration statement, (ii)
the entire amount of Registrable Securities proposed to be sold by a Designated
Holder in a single sale, in the opinion of counsel satisfactory to the Company
and the Designated Holder, each in their reasonable judgment, may be distributed
to the public without any limitation as to volume pursuant to Rule 144 (or any
successor provision then in effect) under the Securities Act or (iii) the
Registrable Securities are proposed to be sold or distributed by a Person not
entitled to the registration rights granted by this Agreement.
(c) Holders of Registrable Securities. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns of record Registrable
Securities, or holds an option to purchase, or a security convertible into or
exercisable or exchangeable for, Registrable Securities whether or not such
acquisition or conversion has actually been effected and disregarding any legal
restrictions upon the exercise of such rights. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company may act upon the basis
of the instructions, notice or election received from the registered owner of
such Registrable Securities. Registrable Securities issuable upon exercise of an
option or upon conversion of another security shall be deemed outstanding for
the purposes of this Agreement.
3. Demand Registration.
(a) Request for Demand Registration. At any time after the IPO
Effectiveness Date, the Plantowsky Shareholders as a group, acting through
Plantowsky (the "Initiating Holder(s)") may make a written request to the
Company to register, under the Securities Act (other than pursuant to a
registration statement on Form S-4 or S-8 or any successor thereto) and under
the securities or "blue sky" laws of any jurisdiction designated by such holder
or holders (a "Demand Registration"), the number of Registrable Securities
stated in such request; provided, however, that the Company shall not be
obligated to effect more than one (1) Demand Registration for the Plantowsky
Shareholders pursuant to this Section 3; provided, further, however, that the
Company shall not be obligated to effect more than one such Demand Registration
in any twelve month period. If at the time of any request to register
Registrable Securities pursuant to this Section 3(a), the Company is engaged in,
or has fixed plans to engage in within thirty (30) days of the time of such
request, a registered public offering or is engaged in any other activity which,
in the good faith
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determination of the Board of Directors of the Company, 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
reasonable period not in excess of three (3) months from the effective date of
such offering or the date of completion of such other material activity, as the
case may be, such right to delay a request to be exercised by the Company not
more than once in any one-year period. In addition, the Company shall not be
required to effect any registration within ninety (90) days after the effective
date of any other Registration Statement of the Company. Each request for a
Demand Registration by the Initiating Holder(s) shall state the amount of the
Registrable Securities proposed to be sold and the intended method of
disposition thereof. Upon a request for a Demand Registration, the Company shall
promptly take such steps as are necessary or appropriate to prepare for the
registration of the Registrable Securities to be registered.
(b) Incidental or "Piggy-Back" Rights with Respect to a Demand
Registration. Each of the Designated Holders (other than the Initiating Holders)
may offer its or his Registrable Securities under any Demand Registration
pursuant to this Section 3. Within ten (10) days after the receipt from an
Initiating Holder of a request for a Demand Registration, the Company shall (i)
give written notice thereof to all of the Designated Holders (other than the
Initiating Holder) and (ii) subject to Section 3(e), include in such
registration all of the Registrable Securities held by such Designated Holders
from whom the Company has received a written request for inclusion therein
within ten (10) days of the receipt by such Designated Holders of such written
notice referred to clause (i) above. Each such request by such Designated
Holders shall specify the number of Registrable Securities proposed to be
registered and the intended method of disposition thereof. The failure of any
Designated Holder to respond within such 10-day period referred to in clause
(ii) above shall be deemed to be a waiver of such Designated Holder's rights
under this Section 3, provided that any Designated Holder may waive its rights
under this Section 3 prior to the expiration of such 10-day period by giving
written notice to the Company, with a copy to the Initiating Holder.
(c) Effective Demand Registration. The Company shall use its
reasonable efforts to cause any such Demand Registration to become and remain
effective as soon as practicable, but in any event not later than 120 days after
it receives a request under Section 3(a) hereof. A registration shall not
constitute a Demand Registration until it has become effective and remains
continuously effective for the lesser of (i) the period during which all
Registrable Securities registered in the Demand Registration are sold and (ii)
120 days; provided, however, that a registration shall not constitute a Demand
Registration if (x) after such Demand Registration has become effective, such
registration or the related offer, sale or distribution of Registrable
Securities thereunder is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court for any
reason not attributable to the Initiating Holders and such interference is not
thereafter eliminated, (y) the conditions to closing specified in the
underwriting agreement, if any, entered into in connection with such Demand
Registration are not satisfied or waived, other than by reason of a failure by
the Initiating Holders or (z) if the request for such Demand Registration is
withdrawn by the Initiating Holder and such Initiating Holder reimburses the
Company for any expenses incurred in relation thereto.
(d) Expenses. In any registration initiated as a Demand Registration,
the Company shall pay all Registration Expenses (other than underwriting
discounts and commissions) in connection therewith, whether or not such Demand
Registration becomes effective.
(e) Underwriting Procedures. If the initiating Holders holding a
majority of the Registrable Securities held by all of the Initiating Holders to
which the requested Demand Registration relates so elect, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the form
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of a firm commitment underwritten offering and the managing underwriter or
underwriters selected for such offering shall be the Approved Underwriter (as
hereinafter defined) selected in accordance with Section 3(f). In connection
with any Demand Registration under this Section 3 involving an underwriting,
none of the Registrable Securities held by any Designated Holder making a
request for inclusion of such Registrable Securities pursuant to Section 3(b)
hereof shall be included in such underwriting unless such Designated Holder
accepts the terms of the underwriting as agreed upon by the Company, the
Initiating Holders and the Approved Underwriter, and then only in such quantity
as will not, in the opinion of the Approved Underwriter, jeopardize the success
of such offering by the Initiating Holders. If the Approved Underwriter advises
the Company in writing that in its opinion the aggregate amount of such
Registrable Securities requested to be included in such offering is sufficiently
large to have a material adverse effect on the success of such offering, then
the Company shall include in such registration only the aggregate amount of
Registrable Securities that in the opinion of the Approved Underwriter may be
sold without any such material adverse effect and shall reduce, first, as to the
Designated Holders (who are not Initiating Holders and who requested to
participate in such registration pursuant to Section 3(b) hereof) as a group, if
any; and second, as to the Initiating Holders as a group, pro rata within each
group based on the number of Registrable Securities included in the request for
Demand Registration, the amount of Registrable Securities to be included in such
registration; provided, however, that if the number of Registrable Securities to
be included in a Demand Registration by an Initiating Holder is reduced by the
Approved Underwriter, then such Initiating Holder shall be entitled to retain a
Demand Registration with respect to such number of Registrable Securities
excluded by the Approved Underwriter; provided that such Initiating Holder may
not initiate such Demand Registration within nine months of the effective date
of the Registration Statement with respect to the Demand Registration in which
the Approved Underwriter excluded such initiating Holder's Registrable
Securities.
(f) Selection of Underwriters. If any Demand Registration of
Registrable Securities is in the form of an underwritten offering, the Company
shall select and obtain an investment banking firm of national reputation to act
as the managing underwriter of the offering (the "Approved Underwriter");
provided, however, that the Approved Underwriter shall, in any case, be
reasonably acceptable to the Initiating Holders holding a majority of the
Registrable Securities to be included in such registration.
4. Incidental or "Piggy-Back" Registration.
(a) Request for Incidental Registration. At any time after the IPO
Effectiveness Date, if the Company proposes to file a Registration Statement
under the Securities Act with respect to an offering by the Company for its own
account (other than a registration statement on Form S-4 or S-8 or any successor
thereto), then the Company shall give written notice of such proposed filing to
each of the Designated Holders of Registrable Securities at least thirty (30)
days before the anticipated filing date, and such notice shall describe the
proposed registration and distribution and offer such Designated Holders the
opportunity to register the number of Registrable Securities as each such holder
may request (an "Incidental Registration"). The Company shall, and shall use its
reasonable efforts (within ten (10) days of the notice provided for in the
preceding sentence) to cause the managing underwriter or underwriters of a
proposed underwritten offering (the "Company Underwriter") to permit each of the
Designated Holders who have requested in writing to participate in the
Incidental Registration to include its or his Registrable Securities in such
offering on the same terms and conditions as the securities of the Company
included therein. In connection with any Incidental Registration under this
Section 4(a) involving an underwriting, the Company shall not be required to
include any Registrable Securities in such underwriting unless the holders
thereof accept the terms of the underwriting as reasonably agreed upon between
the Company and the Company Underwriter, and then only in such quantity as will
not, in the opinion of the Company Underwriter, jeopardize the success of the
offering by the Company. If in the
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written opinion of the Company Underwriter the registration of all or part of
the Registrable Securities which the Designated Holders have requested to be
included would materially adversely affect such offering, then the Company shall
be required to include in such Incidental Registration, to the extent of the
amount that the Company Underwriter believes may be sold without causing such
adverse effect, first, all of the securities to be offered for the account of
the Company; second, the Registrable Securities to be offered for the account of
the Designated Holders pursuant to this Section 4, pro rata based on the amount
recommended by the Company Underwriter; and third, any other securities
requested to be included in such underwriting.
(b) Expenses. The Company shall bear all Registration Expenses (other
than underwriting discounts and commissions) in connection with any Incidental
Registration pursuant to this Section 4, whether or not such Incidental
Registration becomes effective.
5. Form S-3 Registration.
(a) Request for a Form S-3 Registration. In the event that the
Company shall receive from any Designated Holder (the "S-3 Initiating Holder") a
written request that the Company register, under the Securities Act and the
securities and "blue sky" laws of any jurisdiction reasonably designated by such
Designated Holder, on Form S-3 (or any successor form then in effect), all or a
portion of the Registrable Securities owned by such S-3 Initiating Holder, the
Company shall give written notice of such request to each of the other
Designated Holders at least 30 days before the anticipated filing date of such
Form S-3, and such notice shall describe the proposed registration and offer
such other Designated Holders the opportunity to register the number of
Registrable Securities as each such Designated Holder may request in writing to
the Company, given within 15 days after their receipt from the Company of the
written notice of such registration. The Company shall (i) take such steps as
are necessary or appropriate to prepare for the registration of the Registrable
Securities to be registered and (ii) use its reasonable best efforts to (x)
cause such registration pursuant to this Section 5(a) to become and remain
effective as soon as practicable, but in any event not later than three months
after it receives a request therefor and (y) cause the Company Underwriter to
permit the Designated Holders who have requested in writing to participate in
such registration to include their Registrable Securities in such offering on
the same terms and conditions as the Registrable Securities of the S-3
Initiating Holder included therein.
(b) Form S-3 Underwriting Procedures. If the S-3 Initiating Holder so
elects, the Company shall use its reasonable efforts to cause the offering on
Form S-3 pursuant to this Section 5 to be in the form of a firm commitment
underwritten offering and the Company shall select an investment banking firm of
national reputation to act as the managing underwriter of such offering;
provided, however, that such underwriter shall, in any case, be acceptable to
the S-3 Initiating Holder in its reasonable judgment. In connection with any
offering under Section 5(a) involving an underwriting, the Company shall not be
required to include any Registrable Securities in such underwriting unless the
Designated Holders thereof accept the terms of the underwriting as agreed upon
between the Company, such selected underwriter and the S-3 Initiating Holder,
and then only in such quantity as will not, in the opinion of such underwriter,
jeopardize the success of the offering by the S-3 Initiating Holder. If in the
written opinion of such underwriter the registration of all or part of the
Registrable Securities which the S-3 Initiating Holder and the other Designated
Holders have requested to be included would materially adversely affect such
public offering, then the Company shall be required to include in the
underwriting, to the extent of the amount that such underwriter believes may be
sold without causing such adverse effect, first, all of the Registrable
Securities to be offered for the account of the S-3 Initiating Holder; second,
the Registrable Securities to be offered for the account of the other Designated
Holders who requested inclusion of their Registrable Securities pursuant to
Section 5(a),
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pro rata based on the number of Registrable Securities proposed to be offered
for the account of such Designated Holders; and third, any other securities
requested to be included in such underwriting.
(c) Limitations on Form S-3 Registrations. If at the time of any
request to register Registrable Securities pursuant to Section 5(a), the Company
is engaged in, or has fixed plans to engage in within three months (3) of the
time of such request, a registered public offering or is engaged in any other
activity which, in the good faith determination of the Board of Directors of the
Company, would be adversely affected by the requested registration on Form S-3
(or any successor form then in effect) to the material detriment of the Company,
then the Company may at its option direct that such request be delayed for a
reasonable period not in excess of three (3) months from the effective date of
such offering or the date of completion of such other material activity, as the
case may be, such right to delay a request to be exercised by the Company not
more than once in any one-year period. In addition, the Company shall not be
required to effect any registration pursuant to Section 5(a), (i) within three
months after the effective date of any other Registration Statement of the
Company, (ii) if within the 12-month period preceding the date of such request,
the S-3 Initiating Holder has included its Registrable Securities in an offering
on Form S-3, (iii) if Form S-3 is not available for such offering by the
Initiating S-3 Holder, (iv) if the S-3 Initiating Holder has already requested
one registration on Form S-3 and all of the Registrable Securities requested to
be included in such registration were so included or (v) if the S-3 Initiating
Holder, together with the Designated Holders (other than the S-3 Initiating
Holder) registering Registrable Securities in such registration, propose to sell
their Registrable Securities at an aggregate price (calculated based upon the
Market Price of the Registrable Securities on the date of filing of the Form S-3
with respect to such Registrable Securities) to the public of less than
$15,000,000. The parties acknowledge and agree that the limitation in subsection
(iv) of the preceding sentence is for the purpose of limiting the Shareholders
(acting as a group through Plantowsky) to one registration each on Form S-3,
regardless of the number of Designated Holders in each group.
(d) Expenses. In connection with any registration pursuant to this
Section 5, the Company shall pay all Registration Expenses (other than
underwriting discounts and commissions), whether or not such registration
becomes effective.
(e) No Demand Registration. No registration requested by any
Designated Holder pursuant to this Section 5 shall be deemed a Demand
Registration pursuant to Section 3.
6. Holdback Agreements.
(a) Restrictions on Public Sale by Designated Holders. Each of the
Designated Holders agrees not to effect any public sale or distribution of any
Registrable Securities being registered or of any securities convertible into or
exchangeable or exercisable for such Registrable Securities, including a sale
pursuant to Rule 144 under the Securities Act, during the 90-day period
beginning on the effective date of such registration statement (except as part
of such registration), (i) in the case of a non-underwritten public offering, if
and to the extent requested by the Initiating Holders (in the event of a Demand
Registration pursuant to Section 3) or the Company (in the event of an
Incidental Registration pursuant to Section 4(a)), as the case may be, or (ii)
in the case of an underwritten public offering, if and to the extent requested
by the Approved Underwriter (in the event of a Demand Registration pursuant to
Section 3) or the Company Underwriter (in the event of an Incidental
Registration pursuant to Section 4(a)), as the case may be.
(b) Restrictions on Public Sale by the Company. The Company agrees
not to effect any public sale or distribution of any of its securities, or any
securities convertible into or exchangeable or
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exercisable for such securities (except pursuant to registrations on Form S-4 or
S-8 or any successor thereto), during the period beginning on the effective date
of any registration statement in which the Designated Holders of Registrable
Securities are participating and ending on the earlier of (i) the date on which
all Registrable Securities registered on such registration statement are sold
and (ii) 180 days after the effective date of such registration statement.
7. Registration Procedures.
(a) Obligations of the Company. Whenever registration of Registrable
Securities has been requested pursuant to Section 3, Section 4 or Section 5 of
this Agreement, the Company shall use its reasonable efforts to effect the
registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection with any such request, the Company shall, as expeditiously as
reasonably possible:
(i) use its reasonable efforts to prepare and file with the SEC a
registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and
which form shall be available for the sale of such Registrable
Securities in accordance with the intended method of distribution
thereof, and use its best efforts to cause such registration
statement to become effective; provided, however, that (x) before
filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall provide counsel selected by
the Designated Holders holding a majority of the Registrable
Securities being registered in such registration ("Holders' Counsel")
and any other Inspector (as hereinafter defined) with an adequate and
appropriate opportunity to participate in the preparation of such
registration statement and each prospectus included therein (and each
amendment or supplement thereto) to be filed with the SEC, which
documents shall be subject to the review of Holders' Counsel, and (y)
the Company shall notify the Holders' Counsel and each seller of
Registrable Securities of any stop order issued or threatened by the
SEC and take all reasonable action required to prevent the entry of
such stop order or to remove it if entered;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the lesser of (x) 180 days and (y) such
shorter period which will terminate when all Registrable Securities
covered by such registration statement have been sold, and comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement;
(iii) as soon as reasonably possible, furnish to each seller of
Registrable Securities, prior to filing a registration statement,
copies of such registration statement as is proposed to be filed, and
thereafter such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits
thereto), the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as
each such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;
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(iv) use its reasonable efforts to register or qualify such
Registrable Securities under such other securities or "blue sky" laws
of such jurisdictions as any seller of Registrable Securities may
reasonably request, and to continue such qualification in effect in
such jurisdiction for 180 days or for as long as any such seller
requests or until all of such Registrable Securities are sold,
whichever is shortest, and do any and all other acts and things which
may be reasonably necessary or advisable to enable any such seller to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller; provided, however, that the Company
shall not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 7(a)(iv), (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in any such
jurisdiction;
(v) use its reasonable efforts to cause the Registrable
Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the
Company to enable the seller or sellers of Registrable Securities to
consummate the disposition of such Registrable Securities;
(vi) notify each seller of Registrable Securities at any time
when a prospectus relating thereto is required to be delivered under
the Securities Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such
registration statement contains an untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, and the
Company shall promptly prepare a supplement or amendment to such
prospectus and furnish to each seller a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be
necessary so that, after delivery to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they
were made;
(vii) enter into and perform customary agreements (including an
underwriting agreement in customary form with the Approved
Underwriter or Company Underwriter, if any, selected as provided in
Section 3, Section 4 or Section 5, as the case may be) and take such
other actions as are prudent and reasonably required in order to
expedite or facilitate the disposition of such Registrable
Securities;
(viii) make available for inspection by any seller of Registrable
Securities, any managing underwriter participating in any disposition
pursuant to such registration statement, Holders' Counsel and any
attorney, accountant or other agent retained by any such seller or
any managing underwriter (each, an "Inspector" and collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause
the Company's and its subsidiaries' officers, directors and
employees, and the independent public accountants of the Company, to
supply all information reasonably requested by any such Inspector in
connection with such registration statement. Records that the Company
determines, in good faith, to be confidential
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and which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (x) the disclosure of such Records
is necessary to avoid or correct a misstatement or omission in the
registration statement, (y) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction or (z) the information in such Records was known to the
Inspectors on a non-confidential basis prior to its disclosure by the
Company or has been made generally available to the public. Each
seller of Registrable Securities agrees that it shall, upon learning
that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at
the Company's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(ix) if such sale is pursuant to an underwritten offering, use
its best efforts to obtain a "cold comfort" letter from the Company's
independent public accountants in customary form and covering such
matters of the type customarily covered by "cold comfort" letters as
Holders' Counsel or the managing underwriter reasonably request;
(x) use its reasonable efforts to furnish, at the request of any
seller of Registrable Securities on the date such securities are
delivered to the underwriters for sale pursuant to such registration
or, if such securities are not being sold through underwriters, on
the date the registration statement with respect to such securities
becomes effective, an opinion, dated such date, of counsel
representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the seller making such
request, covering such legal matters with respect to the registration
in respect of which such opinion is being given as such seller may
reasonably request and are customarily included in such opinions and
are reasonably acceptable to counsel representing the Company;
(xi) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to
its security holders, as soon as reasonably practicable but no later
than fifteen (15) months after the effective date of the registration
statement, an earnings statement covering a period of twelve (12)
months beginning after the effective date of the registration
statement, in a manner which satisfies the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(xii) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company
are then listed, provided that the applicable listing requirements
are able to be satisfied;
(xiii) keep Holders' Counsel advised in writing as to the
initiation and progress of any registration under Section 3 or
Section 4 hereunder;
(xiv) cooperate with each seller of Registrable Securities and
each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any
filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD"); and
(xv) use reasonable efforts to take all other steps necessary to
effect the registration of the Registrable Securities contemplated
hereby.
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(b) Seller information. The Company may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding the distribution of such securities as
the Company may from time to time reasonably request in writing. Failure of any
seller of Registrable Securities to provide any requested information in a
reasonably timely manner shall be grounds for removal of the Registrable
Securities of such seller from the offering.
(c) Notice to Discontinue. Each Designated Holder of Registrable
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 7(a)(vi), such Designated Holder shall
forthwith discontinue disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such
Designated Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 7(a) (vi) and, if so directed by the Company,
such Designated Holder shall deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Designated Holder's
possession, of the prospectus covering such Registrable Securities which is
current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such registration
statement shall be maintained effective pursuant to this Agreement (including,
without limitation, the period referred to in Section 7(a) (ii)) by the number
of days during the period from and including the date of the giving of such
notice pursuant to Section 7(a) (vi) to and including the date when the
Designated Holder shall have received the copies of the supplemented or amended
prospectus contemplated by and meeting the requirements of Section 7(a) (vi).
(d) Registration Expenses. The Company shall pay all expenses (other
than as set forth in Sections 3(d), 4(b) and 5(d)) arising from or incident to
the performance of, or compliance with, this Agreement, including, without
limitation, (i) SEC, stock exchange and NASD registration and filing fees, (ii)
all fees and expenses incurred in complying with securities or "blue sky" laws
(including reasonable fees, charges and disbursements of counsel in connection
with "blue sky" qualifications of the Registrable Securities), (iii) all
printing, messenger and delivery expenses, (iv) the fees, charges and expenses
of counsel to the Company and of its independent public accountants and any
other accounting fees, charges and expenses incurred by the Company (including,
without limitation, any expenses arising from any "cold comfort" letters and any
special audits incident to or required by any registration or qualification) and
the reasonable legal fees, charges and expenses of one counsel engaged by the
Initiating Holders to represent their interests in connection with a Demand
Registration and (v) any liability insurance or other premiums for insurance
obtained by the Company in connection with any Demand Registration, Incidental
Registration or registration on Form S-3 pursuant to the terms of this
Agreement, regardless of whether such registration statement is declared
effective. All of the expenses described in this Section 7(d) are referred to
herein as "Registration Expenses".
8. Indemnification: Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the fullest extent permitted by law, each Designated
Holder, its officers, directors, trustees, partners, employees, advisors and
agents and each Person who controls (within the meaning of the Securities Act or
the Exchange Act) such Designated Holder from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue, or allegedly untrue,
statement of a material fact contained in any registration statement, prospectus
or preliminary prospectus or notification or offering circular (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same are caused by
or contained in any information concerning such
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Designated Holder furnished in writing to the Company by such Designated Holder
expressly for use therein. The Company shall also provide customary indemnities
to any underwriters of the Registrable Securities, their officers, directors and
employees and each Person who controls such underwriters (within the meaning of
the Securities Act and the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Designated Holders of Registrable
Securities.
(b) Indemnification by Designated Holders. In connection with any
registration statement in which a Designated Holder is participating pursuant to
Section 3, Section 4 or Section 5 hereof, each such Designated Holder shall
furnish to the Company in writing such information with respect to such
Designated Holder as the Company may reasonably request or as may be required by
law for use in connection with any such registration statement or prospectus and
each Designated Holder agrees to indemnify and hold harmless, to the fullest
extent permitted by law, the Company, any underwriter retained by the Company
and their respective directors, officers, employees, advisors and agents and
each Person who controls the Company or such underwriter (within the meaning of
the Securities Act and the Exchange Act) to the same extent as the foregoing
indemnity from the Company to the Designated Holders, but only with respect to
any such information with respect to such Designated Holder furnished in writing
to the Company by such Designated Holder expressly for use therein; provided,
however, that the total amount to be indemnified by such Designated Holder
pursuant to this Section 8(b) shall be limited to the net proceeds received by
such Designated Holder in the offering to which the registration statement or
prospectus relates.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder (the "Indemnified Party") agrees to give prompt
written notice to the indemnifying party (the "Indemnifying Party") after the
receipt by the Indemnified Party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
for which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; provided, however, that the failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of any liability
that it may have to the Indemnified Party hereunder. If notice of commencement
of any such action is given to the Indemnifying Party as above provided, the
Indemnifying Party shall be entitled to participate in and, to the extent it may
wish, jointly with any other Indemnifying Party similarly notified, to assume
the defense of such action at its own expense, with counsel chosen by it and
reasonably satisfactory to such Indemnified Party. The Indemnified Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be paid by the Indemnified Party unless
(i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party
fails to assume the defense of such action with counsel reasonably satisfactory
to the Indemnified Party in its reasonable judgment or (iii) the named parties
to any such action (including any impleaded parties) have been advised by such
counsel that either (x) representation of such Indemnified Party and the
Indemnifying Party by the same counsel would be inappropriate under applicable
standards of professional conduct or (y) there may be one or more legal defenses
available to it which are different from or additional to those available to the
Indemnifying Party. In either of such cases, the Indemnifying Party shall not
have the right to assume the defense of such action on behalf of such
Indemnified Party. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld.
(d) Contribution. If the indemnification provided for in this Section
8 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
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Indemnifying Party and Indemnified Party in connection with the actions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative faults of such
Indemnifying Party and Indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such Indemnifying Party or Indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Sections 8(a), 8(b) and 8(c), any legal
or other fees, charges or expenses reasonably incurred by such party in
connection with any investigation or proceeding; provided that the total amount
to be contributed by such Designated Holder shall be limited to the net proceeds
received by such Designated Holder in the offering.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person.
9. Rule 144. The Company hereby covenants that after it has filed
(and such Registration Statement has become effective) a Registration Statement
pursuant to Section 12 of the Exchange Act or a Registration Statement pursuant
to the Securities Act in respect of any Shares it shall file (a) any reports
required to be filed by it under the Exchange Act and (b) take such further
action as each Designated Holder of Registrable Securities may reasonably
request (including providing any information necessary to comply with Rules 144
under the Securities Act), all to the extent required from time to time to
enable such Designated Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or (ii) any similar rules or regulations hereafter adopted by
the SEC. The Company shall, upon the request of any Designated Holder of
Registrable Securities, deliver to such Designated Holder a written statement as
to whether it has complied with such requirements.
10. Miscellaneous.
(a) Recapitalizations, Exchanges, etc. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to (i)
the shares of Common Stock and (ii) any and all equity securities of the Company
or any successor or assign of the Company (whether by merger, consolidation,
sale of assets or otherwise) which may be issued in respect of, in conversion
of, in exchange for or in substitution of, the shares of Common Stock and shall
be appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof.
The Company shall cause any successor or assign (whether by merger,
consolidation or otherwise) to enter into a new registration rights agreement
with the Designated Holders on terms substantially similar to this Agreement as
a condition of any such transaction.
(b) No Inconsistent Agreements. The Company represents and warrants
that it has not granted to any Person the right to request or require the
Company to register any securities issued by the Company, other than the rights
granted to the Designated Holders herein. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Designated Holders
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in this Agreement or grant any additional registration rights to any Person or
with respect to any securities which are not Registrable Securities which are
prior in right to or inconsistent with the rights granted in this Agreement.
(c) Remedies. The Designated Holders, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, shall be
entitled to specific performance of their rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive in any action for specific performance the defense
that a remedy at law would be adequate.
(d) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless consented to in writing by (i) the Company and (ii) the Designated
Holders holding Registrable Securities representing (after giving effect to any
adjustments) at least 85 % of the aggregate number of Registrable Securities
owned by all of the Designated Holders; provided, however, that any such
amendment, modification, supplement, waiver or consent shall not be effective to
withdraw, deny or adversely affect the rights of any Designated Holder who has
not consented in writing thereto. Subject to the proviso in the preceding
sentence, any such written consent shall be binding upon the Company and all of
the Designated Holders.
(e) Notices. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be made by
registered or certified first-class mail, return receipt requested, telecopier,
courier service, overnight mail or personal delivery:
(i) if to the Company:
BindView Development Corporation
0000 Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Chief Executive Officer
(ii) if to the Plantowsky Shareholders:
BindView Development Corporation
0000 Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx, Chief Financial Officer
(iii) if to any other Designated Holder, at its address as
it appears on the record books of the Company.
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; when delivered by courier
or overnight mail, if delivered by commercial courier service or overnight mail;
five (5) Business Days after being deposited in the mail, postage prepaid, if
mailed; and when receipt is mechanically acknowledged, if telecopied.
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(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties hereto. The Demand Registration rights of the General Atlantic
Shareholders, the JMI Shareholders and the Plantowsky Shareholders contained in
Section 3 hereof and the other rights of each of the General Atlantic
Shareholders, JMI Shareholders and the Plantowsky Shareholders with respect
thereto shall be, with respect to any Registrable Security, (i) automatically
transferred among the General Atlantic Shareholders, (ii) automatically
transferred among the JMI Shareholders, (iii) automatically transferred among
the Plantowsky Shareholders and (iv) in all other cases, transferred only with
the consent of the Company. The incidental or "piggy-back" registration rights
of the Designated Holders contained in Sections 3(b) and 4 hereof, the Form S-3
registration rights contained in Section 5 hereof and the other rights of each
of the Designated Holders with respect thereto shall be, with respect to any
Registrable Security, automatically transferred by such Designated Holder to any
Person who is the transferee of such Registrable Security. All of the
obligations of the Company hereunder shall survive any such transfer; provided,
however, that the "piggyback" registration rights of the Other Shareholders (as
set forth in subsection (g) below) may be transferred only with the consent of
the Company.
(g) Third Party Beneficiaries. The parties to this Agreement agree
that the shareholders of the Company listed on Schedule 1 (the "Other
Shareholders") shall be entitled to certain "piggy-back" registration rights
under Sections 3(b), 4(a) and 5(a) of this Agreement. The rights granted
pursuant to the preceding sentence are expressly conditioned on the agreement of
each such Other Shareholder to abide by the obligations set forth herein as if
such Other Shareholder was an original signatory to this Agreement including,
without limitation, the obligations set forth in Sections 3(b), 4(a), 5(b), 6(a)
7(a) and 8(b). The Company shall provide notice to the Other Shareholders of an
event that triggers the Other Shareholders' "piggy-back" registration rights.
The number of Registrable Securities of the Other Shareholders requested to be
included in any such registration shall be included in the Registrable
Securities of the Plantowsky Shareholders for purposes of any calculation the
number of Registrable Securities that may be included in such registration.
Other than as set forth in this Section 10(g) and Sections 8(a) and 8(b), no
Person other than the parties hereto and their successors and permitted assigns
is intended to be a beneficiary of any of the rights granted hereunder.
(h) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
(k) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, it being intended
that all of the rights and privileges of the Designated Holders shall be
enforceable to the fullest extent permitted by law.
(l) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of
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the parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and in the Stock Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(m) Further Assurances. Each of the parties shall execute such
documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed, or have caused to
be executed, this Agreement on the date first written above.
BINDVIEW DEVELOPMENT CORPORATION
By:
--------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
-------------------------------------------
Xxxxx X. Xxxxxxxxxx
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