REGISTRATION RIGHTS AGREEMENT
EXECUTION COPY
This Registration Rights Agreement (this
“Agreement”) is made as of June 29, 2010 by Unify Corporation, a Delaware
corporation (the “Company”), for the benefit of the Holders (as such term is
hereinafter defined). The Company hereby confirms that the rights granted under
this Agreement constitute a material inducement to the Holders to participate in
(i) the merger of Strategic Office Solutions, Inc., a California corporation
doing business as Daegis (“Daegis”), with Unify Acquisition Corp., a California
corporation and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant
to the Merger Agreement (as defined herein) and (ii) in the Warrant (as defined
herein), as applicable. Each Holder, by its participation or request to
participate in any Registration effected pursuant to this Agreement, shall be
deemed to have confirmed such Holder’s agreement to comply with the applicable
provisions of this Agreement.
NOW, THEREFORE, the Company hereby
agrees, in favor of the Holders, as follows:
1. Definitions. In addition to those terms defined elsewhere
in this Agreement, the following terms shall have the following meanings
wherever used in this Agreement:
“Act” shall mean the Securities Act of 1933,
as amended, and any successor statute from time to time.
“Affiliate”
shall mean, with respect to any person, any other person controlling, controlled
by or under common control with the first person.
“Common
Stock” means the common stock of
the Company, par value $0.001 and any other class of securities into which such
shares may hereafter have been reclassified or changed.
“Company”
shall mean Unify Corporation, a Delaware corporation, and shall include any
successor thereto.
“Costs
and Expenses” shall mean all of the costs and expenses relating to any subject
Registration Statement, including but not limited to registration, filing and
qualification fees, blue sky expenses, costs of listing any Shares on any
exchange or other trading media, and printing expenses, fees and disbursements
of counsel and accountants to the Company, and reasonable fees and disbursements
of (i) a single counsel (in addition to appropriate local counsel) to the
Holders (other than Hercules) and (ii) separate counsel to Hercules;
provided, however, that underwriting discounts and commissions
attributable solely to the securities registered for the benefit of Holders,
fees and disbursements of any additional counsel to Holders, and all other
expenses attributable solely to Holders shall be borne by each subject
Holder.
“Daegis”
shall mean Strategic Office Solutions, Inc., a California corporation doing
business as Daegis.
“Effectiveness
Date” has the meaning set forth in Section 2(b).
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and any
successor statute from time to time.
“Filing
Date” has the meaning set forth in Section 2(a).
“Hercules”
shall mean Hercules Technology II, L.P., a Holder for purposes of this
Agreement.
“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time
of Registrable Shares.
“Liquidated
Damages” shall have the meaning set forth in Sections 2(f) and
(2g).
“Merger
Agreement” shall mean the Agreement and Plan of Merger dated as of June 29,
2010, by and among the Company, Merger Sub, Daegis, and certain shareholders of
Daegis.
“Merger
Consideration” shall mean the 2,085,714 shares of Common Stock issued to the
shareholders of Daegis under the Merger Agreement, and the shares of Common
Stock issuable upon conversion of the convertible notes issued to the
shareholders of Daegis under the Merger Agreement.
“Merger
Sub” shall mean Unify Acquisition Corp., a California corporation and
wholly-owned subsidiary of the Company.
“Person”
shall mean any individual, corporation, partnership, limited partnership,
limited liability company, trust, or other entity of any kind, and any
government or department or agency thereof.
“Prospectus”
means the Prospectus included in the Registration Statement (including, without
limitation, a Prospectus that includes any information previously omitted from a
Prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any Prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Shares covered by the Registration Statement, and all
other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Shares” shall mean all Shares, excluding any Shares which may then be sold by
the Holder thereof without restriction (including, without limitation, volume
restriction) pursuant to Rule 144 promulgated under the Act.
“Registration”
shall mean any registration of Common Stock pursuant to a registration statement
filed by the Company with the SEC in respect of any class of Common Stock,
other than a registration statement in respect of
employee stock options or other employee benefit plans or in respect of any
merger, consolidation, acquisition or like combination on Form X-0, Xxxx X-0 or
any equivalent form of registration then in effect.
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“Registration
Period” shall mean, with respect to a Registration Statement, the period of time
from the effective date of such Registration Statement until such date as is the
earlier of (a) the date on which all of the Registrable Shares covered by such
Registration Statement shall have been sold to the public, or (b) the date on
which the Shares (in the opinion of counsel to the Company evidenced by a
written opinion issued to the Holders in form reasonably acceptable to the
Holders) may be immediately sold without restriction (including, without
limitation, as to volume restrictions) by each Holder thereof without
registration under the Act.
“Registration
Statement” means the registration statement required to be filed hereunder,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“SEC”
shall mean the United States Securities and Exchange Commission, or any
successor agency or agencies performing the functions thereof.
“Shares”
shall mean, collectively, (i) the Common Stock and/or other securities issued
and/or issuable from time to time as Merger Consideration, (ii) the shares of
Common Stock issued by the Company under the Warrant and (iii) any additional or
other Shares issued in respect of any of the foregoing Shares by reason of any
stock split, stock dividend, merger, share exchange, recapitalization or other
such event.
“Warrant”
shall mean the Warrant to purchase Common Stock No. 1 of the Company dated June
29, 2010 in favor of Hercules.
“Warrant Exercise Date” shall mean any time on
or after the twenty-first (21st) day following the Company’s distribution of an
information statement to its stockholders, in accordance with Regulation 14C
under the Securities Exchange Act of 1934, as amended, with respect to the
action taken by the Company’s stockholders by written consent approving the
issuance of the Warrant Shares.
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2. Shelf Registration.
(a) The Company shall prepare and file with the SEC (i) not later than sixty
(60) days after the date of this Agreement (the “Filing Date”), a Registration
Statement or Registration Statements (as necessary) on a form that is
appropriate under the Act (and, if available, pursuant to Rule 415 promulgated
under the Act), covering the resale of all of the Registrable Shares, in an
amount sufficient to cover the resale of all Shares. The Registration Statement
shall be on Form S-3 (except if the Company is not then eligible to register for
resale the Registrable Shares on Form S-3, in which case such registration shall
be on another appropriate form in accordance herewith).
(b) Subject to the terms of this Agreement, the Company shall use its best
efforts to cause the Registration Statement(s) required by this Section 2 to be
declared effective under the Act as promptly as possible after the filing
thereof, but in any event not later than one hundred twenty (120) days after the
date of this Agreement (the “Effectiveness Date”).
(c) Subject to the terms of this Agreement, the Company shall use its best
efforts to keep each Registration Statement under this Section 2 effective at
all times during the applicable Registration Period.
(d) If any offering pursuant to a Registration Statement pursuant to this
Section 2 involves an underwritten offering (which may only be with the consent
of the Company, which shall not be unreasonably withheld or delayed), the
Holders (acting by a majority in interest) shall have the right to select legal
counsel and an investment banker or bankers and manager or managers to
administer to the offering, which investment banker or bankers or manager or
managers shall be reasonably satisfactory to the Company; provided that Hercules shall have the right to select its
own legal counsel.
(e) The Company shall notify the Holders via facsimile or electronic mail of
the effectiveness of the Registration Statement within three business days of
the Company telephonically confirming effectiveness with the Commission. The
Company shall, by 9:30 AM Eastern Time on the Trading Day that is three business
days after the Effective Date, file a Form 424(b)(5) with the
Commission.
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(f) If: (i) the Registration Statement or Registration Statements (as
necessary) are not filed on or prior to its Filing Date (ii) the Company files
such Registration Statement(s) without affording the Holders the opportunity to
review and comment on the same as required by Section 2(i) hereof; (iii) a
Registration Statement(s) filed or required to be filed hereunder is not
declared effective by the Commission by the Effectiveness Date; or (iv) after
the effective date of a Registration Statement, such Registration Statement
ceases for any reason to remain continuously effective as to all Registrable
Shares included in such Registration Statement during the Registration Period,
or the Holders are otherwise not permitted to utilize such Registration
Statement(s) to resell such Registrable Shares (A) for the reasons set forth in
Section 2(h) hereof or (B) for any other reason, more than an aggregate of 60
calendar days (which will not include more than 30 consecutive days) during any
12-month period (any such failure or breach being referred to as an “Event”, and
for purposes of clause (i), (ii) and (iii), the date on which such Event occurs
and for purposes of clause (iv) the date on which such period,
as applicable, is exceeded
being referred to as “Event Date”), then, in addition to any other rights the
Holders may have hereunder or under applicable law, on each such Event Date and
on each monthly anniversary of each such Event Date (if the applicable Event
shall not have been cured by such date) until the applicable Event is cured, the
Company shall pay to each Holder (except Hercules which will receive liquidated
damages as described below in Section 2(g)) an amount in cash, as partial
liquidated damages and not as a penalty, equal to $0.01167 per Share for any
unregistered Registrable Share then held by such Holder. The aggregate
liquidated damages for all Holders other than Hercules shall be limited to $0.07
per Share. If the Company fails to pay any partial liquidated damages pursuant
to this Section in full within seven days after the date payable, the Company
will pay interest thereon at a rate of 18% per annum (or such lesser maximum
amount that is permitted to be paid by applicable law) to the Holder, accruing
daily from the date such partial liquidated damages are due until such amounts,
plus all such interest thereon, are paid in full. The partial liquidated damages
pursuant to the terms hereof shall apply on a daily pro rata basis for any
portion of a month prior to the cure of an Event.
(g) Notwithstanding Section 2(f) above, if: (i) the Registration Statement or
Registration Statements (as necessary) are not filed on or prior to the Filing
Date (ii) the Company files such Registration Statement(s) without affording the
Holders the opportunity to review and comment on the same as required by Section
2(i) hereof; (iii) a Registration Statement(s) filed or required to be filed
hereunder is not declared effective by the Commission by the Effectiveness Date;
or (iv) after the effective date of a Registration Statement, such Registration
Statement ceases for any reason to remain continuously effective as to all
Registrable Shares included in such Registration Statement during the
Registration Period, or Hercules is otherwise not permitted to utilize such
Registration Statement(s) to resell such Registrable Shares (A) for the reasons
set forth in Section 2(h) hereof or (B) for any other reason, in each case, for
more than 30 consecutive calendar days or for more than 60 calendar days in the
aggregate during any twelve-month period (which need not be consecutive business
days) (any such failure or breach being referred to as an “Event”, and for
purposes of clause (i), (ii) and (iii), the date on which such Event occurs and
for purposes of clause (iv) the date on which such period, as applicable, is
exceeded being referred to as an “Event Date”), then, in addition to any other
rights Hercules may have hereunder or under applicable law, the Company shall
pay to Hercules an amount in cash, as partial liquidated damages and not as a
penalty, an amount equal to (x) on the one month anniversary of the Event Date,
$100,000, and (y) on each one month anniversary of the Event Date occurring
thereafter (if the applicable Event shall not have been cured by such monthly
anniversary) until the applicable Event is cured, a cumulative amount equal to
(1) the aggregate amount paid on the one month anniversary of the Event Date and
each succeeding monthly anniversary, if any, plus (2) $100,000 for each passing
of an additional thirty (30) days thereafter, which amount will be pro-rated if
the Event is cured prior to the next monthly anniversary; provided that the total aggregate amount shall not exceed
$500,000 per month. For example, if an Event occurs and is ongoing for
forty-five (45) days, the amount of the partial liquidated damages payable by
the Company to Hercules pursuant to the terms hereof, would equal $200,000
($100,000 for the first thirty (30) days plus $200,000 multiplied by the 0.5 to
account for the fact that the Event was cured fifteen (15) days before the next
monthly anniversary). Solely to the extent (i) the Warrant is not exercisable in
accordance with its terms by the Warrant Exercise Date and (ii) the Warrant has
been returned to the Company for cancellation in accordance with Section 8.20 of
the Loan and Security Agreement of even date herewith between the Company,
certain subsidiaries of the Company as guarantors and Hercules, this Section 2(g) shall terminate at
cancellation of the Warrant, the Shares issuable upon exercise of the Warrant
shall cease to be Registrable Shares and Hercules shall have no further rights
or obligations under this Agreement.
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(h) If the Registrable Shares are registered for resale under an effective
Registration Statement, the Holders shall cease any distribution of such Shares
under such Registration Statement:
(i) for a period of up to
sixty (60) days if (A) such distribution would require the public disclosure of
material non-public information concerning any transaction or negotiations
involving the Company or any of its Affiliates that, in the reasonable judgment
of the Company’s Board of Directors, would materially interfere with such
transaction or negotiations, or (B) such distribution would otherwise require
premature disclosure of information that, in the reasonable judgment of the
Company’s Board of Directors, would adversely affect or otherwise be detrimental
to the Company; provided that the Company shall not invoke this clause
(i) more than twice in any twelve (12) month period or for more than an
aggregate of ninety (90) days in any such twelve (12) month period;
(ii) not more than once in any twelve (12) month period, for up to thirty (30)
days, upon the request of the Company if the Company proposes to file a
Registration Statement under the Act for the offering and sale of securities for
its own account in an underwritten offering and the managing underwriter
therefor shall advise the Company in writing that in its opinion the continued
distribution of the Registrable Shares would adversely affect the offering of
the securities proposed to be registered for the account of the Company;
and
(iii) for a period of up to sixty (60) days after the filing of the Company’s
annual report on Form 10-K or Form 10-KSB or other event that requires the
filing of a post-effective amendment to any Registration Statement hereunder, so
long as the Company has filed and is during such period actively pursuing
effectiveness of such post-effective amendment with the staff of the
SEC.
The Company shall
promptly notify the Holders in writing at such time as (x) such transactions or
negotiations have been otherwise publicly disclosed or terminated, or (y) such
non-public information has been publicly disclosed or counsel to the Company has
determined that such disclosure is not required due to subsequent
events.
(i) The Company shall (i) not
less than five business days prior to filing of the Registration Statement,
provide to each Holder for his, her or its review (A) a copy of the Registration
Statement proposed to be filed, and all amendments and supplements thereto, in
each case to the extent of any information with respect to the Holders, their
and their Affiliates’ beneficial ownership of securities of the Company, and
their intended method of disposition of Registrable Shares, and (B) all requests
for acceleration or effectiveness thereof and any correspondence between the
Company and the SEC relating to the Registration Statement (collectively, the
“Registration Documents”), for a reasonable period of time prior to their filing
with the SEC, (ii) not file (or send) any Registration Documents in a form to
which such Holder reasonably objects, (iii) not request acceleration of such
Registration Statement without prior notice to such Holder and (iv) consider all
appropriate comments that are timely provided by such Holder with respect to the
Registration Statement. The sections of such Registration Statement covering
information with respect to the Holders, their and their Affiliates’ beneficial
ownership of securities of the Company, and their intended method of disposition
of Registrable Shares shall conform to the information provided to the Company
by the Holders.
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(j) The Registration Statement pursuant to this Section 2 shall not include
any securities other than Registrable Shares.
(k)
The Company shall bear all of the
Costs and Expenses of the Registration pursuant to this Section 2.
3. Piggyback Registration. In the event that the Company shall propose
a Registration at any time after the first anniversary of the date hereof when a
Registration Statement is not effective pursuant to Section 2 above, then the
Company shall give to each Holder written notice (the “Registration Notice”) of
such proposed Registration (which notice shall include a statement of the
proposed filing date thereof, the underwriters and/or managing underwriters of
the subject offering, and any other known material information relating to the
proposed Registration) not less than twenty (20) or more than sixty (60)
calendar days prior to the filing of the subject Registration Statement, and
shall, subject to the limitations provided in this Section 3, include in such
Registration Statement all or a portion of the Registrable Shares owned by
and/or issuable to each Holder, as and to the extent that such Holder may
request same to be so included by means of written notice given to the Company
within ten (10) business days after the Company’s giving of the Registration
Notice. Each Holder shall be permitted to withdraw all or any part of its
Registrable Shares from a Registration Statement by written notice to the
Company given at any time prior to the effective date of the Registration
Statement. The Company shall bear all of the Costs and Expenses of any
Registration described in this Section 3; provided, however, that each Holder shall pay, pro rata based upon the number of its Registrable
Shares included therein, the underwriters’ discounts, commissions and
compensation attributable solely to the inclusion of such Registrable Shares in
the overall public offering. Notwithstanding anything to the contrary contained
herein, the Company’s obligation to include a Holder’s Registrable Shares in any
such Registration Statement shall be subject, at the option of the Company, to
the following further conditions:
(a) The distribution for the account of such Holder shall be underwritten by
the same underwriters (if any) who are underwriting the distribution of the
securities for the account of the Company and/or any other persons whose
securities are covered by such Registration Statement, and shall be made at the
same underwriter discount or commission applicable to the distribution of the
securities for the account of the Company and/or any other Persons whose
securities are covered by such Registration Statement; and such Holder shall
enter into an agreement with such underwriters containing customary
indemnification and other provisions;
(b) If at any time after giving the Registration Notice, and prior to the
effective date of the Registration Statement filed in connection with such
Registration Notice, the Company shall determine for any reason not to proceed
with the subject Registration, the Company may, at its election, give written
notice of such determination to the Holders and, thereupon, shall be relieved of
its obligation to register any of the Holders’ Registrable Shares in connection
with such Registration;
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(c) In connection with an underwritten public offering pursuant to a
Registration Statement under this Section 3, if and only if the managing
underwriter(s) thereof shall advise the Company in writing that, due to adverse
market conditions or the potential adverse impact on the offering to be made for
the account of the Company, the securities to be included in such Registration
will not include all of the Registrable Shares requested to be so included by
the Holders, then the Company will promptly furnish each such Holder with a copy
of such written statement and may require, by written notice to each such Holder
accompanying such written statement, that the distribution of all or a specified
portion of such Registrable Shares be excluded from such distribution (with any
such “cutback” to be allocated among the subject Holders (and, if applicable,
any other holders of Common Stock to be included in such Registration) in
proportion to the relative number of shares of Common Stock requested by such
Persons to be included in such Registration); and
(d)
The Company shall not be
obligated to effect any registration of Shares incidental to the Registration of
any of its securities in connection with mergers, acquisitions, exchange offers,
dividend reinvestment plans or stock option or other employee benefit plans on
Form X-0, Xxxx X-0 or any equivalent form of registration then in
effect.
4. Registration Procedures. In the case of each Registration effected by
the Company in which Registrable Shares are to be sold for the account of any
Holder, the Company, at its sole cost and expense, will use its best efforts
to:
(a) prepare and file with the SEC such amendments and supplements, including
post-effective amendments, to such Registration Statement and the Prospectus
included therein as may be necessary to effect and maintain the effectiveness of
such Registration Statement, until the completion of the distribution of the
Registrable Shares included therein, as may be required by the applicable rules
and regulations of the SEC and the instructions applicable to the form of such
Registration Statement, and furnish to the Holders of the Registrable Shares
covered thereby copies of any such supplement or amendment not less than three
business days prior to the date first used and/or filed with the SEC, and comply
with the provisions of the Act with respect to the disposition of all the Shares
to be included in such Registration Statement;
(b) provide (i) the Holders of the Registrable Shares to be included in such
Registration Statement, (ii) the underwriters (which term, for purposes of this
Agreement, shall include a person deemed to be an underwriter within the meaning
of Section 2(11) of the Act), if any, thereof, (iii) the sales or placement
agent, if any, therefor, (iv) one counsel for such underwriters or agent , (v)
not more than one counsel for all the Holders (other than Hercules) of such
Registrable Shares and (vi) separate counsel for Hercules, the reasonable
opportunity review such Registration Statement, each Prospectus included therein
or filed with the SEC, and each amendment or supplement thereto, in each case to
the extent of any disclosures regarding the Holders, their and their Affiliates’
beneficial ownership of securities of the Company, and their intended method of
disposition of the Registrable Shares included in such Registration Statement
(or any amendment to any such information previously included in such
Registration Statement (including any amendment or supplement thereto) or any
Prospectus included therein);
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(c) for a reasonable period prior to the filing of such Registration
Statement, and not more than once in any calendar quarter throughout the period
specified above, make available for inspection by the Persons referred to in
Section 4(b) above such financial and other information and books and records of
the Company, and cause the officers, directors, employees, counsel and
independent certified public accountants of the Company to respond to such
inquiries, as shall be reasonably necessary, in the judgment of the respective
counsel referred to in such Section 4(b), to conduct a reasonable investigation
within the meaning of the Act; provided, however, that each such party shall be required to
maintain in confidence and not disclose to any other person or entity any
information or records reasonably designated by the Company in writing as being
confidential, until such time as and to the extent that (i) such information
becomes a matter of public record or generally available to the public (whether
by virtue of its inclusion in such Registration Statement or otherwise, other
than by reason of a breach hereof), (ii) such party shall be required to
disclose such information pursuant to the subpoena or order of any court or
other governmental agency or body having jurisdiction over the matter, or (iii)
such information is required to be set forth in such Registration Statement or
the Prospectus included therein or in an amendment to such Registration
Statement or an amendment or supplement to such Prospectus in order that such
Registration Statement, Prospectus, amendment or supplement, as the case may be,
does not include an untrue statement of a material fact or omit to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; and further provided, that the Company need not make such
information available, nor need it cause any officer, director or employee to
respond to such inquiry, unless each such Holder of Registrable Shares to be
included in a Registration Statement hereunder, upon the Company’s request,
executes and delivers to the Company a specific undertaking to substantially the
same effect contained in the immediately preceding proviso;
(d)
promptly notify in writing the
Holders of Registrable Shares to be included in a Registration Statement
hereunder, the sales or placement agent, if any, therefor and the managing
underwriter of the securities being sold, (i) when such Registration Statement
or the Prospectus included therein or any Prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such registration
statement or any post-effective amendment, when the same has become effective,
(ii) of any comments by the SEC and by the blue sky or securities commission or
regulator of any state with respect thereto or any request by the SEC for
amendments or supplements to such Registration Statement or the Prospectus or
for additional information, (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of such registration statement or the initiation of
any proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose, or (v) if it shall be the case, at any time when a Prospectus
is required to be delivered under the Act, that such Registration Statement,
Prospectus, or any document incorporated by reference in any of the foregoing
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 then existing;
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(e) avoid the issuance of,
or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of the Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable Shares
for sale in any jurisdiction, as soon as practicable;
(f) if requested by any managing underwriter or underwriter, any placement or
sales agent or any Holder of Registrable Shares to be included in a Registration
Statement, promptly incorporate in a Prospectus, Prospectus supplement or
post-effective amendment such information as is required by the applicable rules
and regulations of the SEC and as such managing underwriter or underwriters,
such agent or such Holder may reasonably specify should be included therein
relating to the terms of the sale of the Registrable Shares included thereunder,
including, without limitation, information with respect to the number of
Registrable Shares being sold by such Holder or agent or to such underwriters,
the name and description of such Holder, the offering price of such Registrable
Shares and any discount, commission or other compensation payable in respect
thereof, the purchase price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable Shares to be sold
in such offering; and make all required filings of such Prospectus, Prospectus
supplement or post-effective amendment promptly after notification of the
matters to be incorporated in such Prospectus, Prospectus supplement or
post-effective amendment;
(g) furnish, without charge, to each Holder of Registrable Shares to be
included in such Registration Statement hereunder, each placement or sales
agent, if any, therefor, each underwriter, if any, thereof and the counsel
referred to in Section 4(b) an executed copy of such Registration Statement,
each such amendment and supplement thereto (in each case excluding all exhibits
and documents incorporated by reference) and such number of copies of the
Registration Statement (excluding exhibits thereto and documents incorporated by
reference therein unless specifically so requested by such Holder, agent or
underwriter, as the case may be) and the Prospectus included in such
Registration Statement (including each preliminary Prospectus and any summary
Prospectus), in conformity with the requirements of the Act, as such Holder,
agent, if any, and underwriter, if any, may reasonably request in order to
facilitate the disposition of the Shares owned by such Holder, sold by such
agent or underwritten by such underwriter and to permit such Holder, agent and
underwriter to satisfy the Prospectus delivery requirements of the Act; and the
Company hereby consents to the use of such Prospectus and any amendment or
supplement thereto by each such Holder and by any such agent and underwriter, in
each case in the form most recently provided to such person by the Company, in
connection with the offering and sale of the Shares covered by the Prospectus
(including such preliminary and summary Prospectus) or any supplement or
amendment thereto;
(h) timely (i) register or qualify (to the extent legally required) the
Shares to be included in such Registration Statement under such other securities
laws or blue sky laws of such jurisdictions to be designated by the Holders of
such Shares participating in such Registration and each placement or sales
agent, if any, therefor and underwriter, if any, thereof, as any Holder and each
underwriter, if any, of the securities being sold shall reasonably request, (ii)
keep such registrations or qualifications in effect and comply with such laws so
as to permit the continuance of offers, sales and dealings therein in such
jurisdictions for so long as may be necessary to enable such Holder, agent or
underwriter to complete its distribution of the Registrable Shares pursuant to
such Registration Statement, and (iii) take any and all such actions as may be
reasonably necessary or advisable to enable such Holder, agent, if any, and
underwriter to consummate the disposition in such jurisdictions of such Shares;
provided, however, that the Company shall not be required for
any such purpose to (A) qualify generally to do business as a foreign
corporation or a broker-dealer in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this Section 4(h),
(B) subject itself to taxation in any such jurisdiction, or (C) consent to
general service of process in any such jurisdiction;
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(i) cooperate with the
Holders of the Registrable Shares to be included in a Registration Statement
hereunder and the managing underwriter(s) to facilitate the timely preparation
and delivery of certificates representing Registrable Shares to be sold, which
certificates shall be printed, lithographed or engraved, or produced by any
combination of such methods, in customary form to permit the transfer thereof
through the Company’s transfer agent; and enable such Registrable Shares to be
in such denominations and registered in such names as the managing
underwriter(s) may request at least two (2) business days prior to any sale of
the Registrable Shares;
(j) provide a CUSIP number for all Shares, not later than the effective date
of the Registration Statement;
(k) in the event that Registrable Shares included in any Registration
Statement are to be sold to or through any underwriter or placement or sales
agent, (i) make such representations and warranties to the Holders of such
Registrable Shares and the placement or sales agent, if any, therefor and the
underwriters, if any, thereof in form, substance and scope as are customarily
made in connection with any offering of equity securities pursuant to any
appropriate agreement and/or in a registration statement filed on the form
applicable to such Registration Statement; (ii) if so requested by any such
underwriter or placement or sales agent, obtain an opinion of counsel to the
Company in customary form and covering such matters, of the type customarily
covered by such an opinion, as the managing underwriters, if any, and/or the
placement or sales agent may reasonably request, addressed to such Holders and
the placement or sales agent, if any, therefor and the underwriters, if any,
thereof and dated the effective date of such Registration Statement (and if such
Registration Statement contemplates an underwritten offering of a part or of all
of the Shares included in such Registration Statement, dated the date of the
closing under the underwriting agreement relating thereto) (it being agreed that
the matters to be covered by such opinion shall include, without limitation, the
due organization of the Company and its subsidiaries, if any; the qualification
of the Company and its subsidiaries, if any, to transact business as foreign
entities; the due authorization, execution and delivery of this Agreement and of
any underwriting agreement; the absence, to such counsel’s knowledge, of pending
or threatened material legal or governmental proceedings involving the Company
or any subsidiary; the absence of a known breach by the Company or its
subsidiaries of, or a default under, agreements binding the Company or any
subsidiary; the absence of governmental approvals required to be obtained in
connection with the Registration Statement, the offering and sale of the Shares,
this Agreement or any underwriting agreement; the compliance as to form of such
Registration Statement and any documents incorporated by reference therein with
the requirements of the Act; and the effectiveness of such Registration
Statement under the Act); (iii) if so requested by any such underwriter or
placement or sales agent, obtain a “cold comfort” letter or letters from the
independent certified public accountants of the Company addressed to the Holders
and the placement or sales agent, if any, therefor and the underwriters, if any,
thereof, dated (A) the effective date of such Registration Statement, and (B)
the effective date of the most recent (or, if so stated in the request therefor,
the next) Prospectus supplement to the Prospectus included in such Registration
Statement or post-effective amendment to such Registration Statement which
includes unaudited or audited financial statements as of a date or for a period
subsequent to that of the latest such statements included in such Prospectus
(and, if such Registration Statement contemplates an underwritten offering
pursuant to any Prospectus supplement to the Prospectus included in such
Registration Statement or post-effective amendment to such Registration
Statement which includes unaudited or audited financial statements as of a date
or for a period subsequent to that of the latest such statements included in
such Prospectus, dated the date of the closing under the underwriting agreement
relating thereto), such letter or letters to be in customary form and covering
such matters of the type customarily covered by letters of such type; (iv)
deliver such documents and certificates, including officers’ certificates, as
may be customary and reasonably requested by Holders of the Registrable Shares
being sold and the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof to evidence the accuracy of the representations
and warranties made pursuant to clause (i) above and the compliance with or
satisfaction of any agreements or conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (v) undertake such
obligations relating to expense reimbursement, indemnification and contribution
as are provided in Sections 2, 3 and 5 hereof;
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(l) notify in writing each
Holder of Registrable Shares of any proposal by the Company to amend or waive
any provision of this Agreement and of any amendment or waiver effected pursuant
thereto, each of which notices shall contain the text of the amendment or waiver
proposed or effected, as the case may be;
(m) engage to act on behalf of the Company, with respect to the Registrable
Shares to be so registered, a registrar and transfer agent having such duties
and responsibilities (including, without limitation, registration of transfers
and maintenance of stock registers) as are customarily discharged by such an
agent, and to enter into such agreements and to offer such indemnities as are
customary in respect thereof; and
(n) otherwise comply with all applicable rules and regulations of the SEC,
and make available to the Holders, as soon as practicable, but in any event not
later than 18 months after the effective date of such Registration Statement, an
earnings statement covering a period of at least twelve (12) months which shall
satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder.
5. Indemnification by the
Company.
(a) The Company shall, not withstanding any termination of this Agreement,
indemnify each Holder and its Affiliates from and against any claim, loss, cost,
charge or liability of any kind, including amounts paid in settlement and
reasonable attorneys’ fees, which may be incurred by the Holder or Affiliate as
a result of any breach of any representation or warranty or covenant of the
Company contained in this Agreement or in any certificate delivered on the
closing date of any public offering of Shares.
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(b) The Company shall
indemnify and hold harmless each Holder and its Affiliates, any underwriter (as
defined in the Act) for any Holder, each officer and director of a Holder, legal
counsel and accountants for a Holder, and each person, if any, who controls a
Holder or such underwriter within the meaning of the Act, against any losses,
expenses, claims, damages or liabilities, joint or several, to which such Holder
or any such Affiliate, underwriter, officer, director or controlling person
becomes subject, under the Act or any rule or regulation thereunder or
otherwise, insofar as such losses, expenses, claims, damages or liabilities (or
actions in respect thereof) (i) are caused by any untrue statement or alleged
untrue statement of any material fact contained in any preliminary Prospectus
(if used prior to the effective date of the Registration Statement), or
contained, on the effective date thereof, in any Registration Statement in which
Registrable Shares were included, the Prospectus contained therein, any
amendment or supplement thereto, or any other document related to such
Registration Statement, or (ii) arise out of or are based upon 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, or (iii) arise out
of any violation by the Company of the Act or any rule or regulation thereunder
applicable to the Company and relating to actions or omissions otherwise
required of the Company in connection with such registration. The Company shall
reimburse each Holder and any such Affiliate, underwriter, officer, director or
controlling person for any legal or other expenses reasonably incurred by such
Holder, or any such officer, director, underwriter or controlling person in
connection with investigating, defending or settling any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be liable to any
such Persons in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information furnished to the Company in writing by such
Person expressly for inclusion in any of the foregoing documents. This indemnity
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 the
Company, which consent shall not be unreasonably withheld or
delayed.
6. Further Obligations of
Holders. The obligations
of the Company with respect to any particular Holder are subject to such
Holder’s agreement to the following (which such Holder shall specifically
confirm in writing to the Company upon the Company’s request in connection with
any Registration Statement):
(a) Such Holder shall furnish in writing to the Company all information
concerning such Holder and its and its Affiliates’ holdings of securities of the
Company and its Affiliates, and the intended method of disposition of the
Registrable Shares included in such Registration Statement, as shall be
reasonably required in connection with the preparation and filing of any
Registration Statement covering any of such Holder’s Registrable
Shares.
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(b) Such Holder shall, not withstanding any termination of this Agreement,
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed a Registration Statement, each person (if any) who
controls the Company within the meaning of the Act, and any underwriter (as
defined in the Act) for the Company, against any losses, claims, damages or
liabilities to which the Company or any such director, officer, controlling
person or underwriter may become subject under the Act or any rule or regulation
thereunder or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) (i) are caused by any untrue statement or
alleged untrue statement of any material fact contained in any preliminary
Prospectus (if used prior to the effective date of the Registration Statement),
or contained, on the effective date thereof, in any Registration Statement in
which such Holder’s Registrable Shares were included, the Prospectus contained
therein, any amendment or supplement thereto, or any other document related to
such Registration Statement, or (ii) arise out of or are based upon 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, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with information furnished to the Company by such Holder in
writing expressly for inclusion in any of the foregoing documents. In no event
shall any Holder be required to pay indemnification hereunder (or contribution
under Section 7(d) below) in an aggregate amount in excess of the net proceeds
received by such Holder in the subject offering. This indemnity 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 the subject Holder,
which consent shall not be unreasonably withheld or delayed.
7. Additional Provisions.
(a) Each Holder and each other Person indemnified pursuant to Section 5 above
shall, in the event that it receives written notice of the commencement of any
action against it which is based upon an alleged act or omission which, if
proven, would result in the Company’s having to indemnify it pursuant to Section
5 above, promptly notify the Company, in writing, of the commencement of such
action and permit the Company, if the Company so notifies such Holder within
twenty (20) calendar days after receipt by the Company of notice of the
commencement of the action, to participate in and to assume the defense of such
action with counsel reasonably satisfactory to such Holder; provided, however, that such Holder or other indemnified person
shall be entitled to retain its own counsel at its own expense (except that the
indemnifying party shall bear the expense of such separate counsel if
representation of both parties by the same counsel would be inappropriate due to
actual or potential conflicts of interest). The failure to notify the Company
promptly of the commencement of any such action shall not relieve the Company of
any liability to indemnify such Holder or such other indemnified person, as the
case may be, under Section 5 above, except to the extent that the Company shall
be actually prejudiced or shall suffer any loss by reason of such failure to
give notice, and shall not relieve the Company of any other liabilities which it
may have under this or any other agreement.
(b) The Company and each other Person indemnified pursuant to Section 6 above
shall, in the event that it receives notice of the commencement of any action
against it which is based upon an alleged act or omission which, if proven,
would result in any Holder having to indemnify it pursuant to Section 6 above,
promptly notify such Holder, in writing, of the commencement of such action and
permit such Holder, if such Holder so notifies the Company within twenty (20)
calendar days after receipt by such Holder of notice of the commencement of the
action, to participate in and to assume the defense of such action with counsel
reasonably satisfactory to the Company; provided, however, that the Company or other
indemnified person shall be entitled to retain its own counsel at the Company’s
expense. The failure to notify any Holder promptly of the commencement of any
such action shall not relieve such Holder of liability to indemnify the Company
or such other indemnified person, as the case may be, under Section 6 above,
except to the extent that the subject Holder shall be actually prejudiced or
shall suffer any loss by reason of such failure to give notice, and shall not
relieve such Holder of any other liabilities which it may have under this or any
other agreement.
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(c) No indemnifying party, in
the defense of any such claim or litigation, shall, except with the consent of
each indemnified person who is party to such claim or litigation, 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 person of a release from all liability in respect to such claim or
litigation. Each such indemnified person shall furnish such information
regarding itself or the claim in question as an indemnifying party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in Sections 5 and 6 is unavailable or
insufficient to hold harmless an indemnified party, then, subject to the limits
set forth in Section 6(b) above, each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the expenses,
claims, losses, damages or liabilities (or actions or proceedings in respect
thereof) referred to in Sections 5 and 6, in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the sellers of
Shares on the other hand in connection with statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) or expenses, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the sellers of Shares and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Holders agree that it would not be just and equitable if contributions pursuant
to this Section 7(d) were to be determined by pro rata allocation (even if all
sellers of Shares were treated as one entity for such purpose) or by another
method of allocation which does not take account of the equitable considerations
referred to in the first sentence of this Section. The amount paid by an
indemnified person as a result of the expenses, claims, losses, damages or
liabilities (or actions or proceedings in respect thereof) referred to in the
first sentence of this Section 7(d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified person in connection with
investigating or defending any claim, action or proceeding which is the subject
of this Section 7(d). No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of sellers of Shares to contribute pursuant to this Section 7(d)
shall be several in proportion to the respective amounts of Shares sold by them
pursuant to a Registration Statement.
8. Rule 144 Information. For so long as the Company shall remain a
reporting company under the Exchange Act, the Company will at all times keep
publicly available adequate current public information with respect to the
Company of the type and in the manner specified in Rule 144(c) promulgated under
the Act.
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9. Limitations on Subsequent Registration
Rights. From and after the
date of this Agreement, the
Company shall not, without the prior written consent of the Holders of a
majority of the Registrable Shares then outstanding and/or issuable, enter into
any agreement with any holder or prospective holder of any securities of the
Company which would require the Company to include such securities in any
Registration filed under Section 2 hereof.
Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be given by personal delivery, by telecopier (with confirmation of
receipt), by recognized overnight courier service (with all charges prepaid or
billed to the account of the sender), or by certified or registered mail, return
receipt requested, and with postage prepaid, addressed (a) if to the Company, at
its office at 0000 Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Chief Financial Officer, Telecopier: (000) 000-0000, or such other
address or telecopier number as shall have been specified by the Company to the
Holders by written notice, or (b) if to any Holder, at his, her or its address
or telecopier number as same appears on the records of the Company. All notices
shall be deemed to have been given either at the time of the delivery or
telecopy (with confirmation of receipt) thereof, or, if sent by overnight
courier, on the next business day following delivery thereof to the overnight
courier service, or, if mailed, at the completion of the third business day
following the time of such mailing.
10. Waiver and Amendment. No waiver, amendment or modification of this
Agreement or of any provision hereof shall be valid unless evidenced in writing
and duly executed by the Company and Holders holding, in the aggregate, a
majority of the Registrable Shares then outstanding and/or issuable,
provided that any waiver, amendment or modification of this
Agreement or of any provision that affects Hercules, including but not limited
to Section 2, shall not be valid unless evidenced in writing and duly executed
by the Company and Hercules. No waiver of any default hereunder shall be deemed
a waiver of any other, prior or subsequent default hereunder.
11. Governing Law. This Agreement shall (irrespective of the
place where it is executed and delivered) be governed, construed and controlled
by and under the substantive laws of the State of Delaware, without regard to
conflicts of law principles.
12. Binding Effect. This Agreement shall be binding upon and
shall inure to benefit of the Company and the Holders and their respective
successors in interest from time to time.
13. Dispute Resolution. With respect to all Holders other than
Hercules, any Dispute arising out of this Agreement shall be resolved in
accordance with Section 9.6 (Arbitration) of the Merger Agreement.
14. Jurisdiction and Venue. With respect to Hercules, any dispute which
may arise in connection with this Agreement shall be determined with the
provisions of the Warrant.
15. Captions. The captions and Section headings used in
this Agreement are for convenience only, and shall not affect the construction
or interpretation of this Agreement or any of the provisions
hereof.
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16. Gender. All pronouns used in this Agreement in the
masculine, feminine or neutral gender shall, as the context may allow, also
refer to each other gender.
17. Entire Agreement. This Agreement constitutes the sole and
entire agreement and understanding between the parties hereto as to the subject
matter hereof, and supersedes all prior discussions, agreements and
understandings of every kind and nature between them as to such subject
matter.
18. Reliance and Benefit. This Agreement is intended to benefit, and
may be relied upon by, all Holders from time to time, as if such Holders were
expressly named herein, party hereto and signatory hereon.
19. Independent Nature of Holders’ Obligations and
Rights. The obligations of
each Holder hereunder are several and not joint with the obligations of any
other Holder hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder other than as
specified in this Agreement. Nothing contained herein or in any other agreement
or document delivered at any closing, and no action taken by any Holder pursuant
hereto or thereto, shall be deemed to constitute the Holders as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement. Each Holder
shall be entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.
[The remainder of this
page is intentionally blank]
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IN WITNESS WHEREOF,
the Company has executed this Agreement as of the date first set forth
above.
| UNIFY CORPORATION | ||
| |
||
| By: | /s/ Xxxx X. Xxxxx | |
| Name: | Xxxx X. Xxxxx | |
| Title: | President and CEO | |
