Exhibit 10.8
[PWRW&G Draft 12/15/98]
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of
[DATE] by and between AUTOMATIC DATA PROCESSING, INC., a Delaware corporation
("ADP"), and PEACHTREE SOFTWARE, INC., a Delaware corporation ("Peachtree").
RECITALS
WHEREAS, ADP currently owns all of the issued and outstanding shares
of common stock, $0.01 par value (the "Common Stock"), of Peachtree;
WHEREAS, ADP has determined that it is appropriate and desirable,
subject to market conditions, to cause ADP and Peachtree to sell shares of the
Common Stock;
WHEREAS, ADP has determined that it is appropriate and desirable that
such sale be effected as an underwritten initial public offering of the Common
Stock (the "Offering");
WHEREAS, ADP has determined that in connection with the Offering the
separation of the business operations conducted by Peachtree from ADP's business
operations (the "Separation") is in the best interests of ADP and its
shareholders; and
WHEREAS, in connection with the Offering and the Separation, each of
ADP and Peachtree has determined that certain transactions and agreements
between Peachtree and ADP, all as more fully described in the Intercompany
Agreement of even date herewith between ADP and Peachtree (the "Intercompany
Agreement") and the Ancillary Agreements (as defined in the Intercompany
Agreement), are appropriate and desirable to establish Peachtree as a
stand-alone entity; and
WHEREAS, ADP and Peachtree desire to enter into this Agreement to set
forth their agreement regarding (i) certain registration rights with respect to
the Common Stock and any other securities issued in respect thereof or in
exchange therefor and (ii) certain representations, warranties, covenants and
agreements applicable in connection therewith.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, ADP and Peachtree, for themselves,
their successors and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Capitalized terms used but not defined in
this Agreement shall have the meanings ascribed thereto in the Intercompany
Agreement. As used in this Agreement, the following terms will have the
following meanings, applicable both to the singular and the plural forms of the
terms described:
"ADP Entity" means any of ADP and the Subsidiaries of ADP (other than
Subsidiaries that constitute Peachtree Entities).
"Agreement" means this Registration Rights Agreement, as amended,
modified or supplemented and in effect from time to time.
"Company Securities" has the meaning ascribed thereto in Section
2.2(b).
"Disadvantageous Condition" has the meaning ascribed thereto in
Section 2.1(a).
"Holder" means ADP, the other ADP Entities and any Transferee.
"Holder Securities" has the meaning ascribed thereto in Section
2.2(b).
"Intercompany Agreement" has the meaning ascribed thereto in the
Recitals to this Agreement.
"Offering" has the meaning ascribed thereto in the Recitals to this
Agreement.
"Other Holders" has the meaning ascribed thereto in Section 2.2(c).
"Other Securities" has the meaning ascribed thereto in Section 2.2.
"Peachtree Entity" means any of Peachtree and its Subsidiaries.
"Registrable Securities" means shares of Common Stock and any stock or
other securities into which or for which such Common Stock may hereafter be
changed, converted or exchanged and any other shares or securities issued to the
Holders and such shares or other securities into which or for which such shares
are so changed, converted or exchanged upon any reclassification, share
combination, share subdivision, share dividend, share exchange, merger,
consolidation or other transaction or event. As to any particular Registrable
Securities, such Registrable Securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale by the Holder thereof
shall have been declared effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement; (ii)
they are sold by a person in a transaction in which rights under the
registration provisions of this Agreement are not
assigned; (iii) they may be sold to the public pursuant to Rule 144(k) (or any
similar provision then in force) under the Securities Act without registration
under the Securities Act; (iv) they have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer have
been delivered by Peachtree and subsequent disposition of them does not require
registration of them under the Securities Act; or (v) they shall have ceased to
be outstanding.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article II, including, without limitation, (i) the fees, disbursements and
expenses of Peachtree's counsel and accountants and the fees and expenses of
counsel selected by the Holders in accordance with this Agreement in connection
with the registration of the securities to be disposed of; (ii) all expenses,
including filing fees, in connection with the preparation, printing and filing
of the registration statement, any preliminary prospectus or final prospectus,
any other offering document and amendments and supplements thereto and the
mailing and delivering of copies thereof to any underwriters, dealers, brokers
or agents designated by the Holders; (iii) the cost of printing or producing any
underwriting agreements and blue sky or legal investment memoranda and any other
documents in connection with the offering, sale or delivery of the securities to
be disposed of; (iv) all expenses in connection with the qualification of the
securities to be disposed of for offering and sale under state securities laws,
including the fees and disbursements of counsel for any underwriters, dealers,
brokers or agents designated by the Holders and the Holders of securities in
connection with such qualification and in connection with any blue sky and legal
investment surveys; (v) the filing fees incident to securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the securities to be disposed of; (vi) transfer agents' and registrars' fees
and expenses and the fees and expenses of any other agent or trustee appointed
in connection with such offering; (vii) all security engraving and security
printing expenses; (viii) all fees and expenses payable in connection with the
listing or approval for trading of the securities on any securities exchange or
automated interdealer quotation system or the rating of such securities, (ix)
any other fees, expenses and disbursements customarily paid by the sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, and (x) other reasonable actual out-of-pocket expenses of Holders
in addition to legal fees and expenses referred to in clause (i) above.
"Rule 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated under
the Securities Act.
"Selling Holder" has the meaning ascribed thereto in Section 2.4(e).
"Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than fifty
percent (50%) of the voting stock or other voting ownership interests is owned
or controlled, directly or
indirectly, by such Person or by one or more of the Subsidiaries of such Person
or by a combination thereof.
"Transferee" has the meaning ascribed thereto in Section 2.9.
Section 1.2 Internal References. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement and references
to the parties shall mean the parties to this Agreement.
ARTICLE II
REGISTRATION RIGHTS
Section 2.1 Demand Registration.
(a) Upon written notice at any time after the Closing Date from
any Holder of Registrable Securities requesting that Peachtree effect the
registration under the Securities Act of any or all of the Registrable
Securities held by such Holder, which notice shall specify the intended method
or methods of disposition of such Registrable Securities, Peachtree shall use
its best efforts to effect the registration under the Securities Act and
applicable state securities laws of such Registrable Securities for disposition
in accordance with the intended method or methods of disposition stated in such
request (including in a Rule 415 Offering, if Peachtree is then eligible to
register such Registrable Securities on Form S-3 (or a successor form) for such
offering); provided, that:
(i) with respect to any registration statement filed, or to
be filed, pursuant to this Section 2.1, if Peachtree shall furnish to
the Holders of Registrable Securities that have made such request a
certified resolution of the Board of Directors of Peachtree (adopted
by the affirmative vote of a majority of the directors that are
neither designated by the ADP Entities nor directors or officers of
any ADP Entity) stating that in the Board of Directors' good faith
judgment it would (because of the existence of, or in anticipation of,
any acquisition or financing activity, or the unavailability for
reasons beyond Peachtree's reasonable control of any required
financial statements, or any other event or condition of similar
significance to Peachtree) be significantly disadvantageous (a
"Disadvantageous Condition") to Peachtree for such a registration
statement to be maintained effective, or to be filed and become
effective, and setting forth the general reasons for such judgment,
Peachtree shall be entitled to cause such registration statement to be
withdrawn and the effectiveness of such registration statement
terminated, or, in the event no registration statement has yet been
filed, shall be entitled not to file any such registration statement,
until such Disadvantageous Condition no longer exists (notice of which
Peachtree shall promptly deliver to such Holders). Upon receipt of any
such notice of a Disadvantageous Condition, such Holders shall
forthwith discontinue use of the prospectus contained in such
registration statement and, if so directed by Peachtree, each such
Holder will deliver to Peachtree all copies, other than permanent
file copies then in such Holder's possession, of the prospectus then covering
such Registrable Securities current at the time of receipt of such notice;
provided, that the filing or use of any such registration statement may not be
delayed or discontinued for a period in excess of 90 days due to the occurrence
of any particular Disadvantageous Condition and no more than two resolutions
regarding Disadvantageous Conditions may be made by the Board of Directors in
any two-year period;
(ii) the Holders of Registrable Securities may collectively
exercise their rights under this Section 2.1(through notice delivered
by Holders owning in the aggregate a majority in economic interest of
the Registrable Securities then held by Holders) on not more than four
occasions;
(iii) except as otherwise provided herein, the Holders of
Registrable Securities shall not have the right to exercise
registration rights pursuant to this Section 2.1 within the 180-day
period following the registration and sale of Registrable Securities
effected pursuant to a prior exercise of the registration rights
provided in this Section 2.1; and
(iv) the Holders of Registrable Securities shall not have
the right to exercise registration rights pursuant to this Section 2.1
within any "lock-up" period following the Closing Date agreed with the
Underwriters in connection with the Offering, unless such "lock-up" is
waived by the Underwriters.
(b) Notwithstanding any other provision of this Agreement to the
contrary, a registration requested by a Holder of Registrable Securities
pursuant to this Section 2.1 shall not be deemed to have been effected (and,
therefore, not requested for purposes of paragraph (a) above), (i) unless it has
become effective, (ii) if after it has become effective such registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason other than a
misrepresentation or an omission by such Holder and, as a result thereof, the
Registrable Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth in the related
registration statement or (iii) if the conditions to closing specified in any
purchase or underwriting agreement entered into in connection with such
registration are not satisfied or waived other than by reason of some act or
omission by such Holder of Registrable Securities.
(c) In the event that any registration pursuant to this Section
2.1 shall involve, in whole or in part, an underwritten offering, the Holders of
a majority of the Registrable Securities to be registered shall have the right
to designate an underwriter or underwriters reasonably acceptable to Peachtree
as the lead or managing underwriters of such underwritten offering and, in
connection with each registration pursuant to this Section 2.1, such Holders may
select one counsel reasonably acceptable to Peachtree to represent all such
Holders.
(d) Peachtree shall have the right to cause the registration of
additional equity securities for sale for its account, the account of any
Peachtree Entity or
any existing or former directors, officers or employees of Peachtree Entities in
any registration of Registrable Securities requested by the Holders pursuant to
paragraph (a) above; provided, that if such Holders are advised in writing (with
a copy to Peachtree) by a nationally recognized investment banking firm selected
by such Holders reasonably acceptable to Peachtree (which shall be the lead
underwriter or a managing underwriter in the case of an underwritten offering)
that, in such firm's good faith view, all or a part of such additional equity
securities cannot be sold and the inclusion of such additional equity securities
in such registration would be likely to have an adverse effect on the price,
timing or distribution of the offering and sale of the Registrable Securities
then contemplated by any Holder, the registration of such additional equity
securities or part thereof shall not be permitted. The Holders of the
Registrable Securities to be offered may require that any such additional equity
securities be included in the offering proposed by such Holders on the same
conditions as the Registrable Securities that are included therein. In the event
that the number of Registrable Securities requested to be included in a
registration statement by the Holders thereof exceeds the number which, in the
good faith view of such investment banking firm, can be sold without adversely
affecting the price, timing, distribution or sale of securities in the offering,
the number shall be allocated pro rata among the requesting Holders on the basis
of the relative number of Registrable Securities then held by each such Holder
(provided, that any number in excess of a Holder's request may be reallocated
among the remaining requesting Holders in a like manner).
Section 2.2 Piggyback Registration. In the event that Peachtree at any
time after the Closing Date proposes to register any of its Common Stock, any
other of its equity securities or securities convertible into or exchangeable
for its equity securities (collectively, including Common Stock, "Other
Securities") under the Securities Act, whether or not for sale for its own
account, in a manner that would permit registration of Registerable Securities
for sale for cash to the public under the Securities Act, it shall at each such
time give prompt written notice to each Holder of Registrable Securities of its
intention to do so and of the rights of such Holder under this Section 2.2.
Subject to the terms and conditions hereof, such notice shall offer each such
Holder the opportunity to include in such registration statement such number of
Registrable Securities as such Holder may request. Upon the written request of
any such Holder made within 15 days after the receipt of Peachtree's notice
(which request shall specify the number of Registrable Securities intended to be
disposed of and the intended method of disposition thereof), Peachtree shall use
its best efforts to effect, in connection with the registration of the Other
Securities, the registration under the Securities Act of all Registrable
Securities which Peachtree has been so requested to register, to the extent
required to permit the disposition (in accordance with such intended method of
disposition thereof) of the Registrable Securities so requested to be
registered; provided, that:
(a) if, at any time after giving such written notice of its
intention to register any Other Securities and prior to the effective date of
the registration statement filed in connection with such registration, Peachtree
shall determine for any reason not to register the Other Securities, Peachtree
may, at its election, give written notice of such determination to such Holders
and thereupon Peachtree shall be relieved of its obligation to register such
Registrable Securities in connection with the registration of such Other
Securities, without prejudice, however, to the rights of the Holders of
Registrable Securities immediately to
request that such registration be effected as a registration under Section 2.1
to the extent permitted thereunder;
(b) if the registration referred to in the first sentence of this
Section 2.2 is to be an underwritten registration on behalf of Peachtree, and a
nationally recognized investment banking firm selected by Peachtree advises
Peachtree in writing that, in such firm's good faith view, all or a part of such
Registrable Securities cannot be sold and the inclusion of all or a part of such
Registrable Securities in such registration would be likely to have an adverse
effect upon the price, timing or distribution of the offering and sale of the
Other Securities then contemplated, Peachtree shall include in such
registration:
(i) first, all Other Securities Peachtree proposes to sell
for its own account ("Company Securities");
(ii) second, up to the full number of Registrable Securities
held by Holders constituting ADP Entities that are requested to be
included in such registration (Registrable Securities that are so held
being sometimes referred to herein as "Holder Securities") in excess
of the number of Company Securities to be sold in such offering which,
in the good faith view of such investment banking firm, can be sold
without adversely affecting such offering (and (x) if such number is
less than the full number of such Holder Securities, such number shall
be allocated by ADP among such ADP Entities and (y) in the event that
such investment banking firm advises that less than all of such Holder
Securities may be included in such offering, such ADP Entities may
withdraw their request for registration of their Registrable
Securities under this Section 2.2 and 90 days subsequent to the
effective date of the registration statement for the registration of
such Other Securities request that such registration be effected as a
registration under Section 2.1 to the extent permitted thereunder;
(iii) third, up to the full number of Registrable Securities
held by Holders (other than ADP Entities) of Registrable Securities
that are requested to be included in such registration in excess of
the number of Company Securities and Holder Securities to be sold in
such offering which, in the good faith view of such investment banking
firm, can be so sold without so adversely affecting such offering (and
(x) if such number is less than the full number of such Registrable
Securities, such number shall be allocated pro rata among such Holders
on the basis of the number of Registrable Securities requested to be
included therein by each such Holder and (y) in the event that such
investment banking firm advises that less than all of such Registrable
Securities may be included in such offering, such Holders may withdraw
their request for registration of their Registrable Securities under
this Section 2.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities
request that such registration be effected as a registration under
Section 2.1 to the extent permitted thereunder); and
(iv) fourth, up to the full number of the Other Securities
(other than Company Securities), if any, in excess of the number of
Company Securities and Registrable Securities to be sold in such
offering which, in the good
faith view of such investment banking firm, can be so sold without so
adversely affecting such offering (and, if such number is less than
the full number of such Other Securities, such number shall be
allocated pro rata among the holders of such Other Securities (other
than Company Securities) on the basis of the number of securities
requested to be included therein by each such Holder);
(c) if the registration referred to in the first sentence of this
Section 2.2 is to be an underwritten secondary registration on behalf of holders
of Other Securities (the "Other Holders"), and the lead underwriter or managing
underwriter advises Peachtree in writing that in their good faith view, all or a
part of such additional securities cannot be sold and the inclusion of such
additional securities in such registration would be likely to have an adverse
effect on the price, timing or distribution of the offering and sale of the
Other Securities then contemplated, Peachtree shall include in such registration
the number of securities (including Registrable Securities) that such
underwriters advise can be so sold without adversely affecting such offering,
allocated pro rata among the Other Holders and the Holders of Registrable
Securities on the basis of the number of securities (including Registrable
Securities) requested to be included therein by each Other Holder and each
Holder of Registrable Securities; provided, that if such Other Holders have
requested that such registration statement be filed pursuant to demand
registration rights granted to them by Peachtree, Peachtree shall include in
such registration (i) first, Other Securities sought to be included therein by
the Other Holders pursuant to the exercise of such demand registration rights,
(ii) second, the number of Holder Securities sought to be included in such
registration in excess of the number of Other Securities sought to be included
in such registration by the Other Holders which in the good faith view of such
investment banking firm, can be so sold without so adversely affecting such
offering (and (x) if such number is less than the full number of such Holder
Securities, such number shall be allocated by ADP among such ADP Entities and
(y) in the event that such investment banking firm advises that less than all of
such Holder Securities may be included in such offering, such ADP Entities may
withdraw their request for registration of their Registrable Securities under
this Section 2.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities request
that such registration be effected as a registration under Section 2.1 to the
extent permitted thereunder) and (iii) third, the number of Registrable
Securities sought to be included in such registration by Holders (other than ADP
Entities) of Registrable Securities in excess of the number of Other Securities
and the number of Holder Securities sought to be included in such registration
which, in the good faith view of such investment banking firm, can be so sold
without so adversely affecting such offering (and (x) if such number is less
than the full number of such Registrable Securities, such number shall be
allocated pro rata among such Holders on the basis of the number of Registrable
Securities requested to be included therein by each such Holder and (y) in the
event that such investment banking firm advises that less than all of such
Registrable Securities may be included in such offering, such Holders may
withdraw their request for registration of their Registrable Securities under
this Section 2.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities request
that such registration be effected as a registration under Section 2.1 to the
extent permitted thereunder);
(d) Peachtree shall not be required to effect any registration of
Registrable Securities under this Section 2.2 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
executive or employee benefit or compensation plans; and
(e) no registration of Registrable Securities effected under this
Section 2.2 shall relieve Peachtree of its obligation to effect a registration
of Registrable Securities pursuant to Section 2.1.
Section 2.3 Expenses. Except as provided herein and except for
underwriting discounts and commissions attributable to the Registrable
Securities sold by the Holders, Peachtree shall pay all Registration Expenses
with respect to a particular offering (or proposed offering). Notwithstanding
the foregoing, each Holder and Peachtree shall be responsible for its own
internal administrative and similar costs, which shall not constitute
Registration Expenses.
Section 2.4 Registration and Qualification. If and whenever Peachtree
is required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 2.1 or 2.2, Peachtree shall as promptly
as practicable:
(a) prepare, file and use its reasonable best efforts to cause to
become effective a registration statement under the Securities Act relating to
the Registrable Securities to be offered;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities until the earlier of (A) such time as
all of such Registrable Securities have been disposed of in accordance with the
intended methods of disposition set forth in such registration statement and (B)
the expiration of six months after such registration statement becomes
effective; provided, that such six-month period shall be extended for such
number of days that equals the number of days elapsing from (x) the date the
written notice contemplated by paragraph (f) below is given by Peachtree to (y)
the date on which Peachtree delivers to the Holders of Registrable Securities
the supplement or amendment contemplated by paragraph (f) below;
(c) furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such registration
statement or prospectus, and such other documents, as the Holders of Registrable
Securities or such underwriter may reasonably request, and upon
request a copy of any and all transmittal letters or other correspondence to or
received from, the Commission or any other governmental agency or
self-regulatory body or other body having jurisdiction (including any domestic
or foreign securities exchange) relating to such offering;
(d) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such U.S. jurisdictions as the Holders of such
Registrable Securities or any underwriter to such Registrable Securities shall
request, and use its reasonable best efforts to obtain all appropriate
registrations, permits and consents in connection therewith, and do any and all
other acts and things which may be necessary or advisable to enable the Holders
of Registrable Securities or any such underwriter to consummate the disposition
in such jurisdictions of its Registrable Securities covered by such registration
statement; provided, that Peachtree shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any such
jurisdiction wherein it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) (i) use its best efforts to furnish to each Holder of
Registrable Securities included in such registration (each, a "Selling Holder")
and to any underwriter of such Registrable Securities an opinion of independent
counsel for Peachtree addressed to each Selling Holder and dated the date of the
closing under the underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration statement) and (ii)
use its best efforts to furnish to each Selling Holder a "cold comfort" letter
addressed to each Selling Holder and signed by the independent public
accountants who have audited the financial statements of Peachtree included in
such registration statement, in each such case covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public offerings
of securities and such other matters as the Selling Holders may reasonably
request and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements;
(f) as promptly as practicable, notify the Selling Holders in
writing (i) at any time when a prospectus relating to a registration pursuant to
Sections 2.1 or 2.2 is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and (ii) of any request by the Commission
or any other regulatory body or other body having jurisdiction for any amendment
of or supplement to any registration statement or other document relating to
such offering, and in either such case, at the request of the Selling Holders
prepare and furnish to the Selling Holders a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading;
(g) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Securities to be so
included in the registration statement;
(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders to the extent not already provided, as soon as reasonably practicable,
but not later than eighteen (18) months after the effective date of the
registration statement, an earnings statement covering the period of at least
twelve (12) months beginning with the first full month after the effective date
of such registration statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the Securities Act;
(i) use its best efforts to list all such Registrable Securities
covered by such registration on each securities exchange and automated
inter-dealer quotation system on which a class of common equity securities of
Peachtree is then listed;
(j) to the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of Peachtree to attend any "road shows"
scheduled in connection with any such registration, with all out-of-pocket costs
and expense incurred by Peachtree or such officers in connection with such
attendance to be paid by Peachtree; and
(k) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected pursuant
to Sections 2.1 or 2.2 unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested by
the Selling Holders or the underwriters.
Section 2.5 Conversion of Other Securities, Etc. In the event that any
Holder offers any options, rights, warrants or other securities issued by it or
any other Person that are offered with, convertible into or exercisable or
exchangeable for any Registrable Securities, the Registrable Securities
underlying such options, rights, warrants or other securities shall continue to
be eligible for registration pursuant to Sections 2.1 and 2.2.
Section 2.6 Underwriting; Due Diligence.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration requested under
this Article II, Peachtree shall enter into an underwriting agreement with such
underwriters for such offering, which agreement will contain such
representations and warranties by Peachtree and such other terms and provisions
as are customarily contained in underwriting agreements of Peachtree to the
extent relevant and as are customarily contained in underwriting agreements
generally with respect to secondary distributions to the extent relevant,
including, without limitation, indemnification and contribution provisions
substantially to the effect and to the extent
provided in Section 2.7, and agreements as to the provision of opinions of
counsel and accountants' letters to the effect and to the extent provided in
Section 2.4(e). The Selling Holders on whose behalf the Registrable Securities
are to be distributed by such underwriters shall be parties to any such
underwriting agreement and the representations and warranties by, and the other
agreements on the part of, Peachtree to and for the benefit of such
underwriters, shall also be made to and for the benefit of such Selling Holders.
Such underwriting agreement shall also contain such representations and
warranties by such Selling Holders and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, when relevant, including, without limitation, indemnification and
contribution provisions substantially to the effect and to the extent provided
in Section 2.7.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article II, Peachtree shall give the Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books and
records and such opportunities to discuss the business of Peachtree with its
officers and the independent public accountants who have certified the financial
statements of Peachtree as shall be necessary, in the opinion of such Holders
and such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
Section 2.7 Indemnification and Contribution.
(a) In the case of each offering of Registrable Securities made
pursuant to this Article II, Peachtree agrees to indemnify and hold harmless, to
the extent permitted by law, each Selling Holder, each underwriter of
Registrable Securities so offered and each Person, if any, who controls any of
the foregoing Persons within the meaning of the Securities Act and the officers,
directors, affiliates, employees and agents of each of the foregoing, against
any and all losses, liabilities, costs (including reasonable attorney's fees and
disbursements), claims and damages, joint or several, to which they or any of
them may become subject, under the Securities Act or otherwise, including any
amount paid in settlement of any litigation commenced or threatened, insofar as
such losses, liabilities, costs, claims and damages (or actions or proceedings
in respect thereof, whether or not such indemnified Person is a party thereto)
arise out of or are based upon any untrue statement by Peachtree or alleged
untrue statement by Peachtree of a material fact contained in the registration
statement (or in any preliminary or final prospectus included therein) or in any
offering memorandum or other offering document relating to the offering and sale
of such Registrable Securities prepared by Peachtree or at its direction, or any
amendment thereof or supplement thereto, or in any document incorporated by
reference therein, or any omission by Peachtree or alleged omission by Peachtree
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however that Peachtree
shall not be liable to any Person in any such case to the extent that any such
loss, liability, cost, claim or damage arises out of or relates to any untrue
statement or alleged untrue statement, or any omission, if such statement or
omission shall have been made in reliance upon and in conformity with
information relating to a Selling Holder,
another holder of securities included in such registration statement or
underwriter furnished in writing to Peachtree by or on behalf of such Selling
Holder, other holder or underwriter specifically for use in the registration
statement (or in any preliminary or final prospectus included therein), offering
memorandum or other offering document, or any amendment thereof or supplement
thereto. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Selling Holder, any other holder or
any underwriter and shall survive the transfer of such securities. The foregoing
indemnity agreement is in addition to any liability that Peachtree may otherwise
have to each Selling Holder, other holder or underwriter of the Registrable
Securities or any controlling person of the foregoing and the officers,
directors, affiliates, employees and agents of each of the foregoing; provided
further, that, in the case of an offering with respect to which a Selling Holder
has designated the lead or managing underwriters (or a Selling Holder is
offering Registrable Securities directly, without an underwriter), this
indemnity does not apply to any loss, liability, cost, claim or damage arising
out of or relating to any untrue statement or alleged untrue statement or
omission or alleged omission in any preliminary prospectus or offering
memorandum if a copy of a final prospectus or offering memorandum was not sent
or given by or on behalf of any underwriter (or such Selling Holder or other
holder, as the case may be) to such Person asserting such loss, liability, cost,
claim or damage at or prior to the written confirmation of the sale of the
Registrable Securities as required by the Securities Act and such untrue
statement or omission had been corrected in such final prospectus or offering
memorandum.
(b) In the case of each offering made pursuant to this Agreement,
each Selling Holder, by exercising its registration rights hereunder, agrees to
indemnify and hold harmless, and to cause each underwriter of Registrable
Securities included in such offering (in the same manner and to the same extent
as set forth in Section 2.7(a)) to agree to indemnify and hold harmless,
Peachtree, each other underwriter who participates in such offering, each other
Selling Holder or other holder with securities included in such offering and in
the case of an underwriter, such Selling Holder or other holder, and each
Person, if any, who controls any of the foregoing within the meaning of the
Securities Act and the officers, directors, affiliates, employees and agents of
each of the foregoing, against any and all losses, liabilities, costs (including
reasonable attorney's fees and disbursements), claims and damages to which they
or any of them may become subject, under the Securities Act or otherwise,
including any amount paid in settlement of any litigation commenced or
threatened, insofar as such losses, liabilities, costs, claims and damages (or
actions or proceedings in respect thereof, whether or not such indemnified
Person is a party thereto) arise out of or are based upon any untrue statement
or alleged untrue statement by such Selling Holder or underwriter, as the case
may be, of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or in any offering memorandum
or other offering document relating to the offering and sale of such Registrable
Securities prepared by Peachtree or at its direction, or any amendment thereof
or supplement thereto, or any omission by such Selling Holder or underwriter, as
the case may be, or alleged omission by such Selling Holder or underwriter, as
the case may be, of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that such untrue statement of a material fact is contained in, or such
material fact is omitted from information relating to such Selling
Holder or underwriter, as the case may be, furnished to Peachtree in writing by
or on behalf of such Selling Holder or underwriter, as the case may be,
specifically for use in such registration statement (or in any preliminary or
final prospectus included therein), offering memorandum or other offering
document, or any amendment thereof or supplement thereto. The foregoing
indemnity is in addition to any liability which such Selling Holder or
underwriter, as the case may be, may otherwise have to Peachtree, or controlling
persons and the officers, directors, affiliates, employees, and agents of each
of the foregoing; provided, that, in the case of an offering made pursuant to
this Agreement with respect to which Peachtree has designated the lead or
managing underwriters (or Peachtree is offering securities directly, without an
underwriter), this indemnity does not apply to any loss, liability, cost, claim,
or damage arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission in any preliminary prospectus or
offering memorandum if a copy of a final prospectus or offering memorandum was
not sent or given by or on behalf of any underwriter (or Peachtree, as the case
may be) to such Person asserting such loss, liability, cost, claim or damage at
or prior to the written confirmation of the sale of the Registrable Securities
as required by the Securities Act and such untrue statement or omission had been
corrected in such final prospectus or offering memorandum.
(c) Each party indemnified under paragraph (a) or (b) above
shall, promptly after receipt of notice of a claim or action against such
indemnified party in respect of which indemnity may be sought hereunder, notify
the indemnifying party in writing of the claim or action; provided; that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party under this Section 2.7 (except that the
failure to notify an indemnifying party promptly of the commencement of any such
action to the extent prejudicial to the indemnifying party's ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party to the extent the indemnifying party is prejudiced under this
Section 2.7, but the omission so to notify the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 2.7). If any such claim or action shall be brought
against an indemnified party, and it shall have notified the indemnifying party
thereof, unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified party and indemnifying parties may exist in
respect of such claim, the indemnifying party shall be entitled to participate
therein, and, to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense thereof with counsel
satisfactory to the indemnified party (who shall not, except with the consent of
the indemnified party, be counsel to the indemnifying party). After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 2.7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation. If the indemnifying party
does not assume the defense of such claim or action, it is understood that the
indemnifying party shall not, in connection with any one such claim or action or
separate but substantially similar or related claims or actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to one separate firm of local attorneys in each such jurisdiction) at
any time for all such indemnified parties. Any indemnifying party
against whom indemnity may be sought under this Section 2.7 shall not be liable
to indemnify an indemnified party if such indemnified party settles such claim
or action without the consent of the indemnifying party, which consent shall not
be unreasonably withheld.
(d) If the indemnification provided for in this Section 2.7 shall
for any reason be unavailable (other than in accordance with its terms) to an
indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, cost, claim or damage in
such proportion as shall be appropriate to reflect (i) the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other hand or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the indemnified party failed to give the
notice required under paragraph (c) above, the relative benefits and the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other with respect to the statements or omissions which resulted in
such loss, liability, cost, claim or damage as well as any other relevant
equitable considerations. The relative benefits received by the indemnifying
party and the indemnified party shall be deemed to be in the same respective
proportion as the net proceeds (before deducting expenses) of the offering
received by such party (or, in the case of an underwriter, such underwriter's
discounts and commissions) bear to the aggregate offering price of the
Registrable Securities or Other Securities. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the indemnifying party on the one hand or the
indemnified party on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, but not by reference to any indemnified party's stock
ownership in Peachtree. The amount paid or payable by an indemnified party as a
result of the loss, cost, claim, damage or liability, or action in respect
thereof, referred to above in this paragraph (d) shall be deemed to include, for
purposes of this paragraph (d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.7(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 immediate preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) Indemnification and contribution similar to that specified in
the preceding paragraphs of this Section 2.7 (with appropriate modifications)
shall be given by Peachtree, the Selling Holders and underwriters with respect
to any required registration or other qualification of securities under any
state law or regulation or governmental authority.
(f) In no event shall ADP be liable pursuant to this Section 2.7
for any amounts in excess of the net proceeds received by ADP pursuant to its
sales of securities in the offering in connection with which its liability
hereunder arises.
(g) The obligations of the parties under this Section 2.7 shall
be in addition to any liability which any party may otherwise have to any other
party.
Section 2.8 Rule 144 and Form S-3. Commencing 90 days after the
Closing Date, Peachtree shall use its best efforts to ensure that the conditions
to the availability of Rule 144 set forth in paragraph (c) thereof shall be
satisfied. Upon the request of any Holder of Registrable Securities, Peachtree
will deliver to such Holder a written statement as to whether it has complied
with such requirements. Peachtree further agrees to use its best efforts to
cause all conditions to the availability of Form S-3 (or any successor form)
under the Securities Act of the filing of registration statements under this
Agreement to be met as soon as practicable after the Closing Date.
Notwithstanding anything contained in this Section 2.8, Peachtree may deregister
under Section 12 of the Exchange Act if it then is permitted to do so pursuant
to said Act and the rules and regulations thereunder.
Section 2.9 Transfer of Registration Rights. Any Holder may transfer
all or any portion of its rights under Article II to any transferee of a number
of Registrable Securities owned by such Holder exceeding twenty percent (20%) of
such securities outstanding at the time of transfer (each transferee that
receives such minimum number of Registrable Securities, a "Transferee"). Any
transfer of registration rights pursuant to this Section 2.9 shall be effective
upon receipt by Peachtree of (i) written notice from such Holder stating the
name and address of any Transferee and identifying the number of Registrable
Securities with respect to which the rights under this Agreement are being
transferred and the nature of the rights so transferred and (ii) a written
agreement from such Transferee to be bound by the applicable terms of this
Agreement. The Holders may exercise their rights hereunder in such priority as
they shall agree upon among themselves.
Section 2.10 Holdback Agreement. If any registration pursuant to this
Article II shall be in connection with an underwritten public offering of
Registrable Securities, each Selling Holder agrees not to effect any public sale
or distribution, including any sale under Rule 144, of any equity security of
Peachtree or any security convertible into or exchangeable or exercisable for
any equity security of Peachtree, in the case of Registrable Securities
(otherwise than through the registered public offering then being made), within
7 days prior to or 90 days (or such lesser period as the lead or managing
underwriters may permit) after the effective date of the registration statement
(or the commencement of the offering to the public of such Registrable
Securities in the case of Rule 415 offerings). Peachtree hereby also so agrees
and agrees to cause each other holder of equity securities or securities
convertible into or exchangeable or exercisable for such securities purchased
from Peachtree otherwise than in a public offering so to agree; provided that,
subject to Section 2.6(a) hereof, Peachtree shall not be so restricted from
effecting any public sale or distribution of any security in connection with any
merger, acquisition, exchange offer, subscription offer, dividend reinvestment
plan or stock option or other executive or employee benefit or compensation
plan.
ARTICLE III
MISCELLANEOUS
Section 3.1 Limitation of Liability. Neither ADP nor Peachtree shall
be liable to the other for any special, indirect, incidental or consequential
damages of the other arising in connection with this Agreement.
Section 3.2 Subsidiaries. ADP agrees and acknowledges that ADP shall
be responsible for the performance by each ADP Entity of the obligations
hereunder applicable to such entity. Peachtree agrees and acknowledges that
Peachtree shall be responsible for the performance by each Peachtree Entity of
the obligations hereunder applicable to such entity.
Section 3.3 Amendments. This Agreement may not be amended, modified or
terminated orally, but only by a writing duly executed by or on behalf of the
parties hereto in accordance with the terms of the Intercompany Agreement
governing amendment, modification or termination.
Section 3.4 Term. This Agreement shall remain in effect until all
Registrable Securities held by Holders have been transferred by them to Persons
other than Transferees; provided, that the provisions of Section 2.7 shall
survive any such expiration.
Section 3.5 Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement or such provision
of the application of such provision to such party or circumstances, other than
those to which it is so determined to be invalid, illegal or unenforceable,
shall remain in full force and effect to the fullest extent permitted by law and
shall not be affected thereby, unless such a construction would be unreasonable.
Section 3.6 Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered (a) in person, (b) by registered or certified
mail, postage prepaid, return receipt requested or (c) by facsimile or other
generally accepted means of electronic transmission (provided, that a copy of
any notice delivered pursuant to this clause (c) shall also be sent pursuant to
clause (b)), addressed as follows:
(a) If to Peachtree, to:
If to the ADP Parties, to:
Automatic Data Processing, Inc.
Xxx XXX Xxxxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Legal Department
If to the Peachtree Parties, to:
Peachtree Software, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.
Section 3.7 Further Assurances. ADP and Peachtree shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments and take such other action as may be necessary or advisable to
carry out their obligations under this Agreement and under any exhibit, document
or other instrument delivered pursuant hereto.
Section 3.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original instrument, but all
of which together shall constitute but one and the same agreement.
Section 3.9 Governing Law. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and governed by, the
laws of the State of New York.
Section 3.10 Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
Section 3.11 Successors. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns. Nothing contained in this Agreement, express or implied,
is intended to confer upon any other person or entity any benefits, rights or
remedies.
Section 3.12 Specific Performance. The parties hereto acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, it is agreed that they
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States or
any state thereof, in addition to any other remedy to which they may be entitled
at law or equity.
Section 3.13. Recitals. The Recitals in this Agreement are
incorporated herein by reference as if set forth in full and, as so
incorporated, are specifically agreed to by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
AUTOMATIC DATA PROCESSING, INC.
By:
---------------------------------
Name:
Title:
PEACHTREE SOFTWARE, INC.
By:
---------------------------------
Name:
Title:
