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REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 24, 1994
BY AND AMONG
GREAT PLAINS SOFTWARE, INC.
AND
THE HOLDERS OF REGISTRABLE SECURITIES
NAMED ON THE SIGNATURE PAGES HERETO
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TABLE OF CONTENTS
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This Table of contents is not part of the Agreement to which it is
attached but is inserted for convenience only.
Page
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Section 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. DEMAND REGISTRATION RIGHTS. . . . . . . . . . . . . . . . . . 6
(a) DEMANDS FOR REGISTRATION. . . . . . . . . . . . . . . . . . . 6
(b) LIMITATIONS ON DEMAND REGISTRATIONS . . . . . . . . . . . . . 7
(c) REGISTRATION STATEMENT FORM . . . . . . . . . . . . . . . . . 7
(d) REGISTRATION EXPENSES . . . . . . . . . . . . . . . . . . . . 7
(e) PRIORITY IN CUTBACK REGISTRATIONS . . . . . . . . . . . . . . 8
(f) PREEMPTION OF DEMAND REGISTRATION . . . . . . . . . . . . . . 8
Section 3. PIGGYBACK REGISTRATIONS . . . . . . . . . . . . . . . . . . . 8
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES . . . . . . . . . . . 8
(b) REGISTRATION EXPENSES . . . . . . . . . . . . . . . . . . . . 9
(c) PRIORITY IN CUTBACK REGISTRATIONS . . . . . . . . . . . . . . 9
Section 4. REGISTRATION PROCEDURES . . . . . . . . . . . . . . . . . . . 9
Section 5. UNDERWRITTEN OFFERINGS. . . . . . . . . . . . . . . . . . . . 14
(a) UNDERWRITTEN OFFERINGS IN CONNECTION WITH DEMAND REGISTRATION 14
(b) UNDERWRITTEN PIGGYBACK OFFERINGS. . . . . . . . . . . . . . . 15
Section 6. HOLDBACK AGREEMENTS . . . . . . . . . . . . . . . . . . . . . 16
(a) BY THE HOLDERS . . . . . . . . . . . . . . . . . . . . . . . 16
(b) BY THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . 16
Section 7. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . 16
(a) INDEMNIFICATION BY THE COMPANY. . . . . . . . . . . . . . . . 16
(b) INDEMNIFICATION BY THE SELLERS. . . . . . . . . . . . . . . . 17
(c) NOTICES OF CLAIMS . . . . . . . . . . . . . . . . . . . . . . 18
(d) CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . 19
(e) OTHER INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 20
(f) INDEMNIFICATION PAYMENTS. . . . . . . . . . . . . . . . . . . 20
Section 8. COVENANTS RELATING TO RULE 144. . . . . . . . . . . . . . . . 20
Section 9. NO EXISTING AGREEMENTS. . . . . . . . . . . . . . . . . . . . 21
Section 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 22
(c) AMENDMENT; TERMINATION. . . . . . . . . . . . . . . . . . . . 22
(d) WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(e) CONSENTS AND WAIVERS BY HOLDERS . . . . . . . . . . . . . . . 23
(f) NO THIRD PARTY BENEFICIARY. . . . . . . . . . . . . . . . . . 23
(g) SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . 23
(h) HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(i) INVALID PROVISIONS. . . . . . . . . . . . . . . . . . . . . . 23
(j) REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(k) GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 24
(l) COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . 24
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT dated as of June 24, 1994 is made
and entered into by and among Great Plains Software, Inc., a Minnesota
corporation (the "Company"), and the Persons named on the signature pages hereto
as Investors (the "Investors"). Capitalized terms not otherwise defined herein
have the meanings set forth in SECTION 1.
WHEREAS, simultaneously herewith the Company is issuing and selling,
and the Investors are purchasing from the Company, 888,576 shares and the
Company is agreeing to issue and sell and the Investors are agreeing to purchase
from the Company, upon the satisfaction of certain conditions, an additional
282,088 shares of Series B Convertible Preferred Stock, par value $.01
(collectively, the "Series B Preferred Stock"), and Warrants (the "WARRANTS") to
purchase 752,234 shares of Series B Preferred Stock pursuant to the Preferred
Stock and Warrant Purchase Agreement dated the date hereof (the "STOCK PURCHASE
AGREEMENT") among the Company and the Investors;
WHEREAS, in order to induce the Investors to enter into the Stock
Purchase Agreement and to purchase shares of Series B Preferred Stock and
Warrants, the Company is entering into this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS.
(a) Except as otherwise specifically indicated, the following terms
will have the following meanings for all purposes of this Agreement:
"AGREEMENT" means this Registration Rights Agreement, as the same
shall be amended from time to time.
"ARTICLES OF INCORPORATION" means the Second Amended and Restated
Articles of Incorporation (including the Certificates of Designations
establishing the Series A Convertible Preferred Stock of the Company and the
Series B Preferred Stock).
"BOARD" means the Board of Directors of the Company.
"BUSINESS DAY" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City.
"COMMISSION" means the United States Securities and Exchange
Commission, or any successor governmental agency or authority.
"COMMON STOCK" means the Common Stock, par value $.01 per share, of
the Company, as constituted on the date hereof, and any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock.
"COMPANY" has the meaning ascribed to it in the preamble.
"CUTBACK REGISTRATION" means any Demand Registration or Piggyback
Registration to be effected as an underwritten Public Offering in which the
Managing Underwriter with respect thereto advises the Company and the Requesting
Holders in writing that, in its opinion, the number of securities requested to
be included in such registration (including securities of the Company which are
not Registrable Securities) exceeds the number which can be sold in such
offering without a reduction in the selling price anticipated to be received for
the securities to be sold in such Public Offering.
"DEMAND FOR REGISTRATION" has the meaning ascribed to it in SECTION
2(a).
"DEMAND REGISTRATION" means any registration of Registrable Securities
under the Securities Act effected pursuant to a Demand for Registration in
accordance with SECTION 2.
"EFFECTIVE REGISTRATION" means, subject to the last sentence of
SECTION 2(f), a Demand Registration which (i) has been declared or ordered
effective in accordance with the rules of the Commission, and (ii) has been kept
effective for the period of time contemplated by SECTION 4(b). Notwithstanding
the foregoing, a registration that does not become effective after it has been
filed with the Commission solely by reason of the refusal to proceed of the
Holders demanding or requesting such registration shall be deemed to be an
Effective Registration for purposes of this Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"HOLDER" means the holder of Registrable Securities, provided that all
references in this Agreement to the Holders shall be deemed to include holders
of shares of Series B Preferred Stock, and each such Holder shall be deemed to
hold the number of Shares that are at the time issuable upon the conversion of
the shares of Series B Preferred Stock held by such Holder pursuant to the terms
of the Articles of Incorporation; PROVIDED, HOWEVER, that unless a Person (i) is
an Investor or (ii)
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holds Shares (assuming the conversion of any shares of Series B Preferred Stock
held by such Person into Shares) that constitute at least 3% of the Total
Shares, such Person shall not be deemed to be a Holder or to hold Registerable
Securities.
"INDEMNIFIED PARTY" means a party entitled to indemnity in accordance
with SECTION 7.
"INDEMNIFYING PARTY" means a party obligated to provide
indemnification in accordance with SECTION 7.
"INSPECTORS" has the meaning ascribed to it in SECTION 4(j).
"INVESTORS" has the meaning ascribed to it in the preamble.
"LOSSES" has the meaning ascribed to it in SECTION 7(a).
"MANAGING UNDERWRITER" means, with respect to any underwritten Public
Offering, the lead managing underwriter for such offering.
"NASD" means the National Association of Securities Dealers, Inc.
"NOTICE OF DEMAND FOR REGISTRATION" has the meaning ascribed to it in
SECTION 2(a).
"NOTICE OF PIGGYBACK REGISTRATION" has the meaning ascribed to it in
SECTION 3(a).
"PERSON" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust, union
or association.
"PIGGYBACK REGISTRATION" means any registration of equity securities
of the Company under the Securities Act other than (i) a registration in respect
of a dividend reinvestment or similar plan for stockholders of the Company or on
(ii) a registration on Form s-4 or Form S-8 promulgated by the Commission (or
any successor or similar forms thereto) or any other form for a limited purpose,
whether for sale for the account of the Company or for the account of any holder
of securities of the Company (other than Registrable Securities), including a
registration by the Company under the circumstances described in SECTION 2(f).
"PUBLIC OFFERING" means any offering of Shares to the public, either
on behalf of the Company or any of its securityholders, pursuant to an effective
registration statement under the Securities Act.
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"QUALIFIED INDEPENDENT UNDERWRITER" means an underwriter meeting the
requirements of Section 2(1) of Schedule E to the NASD By-Laws as the same may
be amended from time to time.
"QUALIFYING HOLDER" means any Holder who, alone or together with one
or more other Holders, holds Registrable Securities that constitute at least
twelve percent (12%) of the Total Shares.
"RECORDS" has the meaning ascribed to it in SECTION 4(n).
"REGISTRABLE SECURITIES" means the Shares at any time outstanding or
subject to issuance upon conversion of the shares of Series B Preferred Stock
into Shares pursuant to the terms of the Articles of Incorporation and that are
owned by any of the Investors (or any Person that acquires such Shares or such
Series B Preferred Stock from any such Investor). Once issued, Shares shall
cease to be Registrable Securities when (x) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (y) they shall have been distributed to the
public pursuant to Rule 144, or (z) they shall have ceased to be outstanding.
"REGISTRATION EXPENSES" means all expenses incident to the Company's
performance of or compliance with its obligations under this Agreement to effect
the registration of Registrable Securities in a Demand Registration or a
Piggyback Registration, including, without limitation, all registration, filing,
securities exchange listing and NASD fees, all registration, filing,
qualification and other fees and expenses of complying with securities or blue
sky laws, all word processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance and
compliance, the reasonable fees and disbursements of a single counsel and single
firm of accountants retained by the Holders of a majority of the Registrable
Securities being registered (provided that the fees and disbursements of such
counsel and accountants for which the Company shall be responsible shall not
exceed $50,000 and the Company shall be responsible for such fees and
disbursements only in the case of the first Demand Registration or, if the first
Demand Registration has not occurred, in the case of a Piggyback Registration
following the election by the Company to effect an underwritten primary
registration in lieu of a Demand Registration, as contemplated by SECTION 2(f),
premiums and other costs of any policies of insurance against liabilities
arising out of the Public Offering of the Registrable Securities being
registered obtained by the Company (it being understood that the Company shall
have no obligation to obtain such insurance) and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and
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commissions and transfer taxes, if any, in respect of Registrable Securities,
which discounts, commissions, and taxes in respect of Registrable Securities
shall in any Demand or Piggyback Registration be payable by the Holders thereof
PRO RATA among such Holders in proportion to the number of Registrable
Securities being sold by them.
"REQUEST FOR REGISTRATION" means a written request by a Holder to the
Company for registration of Registrable Securities in response to a Notice of
Demand for Registration or a Notice of Piggyback Registration, which request
shall specify the Registrable Securities intended to be disposed of and the
intended method of disposition thereof.
"REQUESTING HOLDERS" means, with respect to any registration, the
Holders demanding or requesting to have Registrable Securities included in a
registration in accordance with Section 2 or 3.
"RULE 144" means Rule 144 promulgated by the Commission under the
Securities Act, and any successor provision thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SERIES B PREFERRED STOCK" has the meaning ascribed to it in the first
recital to this Agreement.
"SHARES" means the shares of Common Stock.
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement of even
date herewith by and among the parties thereto.
"TOTAL SHARES" means the sum of (x) the issued and outstanding Shares
at the date of this Agreement and (y) the Shares issuable upon conversion of the
Series B Preferred Stock (assuming that all authorized shares of Series B
Preferred Stock are outstanding) at the date of this Agreement.
"WARRANT" has the meaning ascribed to it in the first recital of this
Agreement.
(b) Unless the context of this Agreement otherwise requires, (i)
words of any gender include each other gender; (ii) words using the singular or
plural number also include the plural or singular number, respectively; (iii)
the terms "hereof," "herein," "hereby, herewith," and derivative or similar
words refer to this entire Agreement; and (iv) the term "Section" refers to the
specified Section
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of this Agreement. Whenever this Agreement refers to a number of days, such
number shall refer to calendar days unless Business Days are specified.
SECTION 2. DEMAND REGISTRATION RIGHTS.
(a) DEMANDS FOR REGISTRATION. At any time after the third
anniversary of the date hereof or such earlier time as the Company shall have
effected a Public Offering, any Qualifying Holder may demand that the Company
use its best efforts to effect the registration under the Securities Act of all
or part of such Qualifying Holder's Registrable Securities. Such demand-for
registration (a "DEMAND FOR REGISTRATION") shall be in writing, delivered to the
Company in accordance with SECTION 11(a), and shall specify the number of
Registrable Securities to be registered and the intended method of disposition
thereof. No later than fifteen (15) Business Days after receipt of such Demand
for Registration, the Company shall give written notice (a "NOTICE OF DEMAND FOR
REGISTRATION") of such Demand for Registration to all other Holders, and shall
use its best efforts to effect the registration under the Securities Act of:
(i) the Registrable Securities included in the Demand for
Registration, and
(ii) all other Registrable Securities as to which any Holder has
delivered to the Company a Request for Registration within fifteen (15)
Business Days after the giving of the Notice of Demand for Registration,
all to the extent required to permit the disposition of the Registrable
Securities so to be registered in accordance with the methods of disposition
specified. At the request of the Holders of a majority of the Registrable
Securities to be registered, the method of disposition of all Registrable
Securities included in such registration shall be an underwritten offering
effected in accordance with SECTION 5(a). Notwithstanding the foregoing, the
Company may postpone taking action with respect to a Demand Registration or may
require that Holders of Registrable Securities cease making sales under an
effective registration for a reasonable period of time (not exceeding one
hundred eighty (180) days, in the case of a Demand Registration, and not
exceeding ninety (90) days, in the case of an effective registration) if, in the
good faith opinion of the Board, effecting the registration or allowing such
sales would adversely affect or require the premature disclosure of a material
financing, acquisition, disposition of assets or stock, merger or other
comparable transaction or would require the Company to make public disclosure of
information the public disclosure of which would have a material adverse effect
upon the Company, PROVIDED that the Company shall not delay such action or
require such cessation pursuant to this sentence more than once in any twelve
(12) month period. Subject to SECTION 2(e), the Company may include in such
registration securities for sale for its own account. Neither the Company nor
any Holder shall have the right to include any securities
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in a registration statement to be filed as part of a Demand Registration unless
(i) such securities are of the same class as the Registrable Securities to be
included in the Demand for Registration (or another class of securities is to be
sold by the Company for its own account and a majority of the demanding Holders
consent to such inclusion in writing), and (ii) if such Demand Registration is
an underwritten offering, the Company and such other Holders agree in writing to
sell, subject to SECTION 2(e), their securities on the same terms and conditions
as apply to the Registrable Securities being sold pursuant to the Demand for
Registration.
(b) LIMITATIONS ON DEMAND REGISTRATIONS. Notwithstanding anything
herein to the contrary, the Company shall not be required to honor a Demand for
Registration if:
(i) the Registrable Securities to be so registered represent less
than twelve percent (12%) of the Total Shares;
(ii) the proposed aggregate Public Offering price for the
Registrable Securities included in the Demand for Registration is less
than $10 million based on the fair value estimated by the underwriters
in the case of an initial Public Offering or the then-current market
price of the Common Stock in the case of a Public Offering other than an
initial Public Offering; or
(iii) such Demand for Registration is received by the Company less
than ninety (90) days following the effective date of any previous
registration of Registrable Securities other than on Form S-8 (or successor
form thereto), regardless of whether any Holder exercised its rights under
this Agreement with respect to such registration.
(c) REGISTRATION STATEMENT FORM. Demand Registrations shall be on
such appropriate registration form selected by the Company as shall be
reasonably acceptable to the Holders of a majority of the Registrable Securities
to which such registration relates, and shall permit the disposition of such
Registrable Securities in accordance with the intended method or methods
specified by the Holders participating therein.
(d) REGISTRATION EXPENSES. The Company will pay all Registration
Expenses incurred in connection with the first Demand Registration. The
Registration Expenses incurred in connection with any subsequent Demand
Registrations shall be allocated among all Persons (including the Company) on
whose behalf securities of the Company are included in such registration, PRO
RATA on the basis of the respective amounts of the securities then being
registered on their behalf.
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(e) PRIORITY IN CUTBACK REGISTRATIONS. If a Demand Registration
becomes a Cutback Registration, the Company shall include in such registration
only the amount of securities which any Managing Underwriter advises the Company
can be sold in such offering without a reduction in the selling price
anticipated to be received for the securities to be sold in such Public
Offering. Securities shall be included in such offering in the following order
of priority: (i) FIRST, the Registrable Securities included in the Demands for
Registration or the Requests for Registration PRO RATA among the Holders making
such Demands for Registration or Requests for Registration in proportion to the
number of Registrable Securities included in their Demands for Registration or
Requests for Registration, and (ii) SECOND, the securities of the Company
included in such registration by the Company for sale for its own account.
(f) PREEMPTION OF DEMAND REGISTRATION. Notwithstanding anything to
the contrary contained herein, and without limitation as to the rights of the
Company to include in a Demand Registration securities for sale for its own
account as provided in SECTION 2(a), at any time within thirty (30) days after
receiving a Demand for Registration, the Company may elect to effect an
underwritten primary registration in lieu of the Demand Registration. If the
Company so elects, the Company shall give prompt written notice to all Holders
of its intention to effect such a registration and shall afford Holders the
rights contained in SECTION 3 with respect to Piggyback Registrations; the
Demands for Registration shall be deemed to have been withdrawn; and such
primary registration shall not be deemed to be an Effective Registration.
SECTION 3. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. Notwithstanding any
limitation contained in SECTION 2, if the Company at any time proposes after the
date hereof to effect a Piggyback Registration, including a registration in lieu
of a Demand Registration pursuant to SECTION 2(f), it will each such time give
prompt written notice (a "NOTICE OF PIGGYBACK REGISTRATION") to all Holders of
its intention to do so and of such Holders' rights under this SECTION 3, which
Notice of Piggyback Registration shall include a description of the intended
method of disposition of such securities. If any Holder delivers a Request for
Registration to the Company within fifteen (15) Business Days after the date of
the Notice of Piggyback Registration, the Company will use its best efforts to
include in the registration statement relating to such Piggyback Registration
all Registrable Securities which the Company has been so requested to register.
Notwithstanding the foregoing, if, at any time after giving a Notice of
Piggyback Registration and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and, thereupon, (i) in the case of a determination
not
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to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), without prejudice,
however, to the rights of any Qualifying Holder to demand that such registration
be effected as a Demand Registration under SECTION 1, and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities. Subject to the provisions of SECTION 2(f), no registration
effected under this SECTION 3 shall relieve the Company of its obligations to
effect a Demand Registration under SECTION 2.
(b) REGISTRATION EXPENSES. The Company will pay all Registration
Expenses incurred in connection with each Piggyback Registration.
(c) PRIORITY IN CUTBACK REGISTRATIONS. If a Piggyback Registration
becomes a Cutback Registration, the Company will include in such registration
the amount of the securities which the Managing Underwriter advises the Company
can be sold in such offering without a reduction in the selling price
anticipated to be received for the securities to be sold in such Public
Offering:
(i) FIRST, the securities proposed by the Company to be sold for its
own account; and
(ii) SECOND, the Registrable Securities included in the Requests for
Registration of Requesting Holders, PRO RATA among such Requesting Holders
in proportion to the number of Registrable Securities included in their
Requests for Registration.
Any securities so excluded shall be withdrawn from and shall not be included in
such Piggyback Registration.
SECTION 4. REGISTRATION PROCEDURES. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act pursuant to SECTION 2 or SECTION 3, the
Company will use its best efforts to effect the registration and sale of such
Registrable Securities in accordance with the intended methods of disposition
thereof specified by the Holders participating therein. Without limiting the
foregoing, the Company in each such case will, as expeditiously as possible:
(a) prepare and file with the Commission (in the case of a Demand
Registration), the requisite registration statement to effect such registration
(including such audited financial statements as may be required by the
Securities Act or the rules and regulations promulgated thereunder) and use its
best efforts to cause such registration statement to become effective; PROVIDED,
that as far in advance as practical before filing such registration statement or
any amendment
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thereto, the Company will furnish to counsel for the Requesting Holders' copies
of reasonably complete drafts of all such documents proposed to be filed
(including exhibits), and any such Holder shall have the opportunity to object
to any information pertaining solely to such Holder that is contained therein
and the Company will make the corrections reasonably requested by such Holder
with respect to such information prior to filing any such registration statement
or amendment;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and any prospectus used in connection
therewith as may be necessary to maintain the effectiveness of such registration
statement and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities included in such registration
statement, in accordance with the intended methods of disposition thereof, until
the earlier of (i) such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement and (ii) one hundred eighty
(180) days after such registration statement becomes effective;
(c) promptly notify each Requesting Holder and the underwriter or
underwriters, if any:
(i) when such registration statement or any prospectus used in
connection therewith, or any amendment or supplement thereto, has been
filed and, with respect to such registration statement or any post-
effective amendment thereto, when the same has become effective;
(ii) of any written request by the Commission for amendments or
supplements to such registration statement or prospectus;
(iii) of the notification to the Company by the Commission of its
initiation of any proceeding with respect to the issuance by the Commission
of, or of the issuance by the Commission of, any stop order suspending the
effectiveness of such registration statement; and
(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale
under the applicable securities or blue sky laws of any jurisdiction;
(d) furnish to each seller of Registrable Securities included in such
registration statement such number of conformed copies of such registration
statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in such registration statement (including each
preliminary
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prospectus and any summary prospectus) and any other prospectus filed under Rule
424 promulgated under the Securities Act relating to such Holder's Registrable
Securities, and such other documents, as such seller may reasonably request to
facilitate the disposition of its Registrable Securities;
(e) use its best efforts to register or qualify all Registrable
Securities included in such registration statement under such other securities
or blue sky laws of such jurisdictions as each Holder thereof shall reasonably
request within fifteen (15) days following the original filing of such
registration statement and to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such Holders except that the Company shall not for any such purpose be
required (i) to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this paragraph (e)
be obligated to be so qualified, (ii) to consent to general service of process
in any such jurisdiction or (iii) to subject itself to taxation in any such
jurisdiction by reason of such registration or qualification;
(f) use its best efforts to cause all Registrable Securities included
in such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable each Holder
thereof to consummate the disposition of such Registrable Securities;
(g) to the extent any of the following are obtained by or furnished
to the Company or the underwriters, furnish to each Requesting Holder a signed
counterpart, addressed to such Holder (and the underwriters, if any), of
(i) an opinion of counsel for the Company, dated the effective date
of such registration statement (or, if such registration includes an
underwritten Public Offering, dated the date of any closing under the
underwriting agreement), and
(ii) a "cold comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an underwritten
Public Offering, dated the date of any closing under the underwriting
agreement), signed by the independent public accountants who have certified
the Company's financial statements included in such registration statement,
in each case covering the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants letter, with respect to events subsequent to the date of such
financial statements, as are covered in the opinion of issuer's counsel and in
the accountants' letter delivered to the underwriters in the underwritten Public
Offering;
-11-
(h) notify each Holder whose Registrable Securities are included in
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which any 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 the light of the circumstances under which they were
made, not misleading, and at the request of any such Holder promptly prepare and
furnish to such Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such 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
the light of the circumstances under which they were made, not misleading;
(i) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve (12) months but not more than eighteen
(18) months, beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder, and not file any amendment or supplement to such Registration
Statement or prospectus to which any such seller or any Requesting Holder shall
have reasonably objected on the grounds that such amendment or supplement does
not comply in all material respects with the requirements of the Securities Act
or of the rules or regulations thereunder;
(j) make available for inspection by any Requesting Holder and any
attorney, accountant or other agent retained by such Holder (collectively, the
"INSPECTORS"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "RECORDS") reasonably necessary
to enable the Inspectors to exercise their due diligence responsibility, and
cause the Company's officers, directors and employees to supply all information
reasonably requested by any such Inspector in connection with such registration
statement;
(k) provide a transfer agent and registrar for all Registrable
Securities included in such registration statement not later than the effective
date of such registration statement; and
(l) use its best efforts to cause all Registrable Securities included
in such registration statement to be listed, upon official notice of issuance,
on any securities exchange on which any of the securities of the same class as
the Registrable Securities are then listed.
-12-
The Company may require each Holder whose Registrable Securities are
being registered to, and each such Holder, as a condition to including
Registrable Securities in such registration, shall, furnish the Company and the
underwriters with such information and affidavits regarding such Holder and the
distribution of such securities as the Company and the underwriters may from
time to time reasonably request in writing in connection with such registration.
At any time during the effectiveness of any registration statement covering
Registrable Securities offered by a Holder, if such Holder becomes aware of any
change materially affecting the accuracy of the information contained in such
registration statement or the prospectus (as then amended or supplemented)
relating to such Holder, it will immediately notify the Company of such change.
Upon receipt of any notice from the Company of the happening of any
event of the kind described in paragraph (h) of this SECTION 4, each Holder will
forthwith discontinue such Holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such Holder receives the copies of the supplemented or amended prospectus
contemplated by paragraph (h) of this SECTION 4 and, if so directed by the
Company, shall deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such Holder's possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice,
the period referred to in paragraph (b) of this SECTION 4 shall be extended by a
number of days equal to the number of days during the period from and including
the giving of notice pursuant to paragraph (h) of this SECTION 4 and to and
including the date when each Holder whose Registrable Securities are included in
such registration statement receives the copies of the supplemented or amended
prospectus contemplated by paragraph (h) of this SECTION 4.
SECTION 5. UNDERWRITTEN OFFERINGS. If a Demand for Registration is
made pursuant to SECTION 2, or if the Company at any time proposes to register
any of its securities in a Piggyback Registration or otherwise, and, in either
case, the securities included in such registration are to be distributed by or
through one or more underwriters, such securities shall be distributed by or
through, and the Company shall enter into a firm commitment underwriting
agreement in customary form with, (i) a Managing Underwriter, (ii) such other
underwriters, reasonably satisfactory to the Company, as may be selected by the
Managing Underwriter to assist or participate in the distribution, and (iii) if
a Qualified Independent Underwriter is required for such registration pursuant
to Schedule E to the NASD By-Laws or otherwise, a Qualified Independent
Underwriter.
(a) UNDERWRITTEN OFFERINGS IN CONNECTION WITH DEMAND REGISTRATION.
If a Demand for Registration is made pursuant to SECTION 2 and the
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distribution of the Registrable Securities included in such Demand for
Registration is to be underwritten, the underwriting agreement shall include,
among other provisions, indemnities to the effect and to the extent provided in
SECTION 7. The Holders whose Registrable Securities are to be distributed by
such underwriters shall be parties to such underwriting agreement. No
Requesting Holder may participate in such underwritten offering unless such
Holder agrees to sell its Registrable Securities on the basis provided in such
underwriting agreement and completes and executes all questionnaires, powers of
attorney, indemnities and other documents reasonably required under the terms of
such underwriting agreement. If any Requesting Holder disapproves of the terms
of an underwriting, such Holder may elect to withdraw therefrom and from such
registration by notice to the Company and the Managing Underwriter, and each of
the remaining Requesting Holders shall be entitled to increase the number of
Registrable Securities being registered to the extent of the Registrable
Securities so withdrawn (i) in the case of a Cutback Registration, in accordance
with the priorities set forth in SECTION 2(e) and (ii) in all other cases in the
proportion which the number of Registrable Securities being registered by such
remaining Requesting Holder bears to the total number of Registrable Securities
being registered by all such remaining Requesting Holders.
(b) UNDERWRITTEN PIGGYBACK OFFERINGS. If the Company at any time
proposes to register any of its securities in a Piggyback Registration and such
securities are to be distributed by or through one or more underwriters, the
Company will, subject to the provisions of SECTION 3(c), use its best efforts,
if requested by any Holder whose Registrable Securities are included in such
registration to arrange for such underwriters to include the Registrable
Securities to be offered and sold by such Holder among the securities to be
distributed by such underwriters, and such Holders shall be obligated to sell
their Registrable Securities in such Piggyback Registration through such
underwriters on the same terms and conditions as apply to the other Company
securities to be sold by such underwriters in connection with such Piggyback
Registration. The Holders whose Registrable Securities are to be distributed by
such underwriters shall be parties to the underwriting agreement between the
Company and such underwriter or underwriters. No Requesting Holder may
participate in such underwritten offering unless such Holder agrees to sell its
Registrable Securities on the basis provided in such underwriting agreement and
completes and executes all questionnaires, powers of attorney, indemnities and
other documents reasonably required under the terms of such underwriting
agreement. If any Requesting Holder disapproves of the terms of an
underwriting, such Holder may elect to withdraw therefrom and from such
registration by notice to the Company and the Managing Underwriter, and each of
the remaining Requesting Holders shall be entitled to increase the number of
Registrable Securities being registered to the extent of the Registrable
Securities so withdrawn (i) in the case of a Cutback Registration, in accordance
with the priorities set forth in SECTION 3(c) and (ii) in all other cases in the
proportion which the number of Registrable Securities being registered by such
remaining
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Requesting Holder bears to the total number of Registrable Securities being
registered by all such remaining Requesting Holders.
SECTION 6. HOLDBACK AGREEMENTS.
(a) BY THE HOLDERS. Unless the Managing Underwriter (or, in the case
of a non-underwritten Public Offering, the Company) otherwise agrees, no Holder
shall effect any public sale or distribution (including a sale under Rule 144)
of any Registrable Securities, or any securities convertible into or
exchangeable or exercisable for Registrable Securities, during such period of
time as is sufficient and appropriate, in the opinion of the Managing
Underwriter (or, in the case of a non-underwritten Public Offering, the
Company), in order to complete the sale and distribution of the securities
included in such registration, except as part of such registration statement,
whether or not such Holder participates in such registration.
(b) BY THE COMPANY. Unless any Managing Underwriter otherwise
agrees, the Company shall not effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the fourteen (14) days prior to and the
ninety (90) days after the effective date of the registration statement filed in
connection with an underwritten offering made pursuant to a Demand Registration
or a Piggyback Registration (or for such shorter period of time as is sufficient
and appropriate, in the opinion of any Managing Underwriter or, if there is no
Managing Underwriter, the Company, in order to complete the sale and
distribution of the securities included in such registration), except as part of
such underwritten registration and except pursuant to registrations on Form S-4
or Form S-8 promulgated by the Commission (or any successor or similar forms
thereto).
SECTION 7. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall, to the full
extent permitted by law, indemnify and hold harmless each seller of Registrable
Securities included in any registration statement filed in connection with a
Demand Registration or a Piggyback Registration, its directors, officers, and
partners, and each other Person, if any, who controls any such seller within the
meaning of the Securities Act, against any losses, claims, damages, expenses or
liabilities, joint or several (together, "Losses"), to which such seller or any
such director, officer, partner or controlling Person may become subject under
the Securities Act or otherwise, insofar as such Losses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or
-15-
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, and the
Company will reimburse such seller and each such director, officer, partner and
controlling Person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such Loss (or action or
proceeding in respect thereof); PROVIDED, that the Company shall not be liable
in any such case to the extent that any such Loss (or action or proceeding in
respect thereof) arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in any such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such seller specifically stating
that it is for use in the preparation thereof, or (ii) such seller's failure to
send or give a copy of the final prospectus to the Persons asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such director, officer,
partner or controlling Person, and shall survive the transfer of such securities
by such seller. The Company shall also indemnify each other Person who
participates (including as an underwriter) in the offering or sale of
Registrable Securities, their officers and directors, and partners, and each
other Person, if any, who controls any such participating Person within the
meaning of the Securities Act to the same extent as provided above with respect
to sellers of Registrable Securities.
(b) INDEMNIFICATION BY THE SELLERS. Each Holder whose Registrable
Securities are included or are to be included in any registration statement
filed in connection with a Demand Registration or a Piggyback Registration, as a
condition to including Registrable Securities in such registration statement,
shall, to the full extent permitted by law, indemnify and hold harmless the
Company, its directors and officers, and each other Person, if any, who controls
the Company within the meaning of the Securities Act, against any Losses to
which the Company or any such director or officer or controlling Person may
become subject under the Securities Act or otherwise, insofar as such Losses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, if such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such seller specifically stating that it is for use in the
preparation of
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such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement; PROVIDED, HOWEVER, that the obligation to
provide indemnification pursuant to this SECTION 7(b) shall be several, and not
joint and several, among such Indemnifying Parties on the basis of the number of
Registrable Securities of each such Indemnifying Party included in such
registration statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling Person and shall survive the transfer of such
securities by such seller. Such Holders shall also indemnify each other Person
who participates (including as an underwriter) in the offering or sale of
Registrable Securities, their officers and directors and each other Person, if
any, who controls any such participating Person within the meaning of the
Securities Act to the same extent as provided above with respect to the Company.
(c) NOTICES OF CLAIMS. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraph (a) or (b) of this SECTION 7, such
Indemnified Party shall, if a claim in respect thereof is to be made against an
Indemnifying Party pursuant to such paragraphs, give written notice to the
latter of the commencement of such action, PROVIDED that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under the preceding paragraphs of this
SECTION 7, except to the extent that the Indemnifying Party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an Indemnified Party, the Indemnifying Party shall be entitled to
participate in and, unless, in the reasonable judgment of any Indemnified Party,
a conflict of interest between such Indemnified Party and any Indemnifying Party
exists with respect to such claim, to assume the defense thereof, jointly with
any other Indemnifying Party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such Indemnified Party, and after notice
from the Indemnifying Party to such Indemnified Party of its election so to
assume the defense thereof, the Indemnifying Party shall not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation; PROVIDED that the Indemnified Party may participate in such
defense at the Indemnified Party's expense; and PROVIDED FURTHER that the
Indemnified Party or Indemnified Parties shall have the right to employ one
counsel to represent it or them if, in the reasonable judgment of the
Indemnified Party or Indemnified Parties, it is advisable for it or them to be
represented by separate counsel by reason of having legal defenses which are
different from or in addition to those available to the Indemnifying Party, and
in that event the reasonable fees and expenses of such one counsel shall be paid
by the Indemnifying Party. If the Indemnifying Party is not entitled to, or
elects not to, assume the defense of a claim, it will not be obligated to pay
the fees and expenses of more than one counsel for the Indemnified Parties with
respect to such claim, unless in the reasonable judgment of any Indemnified
Party a
-17-
conflict of interest may exist between such Indemnified Party and any other
Indemnified Parties with respect to such claim, in which event the Indemnifying
Party shall be obligated to pay the fees and expenses of such additional counsel
for the Indemnified Parties or counsels. No Indemnifying Party shall consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation without the consent of the Indemnified Party. No Indemnifying Party
shall be subject to any liability for any settlement made without its consent.
(d) CONTRIBUTION. If the indemnity and reimbursement obligation
provided for in any paragraph of this SECTION 7 is unavailable or insufficient
to hold harmless an Indemnified Party in respect of any Losses (or actions or
proceedings in respect thereof) referred to therein, then the Indemnifying Party
shall contribute to the amount paid or payable by the Indemnified Party as a
result of such Losses (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and the Indemnified Party on the other hand in connection
with statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, then the
Indemnifying Party shall contribute to the amount paid or payable by the
Indemnified Party as a result of such Losses (or actions or proceedings in
respect thereof) in such proportion as is appropriate to reflect not only the
relative fault of, but also the relative benefits received by, the Indemnifying
Party on the one hand and the Indemnified Party on the other hand in connection
with statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. 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 Indemnifying Party or the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
parties hereto agree that it would not be just and equitable if contributions
pursuant to this paragraph were to be 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 first sentence of this paragraph. The amount
paid by an Indemnified Party as a result of the Losses referred to in the first
sentence of this paragraph shall be deemed to include any legal and other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any Loss which is the subject of this paragraph.
No Indemnified Party guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution
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from the Indemnifying Party if the Indemnifying Party was not guilty of such
fraudulent misrepresentation.
(e) OTHER INDEMNIFICATION. Indemnification similar to that specified
in the preceding paragraphs of this SECTION 7 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any federal or state law or regulation of any governmental authority other than
the Securities Act. The provisions of this SECTION 7 shall be in addition to
any other rights to indemnification or contribution which an Indemnified Party
may have pursuant to law, equity, contract or otherwise.
(f) INDEMNIFICATION PAYMENTS. The indemnification required by this
SECTION 7 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or Losses
are incurred.
SECTION 8. COVENANTS RELATING TO RULE 144. If at any time the
Company is required to file reports in compliance with either Section 13 or
Section 15(d) of the Exchange Act, the Company will (a) file reports in
compliance with the Exchange Act and (b) comply with all rules and regulations
of the Commission applicable in connection with the use of Rule 144 and take
such other actions and furnish each Holder with such other information as such
Holder may reasonably require in order to avail itself of such rule or any other
rule or regulation of the Commission allowing such Holder to sell any
Registrable Securities without registration.
SECTION 9. NO EXISTING AGREEMENTS. The Company represents and
warrants to each other party hereto that there is not in effect on the date
hereof any agreement by the Company (other than this Agreement) pursuant to
which any holders of securities of the Company have a right to cause the Company
to register or qualify such securities under the Securities Act or any
securities or blue sky laws of any jurisdiction.
SECTION 10. MISCELLANEOUS.
(a) NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally, by courier or by facsimile transmission or mailed (first
class postage prepaid) to the parties at the addresses or facsimile numbers set
forth below.
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(i) If to the Company, to:
Great Plains Software, Inc.
0000 Xxxxxxxxx 00xx Xxxxxx
Xxxxx, Xxxxx Xxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
(ii) if to the Investors or any of them, to:
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
with copy to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
All such notices, requests and other communications will (x) if
delivered personally or by courier to the address provided in this SECTION
10(a), be deemed given upon delivery, (y) if delivered by facsimile transmission
to the facsimile number provided in this SECTION 10(a), be deemed given when
receipt of transmission has been orally confirmed by the sending party, and (z)
if delivered by first class or registered mail in the manner described above to
the address as provided in this SECTION 10(a), be deemed given three (3)
Business Days after deposit in the United States Mail (in each case regardless
of whether such notice, request or other communication is received by any other
Person to whom a copy of such notice is to be delivered pursuant to this
Section). Any party from time to time may change its address, facsimile number
or other information for the purpose of notices to that party by giving notice
specifying such change to the other parties hereto.
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(b) ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof, and contains the sole and entire agreement between the parties
hereto with respect to the-subject matter hereof.
(c) AMENDMENT; TERMINATION. This Agreement may be amended,
supplemented or modified only by a written instrument (which may be executed in
any number of counterparts) duly executed by or on behalf of each of the Company
and the Holders of two-thirds (2/3) or more of the Registrable Securities then
outstanding or subject to issuance. This Agreement shall be deemed terminated
and shall be of no further force and effect, except for the provisions of
SECTION 7, which provisions shall survive such termination, at such time as
there are no Holders or any Persons who hold Registrable Securities, whichever
is earlier.
(d) WAIVER. Subject to paragraph (e) of this Section 11, any term or
condition of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same term or condition of this Agreement on any
future occasion.
(e) CONSENTS AND WAIVERS BY HOLDERS. Any consent of Holders pursuant
to this Agreement, and any waiver by Holders of any provision of this Agreement,
shall be in writing (which may be executed in any number of counterparts) and
may be given or taken by the Holders of two-thirds (2/3) or more of the
Registrable Securities then outstanding or subject to issuance, and any such
consent or waiver so given or taken will be binding on all the Holders.
(f) NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnification under SECTION 7.
(g) SUCCESSORS AND ASSIGNS. The registration rights contained in
this Agreement shall be transferable by any Holder to any Person that acquires
Registrable Securities from such Holder (excluding any Person that acquires such
Registrable Securities in a transaction pursuant to which such securities cease
to be Registrable Securities).
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(h) HEADINGS. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
(i) INVALID PROVISIONS. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
(j) REMEDIES. Except as otherwise expressly provided for herein, no
remedy conferred by any of the specific provisions of this Agreement is intended
to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter if, existing at law or in equity or by statute or otherwise. The
election of any one or more remedies by any party hereto shall not constitute a
waiver by any such party of the right to pursue any other available remedies.
Damages in the event of breach of this Agreement by any party hereto
or any of their respective successors or permitted assigns would be difficult,
if not impossible, to ascertain, and it is therefore agreed that each such
Person, in addition to and without limiting any other remedy or right it may
have, will have the right to an injunction or other equitable relief in any
court of competent jurisdiction, enjoining any such breach, and enforcing
specifically the terms and provisions hereof and each party hereto, on its own
behalf and behalf of its respective successors and permitted assigns, hereby
waives any and all defenses it may have on the ground of lack of jurisdiction or
competence of the court to grant such an injunction or other equitable relief.
The existence of this right will not preclude any such Person from pursuing any
other rights and remedies at law or in equity which such Person may have.
(k) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota applicable to a contract
executed and performed therein, without giving effect to the conflicts of laws
principles thereof.
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(l) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by each party hereto, or the duly authorized officer of each party
hereto, as the case may be, as of the date first above written.
GREAT PLAINS SOFTWARE, INC.
By:
-----------------------------------------
President
INVESTORS
GS CAPITAL PARTNERS, L.P., A
DELAWARE LIMITED PARTNERSHIP
By: GS Advisors, L.P., its general partner
By: GS Advisors, Inc., its general
partner
By:
-----------------------------------------
BRIDGE STREET FUND 1994, L.P., A
DELAWARE LIMITED PARTNERSHIP
By: Stone Street Performance Corp., its managing
general partner
By:
-----------------------------------------
STONE STREET FUND 1994, L.P., A
DELAWARE LIMITED PARTNERSHIP
By: Stone Street Performance Corp., its general
partner
By:
-----------------------------------------
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