REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is entered into as of November 1,
2002 (this "AGREEMENT"), by and among OneSource Information Services, Inc., a
Delaware corporation (the "CORPORATION"), ValueAct Capital Partners, L.P., a
Delaware limited partnership, ValueAct Capital Partners II, L.P., a Delaware
limited partnership, and ValueAct Capital International, Ltd., a British Virgin
Islands corporation (collectively, "VALUEACT").
BACKGROUND
A. Pursuant to the Stock Purchase Agreement, dated as of the date
hereof (the "INFORMATION PARTNERS STOCK PURCHASE AGREEMENT"), by and among
Information Partners Capital Fund, L.P., a Delaware limited partnership, BCIP
Associates, a Delaware general partnership, and BCIP Trust Associates, L.P., a
Delaware limited partnership (collectively, "INFORMATION PARTNERS") and ValueAct
Capital Partners, L.P., a Delaware limited partnership, and the Stock Purchase
Agreement, dated as of the date hereof, by and among Xxxxxxx Xxxxx Venture
Partners III Limited Partnership, an Illinois limited partnership ("WBVP", and
together with Information Partners, the "SELLERS"), and ValueAct (the "WBVP
STOCK PURCHASE AGREEMENT" and together with the Information Partners Stock
Purchase Agreement, the "STOCK PURCHASE AGREEMENTS"), the Sellers have each
agreed to sell to ValueAct, and ValueAct has agreed to purchase from the
Sellers, an aggregate of 3,477,297 shares of Common Stock (as defined below).
B. The Corporation desires that ValueAct purchase the Common Stock of
the Corporation and become a stockholder of the Corporation.
C. In connection with the sale of the Common Stock by the Sellers to
ValueAct, and in order to induce ValueAct to purchase the Common Stock, the
parties hereto desire to enter into certain arrangements relating to ValueAct's
ownership of the Registrable Securities.
TERMS
In consideration of the premises and mutual covenants and obligations
hereinafter set forth and intending to be legally bound, the parties hereto
agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1. DEFINITIONS. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement, have
the meanings herein specified.
"AFFILIATE" means with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person, and that Person's spouse, estate, personal
representative or lineal descendants or any trust for the benefit of such Person
and/or such Person's spouse and/or such Person's lineal descendants or any
entities controlled by such Person. As used in this definition, the term
"CONTROL" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"AGREEMENT" shall have the meaning set forth in the preamble hereto.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the
Corporation.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which banks in New York City are authorized or obligated by law or
executive order to not open or remain closed.
"COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"COMMON STOCK" shall mean the shares of common stock, par value $.01
per share, of the Corporation.
"CORPORATION" shall have the meaning set forth in the preamble hereto.
"DEMAND REGISTRATION REQUEST" shall have the meaning set forth in
Section 2.1 hereof.
"DIRECTORS" shall mean those individuals elected as members of the
Board of Directors.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"HOLDER" shall mean any Person holding Registrable Securities and any
Person holding Registrable Securities to whom the rights under this Agreement
have been transferred in accordance with Section 2.9 hereof.
"PERSON" includes any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
or other legal entity or organization.
"REGISTRABLE SECURITIES" means the shares of Common Stock purchased by
ValueAct pursuant to the Stock Purchase Agreements.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"STOCK PURCHASE AGREEMENTS" shall have the meaning set forth in the
recitals hereof.
"UNDERWRITTEN OFFERING" shall mean a registration in which securities
of the Corporation are sold to an underwriter for reoffering to the public.
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"VALUEACT" shall have the meaning set forth in the preamble hereto.
Section 1.2. HEADINGS. The headings and subheadings in this Agreement
are included for convenience and identification only and are in no way intended
to describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
ARTICLE II
REGISTRATION RIGHTS
Section 2.1. DEMAND REGISTRATION. At any time after the first
anniversary of the date of this Agreement, the holders of not less than 50.1% of
the Registrable Securities then outstanding (the "MAJORITY HOLDER") shall be
entitled to make two (2) written requests at any time and from time to time
(each a "DEMAND REGISTRATION REQUEST") to the Corporation for registration under
the Securities Act with respect to not less than 15% of the shares of the
Registrable Securities then outstanding (a "DEMAND REGISTRATION") (which Demand
Registration Request shall specify the intended number of Registrable Securities
to be disposed of), and the Corporation shall use its best efforts to effect
such registration within thirty (30) days of such request in accordance with the
terms hereof.
Section 2.2. REGISTRATION ON FORM S-3. In addition to the rights under
paragraph Section 2.1 above, at any time after the first anniversary of the date
of this Agreement and upon the written request of the Majority Holder, the
Corporation shall use its best efforts to effect the registration of not less
than 15% of the shares of the Registrable Securities then outstanding on Form
S-3 or any successor form to Form S-3, (a "S-3 REGISTRATION"); PROVIDED,
HOWEVER, that the Corporation shall be obligated to use best efforts to effect
an S-3 Registration only if the Corporation is then eligible to file the related
registration statement on Form S-3 (or any successor form) under the Securities
Act for such a transaction. The Corporation shall not be obligated to effect
more than two registrations in a 12 month period.
Section 2.3. PRIORITY ON DEMAND REGISTRATION. In the event that a
registration pursuant to Section 2.1 or 2.2 is for an Underwritten Offering, the
Corporation shall promptly so advise the Holders. In such event, the right of
any Holder to enter into a registration statement pursuant to Section 2.1 or 2.2
shall be conditioned on such Holder's participation in the underwriting
arrangements required by this Section 2.3, and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent requested shall be
limited to the extent provided herein.
The Corporation shall (together with all Holders and other holders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by a majority of the Holders, but subject to the
Corporation's reasonable approval. Notwithstanding any other provision of this
Section, if the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may limit
the Registrable Securities to be included in such registration and underwriting
(provided that securities of all other security holders are not included
therein). In the event of a limitation on the number of Registrable Securities
to be included in a registration, then the Corporation shall so advise all
Holders and the number of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all Holders thereof in
proportion, as nearly as practicable, to the
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respective amounts of Registrable Securities held by such Holders. No
Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such Person may elect to withdraw therefrom by written notice to
the Corporation, the managing underwriter and the other Holders. The Registrable
Securities so withdrawn shall also be withdrawn from registration, and such
Registrable Securities shall not be transferred in a public distribution prior
to 30 days after the effective date of such registration, or such other shorter
period of time as the underwriters may require.
The Corporation shall be entitled to register securities for sale for
its own account in any registration requested pursuant to this Section unless
the underwriter shall indicate in writing to the Holders that the inclusion of
the shares to be sold for the account of the Corporation will adversely affect
the registration, the price of the shares to be sold and the number of shares to
be sold for the account of the Holders. The Corporation may not cause any other
registration of securities for sale for its own account (other than a
registration effected solely to implement an employee benefit plan or stock
option plan or a transaction contemplated by Rule 145 of the Commission) to be
initiated after a registration requested pursuant to this Section and to become
effective less than 90 days after the effective date of any registration
requested pursuant to this Section.
Section 2.4. INCIDENTAL REGISTRATION.
(a) If the Corporation proposes to register any of its capital
stock or other equity securities, either for its own account or the account of a
security holder or holders (including any securities convertible into or
exchangeable for equity securities) under the Securities Act in connection with
the public offering of such securities solely for cash (other than in connection
with mergers, acquisitions, exchange offers, subscription offers, dividend
reinvestment plans, stock option or other employee benefit plans or other
registrations on Form S-4 or Form S-8 or successor forms thereto), whether or
not for sale for its own account, the Corporation shall, at such time, give at
least thirty (30) days prior written notice to ValueAct of its intentions to
file a registration statement under the Securities Act. Upon the written request
of ValueAct given within twenty (20) days after the receipt of such notice by
the Corporation (which request shall specify the aggregate number of Registrable
Securities owned by ValueAct that ValueAct elects to be registered), the
Corporation shall, subject to the terms hereof, use its best efforts to cause
such Registrable Securities that ValueAct has requested to be registered to be
included in such registration; PROVIDED, HOWEVER, that if, prior to or after the
effective date of the registration statement filed in connection with such
registration, the Corporation shall determine for any reason to terminate or
withdraw such registration, the Corporation shall give written notice of such
determination to ValueAct and, thereupon, shall be relieved of its obligation
under this Section 2.4 to register any Registrable Securities in connection with
such aborted registration (but not from its obligation to pay any expenses
incurred by ValueAct in connection therewith).
(b) In the event that a registration pursuant to Section 2.4 is
for an Underwritten Offering, the Corporation shall promptly so advise the
Holders. In such event, the right of any Holder to enter into a registration
statement pursuant to Section 2.4 shall be conditioned on such Holder's
participation in the underwriting arrangements required by this
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Section 2.4, and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent requested shall be limited to the extent provided
herein.
The Corporation (together with all Holders and other holders proposing
to distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter selected
by the Corporation. Notwithstanding any other provision of this Section 2.4, if
the managing underwriter determines that marketing factors require a limitation
of the number of shares to be underwritten, the underwriter may limit the number
of shares to be included in the underwriting and allocate the shares in priority
as follows: (i) all shares of Common Stock proposed to be underwritten on behalf
of the Corporation for its own account and then (ii) all shares of Registrable
Securities proposed to be underwritten on behalf of the Holders, and then (iii)
all other shares of Common Stock proposed to be included in such registration.
No Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such Person may elect to withdraw therefrom by written notice to
the Corporation, the managing underwriter and the other Holders. The Registrable
Securities so withdrawn shall also be withdrawn from registration, and such
Registrable Securities shall not be transferred in a public distribution prior
to 30 days after the effective date of such registration, or such other shorter
period of time as the underwriters may require.
Section 2.5. EXPENSES OF REGISTRATION. The Corporation shall bear and
pay all reasonable expenses other than underwriting fees, discounts and
commissions relating to shares of Registrable Securities incurred in connection
with each registration, filing or qualification pursuant to this Agreement,
including (without limitation) all registration, blue sky, securities exchange
or listing fees, filing and qualification fees, printing and accounting fees
(including for audits and comfort letters), and fees and disbursements of
counsel for the Holders. Underwriting discounts and commissions relating to the
shares of Registrable Securities included in a registration pursuant to this
Agreement shall be borne and paid ratably by ValueAct in proportion to its
participation in such registration.
Section 2.6. REGISTRATION PROCEDURES. If and whenever the Corporation
is required to effect or cause the registration of any Registrable Securities
under the Securities Act as provided in this Agreement, the Corporation will, as
expeditiously as reasonably possible:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities, and use its best efforts
to cause such registration statement to become effective and to keep ValueAct
advised in writing of the initiation and progress of proceedings regarding such
registration;
(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 for
a period of not less than one-hundred eighty (180) days or such shorter period
which will terminate when all Registrable Securities covered by such
registration statement have been sold (but not before the expiration of the
ninety (90)-day period referred to in Section 4(3) of the Securities Act and
Rule 174
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thereunder, if applicable) and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement;
(c) furnish to ValueAct such number of copies of such
registration statement and of each such amendment and supplement thereof (in
each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and summary prospectus), in conformity with the requirements of the Securities
Act, and such other documents as ValueAct may reasonably request in order to
facilitate the disposition of the Registrable Securities;
(d) use its best efforts to register or qualify such
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as ValueAct shall request, and
do any and all other acts and things which may be necessary or advisable to
enable ValueAct to consummate the disposition in such jurisdictions of the
Registrable Securities; PROVIDED, HOWEVER, that the Corporation shall not be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject itself to general taxation in any jurisdiction where it is not then so
subject;
(e) cooperate with the Holders and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriters may request at least two
(2) business days prior to any sale of Registrable Securities to the
underwriters;
(f) immediately notify ValueAct, at any time when the
registration statement is required to be kept effective under clause (b) of this
Section 2.6, of the Corporation becoming aware that the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing (which facts ValueAct shall keep confidential), and
within ten (10) days prepare and furnish to ValueAct a reasonable number of
copies of an amended or supplemental 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 not misleading in the light of the circumstances then
existing;
(g) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a registration statement at the
earliest possible moment;
(h) use its best efforts to list such Registrable Securities on
any securities exchange or quoted on a quotation system on which the Common
Stock is then listed or quoted, and provide a transfer agent and registrar for
such Registrable Securities covered by such registration statement not later
than the effective date of such registration statement;
(i) furnish ValueAct, upon request, a signed counterpart of:
(i) an opinion of counsel for the Corporation, dated
the effective date of such registration statement (or, if such registration
involves an underwritten public
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offering, dated the date of the closing under the underwriting agreement),
reasonably satisfactory in form and substance to ValueAct and the managing
underwriter, if any; and
(ii) a "comfort" letter, dated the effective date of
such registration statement (or, if such registration involves an underwritten
public offering, dated the date of the closing under the underwriting
agreement), signed by the independent public accountants who have certified the
Corporation's financial statements included in such registration statement,
covering such matters with respect to such registration statement as are
customarily covered in accountants' letters delivered to the underwriters in
underwritten offerings of securities as may reasonably be requested by ValueAct
and the managing underwriter, if any;
(j) make available for inspection by ValueAct, by any
underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by ValueAct or any such underwriter (individually, an "INSPECTOR" and
collectively, the "INSPECTORS"), all pertinent financial and other records,
pertinent corporate documents and properties of the Corporation as shall be
reasonably necessary to enable them to exercise their due diligence
responsibilities (collectively, the "RECORDS"), and cause all of the
Corporation's officers, directors and employees to supply all information
reasonably requested by ValueAct or any such underwriter, attorney, accountant
or agent in connection with such registration statement; PROVIDED that ValueAct
agrees that non-public information obtained by it as a result of such
Inspections shall be deemed confidential and acknowledges its obligations under
the Federal securities laws not to trade any securities of the Corporation on
the basis of material non-public information; The rights granted pursuant to
this subsection (j) may not be assigned or otherwise conveyed by such person or
by any subsequent transferee of any such rights without the written consent of
the Corporation, which consent shall not be unreasonably withheld; provided that
the Corporation may refuse such written consent if the proposed transferee is a
competitor of the Corporation as determined by the Board of Directors in a
written consent a copy of which shall be provided to the proposed transferor;
and provided further, that no such written consent shall be required if the
transfer is made to a party who is not a competitor of the Corporation and who
is a parent, subsidiary, affiliate, partner or group member of such person;
(k) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders, an earnings statement covering the period of at least
twelve (12) months, but not more than eighteen (18) months, beginning with the
first month after the effective date of a registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act;
and
(l) take such other reasonable steps that are necessary or
advisable to permit the sale of such Registrable Securities.
ValueAct agrees that, upon receipt of any notice from the Corporation
of the happening of any event of the kind described in clause (f) of this
Section 2.6, ValueAct will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until ValueAct's receipt of the copies of the supplemented or amended
prospectus contemplated by clause (f) of this Section 2.6, and, if so directed
by the Corporation, ValueAct will deliver to the Corporation (at the
Corporation's expense) all copies, other than permanent file copies then in
ValueAct's possession, of the prospectus covering such
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Registrable Securities current at the time of receipt of the Corporation's
notice. In the event the Corporation shall give any such notice, the periods
mentioned in clause (b) of this Section 2.7 shall be extended by the number of
days during the period from and including the date of the giving of such notice
pursuant to clause (f) of this Section 2.6 to the date when ValueAct shall have
received the copies of the supplemented or amended prospectus contemplated by
clause (f) of this Section 2.6.
Section 2.7. FURNISHING OF INFORMATION. It shall be a condition
precedent to the obligations of the Corporation to take any action pursuant to
this Article II that ValueAct shall have furnished to the Corporation such
information as the Corporation shall request regarding ValueAct, the shares of
Registrable Securities held by ValueAct, and the intended method of disposition
of such shares of Registrable Securities as shall be required to effect the
requested registration. The Corporation shall provide ValueAct with copies of
all correspondence with the Securities and Exchange Commission related to any
registration statement filed pursuant to this Article II and in which ValueAct
is participating on a reasonably prompt basis.
Section 2.8. RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Corporation, the Corporation agrees to use its best lawful efforts to:
(a) Make and keep public information regarding the Corporation
available, as those terms are understood and defined in Rule 144 under the
Securities Act, at all times from and after 90 days following the effective date
of the first registration under the Securities Act filed by the Corporation for
an offering of its securities to the general public.
(b) File with the Commission in a timely manner all reports and
other documents required of the Corporation under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements);
(c) So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request a written statement by the
Corporation as to its compliance with the reporting requirements of said Rule
144 (at any time from and after 90 days following the effective date of the
first registration statement filed by the Corporation for an offering of its
securities to the general public), and of the Securities Act and the Exchange
Act (at any time after it has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Corporation, and such
other reports and documents of the Corporation and other information in the
possession of or reasonably obtainable by the Corporation as a Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such Holder to sell any such securities without
registration.
Section 2.9. TRANSFER OF REGISTRATION RIGHTS. The rights granted to a
Holder under Article II may be assigned to a transferee or assignee in
connection with any transfer or assignment of Registrable Securities by a Holder
provided that: (i) such transfer may otherwise be effected in accordance with
applicable securities laws, (ii) such assignee or transferee acquires at least
one-third of the number of Registrable Securities originally held by ValueAct
(subject to appropriate adjustment for any stock splits, dividends,
subdivisions, combinations, recapitalizations and the like) and (iii) the Holder
notifies the Corporation in writing of the
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transfer or assignment, stating the name and the address of the transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned and the assignee or transferee agrees
in writing to be bound by the provisions of this Agreement.
Section 2.10. LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. Without the
prior written consent of the Majority Holder, the Corporation shall not, after
the date hereof and before the second anniversary of the date of this Agreement,
grant any registration rights which conflict with or impair, or have priority
over, the registration rights granted hereby.
Section 2.11. STANDOFF PERIOD. If at the time of any request to
register Registrable Securities pursuant to Section 2.1 or 2.2 the Corporation
is preparing or within thirty (30) days thereafter commences to prepare a
registration statement for a public offering (other than in connection with a
registration requested pursuant to Section 2.1 or 2.2 or the registration of
equity securities issued or issuable pursuant to an employee stock option, stock
purchase, stock bonus or similar plan or pursuant to a merger, exchange offer or
transaction of the type specified in Rule 145(a) under the Securities Act) which
in fact is filed and becomes effective within ninety (90) days after the
request, or is engaged in any activity which, in the good faith determination of
the Board of Directors, would be adversely affected by the requested
registration to the material detriment of the Corporation, then the Corporation
may at its option direct that such request be delayed for a period not in excess
of four months from the effective date of such offering or the date of
commencement of such other activity, as the case may be, such right to delay a
request to be exercised by the Corporation not more than once in any two year
period. Nothing in this Section shall preclude a Holder of Registrable
Securities from enjoying registration rights which it might otherwise possess
under Section 2.4. If the Corporation has exercised its right to delay a
registration pursuant to this Section and the Holders of Registrable Securities
withdraw the demand for such registration, such withdrawn demand shall not be
counted as a demand under Section 2.1.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
Section 3.1. AUTHORITY. The Corporation has all requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby to
be consummated by the Corporation. The execution, delivery and performance of
this Agreement by the Corporation and the consummation by the Corporation of the
transactions contemplated hereby have been duly authorized by all necessary
limited partnership action and no other proceedings on the part of the
Corporation are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Corporation and (assuming the due authorization, execution and
delivery hereof by the other parties hereto), constitutes the legal, valid and
binding obligation of the Corporation enforceable against the Corporation in
accordance with its terms.
Section 3.2. BOARD OF DIRECTORS. (a) The Corporation represents and
warrants that the Board of Directors has increased its size from to five (5) to
six (6) members.
(b) Effective as of the date hereof, Xxxxx X. Xxxxx (the
"ValueAct
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Director") (i) has been appointed by the Board of Directors as a director to
fill the existing vacancy thereon, to serve until the 2003 annual meeting of the
stockholders of the Corporation, and (ii) subject to the requirements
established by the National Association of Securities Dealers, the Commission,
the Nasdaq Stock Market, Inc., any governmental or regulatory body exercising
authority over the Corporation, or any other applicable statute, rule or
regulation, will be appointed to any Executive or Governance committees or other
committees of the Board of Directors with powers similar to those customarily
exercised by such committees.
ARTICLE IV
ADDITIONAL COVENANT OF THE CORPORATION
Section 4.1. For so long as ValueAct owns at least 30% of the
Registrable Securities, the Corporation shall, subject to the Board of
Director's fiduciary duties under applicable law and subject to the requirements
established by the National Association of Securities Dealers, the Commission,
the Nasdaq Stock Market, Inc., any governmental or regulatory body exercising
authority over the Corporation, or any other applicable statute, rule or
regulation, use its best efforts to include the ValueAct Director in the slate
of nominees recommended for election to the Board of Directors at each annual
meeting of the Corporation after the date hereof.
Section 4.2. In consideration of entering into this Agreement and the
Stock Purchase Agreements, the Corporation shall reimburse ValueAct for, or as
ValueAct may request the Corporation to pay directly, the reasonable fees,
expenses and costs of counsel for ValueAct not to exceed $20,000.
ARTICLE V
INDEMNIFICATION
Section 5.1. INDEMNIFICATION BY THE CORPORATION. To the extent
permitted by law, the Corporation will indemnify each Holder, each of its
officers and directors, partners and legal counsel and each Person controlling
such Holder within the meaning of Section 15 of the Securities Act, with respect
to which registration, qualification or compliance has been effected pursuant to
this Agreement, and each underwriter, if any, and each Person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions or proceedings in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, not misleading, or any violation by the Corporation of
the Securities Act or any rule or regulation promulgated under the Securities
Act applicable to the Corporation in connection with any such registration,
qualification or compliance, and the Corporation will reimburse each such
Holder, each of its officers and directors, partners and legal counsel and each
Person controlling such Holder, each such underwriter and each Person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing, settling or defending any
such claim, loss, damage,
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liability or action, provided that the Corporation will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Corporation by such Holder, controlling Person or
underwriter and stated to be specifically for use therein. Notwithstanding the
foregoing, insofar as the foregoing indemnity relates to any such untrue
statement (or alleged untrue statement) or omission (or alleged omission) made
in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the Commission at the time the registration statement
becomes effective or in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Commission, the indemnity agreement herein shall not inure
to the benefit of any underwriter if a copy of the final prospectus filed
pursuant to Rule 424(b) was not furnished to the Person or entity asserting the
loss, liability, claim or damage at or prior to the time such furnishing is
required by the Securities Act.
Section 5.2. INDEMNIFICATION BY HOLDERS. To the extent permitted by
law, each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Corporation, each of its directors,
officers and legal counsel, each underwriter, if any, of the Corporation's
securities covered by such a registration statement, each Person who controls
the Corporation or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors
and each Person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Corporation, such Holders, such directors, officers, legal counsel, Persons,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Corporation by such Holder and stated to be specifically for
use therein. Notwithstanding the foregoing, the liability of each Holder under
this subsection (b) shall be limited in an amount equal to the net proceeds from
the sale of the Registrable Securities sold by such Holder. In addition, insofar
as the foregoing indemnity relates to any such untrue statement (or alleged
untrue statement) or omission (or alleged omission) made in the preliminary
prospectus but eliminated or remedied in the amended prospectus on file with the
Commission at the time the registration statement becomes effective or in the
final prospectus filed pursuant to Rule 424(b) of the Commission, the indemnity
agreement herein shall not inure to the benefit of the Corporation, any
underwriter or (if there is no underwriter) any Holder if a copy of the final
prospectus filed pursuant to Rule 424(b) was not furnished to the Person or
entity asserting the loss, liability, claim or damage at or prior to the time
such furnishing is required by the Securities Act.
Section 5.3. NOTICE. Each party entitled to indemnification under this
Article 5 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the
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defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Agreement unless the failure to give such notice is materially prejudicial to an
Indemnifying Party's ability to defend such action and provided further, that
the Indemnifying Party shall not assume the defense for matters as to which
there is a conflict of interest or separate and different defenses. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, 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. No
Indemnified Party shall consent to entry of any judgment or enter into any
settlement without the consent of each Indemnifying Party (which consent shall
not be unreasonably withheld). Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
Section 5.4. CONTRIBUTION. If the indemnification provided for in this
Article 5 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any losses, claims, damages, expenses or
liabilities referred to therein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages,
expenses or liabilities in such proportion as is appropriate to reflect the
relative fault of the Corporation on the one hand and all shareholders offering
securities in the offering (the "SELLING SHAREHOLDERS") on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, expenses or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Corporation on the one hand
and the Selling Shareholders on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Corporation or by the Selling Shareholders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Corporation and the Selling
Shareholders agree that it would not be just and equitable if contribution
pursuant to this Section 5.4 were based solely upon the number of entities from
whom contribution was requested or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 5.4. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages, expenses and liabilities referred to above in this
Section 5.4 shall be deemed to include any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such action or claim, subject to the provisions of Section 5.3 hereof.
Notwithstanding the provisions of this Section 5.4, no Selling Shareholder shall
be required to contribute any amount or make any other payments under this
Agreement which in the aggregate exceed the proceeds received by such Selling
Shareholder. 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.
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Section 5.5. Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
ARTICLE VI
MISCELLANEOUS
Section 6.1. NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, telecopier,
any courier guaranteeing overnight delivery or first class registered or
certified mail, return receipt requested, postage prepaid, addressed to the
applicable party at the address set forth below or such other address as may be
hereafter designated in writing by such party to the other parties in accordance
with the provisions of this Section:
(a) if given to the Corporation, at the following address:
OneSource Information Services, Inc.
000 Xxxxx Xxxxxx,
Xxxxxxx, XX 00000
Telecopy: 978.318.4690
Attention: Xxx Xxxxxx
with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, L.L.P.
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: 617.248.7100
Attention: Xxxxx Xxxxxx, Esq.
(b) If to ValueAct, to:
ValueAct Capital Partners, L.P.
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telecopy: 415.362.5727
Attention: Xxxxxx Xxxxx
with a copy to:
Dechert
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopy: 215.994.2222
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
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All such notices and such communications shall be deemed to have been given: at
the time delivered by hand., if personally delivered; when receipt is
acknowledged, if telecopied; on the next Business Day, if timely delivered to a
courier guaranteeing overnight delivery; and five days after being deposited in
the mail, if sent first class or certified mail, return receipt requested,
postage prepaid.
Section 6.2. AMENDMENTS. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against any party hereto unless such modification, amendment or waiver
is approved in writing by each party hereto. The failure of any party to enforce
any of the provisions of this Agreement shall in no way be construed as a waiver
of such provisions and shall not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.
Section 6.3. FAILURE TO PURSUE REMEDIES. The failure of any party to
seek redress for violation of, or to insist upon the strict performance of, any
provision of this Agreement shall not prevent a subsequent act, which would have
originally constituted a violation, from having the effect of an original
violation.
Section 6.4. SPECIFIC PERFORMANCE. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement. Any remedy under this Section 6.4 is subject to certain equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought.
Section 6.5. CUMULATIVE REMEDIES. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive its right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
Section 6.6. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.
Section 6.7. INTERPRETATION. Throughout this Agreement, nouns, pronouns
and verbs shall be construed as masculine, feminine, neuter, singular or plural,
whichever shall be applicable. All references herein to "Articles," "Sections"
and "Paragraphs" shall refer to corresponding provisions of this Agreement.
Section 6.8. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
Section 6.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts with the same effect as if all parties hereto had signed the
same document. All counterparts shall be construed together and shall constitute
one instrument.
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Section 6.10. INTEGRATION. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and,
except as otherwise provided herein, supersedes all prior agreements and
understandings pertaining thereto.
Section 6.11. GOVERNING LAW. This Agreement and the rights of the
parties hereunder shall be interpreted in accordance with the laws of the State
of Delaware, and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
Section 6.12. TERMINATION. This Agreement shall terminate at such time
as the Holders are able to sell, within any three month period, all of the
Registrable Securities beneficially owned by them pursuant to Rule 144 under the
Securities Act.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above stated.
ONESOURCE INFORMATION SYSTEMS, INC.
By: /s/ Xxx Xxxxxx
-----------------------------------------
Name: Xxx Xxxxxx
Title: Chief Financial Officer
VALUEACT CAPITAL PARTNERS, L.P.
BY: VA PARTNERS, L.L.C., its General Partner
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx
Managing Member
VALUEACT CAPITAL PARTNERS II, L.P.
BY: VA PARTNERS, L.L.C., its General Partner
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx
Managing Member
VALUEACT CAPITAL INTERNATIONAL, LTD.
BY: VA PARTNERS, L.L.C., its General Partner
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx
Managing Member
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