FORM OF REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of March 10, 2000, is entered into among
Mission Critical Software, Inc., a Delaware corporation (the "Parent") and (i)
certain Key Employees of Company and (ii) other Accredited Stockholders of
Parent (collectively, the "Stockholders"), as those terms are defined in the
Stock Purchase Agreements, dated as of the date hereof, between Parent and the
Key Employees and between the Parent and certain Accredited Stockholders,
respectively (the "Stock Purchase Agreements"). Terms defined in the Stock
Purchase Agreements are used herein as therein defined.
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
"Commission" means the Securities and Exchange Commission.
"Effective Time" means such time as the certificate of merger with
respect to the Merger contemplated by the Stock Purchase Agreement is duly
filed with the Delaware Secretary of State (or at such later time as may be
specified in the certificate of merger).
"Holder" means a Person who owns Registrable Securities and is either
(a) a party to one of the Stock Purchase Agreements or (b) a Person to whom
Registrable Securities have been transferred by a Person named in (a) or (b),
in accordance with the terms set forth in the Stock Purchase Agreements, who
has agreed in writing to be bound by such terms and this Agreement.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Registrable Securities" means the shares of Parent Stock issued to
the Stockholders pursuant to the Stock Purchase Agreements, including any
additional shares of Parent Stock issued in respect thereof in connection with
a stock split, stock dividend, stock combination, recapitalization, merger,
reorganization or similar event with respect to the Parent Stock and any
anti-dilution provision in any security, document or agreement. As to any
particular Registrable Securities, such Registrable Securities shall cease to
be Registrable Securities as soon as they (i) have been sold or otherwise
disposed of pursuant to a registration statement that was filed with the
Commission and declared effective under the 1933 Act, (ii) are eligible for
sale pursuant to Rule 144 without being subject to applicable volume
limitations thereunder, (iii) have been otherwise sold, transferred or disposed
of by a Holder to any Person that is not a Holder, or (iv) have ceased to be
outstanding.
"Registration Expenses" means Registration Expenses as defined in
Section 2.02.
"Rule 144" means Rule 144 (or any successor rule of similar effect)
promulgated under the 1933 Act, as amended.
"Selling Holder" means any Holder who is selling Registrable
Securities pursuant to a public offering registered hereunder.
"Shelf Registration" means a Shelf Registration as defined in Section
2.01.
SECTION 1.02. Internal References. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to the Stock Purchase
Agreements.
2
ARTICLE 2
REGISTRATION RIGHTS
SECTION 2.01. Shelf Registration. (a) Not later than the later of (i)
120 days from the Closing Date of the Stock Purchase Agreements or (ii) 15 days
after Parent or its successor becomes eligible for registration of its
securities on Form S-3, Parent shall file a registration pursuant to Rule 415
of the 1933 Act covering the Registrable Securities (the "Shelf Registration")
in order to enable the sale from time to time of Registrable Securities in
market transactions or privately negotiated purchases.
(b) Parent agrees to use reasonable efforts to have the Shelf
Registration declared effective promptly and to maintain the effectiveness of
the Shelf Registration for one year.
(c) If at any time, as a result of the existence of nonpublic material
information or for other legitimate reasons Parent determines, after
consultation with its counsel, that the sale of Registrable Securities pursuant
to the Shelf Registration would be prejudicial to Parent, Parent may send to
the Holders and to its transfer agent a notice (a "Blackout Notice") suspending
for up to 45 days the filing of the Shelf Registration or the sale of
Registrable Securities pursuant to the Shelf Registration Statement; provided
that Parent may send such Blackout Notice at any time between the third month
of any fiscal quarter and the announcement of earnings but, at any other time
with any rolling twelve (12) month period, it shall not send more than two (2)
other Blackout Notices.
(d) Each Holder agrees, in the event of an underwritten offering for
Parent (whether for the account of Parent or otherwise) not to offer, sell,
contract to sell or otherwise dispose of any Registrable Securities, or any
securities convertible into or exchangeable or exercisable for such securities,
including any sale pursuant to Rule 144 under the 1933 Act (except as part of
such underwritten offering), during the 14 days prior to, and during the 30-day
period (or such lesser period as the lead or managing underwriters may require)
beginning on, the pricing date for such underwritten offering.
SECTION 2.02. Registration Expenses. (a) In connection with the Shelf
Registration, Parent shall pay the following expenses (the "Registration
Expenses"): (i) registration and filing fees with the Commission, (ii) document
production expenses, (iii) fees and expenses incurred in connection with the
listing or quotation of the Registrable Securities, (iv) fees and expenses of
counsel to Parent and the Selling Holders (limited to $5,000 in the aggregate
in the case of counsel to Selling Holders) and of independent certified public
accountants for Parent and (v) the fees and expenses of any additional experts
retained by Parent
3
in connection with such registration. The Selling Holders shall pay (x) any
fees, discounts or commissions attributable to the sale of Registrable
Securities, (y) fees and expenses of counsel for the Selling Holders, if any,
and (z) any out-of-pocket expenses of the Selling Holders.
ARTICLE 3
INDEMNIFICATION AND CONTRIBUTION
SECTION 3.01. Indemnification by Parent. Parent agrees to indemnify
and hold harmless each Selling Holder and its Affiliates and their respective
officers, directors, partners, stockholders, members, employees, from and
against any and all losses, claims, damages, liabilities, costs and expenses
(including reasonable attorneys' fees) caused by, arising out of, resulting
from or related to any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities (as amended or supplemented if Parent shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities, costs
and expenses are caused by or contained in or based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, prospectus or preliminary prospectus in reliance upon
and in conformity with any information furnished in writing to Parent by or on
behalf of such Selling Holder expressly for use therein or by the Selling
Holder's failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto after Parent has furnished the Selling
Holders with copies of the same.
SECTION 3.02. Indemnification by the Selling Holders . Each Selling
Holder agrees to indemnify and hold harmless Parent, its officers and
directors, the Accredited Stockholders, the Key Employee Stockholders, and each
Person, if any, which controls Parent within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act to the same extent as the
foregoing indemnity from Parent to each Selling Holder, but only with reference
to information furnished in writing by or on behalf of such Selling Holder
expressly for use in any registration statement or prospectus relating to the
Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus.
SECTION 3.03. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
4
Section 3.01 or Section 3.02, such Person (the "Indemnified Party") shall
promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon the request
of the Indemnified Party, shall retain counsel reasonably satisfactory to such
Indemnified Party to represent such Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and, in the written
opinion of counsel for the Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Indemnified
Parties, such firm shall be designated in writing by the Indemnified Parties
and be reasonably satisfactory to the Indemnifying Party. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Parties from and against any loss or liability (to
the extent stated above) by reason of such settlement or judgment.
SECTION 3.04. Contribution. If an indemnification provided for in this
Article 3 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party in respect of any loss, claim, damage or liability, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to
the fullest extent permitted by law contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of such
Indemnifying Party in connection with the statements or omissions that resulted
in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and the
Indemnified Party, as well as any other parties, 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 each such party
5
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Parent and each Selling Holder agrees that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
ARTICLE 4
MISCELLANEOUS
SECTION 4.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to a Key Employee or an Accredited Stockholder to:
Xxxxxx Xxxxxxxx
Chief Financial Officer
Ganymede Software Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
if to Parent to:
Xxxxxxx X. Xxxx
Mission Critical Software, Inc.
Ganymede Software, Inc.
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
6
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxx Xxxx & Xxxxxxxx
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Fax (000) 000-0000
or to such other address or telecopy number and with such other copies as such
party may hereafter specify for the purpose of notice.
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding business day in the place
of receipt.
SECTION 4.02. Rule 144. Parent covenants that it will file any reports
required to be filed by it under the 1933 Act and the 1934 Act and that it will
take such further action as the Holders may reasonably request to the extent
required from time to time to enable the Holders to sell Registrable Securities
without registration under the 1933 Act within the limitation of the exemptions
provided by Rule 144 under the 1933 Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission.
SECTION 4.03. Termination. The registration rights granted under this
Agreement will terminate with respect to any Holder on the later of the first
anniversary of the effectiveness of the Shelf Registration or when all
Registrable Securities held by such Holder can be sold under Rule 144 during
any 3 month period.
SECTION 4.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any rights or obligations under this Agreement, other
than by Parent to NetIQ Corporation, without the consent of each other party
hereto.
SECTION 4.05. Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive laws, but not the choice of law
rules, of the State of Delaware.
7
SECTION 4.06. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal court located in the State of Delaware or any Delaware
state court, and each of the parties hereby consents to the jurisdiction of
such courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding in any such court or that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 4.01 shall
be deemed effective service of process on such party.
SECTION 4.07. Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other party
hereto. No provision of this Agreement shall confer upon any person other than
the parties hereto any rights or remedies hereunder.
SECTION 4.08. Entire Agreement. This Agreement and the Stock Purchase
Agreements, together with their respective exhibits and schedules, constitute
the entire agreement between the parties with respect to the subject matter of
this Agreement and the Stock Purchase Agreements and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
SECTION 4.09. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 4.10. Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of this Agreement shall
be interpreted as if such provision were so excluded and shall be enforced in
accordance with its terms to the maximum extent permitted by law.
SECTION 4.11. Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8
