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Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
November 27, 1996 among TEMPLATE SOFTWARE, INC., a Virginia corporation (the
"Company"), and Alcatel N.V., a company limited by shares with ordinary
structure organized under the laws of the Netherlands (the "Investor").
RECITALS:
A. Concurrently with the execution of this Agreement, the Investor is
acquiring from the Company shares of the Company's Series A Convertible
Preferred Stock, par value $0.01 per share, pursuant to the Convertible
Preferred Stock Purchase Agreement of even date herewith (the "Purchase
Agreement").
B. By entering into this Agreement, the Company wishes to provide a
further inducement to the Investor to purchase the Company's Series A Stock
pursuant to the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. Definitions. For purposes of this Agreement:
(a) "Common Shares" means shares of Common Stock, par value $0.01
per share of the Company.
(b) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Form S-3" means such form under the Securities Act as in effect
on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
(d) "Holder" means any Person owning or having the right to acquire
Registrable Securities, or any assignee thereof in accordance with Section 11.
(e) "Initiating Holders" means the Holder(s) initiating a
registration request under Section 2.
(f) "majority in interest of the Initiating Holders" means
Initiating Holders owning or having the right to acquire a majority of the
Registrable Securities which all Initiating Holders own or have the right to
acquire.
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(g) "Person" means any individual, partnership, limited liability
company, joint venture, corporation, association, trust or any other entity or
organization.
(h) "Qualifying Request" means a request from any of the Holders or
any of their affiliates, partners or assignees that in the aggregate possess at
least fifty percent (50%) of the Registrable Securities outstanding as of the
date of such request.
(i) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(j) "Registrable Securities" means (1) any Common Shares issuable or
issued upon conversion of the Series A Stock, and (2) any Common Shares issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, or upon conversion of, such Series A
Stock or Common Shares or other warrants, rights or securities; provided,
however, that any Registrable Securities sold by a Person in a transaction in
which such Person's rights under this Agreement are not assigned pursuant to
Section 11 below shall cease to be Registrable Securities from and after the
time of such sale.
(k) The number of shares of "Registrable Securities then
outstanding" means and shall be determined by the number of Common Shares
outstanding, and the number of Common Shares issuable, which are Registrable
Securities.
(l) "SEC" means the Securities and Exchange Commission.
(m) "Securities Act" means the Securities Act of 1933, as amended.
(n) "Series A Stock" means the Series A Convertible Preferred Stock,
par value $0.01 per share, of the Company.
(o) "Violation" means any of the following statements, omissions or
violations: (i) any untrue statement or alleged untrue statement of a material
fact contained in a registration statement under this Agreement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto or any documents filed under state securities or "blue
sky" laws in connection therewith, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law.
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2. Request for Registration.
(a) If, after the earlier of (i) the third anniversary of the date
of this Agreement or (ii) the first anniversary of the initial public offering
of the Company's securities, the Company shall receive a written Qualifying
Request that the Company file a registration statement under the Securities Act,
then the Company shall, within ten (10) days of the receipt thereof, give
written notice of such request to all Holders and shall, subject to the
limitations of Section 2(b) below, use its best efforts to effect as soon as
practicable, and in any event within sixty (60) days of the receipt of such
request, the registration under the Securities Act of all Registrable Securities
which the Holders request to be registered within twenty (20) days of the
mailing of such notice by the Company in accordance with Section 18 below;
provided, however, that the Company shall not have any obligation to effect a
registration statement pursuant hereto unless the Registrable Securities
requested by all Holders to be registered pursuant to such request in the
aggregate either (i) constitute at least 25% of all Registrable Securities then
outstanding or (ii) have a fair market value, as of the date such request is
made, of at least $10,000,000. For purposes of clause (ii) of the preceding
sentence, the fair market value of such Registrable Securities shall be based on
the average daily closing price of a share of Common Stock for the twenty (20)
consecutive trading days ended immediately prior to the date such notice is
received, as reported on the consolidated transaction reporting system or, if
the Common Stock is not then included in the consolidated transaction reporting
system, on the principal market for the Common Stock; if the Common Stock is not
then listed or admitted to trading on any national securities exchange or the
National Market System, the fair market value shall be based on the average of
the highest daily reported bid prices during such period as reported on Nasdaq
or, if the Common Stock is not then quoted on Nasdaq, as determined in good
faith by the Company's Board of Directors.
(b) If Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2,
and the Company shall include such information in the written notice referred to
in Section 2(a). In such event, the right of any Holder to include such Holder's
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. A majority in interest of the Initiating Holders shall select
the managing underwriter or underwriters in such underwriting, provided that
such underwriter(s) shall be reasonably satisfactory to the Company. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in Section 4(f)) enter into an
underwriting agreement in customary form with the underwriter or underwriters so
selected for such underwriting by a majority in interest of the Initiating
Holders; provided, however, that no Holder shall be required to make any
representations or warranties except as they relate to such Holder's ownership
of shares and authority to enter into the underwriting agreement and to such
Holder's intended method of distribution, and the liability of such Holder shall
be limited to an amount equal to the net proceeds from the offering received by
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such Holder. Notwithstanding any other provision of this Section 2, if the
underwriter advises the Initiating Holders that marketing factors require a
limitation of the number of shares to be underwritten, then the Initiating
Holders shall so advise the Company, and the Company shall so advise all Holders
of Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated (i) first to the Holders of Registrable
Securities that have elected to participate in such underwritten offering, pro
rata according to the number of Registrable Securities held by each such Holder,
(ii) thereafter, to the extent additional securities may be included in the
offering, to the Company, and (iii) thereafter, to the extent additional
securities may be included in such offering in accordance with the next
succeeding sentence, to the holders of such securities that have elected to
participate in such underwritten offering, pro rata according to the number of
such securities by each holder thereof.
(c) The Company shall be obligated to effect only two (2)
registrations pursuant to this Section 2 but, except as otherwise provided in
Section 6 hereof, an offering which is not consummated shall not be counted for
this purpose; provided, however, that the Company shall be obligated to effect
as many registrations as may be requested by Holders pursuant to any Qualifying
Request in the event and so long as a registration pursuant to Form S-3 or any
similar "short-form" registration statement is available; provided further,
however, that, in the event of a registration pursuant to Form S-3 or any
similar "short form" registration statement, the Company shall include in such
registration additional information that is not required to be included under
the Securities Act but which the underwriters designated by the Initiating
Holders in accordance with this Agreement reasonably request be included for
marketing purposes.
(d) In the event of a registration of Registrable Securities
pursuant to this Section 2, the Company shall make available such officers and
employees of the Company as the underwriters designated by the Initiating
Holders in accordance with this Agreement may reasonably request for purposes of
cooperating with such underwriter's marketing efforts.
(e) Notwithstanding the foregoing, if the Company shall furnish to
Initiating Holders a certificate signed by the President of the Company stating
that in the good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its shareholders for such
registration statement to be filed by reason of a material pending transaction
and it is therefore essential to defer the filing of such registration
statement, the Company shall have the right to defer such filing for a period of
not more than one hundred twenty (120) days after receipt of the request of the
Initiating Holders; provided, however, that the Company may not utilize this
right more than once in any twelve (12) month period.
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3. Company Registration.
(a) If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its securities under the Securities
Act in connection with the public offering of such securities solely for cash,
the Company shall, at such time, promptly give each Holder written notice of
such registration. Upon the written request of each Holder given within twenty
(20) days after mailing of such notice by the Company in accordance with Section
18, the Company shall, subject to the provisions of Section 8, use its best
efforts to cause to be registered under the Securities Act all of the
Registrable Securities that each such Holder has requested to be registered. The
Company shall have no obligation under this Section 3 to make any offering of
its securities, or to complete an offering of its securities that it proposes to
make, and shall incur no liability to any Holder for its failure to do so.
(b) The Company shall not have any obligations under Section 3(a)
with respect to any proposed registration of: (i) securities under a
registration on Form S-8 relating solely to the sale of securities to
participants in a Company stock plan or to other compensatory arrangements to
the extent includable on Form S-8, or a registration on Form S-4; (ii)
securities as part of an initial public offering of such securities occurring
before the first anniversary of the date hereof; or (iii) securities as part of
an initial public offering which is solely a "primary" offering of such
securities by the Company (i.e., in which securities held by any person or
entity other than the Company are not registered).
4. Obligations of the Company. Whenever required under this Agreement
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities being registered thereunder, keep
such registration statement effective for up to ninety (90) days or until the
Holders have completed the distribution referred to in such registration
statement, whichever occurs first (but in any event for at least any period
required under the Securities Act); provided, however, that before filing such
registration statement or any amendments thereto, the Company will furnish to
the Holders copies of all such documents proposed to be filed. The running of
the ninety (90) day period provided for in the preceding sentence shall be
tolled during any period of time in which any stop order relating to such
registration statement is in effect and during any period from the date that TSI
gives any notice provided for in Section 4(g) until such time as any amendment
or supplement required in connection therewith has been filed and is effective
and adequate copies thereof have been provided to the Holders for delivery under
the Securities Act.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
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registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such number of copies of such
registration statement and of each amendment and supplement thereto (in each
case including all exhibits), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act, and
such other documents as Holders may reasonably request in order to facilitate
the disposition of Registrable Securities which they own or have the right to
acquire.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or "blue sky"
laws of such states or jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto (i) to qualify to do business in any state or
jurisdiction where it would not otherwise be required to qualify but for the
requirements of this clause (d), or (ii) to file a general consent to service of
process in any such state or jurisdiction.
(e) Use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
Company's business or operations to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities.
(f) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering.
(g) Notify each Holder of Registrable Securities covered by 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 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.
(h) Notify each Holder of Registrable Securities covered by such
registration statement and such Holder's underwriters, if any, and confirm such
advice in writing: (i) when the registration statement has become effective,
(ii) when any post-effective amendment to the registration statement becomes
effective, and (iii) of any request by the SEC for any amendment or supplement
to the registration statement or prospectus or for additional information.
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(i) Notify each Holder of Registrable Securities if at any time the
SEC should institute or threaten to institute any proceedings for the purpose of
issuing, or should issue, a stop order suspending the effectiveness of the
Registration Statement. Upon the occurrence of any of the events mentioned in
the preceding sentence, the Company will use its best efforts to prevent the
issuance of any such stop order or to obtain the withdrawal thereof as soon as
possible. The Company will advise each Holder of Registrable Securities promptly
of any order or communication of any public board or body addressed to the
Company suspending or threatening to suspend the qualification of any
Registrable Securities for sale in any jurisdiction.
(j) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Agreement, (i) on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in such form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities, and (ii) on the date that the
registration statement with respect to such securities becomes effective, a
"comfort" letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities, and, if such securities are
being sold through underwriters, a reaffirmation of such letter on the date that
such Registrable Securities are delivered to the underwriters for sale.
(k) As soon as practicable after the effective date of the
registration statement, and in any event within sixteen (16) months thereafter,
have "made generally available to its security holders" (within the meaning of
Rule 158 under the Securities Act) an earning statement (which need not be
audited) covering a period of at least twelve (12) months beginning after the
effective date of the registration statement and otherwise complying with
Section 11(a) of the Securities Act.
5. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of any Holder requesting registration of
Registrable Securities that such Holder shall furnish to the Company such
information regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be required to effect
the registration of such Holder's Registrable Securities. If any registration
statement or comparable statement under the Securities Act refers to the
Investor or any of its affiliates, by name or otherwise, as the holder of any
securities of the Company then, unless counsel to the Company advises the
Company that the Securities Act requires that such reference be included in any
such statement, each such holder shall have the right to require the deletion of
such reference to itself and its affiliates.
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6. Expenses of Demand Registration. All expenses, other than
underwriting discounts and commissions relating to Registrable Securities,
incurred in connection with registrations, filings or qualifications pursuant to
Section 2, including without limitation all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one
counsel (selected by a majority in interest of the Initiating Holders) for the
selling Holders shall be borne by the Company; provided, however, that the
Company shall not be required to bear such expenses in connection with any
registration begun pursuant to Section 2 if the offering is not consummated
primarily as a result of any act or omission of any Initiating Holder (in which
case all participating Holders shall bear such expenses pro rata), unless a
majority in interest of the Initiating Holders agree to forfeit one (1) of the
demand registration(s) to which they are then entitled pursuant to Section 2;
provided further, however, that if the reason for such withdrawal was because
(a) the Holders have learned of a material adverse change in the condition
(financial or otherwise), business or prospects of the Company from that known
to the Holders at the time of their request or (b) there has occurred a material
adverse change in marketing factors related to the sale of Registrable
Securities to the public from those existing at the time of the Holders'
request, then the Holders shall not be required to pay any such expenses and
shall retain their rights pursuant to Section 2.
7. Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
3 for each Holder, including without limitation all registration, filing and
qualification fees, printers' and accounting fees relating or apportionable
thereto and the fees and disbursements of one counsel for the selling Holders
(selected by the Holders of a majority of the Registrable Securities being
registered), but excluding underwriting discounts and commissions relating to
Registrable Securities.
8. Underwriting Requirements. In connection with any offering involving
an underwriting of shares being issued by the Company, the Company shall not be
required under Section 3 to include any Holder's securities in such underwriting
unless such Holder accepts the terms of the underwriting as agreed upon between
the Company and the underwriters selected by the Company, and then only in such
quantity as will not, in the opinion of the underwriters, jeopardize the success
of the offering by the Company; provided, however, that no Holder participating
in such underwriting shall be required to make any representations or warranties
except as they relate to such Holder's ownership of shares and authority to
enter into the underwriting agreement and to such Holder's intended method of
distribution, and the liability of such Holder shall be limited to an amount
equal to the net proceeds from the offering received by such Holder. If the
total amount of securities, including Registrable Securities, requested by
holders to be included in such offering (the "Secondary Securities") exceeds the
amount of Secondary Securities that the underwriters reasonably believe
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of Secondary Securities, including
Registrable Securities, which the underwriters believe will not jeopardize the
success of the offering. The amount of Secondary Securities to be so included in
the offering shall be
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allocated among the holders of such securities pro rata according to the number
of such securities held by each such holder or as may be otherwise agreed upon
among such holders.
9. Indemnification. In the event any Registrable Securities are
included in a registration statement under this Agreement:
(a) The Company will indemnify and hold harmless each Holder, its
heirs, personal representatives and assigns, each of such Holder's partners,
each of such Holder's, and each of such Holder's partners', officers, directors,
employees and affiliates, any underwriter (as defined in the Securities Act) for
such Holder and each Person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon a Violation (provided, however,
that the Company will not be required to indemnify any of the foregoing Persons
on account of any losses, claims, damages or liabilities arising from a
Violation if and to the extent that such Violation was made in a preliminary
prospectus and was corrected in a subsequent prospectus that was required by law
to be delivered to the Person making the claim with respect to which
indemnification is sought hereunder (and such subsequent prospectus was made
available by the Company to permit delivery of such prospectus in a timely
manner), and such subsequent prospectus was not so delivered to such Person);
and the Company will pay to each such indemnified party, as incurred, any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 9(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case to a particular indemnified party for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by or on behalf of such indemnified party.
(b) Each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the
registration statement, each Person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling Person of any such
underwriter or other Holder, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing Persons may become subject,
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by or on behalf of such Holder
expressly for use in connection with such registration; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any
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Person intended to be indemnified pursuant to this Section 9(b), in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 9(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld; and
provided further, however, that, in no event shall the liability of any Holder
under this Section 9(b) exceed the net proceeds from the offering received by
such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the indemnified party under this Section 9 except if, and only to
the extent that, the indemnifying party is actually prejudiced thereby; and such
failure to deliver written notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise than under
this Section 9.
(d) The obligations of the Company and Holders under this Section 9
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement, and otherwise.
(e) Any indemnity agreements contained herein shall be in addition
to any other rights to indemnification or contribution which any indemnified
party may have pursuant to law or contract and shall remain operative and in
full force and effect regardless of any investigation made or omitted by or on
behalf of any indemnified party.
(f) If for any reason the foregoing indemnity is unavailable, then
the indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other (taking into consideration, among other things, the fact that
the provision of the registration rights and indemnification hereunder is a
material inducement to the Investor to purchase Series A Stock pursuant to the
Purchase Agreement) or (ii) if the allocation provided by clause (i) above is
not permitted by
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applicable law or provides a lesser sum to the indemnified party than the amount
hereinafter calculated, in such proportion as is appropriate to reflect not only
the relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other (taking into consideration, among other things,
the fact that the provision of the registration rights and indemnification
hereunder is a material inducement to the Investor to purchase Series A Stock
pursuant to the Purchase Agreement) but also the relative fault of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by or on behalf of 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. 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.
Notwithstanding anything to the contrary in this Section 9, no Holder shall be
required, pursuant to this Section 9, to contribute any amount in excess of the
net proceeds received by such indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims, damages, liabilities or
expenses of the indemnified party relate.
10. Reports Under the Exchange Act. With a view to making available to
the Holders the benefits of Rule 144 under the Securities Act and any other rule
or regulation of the SEC that may at any time permit a Holder to sell securities
of the Company to the public without registration or pursuant to a registration
on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration statement filed by the Company for
the offering of its securities to the general public;
(b) take such action as is necessary to enable the Holders to
utilize Form S-3 for the sale of their Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 under
the Securities Act (at any time after the effective date of the first
registration statement filed by the Company) and the Securities Act and Exchange
Act (at any time after it has become subject to such reporting requirements) or
that it qualifies as a registrant whose securities may be resold pursuant to
Form S-3 (at any time it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any
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rule or regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
11. Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Agreement may be assigned in
whole or in part by a Holder to one or more of its partners or affiliates or to
one or more transferees or assignees of not less than twenty-five percent (25%)
of all Registrable Securities acquired by the Investor pursuant to the Purchase
Agreement, provided that such transferee or assignee delivers to the Company a
written instrument by which such transferee or assignee agrees to be bound by
the obligations imposed on Holders under this Agreement to the same extent as if
such transferee or assignee was a party hereto.
12. "Market Stand-Off" Agreement. Each Holder hereby agrees that,
during the period requested by the underwriters in the Company's initial public
offering (not to exceed 180 days following the effective date of the
registration statement of the Company filed under the Securities Act in
connection with such offering), it shall not sell or otherwise transfer or
dispose of (other than to donees or affiliates who agree to be similarly bound)
any Common Shares or any securities of the Company convertible into Common
Shares held by it except Common Shares included in such registration.
13. Amendment; Waiver. Any provision of this Agreement may be amended
only with the written consent of the Company, the Holders of a majority of the
Registrable Securities then outstanding. The observance of any provision of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the party to be
charged; provided, however, that the Holders of a majority of the Registrable
Securities then outstanding may act on behalf of all such Holders of Registrable
Securities. Any amendment or waiver effected in accordance with this Section 13
shall be binding upon each Holder of Registrable Securities at the time
outstanding, each future Holder of all such securities, and the Company.
14. Changes in Registrable Securities. If, and as often as, there are
any changes in the Registrable Securities by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions of this Agreement, as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Registrable Securities as so changed. Without limiting the
generality of the foregoing, the Company will require any successor by merger or
consolidation to assume and agree to be bound by the terms of this Agreement, as
a condition to any such merger or consolidation.
15. Exercise of Conversion Rights. Any election by any Holder to
convert shares of Series A Stock in connection with the registration of the
underlying Registrable Securities hereunder may be made contingent upon the
effectiveness of such registration statement or, in the case of an underwritten
offering, the closing of such offering.
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16. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject matter
hereof. Nothing in this Agreement, express or implied, is intended to confer
upon any Person, other than the parties hereto and their respective successors
and assigns, any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided herein.
17. Governing Law. This Agreement shall be governed in all respects by
the laws of the State of New York as such laws are applied to agreements between
New York residents entered into and to be performed entirely within New York,
whether or not all parties hereto are residents of New York.
18. Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, permitted assigns (as provided
in Section 11), heirs, executors and administrators of the parties hereto.
19. Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon receipt by the party to be notified or on the second
following business day, if delivered by a recognized overnight courier service
offering overnight delivery, or on the third following business day, if such
courier offers second-day delivery, and addressed to the party to be notified
(a) if to a party other than the Company, at such party's address set forth at
the end of this Agreement or at such other address as such party shall have
furnished the Company in writing, or, until any such party so furnishes an
address to the Company, then to and at the address of the last holder of the
Registrable Securities covered by this Agreement who has so furnished an address
to the Company, or (b) if to the Company, at its address set forth at the end of
this Agreement, or at such other address as the Company shall have furnished to
the parties in writing.
20. Severability. Any invalidity, illegality or limitation on the
enforceability of this Agreement or any part thereof, by any party whether
arising by reason of the law of the respective party's domicile or otherwise,
shall in no way affect or impair the validity, legality or enforceability of
this Agreement with respect to other parties. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
21. Titles and Subtitles. The titles of the Sections of this Agreement
are for convenience of reference only and are not to be considered in construing
this Agreement.
22. Delays or Omissions; Remedies Cumulative. It is agreed that no
delay or omission to exercise any right, power or remedy accruing to the
parties, upon any breach or default of the Company under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach or default, or any acquiescence therein, or of any similar
breach or default thereafter occurring; nor shall any
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waiver of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character by a party of any
breach or default under this Agreement, or any waiver by a party of any
provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in writing and that all
remedies, either under this Agreement, or by law or otherwise afforded to a
party, shall be cumulative and not alternative.
23. Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
24. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"COMPANY"
TEMPLATE SOFTWARE, INC.
Address:
00000 Xxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
By:________________________________
Name:
Title:
"INVESTOR"
ALCATEL N.V.
By: Compagnie Financiere Alcatel
Address:
00 xxx Xxxxxxx
00000 Xxxxx Cedex 15
France
Attn: X. Xxxxxx Xxxxxx Xxxxxxx By:________________________________
Name:
Title:
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