EXHIBIT 10.2.3
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of June 20th, 1994, by and among The System Works, Inc.,
a Georgia corporation (the "Company"), Warburg, Xxxxxx Investors, L.P., a
Delaware limited partnership ("Warburg"), Xxxx X. Blend, III ("Blend"), and
Xxxxx X. Xxxxxx, as Withdrawing Stockholder ("Withdrawing Stockholder").
WHEREAS, the Company, Warburg, Blend and the Withdrawing Stockholder
are parties to that certain Registration Rights Agreement dated September 16,
1992 (the "Original Agreement");
WHEREAS, Warburg has entered into the Securities Purchase Agreement of
even date herewith (the "Securities Purchase Agreement") with the Company,
pursuant to which Warburg has agreed to purchase and the Company has agreed to
sell to Warburg 393,965 shares of the Company's Series B Preferred Stock (the
"Purchased Stock");
WHEREAS, pursuant to the Securities Purchase Agreement and the Stock
Repurchase Agreement of even date herewith (the "Repurchase Agreement") between
the Company and the Withdrawing Stockholder, the Company has agreed to use the
proceeds from the sale of the Purchased Stock to repurchase all of the shares of
common stock of the Company owned by the Withdrawing Stockholder;
WHEREAS, upon the consummation of the transactions contemplated by the
Securities Purchase Agreement and the Repurchase Agreement, the Withdrawing
Stockholder shall cease to be a shareholder of the Company;
WHEREAS, as a condition to the effectiveness of the transaction, the
Withdrawing Stockholder desires to relinquish any and all rights with respect to
the Original Agreement;
WHEREAS, Warburg, the Company, Blend and the Withdrawing Stockholder
are entering into the Amended and Restated Stockholders Agreement of even date
herewith (the "Stockholders Agreement"), which will govern certain matters
relating to the operations of the Company and the disposition of shares of
capital stock in the Company;
WHEREAS, the execution and delivery of this Agreement is a condition
to the closing under the Securities Purchase Agreement and the Repurchase
Agreement and a material inducement to entering into the Stockholders Agreement;
and
WHEREAS, the parties hereto desire that all the registration rights
relating to the Company's capital stock be restated and amended and reflected
herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants herein contained, the parties hereto hereby agree as
follows:
SECTION 1. REGISTRATION RIGHTS
1.1 DEFINITIONS
As used in this Section 1:
(a) the term "Affiliate" means a Person (other than a subsidiary)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, a Person. 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 the
ownership of voting securities, by contract or otherwise;
(b) the term "Common Stock" means the Common Stock of the Company,
$0.01 par value per share, including any Common Stock of the Company that may be
issued upon the reclassification of the Old Common Stock contemplated by the
Securities Purchase Agreement;
(c) the term "Form S-3" means such form under the 1933 Act as in
effect on the date hereof or any registration form under the 1933 Act
subsequently adopted by the Securities and Exchange Commission (the "SEC") which
permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC;
(d) the term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.3(h);
(e) the term "Old Common Stock" means the shares of Class A and Class
B Common Stock, $0.01 par value per share, of the Company outstanding
immediately prior to the Reclassification;
(f) the term "Reclassification" means the reclassification of the
Company's outstanding shares of Class A and Class B Common Stock, $0.01 par
value per share, into shares of the Company's Common Stock, and the
reclassification of the Company's outstanding shares of Series C Preferred Stock
and Series D Preferred Stock into Series A Preferred Stock.
(g) the terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "1933 Act") (and any
post-effective amendments
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filed or required to be filed) and the declaration or ordering of effectiveness
of such registration statement;
(h) the term "Registrable Securities" means (i) the shares of Common
Stock issuable in connection with the Reclassification, (ii) the shares of
Common Stock issuable upon conversion of the Series A Preferred Stock and the
Series B Preferred Stock, (iii) the shares of Common Stock held on the date
hereof by Blend, (iv) any shares of Common Stock which the parties hereto may
hereafter acquire and (v) any capital stock of the Company issued as a dividend
or other distribution with respect to, or in exchange for or in replacement of,
the shares of Common Stock referred to in clauses (i)-(v) above; and
(i) the number of shares of "Registrable Securities then outstanding"
shall be determined by adding the number of shares of Common Stock outstanding
which are, and the number of shares of Common Stock issuable pursuant to then
exercisable or convertible securities which upon issuance would be, Registrable
Securities.
1.2 REQUESTED REGISTRATION
(a) REQUEST FOR REGISTRATION. If the Company shall receive at any
time a written request from the Holder or Holders of in excess of 50% of the
Registrable Securities then outstanding and entitled to registration rights
under this Section 1 (the "Initiating Holders") that the Company effect a
registration, qualification or compliance with respect to all or a part of the
Registrable Securities, the Company will, within five (5) days of the receipt
thereof, give written notice of such request to all Holders and shall within
sixty (60) days of its receipt of such written request, file a registration
statement on a form deemed appropriate by the Company's counsel with the SEC
covering all the Registrable Securities which the Holders shall in writing
request (given within twenty (20) days of receipt of the notice given by the
Company pursuant to this Section 1.2(a)) to be included in such registration and
the Company shall use reasonable efforts to cause such registration statement to
become effective no later than 120 days after the receipt of such request.
The Company shall also, as soon as practicable, use reasonable efforts
to effect all such other registration, qualification and compliance (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under the applicable blue sky, or other
state securities laws, and appropriate compliance with exemptive regulations
issued under the 1933 Act, to the extent applicable) as may be so requested and
as would permit or facilitate the sale and distribution of all or such portion
of the Registrable Securities of such Holders as are specified in such request.
No request under this Section 1.2(a) may be made, however, during the 120 day
period immediately following the date on which the Company has given the Holders
notice pursuant to Section 1.3 of any registration statement with respect to
which the Holders can cause Registrable Securities to be included therein.
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The Company shall not be obligated to effect such registration,
qualification or compliance pursuant to Section 1.2(a) hereof (A) after the
Company already has effected two (2) such registrations pursuant to this Section
1.2(a) and such registrations have been declared or ordered effective or (B) in
any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to service in
such jurisdiction and except as may be required by the 1933 Act or applicable
rules or regulations thereunder.
The registration statement filed pursuant to the request of the
Initiating Holders may, subject to the provisions of Section 1.2(b) below,
include other securities of the Company which are held by officers or directors
of the Company, but the Company shall have no absolute right to include any of
its securities in any such registration.
The registration rights set forth in this Section 1.2 shall be
assignable at the option of each of the Holders, in whole or in part, to any
transferee of Registrable Securities; PROVIDED, that the Company is given
written notice by such Holder at the time or within a reasonable time after said
transfer, stating the name and address of such transferee or assignee and
identifying the securities with respect to which such registration rights are
assigned.
(b) UNDERWRITING. If the Initiating Holders intend to distribute the
Registrable Securities covered by such request by means of an underwriting, they
shall so advise the Company as a part of such request made pursuant to Section
1.2(a). The Company shall enter into an agreement in customary form for a
secondary distribution with the underwriter or underwriters selected by such
Initiating Holders for such underwriting, provided such underwriters are
reasonably acceptable to the Company, but the Company shall not be required to
pay any commission to the underwriter in respect of the sale of Registrable
Securities.
If officers or directors of the Company (other than Blend) holding
other securities of the Company shall request inclusion in any registration
pursuant to this Section 1.2, the Holders shall offer to include the securities
of such officers and directors in the underwriting and may condition such offer
on their acceptance by such officers and directors of the further applicable
provisions of this Section 1. The Company shall (together with all officers and
directors proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected for such underwriting by the
Initiating Holders reasonably acceptable to the Company. Notwithstanding any
other provision of this Section 1.2, if the managing underwriter advises the
Holders in writing that marketing factors require a limitation on the number of
shares to be underwritten, the securities of the Company held by officers and
directors of the Company (other than Blend) shall be excluded from the
underwriting by reason of the underwriter's marketing limitation to the extent
so required by such limitation.
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If the number of Registrable Securities included in the registration statement
still exceeds the underwriter's marketing limitations, then the Registrable
Securities of the Holders shall be excluded on a pro rata basis according to the
total amount of Registrable Securities entitled to be included therein owned by
each selling Holder, or in such other apportions as shall be mutually agreed to
by such selling Holders, No Registerable Securities or any other securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. If any officer or director
who has requested inclusion in such registration as provided above disapproves
of the terms of the underwriting, such person may elect to withdraw therefrom by
written notice to the Company, the underwriter and the Initiating Holders. The
securities so withdrawn shall also be withdrawn from registration. If the
underwriter has not limited the number of Registrable Securities or other
securities to be underwritten, the Company may include its securities for its
own account in such registration if the underwriter so agrees and if the number
of Registrable Securities and other securities which would otherwise have been
included in such registration and underwriting will not thereby be limited.
1.3 COMPANY REGISTRATION
(a) INCLUSION IN REGISTRATION. If the Company shall determine to
register any of its securities on a form (other than Form S-8 or Form S-4 or
their successor forms) which would permit the registration of any Registrable
Securities, the Company will:
(i) promptly give to the Holders written notice thereof (which
shall include a list of the jurisdictions, if any, in which the Company
intends to qualify such securities under the applicable blue sky or other
state securities laws); and
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein which must be a firm offer underwriting, all the Registrable
Securities specified in a written request or requests made by each of the
Holders, within 30 days after receipt of the written notice from the
Company described in clause (i) above; provided, however, that if the
offering is underwritten, relates only to securities to be sold by the
Company and is the first public offering by the Company of its securities
and the Holders are advised in writing by the managing underwriter that the
sale of Registrable Securities by the Holders within 120 days of the
effective date of such registration statement, could adversely affect such
underwriting, the Holders shall not sell any of their Registrable
Securities included therein for 120 days after the effective date of such
registration statement (or such shorter time as the managing underwriter
may request).
(b) UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.3(a). In such event the
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right of the Holders to registration pursuant to the Section 1.3 shall be
conditioned upon the Holders' participation in such underwriting and the
inclusion of the Holders' Registrable Securities in the underwriting to the
extent provided herein. The Holders shall (together with the Company
distributing its securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by the Company and shall use their best efforts to
arrange for all documents and opinions required to be delivered thereunder in
respect of their participation as selling shareholders to be delivered.
Notwithstanding any other provision of this Section 1.3, if the managing
underwriter determines that marketing factors require a limitation on the number
of shares to be underwritten, then the Company shall include in the underwriting
only that number of such securities, including Registrable Securities, which the
managing underwriter believes will not jeopardize the success of the offering
(the securities so included to be apportioned as follows: first all securities
which stockholders other than the Holders seek to include in the offering shall
be excluded from the offering to the extent limitation on the number of shares
included in the underwriting is required, then the number of shares held by
Holders that may be included in the underwriting shall be apportioned pro rata
among the selling Holders according to the total amount of Registrable
Securities entitled to be included therein owned by each selling Holder or in
such other apportions as shall be mutually agreed to by such selling Holders)
but in no event shall the amount of securities of the selling Holders included
in the offering be reduced below 25% of the total amount of securities included
in such offering, unless such offering is the initial public offering of the
Company's securities in which case the selling Holders may be excluded if the
managing underwriter makes the determination described above and no securities
other than those of the Company are included. If any of the Holders or any
officer or director disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration,
(c) NUMBER AND TRANSFERABILITY. The Holders shall be entitled to
have their shares included in an unlimited number of registrations pursuant to
this Section 1.3. The registration rights granted pursuant to this Section shall
be assignable at the option of each of the Holders, in whole or in part, to any
transferee of the Registrable Securities (i) so long as such transferee owns at
least 2% of the Common Stock (computed on a fully diluted basis) of the Company
or (ii) the transferee is an Affiliate of the Holder; PROVIDED, that the Company
is given written notice by such Holder at the time or within a reasonable time
after said transfer, stating the name and address of such transferee or assignee
and identifying the securities with respect to which such registration rights
are assigned.
1.4 FORM S-3
The Company shall use reasonable efforts to qualify for registration
on Form S-3 for secondary sales. After the Company has qualified for the use of
Form S-3, Holders of Registrable Securities shall have the right to request an
unlimited number of registrations
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on Form S-3 (such requests shall be in writing and shall state the number of
shares of Registrable Securities to be disposed of and the intended method of
disposition of shares by such holders), subject only to the following:
(i) The Company shall not be required to effect a registration
pursuant to this Paragraph 1.4 unless the Holder or Holders of Registrable
Securities requesting registration propose to dispose of shares of
Registrable Securities having an aggregate price to the public (before
deduction of underwriting discounts and expenses of sale) of more than
$500,000.
(ii) The Company shall not be required to effect a registration
pursuant to this Paragraph 1.4 unless the Holder or Holders of in excess of
50% of Registrable Securities then outstanding and entitled to registration
rights under this Section 1 consent in writing to such registration.
(iii) The Company shall not be required to effect a registration
pursuant to this Paragraph 1.4 within 180 days of the effective date of the
most recent registration pursuant to this Section 1 in which securities
held by the requesting Holder could have been included for sale or
distribution.
The Company shall give written notice to all Holders of Registrable
Securities of the receipt of a request for registration pursuant to this
Paragraph 1,4 and shall provide a reasonable opportunity for other Holders of
Registrable Securities to participate in the registration, provided that if the
registration is for an underwritten offering, the terms of Paragraph 1.2(b)
shall apply to all participants in such offering. Subject to the foregoing, the
Company will use its best efforts to effect promptly the registration of all
shares of Registrable Securities on Form S-3 to the extent requested by the
Holder or Holders thereof for purposes of disposition.
1.5 EXPENSES OF REGISTRATION
All expenses incurred in connection with each registration,
qualification or compliance pursuant to this Section 1 including, without
limitation, all registration, filing and qualification fees, accounting fees and
printing expenses, fees and disbursements of counsel for the Company and the
reasonable fees and expenses of one counsel for the selling Holders and expenses
incidental to or required by each registration shall be borne by the Company,
provided, however, the Company shall not be required to pay an amount in excess
of $30,000 towards the fees and expenses of such counsel related to each
registration. Underwriting discounts and commissions shall be borne and paid
ratably by the Holders of the Registrable Securities included in any such
registration.
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1.6 OTHER OBLIGATIONS OF THE COMPANY
In connection with the Company's obligations to the Holders with
respect to the sale of Registrable Securities pursuant to a public offering
thereof as provided in this Section 1, the Company shall use reasonable efforts
to register Registrable Securities as required, or permitted if any Holder so
requests, by Section 12 of the Securities Exchange Act of 1934 (the "Exchange
Act") and, if the Registrable Securities to be sold meet the criteria for
listing on any exchange on which the Common Stock is then listed, apply for
listing of such Registrable Securities on such exchange.
1.7 REGISTRATION PROCEDURES
In the case of each registration, qualification or compliance effected
by the Company pursuant to this Section 1, the Company shall:
(i) Notify each Holder as to the filing of the Registration
Statement and of all amendments or supplements thereto filed prior to the
effective date of said Registration Statement;
(ii) Notify each Holder, promptly after it shall receive notice
thereof, of the time when said Registration Statement becomes effective or
when any amendment or supplement to any prospectus forming a part of said
Registration Statement has been filed;
(iii) Notify each Holder promptly of any request by the SEC for
the amending or supplementing of such Registration Statement or prospectus
or for additional information;
(iv) Prepare and promptly file with the SEC and promptly notify
each Holder of the filing of any amendments or supplements to such
Registration Statement or prospectus as may be necessary to correct any
statements or omissions if, at any time when a prospectus relating to the
Registrable Securities is required to be delivered under the 1933 Act, any
event with respect to the Company shall have occurred as a result of which
any such prospectus or any other prospectus as then in effect would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading; and, in addition,
prepare and file with the SEC, promptly upon the written request of any
Holder, any amendments or supplements to such Registration Statement or
prospectus which may be reasonably necessary or advisable in connection
with the distribution of the Registrable Securities;
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(v) Advise each Holder promptly after the Company shall receive
notice or obtain knowledge of the issuance of any stop order by the SEC
suspending the effectiveness of any such Registration Statement or
amendment thereto or of the initiation or threatening of any proceeding for
that purpose, and promptly use its best efforts to prevent the issuance of
any stop order or obtain its withdrawal promptly if such stop order should
be issued;
(vi) Use reasonable efforts to qualify as soon as reasonably
practicable the Registrable Securities included in the Registration
Statement for sale under the securities or blue-sky laws of such states and
jurisdictions within the United States as shall be reasonably requested by
any Holder; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business, to become
subject to taxation or to file a consent to service of process generally in
any o-f the aforesaid states or jurisdictions; and
(vii) Furnish each Holder, as soon as available, copies of any
Registration Statement and each preliminary or final prospectus, or
supplement or amendment required to be prepared pursuant hereto, all in
such quantities as any Holder may from time to time reasonably request.
At its expense, the Company shall keep such registration effective for
a period of one hundred twenty (120) days or until each Holder has completed the
distribution described in the registration statement relating thereto, whichever
first occurs; provided, however, that in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 120-day period shall be extended, if
necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that Rule 415, or any successor rule
under the 1933 Act, permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the 1933 Act governing the
obligation to file a post-effective amendment which reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement permit the incorporation by reference of information
required to be included above to be contained in periodic reports filed pursuant
to Section 13 or 15(d) of the Exchange Act in the registration statement.
1.8 INDEMNIFICATION
(a) The Company shall indemnify each Holder, each of its officers,
directors and general and limited partners, and its Affiliates, on whose behalf
registration, qualification or compliance has been effected pursuant to this
Section 1, and each underwriter and each Affiliate thereof, of Registrable
Securities held by or issuable to each Holder, 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 prospectus, offering circular or other document (including any
related registration
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statement, notification or the like) 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 Company of the
1933 Act or any rule or regulation promulgated thereunder applicable to the
Company and relating to action or inaction required of the Company in connection
with any such registration, qualification or compliance, and will reimburse each
Holder, each of its officers, directors and partners and each of its Affiliates,
and each such underwriter and each of its Affiliates, for any legal or other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action; PROVIDED, however, that the
Company shall not be liable to a Holder 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 based upon written information furnished to the
Company by such Holder or the underwriter of any such Holder and stated to be
specifically for use therein.
(b) Each of the Holders shall, if Registrable Securities held by them
are included in the securities as to which such registration, qualification or
compliance is being effected, severally indemnify the Company, each of its
directors and officers who sign such registration statement, each Affiliate of
the Company, each underwriter, if any, of the Company's securities covered by
such registration statement, each other Holder and each Affiliate thereof
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 (including any related
registration statement, notification or the like) 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, and will reimburse the
Company, such directors, officers, employees, Affiliates, other Holders or
underwriters 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 Company by such Holder and stated to be specifically for use
therein; provided, however, that the obligations of each Holder hereunder shall
be limited to an amount equal to the net proceeds to each Holder of securities
sold as contemplated herein.
(c) Each party entitled to indemnification under this Section 1 (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 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
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litigation resulting therefrom, shall be approved by the Indemnified Party, 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 Section 1. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of the 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 of such claim or
litigation. 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.
(d) If the indemnification provided for in this Section 1.8 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering contemplated by
this Agreement are in conflict with the foregoing provisions, the provisions in
such underwriting agreement shall be controlling.
1.9 LOCKUP AGREEMENT
In consideration for the Company agreeing to its obligations under
this Section 1, each Holder agrees in connection with any registration effected
by the Company hereunder (other than (i) a registration relating solely to
employee benefit plans on Form X-0, X-0 or similar forms which may be
promulgated in the future, or (ii) a registration on Form S-4 or similar form
which may be promulgated in the future relating solely to a SEC Rule 145
transaction) of the Company's securities, upon the request of the underwriters
managing any underwritten offering of the Company's securities, not to sell,
make any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any Registrable Securities
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(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed 120 days) from the effective date of such registration as
the Company or the underwriters may specify; PROVIDED, HOWEVER, that (i) such
Holder shall have no obligation to enter into the agreement described herein
unless all executive officers and directors of the Company enter into similar
agreements, and (ii) nothing herein shall prevent any Holder that is a
partnership from making a distribution of Registrable Securities to the partners
thereof that is otherwise in compliance with applicable securities laws, based
on an opinion of counsel, which opinion and counsel are each reasonably
satisfactory to the Company.
1.10 INFORMATION ABOUT THE HOLDERS
Each Holder shall promptly furnish to the Company such information
regarding itself, its Affiliates or subsidiaries and the distribution proposed
by it as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Section 1.
1.11 CONDITIONS TO REGISTRATION
As a condition to the Company's obligation hereunder to cause a
registration statement to be filed or Registrable Securities to be included in a
registration statement, each Holder shall provide such information and execute
such documents as may reasonably be required in connection with such
registration. In addition, the Company shall not be obligated to file a
registration statement or to include Registrable Securities in a registration
statement hereunder, (i) if, in the opinion of counsel to the Company the
proposed disposition of such Registrable Securities may be effected without
registration under the 1933 Act or (ii) if, in the opinion of counsel to the
Company all of such Registrable Securities may be sold by such Holder pursuant
to Rule 144 under the 1933 Act (or any successor rule) (without giving effect to
the provisions of Rule 144(k)) within a period of not more than three calendar
months from the date of such opinion.
1.12 RULE 144
With a view to making available the benefits of certain rules and
regulations of the SEC which may permit the sale of the restricted securities to
the public without registration, the Company agrees to:
(a) Make and keep public information available as those terms are
understood and defined in Rule 144 under the 1933 Act at all times from and
after ninety (90) days following the effective date of the first registration
under the 1933 Act filed by the Company for an offering of its securities to the
general public;
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(b) Use its best efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the Exchange Act at
any time after it has become subject to such reporting requirements; and
(c) After the Company has become subject to such reporting
requirements, so long as each Holder owns any Registrable Securities, furnish to
each Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the 1933 Act and
the Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed as each Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing the Holder to sell any such securities without registration.
1.13 RIGHTS GRANTED TO SUBSEQUENT INVESTORS
Without the written consent of Holders of at least 50% of the
outstanding Registrable Securities (assuming conversions), the Company may not
grant registration rights to future investors in the Company except as described
in this Section 1.13. The Company may grant to future investors registration
rights pertaining only to shares of the Company's Common Stock (including shares
of Common Stock into which any other securities of the Company may be
convertible) and only on the following terms:
(a) Prior to the closing of the first Company-initiated underwritten
public offering of the Company's securities, the Company shall not grant to
future investors any registration rights other than (i) the right to request
inclusion in registrations initiated by the Company, but only in respect of that
portion of such registration as is available to the Holders, with the allocation
of the number of shares to be included by each such holder to be pro rata based
on the number of shares of the Company's Common Stock (assuming conversion) with
registration rights held by the respective holders (including the Holders), and
(ii) the right to request registration, provided that the Holders simultaneously
are granted the right to participate in such requested registration on a
nonpreferential, pro rata basis in accordance with the relative amounts of
Common Stock (assuming conversion) with registration rights held by the
respective holders (including the Holders).
(b) The Company shall not grant any registration rights with respect
to presently outstanding securities of the Company other than the right to
participate in registrations initiated by the Company or its shareholders
(including the Holders), and such rights may be granted only as to such portion
of the registration available after all shares requested to be included in such
registration by the Holders have been so included.
1.14 PARTNERSHIP DISTRIBUTION.
In the event that any Holder which is a limited partnership advises
the Company that it desires to exercise one of the registration rights granted
to it under Sections
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1.2, 1.3 or 1.4 of this Agreement as a Holder of Registrable Securities in order
to effect a distribution of some or all of such Registrable Securities to its
partners, then, notwithstanding any provision of this Agreement conditioning the
inclusion of Registrable Securities in a registration statement upon the
Holder's participation in an underwriting, such Holder may refrain from
including such shares in an underwriting and nevertheless cause such shares to
be included in the applicable registration statement, provided only that (a)
such registration is not the initial registration hereunder of the Company's
securities, and (b) such Holder agrees not to effect such distribution until the
expiration of a standstill period after the effective date of such registration,
such period, not to exceed 90 days, to be of that duration requested by the
managing underwriter of the underwriting of the other securities included in
such registration.
SECTION 2. NOTICES.
All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been given or made if in writing
and delivered personally, sent by courier or sent by registered or certified
mail (postage prepaid, return receipt requested) to the parties at the following
addresses:
(a) If to Warburg, to:
Warburg, Xxxxxx Investors, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
(b) If to the Company, to:
The System Works, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
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with a copy to:
Xxxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
(c) If to Blend, to:
Xxxx X. Blend, III
c/o The System Works, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
or to such other persons or at such other addresses as shall be furnished by the
party by like notice to the other parties hereto, and such notice or
communication shall be deemed to have been given or made as of the date so
delivered or mailed. No change in any of such addresses shall be effective
insofar as notices under this Section 2 are concerned unless such changed
address is located in the United States of America and notice of such change
shall have been given to such other party hereto as provided in this Section 2.
SECTION 3. ASSIGNABILITY.
This Agreement shall be binding upon and inure to the benefit of the
respective heirs, personal representatives, successors and assigns of the
parties hereto.
SECTION 4. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Georgia.
SECTION 5. AMENDMENT.
Any modification, amendment or waiver of this Agreement or any
provision hereof shall be in writing and executed by Holders of not less than
50% of the Registrable Securities; PROVIDED, HOWEVER, that no such modification,
amendment or waiver shall reduce the aforesaid percentage of Registrable
Securities without the consent of all of the Holders of the Registrable
Securities.
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SECTION 6. TERM.
This Agreement shall continue as to each party to this Agreement for
so long as any such party owns stock of the Company.
SECTION 7. 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. Any telecopy of a party's signature shall constitute an original
signature for purposes of this Agreement.
SECTION 8. WAIVER BY WITHDRAWING STOCKHOLDER.
The Withdrawing Stockholder hereby consents to the adoption and
effectiveness of this Agreement and hereby waives, relinquishes and forever
discharges any and all rights that the Withdrawing Stockholder may have had
pursuant to the Original Agreement.
IN WITNESS WHEREOF, the Company and each of the undersigned parties
has executed this Agreement effective for all purposes as of the ___ day of May,
1994.
"THE COMPANY":
THE SYSTEM WORKS, INC.
By /s/ Xxxx X. Blend, III
--------------------------------
"WARBURG":
WARBURG, XXXXXX INVESTORS, L.P.
By: WARBURG, XXXXXX & CO.
General Partner
By /s/ Xxxxxx X. Xxxxx
---------------------------
Xxxxxx X. Xxxxx, Partner
[signatures continued on next page]
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[signatures continued from previous page]
"BLEND":
/s/ Xxxx X. Blend, III
------------------------------
Xxxx X. Blend, III
"WITHDRAWING STOCKHOLDER":
/s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
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