1
Exhibit 10(gg)
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of _____________ __, 2000 by and between CheckFree Holdings
Corporation, a Delaware corporation (including any successor or assign thereof,
the "Company"), and __________, a ____________ corporation (including any
successor or assign thereof, the "Investor").
WHEREAS, pursuant to the Amended and Restated Agreement and
Plan of Merger, dated as of July 7, 2000 (the "Merger Agreement"), by and among,
Microsoft Corporation, First Data Corporation, Citibank, N.A., Citicorp
Electronic Commerce, Inc., H&B Finance, Inc., FDC International Partner, Inc.,
MSFDC International, Inc., TransPoint Acquisition Corporation, Tank Acquisition
Corporation, Chopper Merger Corporation, CheckFree Corporation, Microsoft II,
LLC, First Data, L.L.C. and the Company, the Investor is receiving shares of
Common Stock, par value $.01 per share (including any capital stock into which
the common stock may be exchanged or converted, the "Common Stock"), of the
Company in consideration of (i) the merger of [TransPoint Acquisition
Corporation with and into H&B Finance, Inc.] [Tank Acquisition Corporation with
and into FDC International], and (ii) its obligations under the [Commercial
Alliance Agreement] [Marketing Agreement] (as defined in the Merger Agreement);
WHEREAS, pursuant to the Merger Agreement and in connection
with the transactions contemplated thereby, (i) the Company and the Investor
have entered into a Stockholders Agreement, dated as of the date hereof (the
"Stockholders Agreement"), and (ii) the Company has agreed to grant to the
Investor the Registration Rights (as defined in Section 1 hereof) with respect
to the Registrable Shares (as defined in Section 1 hereof);
NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements hereinafter set forth, and other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:
SECTION 1. REGISTRATION RIGHTS The Investor shall be entitled to offer for sale
the Registrable Shares pursuant to a shelf registration statement or, in certain
other circumstances, as provided by Section 1.3 hereof, subject to the terms and
conditions set forth in the Stockholders Agreement and herein (the "Registration
Rights"). For purposes of this Agreement, "REGISTRABLE SHARES" means (i) the
shares of Common Stock issued to the Investor and its affiliates in connection
with the Merger Agreement, entering into the Ancillary Agreements and the
consummation of the transactions contemplated thereby, (ii) any other shares of
Common Stock 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, all such
shares of Common Stock described in clause (i) above and (iii) any additional
shares of Common Stock acquired during the Standstill Period pursuant to Section
3.l(a)(ii) of the Stockholders Agreement, excluding in the case of each of the
foregoing clauses, however, any Registrable Shares sold by a person in a
transaction in which a holder's registration rights under this Agreement are not
assigned; provided, however, that Registrable Shares shall be treated as
Registrable Shares only if and so long as, they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction or (B) sold in a transaction exempt from the registration
and prospectus delivery requirements of the Securities Act (as defined below)
under Section 4(1) thereof so that all transfer restrictions and restrictive
legends with respect thereto are removed upon the consummation of such sale.
1.1 Shelf Registration Rights.
(a) Shelf Registration Statement. The Company, as promptly as
practicable, shall file with the Securities and Exchange Commission ("SEC") a
registration statement for an offering to be made on a continuous basis pursuant
to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"),
covering all of the Registrable Shares (the "Registration Statement"; and the
related prospectus (including any preliminary prospectus) is referred to as the
"Prospectus"). The Registration Statement shall be on the appropriate form, and
shall otherwise comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations promulgated thereunder,
permitting registration of such Registrable Shares for resale by the Investor in
the manner or manners designated by it (including, without limitation, one or
more underwritten public offerings).
2
The Company will use its commercially reasonable best efforts to cause the
Registration Statement to be declared effective by the SEC by the 30th day after
the Effective Time (as defined in the Merger Agreement) and will notify the
Investor when such Registration Statement has become effective. The Company
agrees (subject to Section 1.2 hereof) to use its commercially reasonable best
efforts to keep the Registration Statement effective (including the preparation
and filing of any amendments and supplements necessary for that purpose) until
the earlier of (i) the date on which the Investor shall have sold all of the
Registrable Shares, or (ii) the date on which all of the Registrable Shares are
eligible for sale pursuant to Rule 144(k) (or any successor provision) or in a
single transaction pursuant to Rule 144(e) (or any successor provision) under
the Securities Act (such period, the "Effective Period"). Upon seeking to offer
and sell its Registrable Shares upon exercise of a Registration Right, the
Investor agrees to provide in a timely manner information regarding the proposed
distribution by the Investor of the Registrable Shares and such other
information reasonably requested by the Company in connection with the
preparation of and for inclusion in the Registration Statement. The Company
agrees to provide to the Investor a reasonable number of copies of the final
Prospectus and any amendments or supplements thereto. If the Registration
Statement ceases to be effective for any reason at any time during the Effective
Period (other than because of the sale of all of the securities registered
thereunder or as permitted by Section 1.2 hereof), the Company shall use its
commercially reasonable best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof.
(b) Offerings and Sales. At any time and from time to time
after the date that any shares of Common Stock become Registrable Shares,
subject to Section 1.1(c) (in the case of any underwritten public offering) and
Section 1.2 (in the case of all offerings hereunder), the Investor may exercise
its Registration Rights hereunder with respect to such Registrable Shares. If
the Investor desires to offer and sell such Registrable Shares pursuant to an
underwritten public offering, the Investor shall deliver to the Company a
written notice (an "Underwritten Registration Notice"), which notice shall be
given at least forty-five (45) days prior to the date on which the Investor
desires to consummate the sale of such Registrable Shares. Any such Underwritten
Registration Notice shall in any event be subject to revocation by the Investor
by delivery of a subsequent written notice delivered to the Company by no later
than the tenth day prior to the contemplated offering, provided, however, that a
revoked Underwritten Registration Notice shall be treated the same as an
Underwritten Registration Notice that is not revoked for purposes of Section
1.1(c) hereof.
Upon receipt of an Underwritten Registration Notice, the
Company shall, within thirty (30) days of receipt of the Underwritten
Registration Notice, give written notice to any other persons possessing similar
registration rights (a "Company Notice") of the Company's receipt of the
Underwritten Registration Notice. Within fifteen (15) days of receipt of such a
Company Notice, any other person that is a party to the Merger Agreement
possessing similar registration rights who desires to offer and sell any of its
shares of Common Stock in such an offering of the type described in the
Underwritten Registration Notice (each, a "Participating Investor") shall give
written notice to each of the Company, the Investor, and the lead managing
underwriter, if any, that has been selected, of such a desire, specifying the
number of shares of Common Stock which such Participating Investor desires to
offer and sell. Subject to the provisions of Section 1.2 hereof, the Company
shall not be permitted to participate in the offering made pursuant to an
Underwritten Registration Notice without the written consent of the Investor
(which consent shall not be unreasonably withheld).
(c) Limitations on Registration Rights for Underwritten
Offerings. Each exercise of a Registration Right pursuant to an Underwritten
Registration Notice shall be with respect to an underwritten public offering of
Registrable Shares (including any shares of Common Stock of a Participating
Investor), either (i) the minimum aggregate total gross proceeds of which to the
Investor and all other Participating Investors shall be equal to or greater than
one hundred million dollars ($100,000,000) or (ii) the number of shares of
Common Stock to be registered by the Investor and all other Participating
Investors pursuant to such Underwritten Registration Notice shall be equal to or
greater than one million (1,000,000) shares of Common Stock. The Investor shall
not be permitted to deliver more than one Underwritten Registration Notice in
any six-month period; provided, however, that any Underwritten Registration
Notice relating to an underwritten public offering which is suspended by the
Company pursuant to Section 1.2 hereof or by the SEC, or for which the
registration statement fails to become effective, shall not be counted as an
Underwritten Registration Notice for purposes of this sentence unless such
underwritten public offering is concluded following the termination of such
suspension. All offers and sales by the Investor under the Registration
Statement referred to in this Section 1.1 shall be completed within the
Effective
2
3
Period, and upon expiration of such period the Investor will not offer or sell
any Registrable Shares under the Registration Statement and the Investor shall
not be entitled to deliver an Underwritten Registration Notice hereunder. If
directed by the Company, the Investor will return all undistributed copies of
the Prospectus in its possession upon the expiration of such period.
1.2 Suspension of Offering. At any time during the Effective
Period, the Company may determine, in the good faith judgment of its Board of
Directors, based upon the advice of counsel, that offers and sales by the
Investor under the Registration Statement shall be suspended if (i) a
negotiation or consummation of a transaction by the Company or its subsidiaries
is pending or an event has occurred, which negotiation, consummation or event
would require additional disclosure by the Company in the Registration Statement
of material information which the Company has a bona fide business purpose for
keeping confidential, and the nondisclosure of which in the Registration
Statement would reasonably be expected to cause the Registration Statement to
fail to comply with applicable disclosure requirements, or (ii) in the case of
any underwritten public offering of Registrable Shares pursuant to an
Underwritten Registration Notice, the offering of such Registrable Shares would
adversely affect a pending or proposed public offering of the Common Stock by
the Company. Immediately upon making such a determination, the Company shall
give written notice to the Investor (a "Materiality Notice"), upon receipt of
which the Investor agrees that it will immediately discontinue offers and sales
of the Registrable Shares under the Registration Statement until (x) in the case
of a Materiality Notice delivered pursuant to clause (i) above, such Investor
receives copies of a supplemented or amended Prospectus that corrects the
misstatement(s) or omission(s) referred to above and receives notice that any
post-effective amendment has become effective or (y) in the case of a
Materiality Notice delivered pursuant to clause (ii) above, such Investor
receives a subsequent notice from the Company that revokes or otherwise
withdraws such Materiality Notice; provided, that the Company may delay, suspend
or withdraw the Registration Statement pursuant to clauses (i) and (ii) above,
for no more than fifteen (15) days after the abandonment or consummation of any
of the foregoing negotiations, transactions, events or offerings or, in any
event, for no more than ninety (90) days after delivery of the Materiality
Notice pursuant to clauses (i) and (ii) above, at any one time (and the Company
shall not be entitled to require the Investor to discontinue offers and sales
for a period of more than 90 days during any 12-month period). If so directed by
the Company, the Investor will deliver to the Company all copies of the
Prospectus covering the Registrable Shares current at the time of receipt of a
Materiality Notice. If a Materiality Notice is given pursuant to clause (ii)
above, the Company agrees to permit the Investor and Participating Investors to
complete an underwritten public offering substantially similar to the type which
was suspended pursuant to clause (ii) within ninety (90) days of the closing of
the Company's public offering or its decision not to undertake a public
offering, as the case may be.
1.3 Piggyback Registration.
(a) If, at any time during the Effective Period, the Company
proposes to register any of its shares of Common Stock for sale under the
Securities Act, except as otherwise described in Section 1.1 hereof, whether or
not for sale for the Company's own account, on a form and in a manner that would
also permit registration of Registrable Shares for sale under the Securities
Act, the Company shall give written notice to the Investor of the Company's
intention to effect such registration at least thirty (30) days prior to the
anticipated filing of such registration statement. If, within twenty (20) days
after the giving of such notice by the Company, the Investor shall deliver to
the Company a written request specifying the number of Registrable Shares such
Investor desires to offer and sell, and the intended disposition thereof, the
Company shall use its commercially reasonable best efforts to effect the
registration of all such Registrable Shares that the Company has been requested
to register, provided:
(i) if, at any time after giving written notice of its
intention to register any securities and prior to the effectiveness of
the registration statement filed in connection therewith, the Company
shall determine for any reason not to register any such securities, the
Company may, at its election, give written notice of such determination
to the Investor, and thereupon the Company shall be relieved of its
obligation to register any Registrable Shares in connection with such
registration (but not from its obligations under Section 1.4
hereunder), without prejudice, however, to the Registration Rights of
the Investor generally under this Section 1; and
3
4
(ii) subject to the provisions of Section 1.6 hereof, if
such registration involves an underwritten public offering, the
Investor must sell its Registrable Shares to the underwriters selected
by the Company on the same terms and conditions as are applicable to
the Company.
(b) The Company shall not be obligated to effect any
registration of Registrable Shares under this Section 1.3 as a result of the
registration of any of its securities in connection with mergers, acquisitions,
exchange offers, dividend reinvestment plans or option or other employee benefit
plans.
1.4 Expenses. The Company shall pay all expenses incident to
the performance by it of its registration obligations under this Section 1,
including (i) all SEC registration and filing fees, (ii) all expenses incurred
in connection with the preparation, printing and distribution of the
Registration Statement and Prospectus and any other document or amendment
thereto and the mailing and delivery of copies thereof to the underwriter and
dealers, (iii) fees and disbursements of counsel for the Company and of the
independent public accountants and other experts of the Company; (iv) the cost
of printing or producing any agreement(s) among underwriters, underwriting
agreement(s) and blue sky or legal investment memoranda, any selling agreements
and any other documents in connection with the offering, sale or delivery of
Registrable Shares to be disposed of; (v) all expenses in connection with the
qualification of Registrable Shares to be disposed of for offering and sale
under state securities laws, including the fees and disbursements of counsel for
the underwriters in connection with such qualification and in connection with
any blue sky and legal investment surveys (but not for any other fees or
disbursements of counsel for the underwriters); (vi) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of Registrable Shares to be disposed of; and (vii)
all fees and expenses incurred in connection with the listing of Registrable
Shares on each securities exchange or quotation system on which the shares of
Common Stock are then listed. The Investor shall be responsible for the payment
of any brokerage and sales commissions, fees and disbursements of such
Investor's counsel, and any transfer taxes relating to the sale or disposition
of the Registrable Shares.
1.5 Selection of Underwriters. If Registrable Shares are being
offered and sold pursuant to an Underwritten Registration Notice, the Investor
shall have the right to select the lead managing underwriter of the offering,
which shall be an investment banking firm of nationally recognized standing
reasonably satisfactory to the Company; provided, however, that if the Investor
desires to request the Company to participate in road show meetings pursuant to
Section 1.6(b), then the lead managing underwriter shall be selected by the
Company.
1.6 Registration Procedures.
(a) If and whenever the Company is required to effect the
registration under the Securities Act of Registrable Shares as provided in this
Agreement, the Company will, as expeditiously as possible:
(i) use its commercially reasonable best efforts to
register or qualify the Registrable Shares by the time the applicable
Registration Statement is declared effective by the SEC under all
applicable state securities or "blue sky" laws of such jurisdictions as
the Investor shall reasonably request in writing, to keep each such
registration or qualification effective during the Effective Period,
and to do any and all other acts and things which may be reasonably
necessary or advisable to enable the Investor to consummate the
disposition in each such jurisdiction of the Registrable Shares owned
by such Investor; provided, however, that the Company shall not be
required to (x) qualify generally to do business in any jurisdiction or
to register as a broker or dealer in any jurisdiction where it would
not otherwise be required to qualify but for this Section 1.6, (y)
subject itself to taxation in any such jurisdiction, or (z) submit to
the general service of process in any such jurisdiction;
(ii) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the Prospectus as may be
necessary to keep the Registration Statement effective and to comply
with the provisions of the Securities Act with respect to the
disposition of all Registrable Shares until such time as all
Registrable Shares have been disposed of in accordance with the
intended methods of disposition by the Investor set forth in the
Registration Statement;
4
5
(iii) furnish to the Investor and to any underwriter of
such Registrable Shares such number of conformed copies of the
Registration Statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the Prospectus included in the Registration Statement (including each
preliminary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in the
Registration Statement or Prospectus, and such other documents as the
Investor or such underwriter may reasonably request;
(iv) cause the Registrable Shares to be listed on each
national securities exchange or quotation system on which the shares of
Common Stock are then listed, if the listing of such securities is then
permitted under the rules of such exchange;
(v) enter into such customary agreements (including, in
the case of an underwritten public offering, an underwriting
agreement), and the Investor, on whose behalf Registrable Shares are to
be distributed by such underwriters, shall also be party to any such
underwriting agreement;
(vi) obtain a "cold comfort" letter or letters from the
Company's independent public accountants and furnish a signed
counterpart of a customary opinion of counsel of the Company, in each
case, addressed to the Investor (and the underwriters, if any), in
customary form and substance, dated the effective date of the
Registration Statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement);
(vii) notify the Investor promptly upon the happening of
any event as a result of which a Prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and, subject to the provisions of Section
1.2 hereof, at the request of the Investor prepare and furnish to the
Investor as many copies of a supplement to or an amendment of such
Prospectus as the Investor reasonably requests so that, as thereafter
delivered to the purchasers of such Registrable Shares, such Prospectus
shall not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
and
(viii) make available for reasonable inspection by, or give
reasonable access to, the Investor, by any underwriter participating in
any disposition to be effected pursuant to the Registration Statement
and by any attorney, accountant or other agent retained by the
Investor, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by the Investor, any underwriter or any other
person in connection with the offering thereunder.
(b) Subject to Section 1.5, in connection with any
underwritten public offering of Registrable Shares, management of the Company
shall participate in customary road show meetings reasonably requested (and
reasonable in scope in light of the size of the offering) upon reasonable prior
notice by the lead managing underwriter of such offering.
(c) The Company may require the Investor, upon selling
Registrable Shares as to which any registration is being effected, to furnish
the Company with such information regarding such Investor and the distribution
of such securities as required to be included in the Registration Statement as
the Company may from time to time reasonably request in writing.
(d) If a registration pursuant to this Section 1 involves an
underwritten public offering and the lead managing underwriter of such offering
advises the Company (or the Investor, if applicable) that, in its judgment, the
number of shares of Common Stock proposed to be included in such underwritten
public offering by the Company (or the Investor, if applicable) should be
limited due to market conditions, then the Company will promptly so advise each
Participating Investor; and the Company, the Investor and the Participating
Investors will include in such offering the number of shares which, in the
opinion of the lead managing underwriter can be sold
5
6
(the "Maximum Offering Amount"). The Maximum Offering Amount shall be allocated
(i) in an offering initiated by the Company as described in Section 1.3 hereof,
first, to the full extent of shares of Common Stock the Company desires to sell,
and second, if any shares of Common Stock remain under the Maximum Offering
Amount, to the Investor and to any other persons possessing similar registration
rights to the Registration Rights, pro rata in accordance with each request for
inclusion made by the Investor and each such other person, or (ii) in an
offering initiated by the Investor as described in Section 1.1(b) hereof, first,
to the Investor, to the full extent of Registrable Shares the Investor desires
to sell, and second, if any shares of Common Stock remain under the Maximum
Offering Amount, to each Participating Investor, pro rata in accordance with
each request for inclusion made by each such Participating Investor. If the
underwriting agreement executed in connection with such offering provides for an
overallotment option to be granted to the underwriters, and if such option is
exercised by the underwriters, the allocation priority established by clause (i)
or clause (ii) above, whichever is applicable, shall govern the allocation with
respect to the sale of any shares of Common Stock pursuant to such exercise by
the underwriters.
(e) If the Investor exercises its Registration Rights to offer
and sell Registrable Shares in an underwritten public offering initiated by any
other person or persons possessing registration rights similar to those conveyed
upon the Investor by this Agreement (each such other person initiating such an
underwritten public offering, an "Other Initiating Person"), the Investor agrees
that the allocation priority for such offering shall be comparable to the
allocation priority established by clause (ii) of Section 1.6(d), except that
the Investor shall participate in such offering with the lowest level of
priority described in clause (ii) of Section 1.6(d), pro rata in accordance with
each request for inclusion made by each such Investor.
SECTION 2. INDEMNIFICATION
2.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless the Investor in any offering or sale of Registrable
Shares, each person (if any) who participates as an underwriter in any offering
and sale of Registrable Shares, and each person, if any, who controls the
Investor or such underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and their respective directors, trustees, officers, partners,
agents, employees and affiliates as follows:
(a) against any and all loss, liability, claim, damage and
expense (joint or several) and action or proceeding (whether commenced
or threatened) whatsoever ("Losses"), as incurred, arising out of or
based upon any untrue statement or alleged untrue statement of a
material fact contained in any registration statement (or any amendment
thereto) pursuant to which the Registrable Shares were registered under
the Securities Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in
any prospectus (or any amendment or supplement thereto), including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(b) against any and all loss, liability, claim, damage, cost
or expense (including reasonable legal fees and expenses)
(collectively, "Losses"), as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company (which
consent will not be unreasonably withheld); and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel), reasonably
incurred in investigating, preparing or defending against any Losses or
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, in each case whether or not a
party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue
6
7
statement or omission, to the extent that any such expense is not paid
under subparagraph (a) or (b) above;
provided, however, that the indemnity provided pursuant to this Section 2.1 does
not apply to any indemnified party with respect to any Losses or expenses to the
extent arising out of (i) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by such indemnified party expressly for use
in the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto), or (ii) such indemnified party's failure
to deliver an amended or supplemental Prospectus if such Losses would not have
arisen had such delivery occurred.
2.2 Indemnification by the Investor. The Investor (and each
permitted assignee of such Investor) agrees to indemnify and hold harmless the
Company, each person (if any) who participates as an underwriter in any offering
and sale of Registrable Shares and each person, if any, who controls the Company
or such underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and their respective directors, trustees,
officers, partners, agents, employees and affiliates, as follows:
(a) against any and all Losses whatsoever, as incurred,
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement
(or any amendment thereto) pursuant to which the Registrable Shares
were registered under the Securities Act, including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of or
based upon any untrue statement or alleged untrue statement of a
material fact contained in any prospectus, including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(b) against any and all Losses whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Investor (which consent will not be unreasonably withheld); and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel), reasonably
incurred in investigating, preparing or defending against any Losses or
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, in each case whether or not a
party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (a) or (b)
above;
provided, however, that the indemnity provided pursuant to this Section 2.2
shall only apply with respect to any Losses to the extent arising out of (i) any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Investor expressly for use in the registration statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto),
or (ii) the Investor's failure to deliver an amended or supplemental Prospectus
if such Losses would not have arisen had such delivery occurred. Notwithstanding
the provisions of this Section 2.2, neither the Investor nor any permitted
assignee shall be required to indemnify the Company, its indemnified persons
hereunder with respect to any amount in excess of the amount of the total
proceeds to the Investor or such permitted assignee, as the case may be, from
sales of the Registrable Shares of the Investor under the registration statement
with respect to such offering, and the Investor shall not be liable under this
Section 2.2 for any statements or omissions of any Participating Investor.
2.3 Conduct of Indemnification Proceedings. The indemnified
party shall give reasonably prompt notice to the indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify the indemnifying party shall not
relieve it from any
7
8
liability which it may have under the indemnity agreement provided in Section
2.1 or 2.2 above, unless and to the extent it did not otherwise learn of such
action and the lack of notice by the indemnified party results in the forfeiture
by the indemnifying party of substantial rights and defenses. If the
indemnifying party so elects within a reasonable time after receipt of such
notice, the indemnifying party may assume the defense of such action or
proceeding at such indemnifying party's own expense with counsel chosen by the
indemnifying party and approved by the indemnified party, which approval shall
not be unreasonably withheld; provided, however, that the indemnifying party
will not settle any such action or proceeding without the written consent of the
indemnified party unless, as a condition to such settlement, the indemnifying
party secures the unconditional release of the indemnified party; and provided
further that if the indemnified party reasonably determines that a conflict of
interest exists where it is advisable for the indemnified party to be
represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to it which are different from or in addition to those
available to the indemnifying party, then the indemnifying party shall not be
entitled to assume such defense and the indemnified party shall be entitled to
separate counsel at the indemnifying party's expense. If the indemnifying party
is not entitled to assume the defense of such action or proceeding as a result
of the proviso to the preceding sentence, the indemnifying party's counsel shall
be entitled to conduct the indemnifying party's defense and counsel for the
indemnified party shall be entitled to conduct the defense of the indemnified
party, it being understood that both such counsel will cooperate with each other
to conduct the defense of such action or proceeding as efficiently as possible.
If the indemnifying party is not so entitled to assume the defense of such
action or does not assume such defense, after having received the notice
referred to in the first sentence of this paragraph, the indemnifying party will
pay the reasonable fees and expenses of counsel for the indemnified party. In
such event, however, the indemnifying party will not be liable for any
settlement effected without the written consent of the indemnifying party (which
consent will not be unreasonably withheld). Except as expressly stated herein,
if an indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
party incurred thereafter in connection with such action or proceeding.
2.4 Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Section 2 is unavailable to an indemnified party, the indemnifying party
shall contribute to the aggregate Losses of the nature contemplated by such
indemnity agreement incurred by any indemnified party, (i) in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and the indemnified parties on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative fault of but also the relative benefits to the
Company on the one hand and the Investor on the other, in connection with the
statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. The relative benefits to the indemnifying
party and the indemnified party shall be determined by reference to, among other
things, the total proceeds received by the indemnifying party and the
indemnified party in connection with the offering to which such Losses relate.
The relative fault of the indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, the indemnifying party or the indemnified party, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action.
The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 2.4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 2.4, the Investor
shall not be required to contribute any amount in excess of the amount of the
total proceeds to the Investor from sales of the Registrable Shares of the
Investor under the registration statement.
Notwithstanding the foregoing, 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. For purposes of this Section 2.4, each person, if
any, who controls an indemnified party within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as such indemnified
party, and each director of the Company, each officer of the Company who signed
a
8
9
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company.
The indemnity agreements contained in this Section 2 shall be
in addition to any other rights (to indemnification, contribution or otherwise)
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 and shall survive the
transfer of any Registrable Shares by the Investor.
SECTION 3. RULE 144 COMPLIANCE
The Company covenants that it will use its reasonable best
efforts to timely file the reports required to be filed by the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended, so as to
enable the Investor to sell Registrable Shares pursuant to Rule 144 under the
Securities Act. In connection with any sale, transfer or other disposition by
the Investor of any Registrable Shares pursuant to Rule 144 under the Securities
Act, the Company shall cooperate with the Investor to facilitate the timely
preparation and delivery of certificates representing Registrable Shares to be
sold and not bearing any Securities Act legend, and enable certificates for such
Registrable Shares to be for such number of shares and registered in such names
as the Investor may reasonably request at least ten (10) business days prior to
any sale of Registrable Shares hereunder.
SECTION 4. MISCELLANEOUS
4.1 Integration; Amendment. This Agreement, together with the
Merger Agreement and the Ancillary Agreements (as defined in the Merger
Agreement), constitutes the entire agreement among the parties hereto with
respect to the matters set forth herein and supersedes and renders of no force
and effect all prior oral or written agreements, commitments and understandings
among the parties with respect to the matters set forth herein. Except as
otherwise expressly provided in this Agreement, no amendment, modification or
discharge of this Agreement shall be valid or binding unless set forth in
writing and duly executed by the Company and the Investor.
4.2 Waivers. No waiver by a party hereto shall be effective
unless made in a written instrument duly executed by the party against whom such
waiver is sought to be enforced, and only to the extent set forth in such
instrument. Neither the waiver by any of the parties hereto of a breach or a
default under any of the provisions of this Agreement, nor the failure of any of
the parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any such provisions, rights or privileges hereunder.
4.3 Successors and Assigns; Third Party Beneficiaries. The
Investor and any other Restricted Party may not assign any of its rights or
delegate its duties under this Agreement except to another Restricted Party;
provided, however that if the Registration Statement has not been declared
effective by the SEC within 45 days of the date hereof, the Investor shall be
entitled to make up to five assignments of its rights in Section 1.1(a) under
this Agreement to a Person other than a Restricted Party, which rights shall
terminate and be of no further force and effect if and when the Registrable
Shares related to such assigned rights are included in the Registration
Statement and the Registration Statement is declared effective by the SEC. The
Company may not assign any of its rights or delegate any of its duties under
this Agreement without the prior written consent of the Investor, provided that
in the event of any merger or consolidation of the Company with any Person (as
defined in the Stockholders Agreement) in which the holders of Common Stock
receive securities of any other Person (the "Successor Issuer") the Company
shall assign all of its rights and delegate all of its obligations under this
Agreement to such Successor Issuer in which event the Successor Issuer will
become the "Company" for all purposes of this Agreement. Any purported
assignment in violation of this Section shall be void. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any Person
other than the Restricted Parties (who shall be third party beneficiaries of
this Agreement entitled to the benefit of, and to enforce, its terms) and the
Company and their respective successors, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Restricted Parties and the Company and
their respective successors, and for the benefit of no other
9
10
Person. No purchaser of Common Stock from a Restricted Party (other than another
Restricted Party) shall be deemed to be a successor or assignee by reason merely
of such purchase.
4.4 Benefits of Registration Rights. The Investor and the
other Restricted Parties may severally or jointly exercise the Registration
Rights hereunder in such proportion as they shall agree among themselves.
4.5 Notices. Notices and other communications required by this
Agreement shall be in writing and delivered by hand against receipt or sent by
recognized overnight delivery service or by certified or registered mail,
postage prepaid, with return receipt requested or by facsimile transmission. All
notices shall be addressed as follows:
If to the Investor:
[Investor]
[Address]
Attention:
[Title]
Telephone:
Fax:
with a copy to:
[Law firm]
[Address]
Attention:
Telephone:
Fax:
If to the Company:
CheckFree Holdings Corporation
0000 X. Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
or such other address as may be designated by a proper notice. Any notice
delivered to the party hereto to whom it is addressed shall be deemed to have
been given and received on the day it was received; provided, however, that if
such day is not a business day then the notice shall be deemed to have been
given and received on the business day next following such day. Any notice sent
by facsimile transmission shall be deemed to have been given and received on the
business day next following the transmission.
10
11
4.6 Specific Performance. The parties hereto acknowledge that
the obligations undertaken by them hereunder are unique and that there would be
no adequate remedy at law if any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to (i)
compel specific performance of the obligations, covenants and agreements of any
other party under this Agreement in accordance with the terms and conditions of
this Agreement and (ii) obtain preliminary injunctive relief to secure specific
performance and to prevent a breach or contemplated breach of this Agreement in
any court of the United States or any State thereof having jurisdiction.
4.7 Governing Law. This Agreement, the rights and obligations
of the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the State of Delaware.
4.8 Headings. Section and subsection headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.
4.9 Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.
4.10 Execution in Counterparts. To facilitate execution, this
Agreement may be executed in as many counterparts as may be required. It shall
not be necessary that the signature of or on behalf of each party appears on
each counterpart, but it shall be sufficient that the signature of or on behalf
of each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
4.11 Severability. If fulfillment of any provision of this
Agreement, at the time such fulfillment shall be due, shall transcend the limit
of validity prescribed by law, then the obligation to be fulfilled shall be
reduced to the limit of such validity; and if any clause or provision contained
in this Agreement operates or would operate to invalidate this Agreement, in
whole or in part, then such clause or provision only shall be held ineffective,
as though not herein contained, and the remainder of this Agreement shall remain
operative and in full force and effect.
11
12
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed on its behalf as of the date first hereinabove set forth.
CHECKFREE HOLDINGS CORPORATION
By:
----------------------------
Name:
Title:
[INVESTOR]
By:
----------------------------
Name:
Title:
12
