Exhibit 10.1
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STOCKHOLDER AGREEMENT
This STOCKHOLDER AGREEMENT, dated as of June 20, 1998 (this "Agreement"),
is made and entered into among Sterling Software, Inc., a Delaware corporation
("Parent"), General Atlantic Partners II, L.P., GAP-Synon Partners, L.P., GAP
Coinvestment Partners, L.P., Advent Atlantic & Pacific Limited Partnership,
Advent Industrial II, L.P., Advent VI, L.P., Xxxx & Co., Saturn & Co., T.A.
Venture Investors Limited Partnership, Xxxxx Xxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx
Xxxxxxxx and Xxxxxxx Xxxxx (each, a "Stockholder" and, collectively, the
"Stockholders").
RECITALS:
A. Parent, Sterling Software (Southern), Inc., a Georgia corporation and
wholly owned subsidiary of Parent ("Merger Sub"), and Synon Corporation, a
Delaware corporation ("Company"), propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), pursuant to which
Company will merge with and into Merger Sub (the "Merger") on the terms and
subject to the conditions set forth in the Merger Agreement. Except as
otherwise defined herein, terms used herein with initial capital letters have
the respective meanings ascribed thereto in the Merger Agreement.
B. As of the date hereof, each Stockholder beneficially owns and is
entitled to dispose of (or to direct the disposition of) and to vote (or to
direct the voting of) the number of shares of capital stock of Company ("Capital
Stock") set forth opposite such Stockholder's name on Schedule A hereto (such
shares of Capital Stock, together with any other shares of capital stock of
Company, the beneficial ownership of which is acquired by such Stockholder
during the period from and including the date hereof through and including the
earlier of (i) the Effective Time and (ii) the date that is one year after the
date on which the Merger Agreement is terminated pursuant to Section 8.1
thereof, are collectively referred to herein as such Stockholder's "Subject
Shares").
C. As a condition and inducement to Parent's willingness to enter into
the Merger Agreement, Parent has requested that each Stockholder agree, and each
Stockholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties and covenants contained in this Agreement and the Merger Agreement
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
VOTING AGREEMENT
Section 1.1 Agreement to Vote Shares. During the period from and
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including the date hereof through and including the earlier of (i) the Effective
Time and (ii) the date on which the Merger Agreement is terminated pursuant to
Section 8.1 thereof, at any meeting of the stock holders of Company called to
consider and vote upon the adoption of the Merger Agreement (and at any and all
postponements and adjournments thereof), and in connection with any action to be
taken in respect of the adoption of the Merger Agreement by written consent of
stockholders of Company, each Stockholder shall vote or cause to be voted
(including by written consent, if applicable) all of such Stockholder's Subject
Shares in favor of the adoption of the Merger Agreement and in favor of any
other matter necessary for the consummation of the transactions contemplated by
the Merger Agreement and considered and voted upon at any such meeting or made
the subject of any such written consent, as applicable.
Section 1.2 Irrevocable Proxy.
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(a) Grant of Proxy. EACH STOCKHOLDER HEREBY APPOINTS PARENT AND ANY
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DESIGNEE OF PARENT, EACH OF THEM INDIVIDUALLY, SUCH STOCKHOLDER'S PROXY AND
ATTORNEY-IN-FACT PURSUANT TO THE PROVISIONS OF SECTION 212 OF THE DELAWARE
GENERAL CORPORATION LAW, WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, TO
VOTE OR ACT BY WRITTEN CONSENT WITH RESPECT TO SUCH STOCKHOLDER'S SUBJECT SHARES
IN ACCORDANCE WITH SECTION 1.1 HEREOF. THIS PROXY IS GIVEN TO SECURE THE
PERFORMANCE OF THE DUTIES OF SUCH STOCKHOLDER UNDER THIS AGREEMENT. EACH
STOCKHOLDER AFFIRMS THAT THIS PROXY IS COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE. EACH STOCKHOLDER SHALL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH
OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY.
(b) Other Proxies Revoked. Each Stockholder represents that any
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proxies heretofore given in respect of such Stockholder's Subject Shares are not
irrevocable, and that all such proxies are hereby revoked.
ARTICLE II
OPTION
Section 2.1 Grant of Option. Each Stockholder hereby grants to Parent an
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irrevocable option (each, an "Option" and, collectively, the "Options") to
purchase such Stockholder's Subject Shares on the terms and subject to the
conditions set forth herein, in exchange for the number of shares of common
stock, par value $0.10 per share, of Parent ("Parent Common Stock") equal to the
product of (a) (i) 0.14357, in the case of Subject Shares that are Common Shares
or Series A Preferred Shares, and (ii) 0.27149, in the case of Subject Shares
that are Series D Preferred Shares, and (b) the number of such Subject Shares to
be purchased upon any
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particular exercise of such Option (such product being the "Option
Consideration"), with the type and number of shares, securities or other
property subject to each of the Options, and the Option Consideration payable
therefor, being subject to adjustment as provided herein.
Section 2.2 Exercise of Option. Parent may exercise all or any of the
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Options, in whole or in part, at any time or from time to time during the period
(the "Option Period") from and including the date hereof through and including
the earlier of (i) the Effective Time and (ii) the date that is one year after
the date on which the Merger Agreement is terminated pursuant to Section 8.1
thereof. Notwithstanding anything in this Agreement to the contrary, Parent
shall be entitled to purchase all Subject Shares in respect of which it shall
have exercised an Option in accordance with the terms hereof prior to the
expiration of the Option Period, and the expiration of the Option Period shall
not affect any rights hereunder which by their terms do not terminate or expire
prior to or as of such expiration.
(b) If Parent wishes to exercise an Option, it shall deliver to the
applicable Stockholder (each a "Selling Stockholder") a written notice (an
"Exercise Notice") to that effect which specifies (i) the number and kind of
Subject Shares to be purchased from such Selling Stockholder and (ii) a date (an
"Option Closing Date") not earlier than three business days after the date such
Exercise Notice is delivered for the consummation of the purchase and sale of
such Subject Shares (an "Option Closing"). If the Option Closing cannot be
effected on the Option Closing Date specified in the Exercise Notice by reason
of any applicable judgment, decree, order, law or regulation, or because any
applicable waiting period under the HSR Act shall not have expired or been
terminated, (i) the Stockholders shall promptly take all such actions as may be
requested by Parent, and shall otherwise fully cooperate with Parent, to cause
the elimination of all such impediments to the Option Closing and (ii) the
Option Closing Date specified in the Exercise Notice shall be extended to the
third business day following the elimination of all such impediments. The place
of the Option Closing shall be at the offices of Xxxxx, Day, Xxxxxx & Xxxxx,
2300 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx, and the time of the
Option Closing shall be 10:00 a.m. (Central Time) on the Option Closing Date.
Section 2.3 Payment and Delivery of Certificates. At any Option Closing,
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Parent shall deliver to each Selling Stockholder a certificate or certificates
evidencing the Option Consideration payable in respect of the Subject Shares to
be purchased from such Selling Stockholder at the Option Closing, and each
Selling Stockholder shall deliver to Parent such Subject Shares, free and clear
of all Liens, with the certificate or certificates evidencing such Subject
Shares being duly endorsed for transfer by such Selling Stockholder and
accompanied by all powers of attorney and/or other instruments necessary to
convey valid and unencumbered title thereto to Parent, and shall assign to
Parent (pursuant to a written instrument in form and substance satisfactory to
Parent) all rights that such Selling Stockholder may have to require Company to
register such Subject Shares under the Securities Act. Transfer taxes, if any,
imposed as a result of the exercise of an Option shall be borne by the Selling
Stockholder.
Section 2.4 Adjustment upon Changes in Capitalization, Etc. In the event
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of any change in the capital stock of either Company or Parent by reason of a
stock dividend, split-up, merger, recapitalization, combination, exchange of
shares, extraordinary distribution or similar transaction, the type and number
of shares, securities or other property subject to each of the
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Options, and the Option Consideration payable therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction, so that (a) Parent shall receive upon exercise of any Option
the number and class of shares, securities or property that Parent would have
received in respect of the applicable Selling Stockholder's Subject Shares if
the Option had been exercised immediately prior to such event relating to
Company or the record date therefor, as applicable, and (b) the applicable
Selling Stockholder shall receive upon exercise of any Option granted by such
Selling Stockholder the number and class of shares, securities or other property
that such Selling Stockholder would have received in respect of such Selling
Stockholder's Subject Shares if the Option had been exercised immediately prior
to such event relating to Parent or the record date therefor, as applicable.
The provisions of this Section 2.4 shall apply in a like manner to successive
stock dividends, split-ups, mergers, recapitalizations, combinations, exchanges
of shares or extraordinary distributions or similar transactions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Certain Representations and Warranties of the Stockholders.
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Each Stockholder, severally and not jointly, represents and warrants to Parent
as follows:
(a) Ownership. Except as specified on Schedule A hereto, such
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Stockholder is the sole record and beneficial owner of the number of shares of
Capital Stock set forth opposite such Stockholder's name on such Schedule A and
has full and unrestricted power to dispose of and to vote such shares of Capital
Stock. Such Stockholder does not own any securities of Company on the date
hereof other than the shares of Capital Stock set forth on such Schedule A and
the options to purchase shares of Capital Stock set forth on such Schedule A.
(b) Due Authorization. Such Stockholder has all requisite power and
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authority to enter into this Agreement and to consummate the transactions
contemplated hereby. In the case of each Stockholder that is not a natural
person, the execution and delivery of this Agreement by such Stockholder and the
consummation by such Stockholder of the transactions contemplated hereby have
been duly authorized by all necessary action, if any, on the part of such
Stockholder. This Agreement has been duly executed and delivered by such
Stockholder and, assuming that this Agreement constitutes the valid and binding
obligation of the other parties hereto, constitutes a valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of equity.
(c) No Conflicts. The execution and delivery of this Agreement do
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not, and, subject to compliance with the HSR Act, to the extent applicable, the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, conflict with, result in a breach or violation of or
default (with or without notice or lapse of time or both) under, or give rise to
a material obligation, a right of termination, cancellation, or acceleration of
any obligation or a loss of a material benefit under, or require notice to or
the consent of any
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person under any agreement, instrument, undertaking, law, rule, regulation,
judgment, order, injunction, decree, determination or award binding on such
Stockholder, other than any such conflicts, breaches, violations, defaults,
obligations, rights or losses that individually or in the aggregate would not
(i) impair the ability of such Stockholder to perform such Stockholder's
obligations under this Agreement or (ii) prevent or delay the consummation of
any of the transactions contemplated hereby.
(d) Purchase for Own Account, Etc. The Parent Common Stock to be
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acquired by each Stockholder upon Parent's exercise of an Option shall be so
acquired for such Stockholder's own account, and shall not be sold, transferred
or otherwise disposed of by such Stockholder except in a transaction registered
or exempt from registration under the Securities Act and in compliance with
applicable state securities laws.
Section 3.2 Representations and Warranties of Parent. Parent hereby
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represents and warrants to each Stockholder that:
(a) Due Authorization. Parent has all requisite corporate power and
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authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Parent and
the consummation by Parent of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Parent. This
Agreement has been duly executed and delivered by Parent and, assuming that this
Agreement constitutes the valid and binding obligation of each Stockholder,
constitutes a valid and binding obligation of Parent, enforceable against Parent
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of equity.
(b) No Conflicts. The execution and delivery of this Agreement do
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not, and, subject to compliance with the HSR Act, to the extent applicable, the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, conflict with, result in a breach or violation of or
default (with or without notice or lapse of time or both) under, or give rise to
a material obligation, right of termination, cancellation, or acceleration of
any obligation or a loss of a material benefit under, or require notice to or
the consent of any person under any agreement, instrument, undertaking, law,
rule, regulation, judgment, order, injunction, decree, determination or award
binding on Parent, other than any such conflicts, breaches, violations,
defaults, obligations, rights or losses that individually or in the aggregate
would not (i) impair the ability of Parent to perform its obligations under this
Agreement or (ii) prevent or delay the consummation of any of the transactions
contemplated hereby.
(c) Purchase for Own Account, Etc. The Options and the Subject
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Shares to be acquired upon exercise of the Options are being and shall be
acquired by Parent for its own account, and shall not be sold, transferred or
otherwise disposed of by Parent except in a transaction registered or exempt
from registration under the Securities Act and in compliance with applicable
state securities laws.
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ARTICLE IV
CERTAIN COVENANTS
Section 4.1 Certain Covenants of Stockholders.
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(a) Restriction on Transfer of Subject Shares, Proxies and
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Noninterference. During the period from and including the thirtieth calendar
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day immediately preceding the Effective Time through and including the earlier
of the Effective Time and the date that is one year after the date on which the
Merger Agreement is terminated pursuant to Section 8.1 thereof (the "Restricted
Period"), no Stockholder shall, directly or indirectly, except pursuant to the
terms of this Agreement or the Merger Agreement, offer for sale, sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of (including in the case
of Preferred Shares, by reason of conversion thereof into Common Shares), or
enter into any contract, option or other arrangement or understanding with
respect to or consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of (including in the case of
Preferred Shares, by reason of conversion thereof into Common Shares), any or
all of such Stockholder's Subject Shares; provided, however, that the provisions
of this sentence shall not apply to any of Advent Atlantic & Pacific Limited
Partnership, Advent Industrial II, L.P., Advent VI, L.P., Xxxx & Co., Saturn &
Co. and T.A. Venture Investors Limited Partnership. During the period from and
including the date hereof through and including the last day of the Restricted
Period, no Stockholder shall, directly or indirectly, (i) except pursuant to the
terms of this Agreement, grant any proxies or powers of attorney, deposit any of
such Stockholder's Subject Shares into a voting trust or enter into a voting
agreement with respect to any of such Stockholder's Subject Shares or (ii) take
any action that would make any representation or warranty contained herein
untrue or incorrect or have the effect of impairing the ability of such
Stockholder to perform such Stockholder's obligations under this Agreement or
preventing or delaying the consummation of any of the transactions contemplated
hereby.
(b) Restrictions on Transfer of Parent Common Stock. Prior to the
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second anniversary of any Option Closing, no Stockholder shall sell, transfer or
otherwise dispose of any of the shares of Parent Common Stock received by such
Stockholder in connection with such Option Closing, except (i) pursuant to an
effective registration statement under the Securities Act, (ii) in conformity
with the provisions of Rule 144 promulgated under the Securities Act ("Rule
144"), or (iii) in a transaction which, in the opinion of counsel reasonably
satisfactory to Parent, is not required to be registered under the Securities
Act. Each Stockholder understands and acknowledges that, except as provided in
Section 4.2, Parent shall not be required to maintain the effectiveness of any
registration statement under the Securities Act for the purpose of facilitating
the resale of any such shares of Parent Common Stock by such Stockholder. In the
event of a sale, transfer or other disposition by any Stockholder of any such
shares of Parent Common Stock received by such Stockholder at any Option Closing
pursuant to Rule 144, such Stockholder shall supply Parent with evidence of
compliance with such Rule, in the form of a letter in the form of Annex I hereto
and the opinion of counsel referred to above. Each Stockholder understands and
acknowledges that Parent may instruct its transfer agent to stop the transfer of
any such shares of Parent Common Stock, but that (provided such transfer is not
prohibited by any other provision
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of this Agreement) upon receipt of such evidence of compliance, Parent shall
cause the transfer agent to effectuate the transfer of such shares of Parent
Common Stock as indicated in such letter.
(c) Tax and Accounting Treatment. No Stockholder shall take any
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position on any federal, state or local income tax return, or take any other
action or reporting position, that is inconsistent with the treatment of the
Merger as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or with the representa tions made
in this Agreement, unless otherwise required pursuant to a "determination" (as
defined in Section 1313(a)(1) of the Code). No Stockholder shall take any action
that could prevent the Merger from being accounted for as a pooling of interests
transaction under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations.
(d) Cooperation. Each Stockholder shall cooperate fully with Parent
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and Company in connection with their respective efforts to fulfill the
conditions to the Merger set forth in Article VII of the Merger Agreement.
(e) Acknowledgments and Waivers. Each Stockholder hereby (i)
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acknowledges that such Stockholder is familiar with (A) the provisions of the
certificate of incorporation of Company fixing the powers, preferences and
rights appurtenant to such Stockholder's Subject Shares, (B) the provisions of
the certificate of incorporation and bylaws of Company and of any and all
agreements, understandings or arrangements between such Stockholder and Company
or any other Stockholder relating to the acquisition, disposition or voting of
shares of Capital Stock (including without limitation any restrictions on
transfer, rights of first offer or first refusal, call options, put options,
buy/sell arrangements or preemptive or similar rights, whether fixed or
contingent), and (C) the provisions of the Merger Agreement and this Agreement,
and (ii) consents to the provisions of the Merger Agreement and this Agreement,
(iii) agrees that if and to the extent that the provisions of the Merger
Agreement or this Agreement conflict with or are inconsistent with any of the
provisions of the instruments, agreements, understandings or arrangements
referred to in clauses (i)(A) or (i)(B) of this sentence, the provisions of the
Merger Agreement and of this Agreement shall control and any and all such
conflicts or inconsistencies (and any and all claims and causes of action that
might otherwise exist with respect thereto) are hereby irrevocably waived.
Without limiting the generality or effect of the foregoing, (i) each Stockholder
hereby irrevocably waives any and all claims and causes of action that might
otherwise exist with respect to the manner in which the aggregate consideration
to holders of Capital Stock provided for in the Merger Agreement has been
allocated pursuant to the Merger Agreement among the various classes and series
of Capital Stock, and (ii) each Stockholder hereby agrees that, following any
purchase by Parent of all of such Stockholder's Subject Shares (pursuant to the
Merger, the exercise of any Option or otherwise), such Stockholder will not
assert or seek to exercise any rights that it might have under the First Amended
and Restated Stockholders Agreement dated August 28, 1992 among Company and
certain stockholders of Company, as subsequently amended and restated.
(f) Releases. Each Stockholder hereby fully, unconditionally and
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irrevocably releases, effective as of the Effective Time, any and all claims and
causes of action that such Stockholder has or may have against Company or any of
its Subsidiaries or any present or former director, officer, employee or agent
of Company or any of its Subsidiaries (collectively, the
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"Released Parties") arising or resulting from or relating to any act, omission,
event or occurrence prior to the Effective Time; provided, however, that such
release shall not apply to any claim or cause of action insofar as it relates
(i) in the case of any Stockholder who is a natural person, to (A) any
entitlement to compensation or benefits earned or accrued by or for the benefit
of such Stockholder prior to the Effective Time in respect of services performed
by such Stockholder to Company, in the ordinary course of Company's business, as
a director, officer or employee of Company, or (B) any entitlement to the
indemnification contemplated by Section 6.18 of the Merger Agreement and (ii) in
the case of Xxxxx Xxxxxxxx and Xxxxxxx Xxxxxx, (x) to any commissions which are
owed or which may in the future become payable to such Stockholders pursuant to
the Employment Agreement between Company and Xxxxx Xxxxxxxx dated July 28, 1994
and the Employment Agreement between Company and Xxxxxxx Xxxxxx dated July 28,
1994, respectively, and (y) to any rights possessed by such Stockholders
pursuant to the Agreement among Company, Dysys Limited, Xxxxx Xxxxxxxx and
Xxxxxxx Xxxxxx dated September 15, 1992 relating to the acquisition of certain
intellectual property included in Company's Obsydian product.
Section 4.2 Registration Rights. On the terms and subject to the
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conditions set forth in this Section 4.2, as promptly as practicable (and, in
any event, within 30 calendar days) after the first Option Closing, Parent shall
file, and shall thereafter use its reasonable best efforts to cause to become
and remain effective, for so long as the shares of Parent Common Stock received
by any Stockholder in connection with any Option Closing continue to be
Registrable Securities (as hereinafter defined), a registration statement
registering for purposes of the Securities Act the resale of all Registrable
Securities held by the Stockholders (the "Registration Statement"). For so long
as Parent is required to cause the Registration Statement to remain effective,
Parent shall use its reasonable best efforts to cause the Parent Common Stock to
be (x) registered or qualified (to the extent not exempt from such registration
or qualification) for sale under the blue sky laws of such states as any
Stockholder may reasonably request (provided that Parent shall not be required
to qualify to do business in, or consent to general service of process in, any
jurisdiction by reason thereof) and (y) listed on a national securities exchange
or accepted for quotation on the National Association of Securities Dealers
Automated Quotation System.
(b) The obligations of Parent hereunder to file the Registration
Statement and to maintain its effectiveness may be suspended for one or more
periods of time not exceeding 60 calendar days, and/or Parent shall be entitled
to provide to the Stockholders Suspension Notices pursuant to Section 4.2(e) to
be in effect for one or more periods of time not exceeding 60 calendar days, if
the Board of Directors of Parent (or the Executive Committee thereof) shall have
determined in good faith that (i) the filing of the Registration Statement or
the maintenance of its effectiveness, and/or the continued use of any related
prospectus (a "Prospectus"), would require disclosure of nonpublic information
that would materially and adversely affect Parent or (ii) there shall have
occurred any event which makes any statement made in the Registration Statement
or any Prospectus untrue in any material respect or which requires the making of
any changes in the Registration Statement or a Prospectus or other documents so
that (A) in the case of the Registration Statement, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and (B) in the case of a Prospectus, it will not contain any untrue statement of
a
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material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The preparation and filing of the
Registration Statement, and any sale covered thereby, will be at Parent's
expense, except for underwriting discounts or commissions, brokers' fees and the
fees and disbursements of counsel for any Stockholder related thereto.
(c) Each Stockholder shall promptly provide all information
reasonably requested by Parent for inclusion in the Registration Statement and
any Prospectus. In connection with any sale or other disposition of Registrable
Securities to be effected pursuant to the Registration Statement, Parent and
each Stockholder will provide each other and any underwriter with customary
representations, warranties, covenants, indemnification and contribution.
(d) For purposes of this Agreement, the term "Registrable
Securities" means shares of Parent Common Stock acquired by any Stockholder as
Option Consideration at any Option Closing; provided however that Registrable
Securities will cease to be Registrable Securities when and to the extent that
(i) a registration statement covering such Registrable Securities has been
declared effective under the Securities Act and such Registrable Securities have
been disposed of pursuant to such effective registration statement, (ii) one
year (and, if applicable, a number of additional days equal to the aggregate
number of days during which the obligations of Parent hereunder were suspended
pursuant to Section 4.2(b) or Suspension Notices under Section 4.2(e) were in
effect) has elapsed since the acquisition of such Registrable Securities by the
applicable Stockholder, or (iii) such Registrable Securities are sold or
transferred by a Stockholder otherwise than to another Stockholder. Each
Stockholder shall promptly notify Parent when any of such Stockholder's shares
of Parent Common Stock shall have ceased to be Registrable Securities.
(e) Parent will use reasonable efforts to notify each Stockholder as
promptly as practicable of (i) any request by the Securities and Exchange
Commission (the "SEC") or any other federal or state governmental authority for
amendments or supplements to the Registration Statement or any Prospectus or for
additional information, (ii) the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose, (iii) any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, and (iv) any determination of the Board of
Directors of Parent described in Section 4.2(b). Upon receipt of any notice
from Parent of the occurrence of any event of the kind described in the
immediately preceding sentence (each, a "Suspension Notice"), each Stockholder
will immediately discontinue offers, sales and other dispositions of Registrable
Securities covered by the Registration Statement or a Prospectus until such
Stockholder has been advised in writing by Parent that such offers, sales or
other dispositions may be resumed and has received copies of any applicable
supplemental or amended Prospectus or any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
Prospectus.
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ARTICLE V
MISCELLANEOUS
Section 5.1 Fees and Expenses. Except to the extent otherwise provided in
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Section 4.2(b), each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby.
Section 5.2 Amendment and Term. This Agreement may not be amended except
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by an instrument in writing signed on behalf of each of the parties hereto.
Notwithstanding anything to the contrary contained herein, upon any termination
of the Merger Agreement pursuant to Section 8.1(a)(i), 8.1(a)(ii) or 8.1(a)(iii)
thereof, or any termination of the Merger Agreement by Company pursuant to
Section 8.1(a)(vi) thereof, this Agreement and the proxy granted pursuant to
Section 1.2 shall immediately terminate and thereupon cease to have any further
force or effect; except that (i) no such termination will relieve any party
hereto of any liability for any breach hereof occurring prior to such
termination and (ii) the provisions of Section 4.1(e) and this Article V shall
survive such termination and continue to be in full force and effect in
accordance with their terms.
Section 5.3 Extension; Waiver. Any agreement on the part of a party to
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waive any provision of this Agreement, or to extend the time for any performance
hereunder, shall be valid only if set forth in an instrument in writing signed
on behalf of such party. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise shall not constitute a
waiver of such rights.
Section 5.4 Legend. Each Stockholder acknowledges and agrees that a
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legend substantially in the form set forth below shall be placed on certificates
representing shares of Parent Common Stock received by such Stockholder in
connection with any Option Closing, which legend shall be removed by delivery of
substitute certificates upon the second anniversary of such Option Closing, or
upon (a) the earlier sale of such shares of Parent Common Stock (i) pursuant to
an effective registration statement under the Securities Act or (ii) in
conformity with the provisions of Rule 144 or (b) the receipt by Parent (or its
transfer agent) of an opinion in form and substance reasonably satisfactory to
Parent (or its transfer agent) from counsel reasonably satisfactory to Parent
(or its transfer agent) to the effect that such legend is no longer required for
purposes of the Securities Act.
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE
HOLDER OF SUCH SHARES MAY SELL, TRANSFER OR OTHERWISE DISPOSE OF SUCH SHARES
ONLY PURSUANT TO (1) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (2) A VALID EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. THE FOREGOING RESTRICTIONS ON TRANSFER ARE SET FORTH
IN A STOCKHOLDER AGREEMENT, DATED JUNE 20, 1998, A COPY OF WHICH MAY BE
OBTAINED FROM STERLING SOFTWARE, INC. "
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Section 5.5 Entire Agreement; Third-Party Beneficiaries. This Agreement
-------------------------------------------
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement, and is not intended to confer upon any person
other than the parties any rights or remedies; provided, however, that the
provisions of Sections 4.1(e) and 4.1(f) are intended to inure to the benefit
of, and to be enforceable by, the Released Parties.
Section 5.6 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflict of
laws thereof.
Section 5.7 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, or sent by overnight courier (providing proof of
delivery), in the case of the Stockholders, to the address set forth on Schedule
A hereto or, in the case of Parent, to the address set forth below (or, in each
case, at such other address as shall be specified by like notice).
Sterling Software, Inc.
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxx X. XxXxxxxxx, Xx., Esq.
Telecopy: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx, Day, Xxxxxx & Xxxxx
2300 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
Section 5.8 Assignment. Neither this Agreement nor any of the rights,
----------
interests, or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise, by any Stockholder without
the prior written consent of Parent, and any such assignment or delegation that
is not consented to shall be null and void. This Agreement, together with any
rights, interests, or obligations of Parent hereunder, may be assigned or
delegated, in whole or in part, by Parent without the consent of or any action
by any Stockholder upon notice by Parent to each Stockholder affected thereby as
herein provided. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns (including without limitation an person
to whom any Subject Shares are sold, transferred or assigned).
11
Section 5.9 Further Assurances. Each Stockholder and Parent shall execute
------------------
and deliver all other documents and instruments and take all other action that
may be reasonably necessary in order to effectuate the provisions hereof and to
consummate the transactions provided for herein.
Section 5.10 Enforcement. Irreparable damage would occur in the event
-----------
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. Accordingly, the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in the Court of Chancery in and for New Castle County in the State of Delaware
(or, if such court lacks subject matter jurisdiction, any appropriate state or
federal court in New Castle County in the State of Delaware), this being in
addition to any other remedy to which they are entitled at law or in equity.
Each of the parties hereto (i) shall submit itself to the personal jurisdiction
of the Court of Chancery in and for New Castle County in the State of Delaware
(or, if such court lacks subject matter jurisdiction, any appropriate state or
federal court in New Castle County in the State of Delaware) in the event any
dispute arises out of this Agreement or any of the transactions contemplated
hereby, (ii) shall not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, and (iii) shall not bring
any action relating to this Agreement or any of the transactions contemplated
hereby in any court other than the Court of Chancery in and for New Castle
County in the State of Delaware (or, if such court lacks subject matter
jurisdiction, any appropriate state or federal court in New Castle County in the
State of Delaware).
Section 5.11 Severability. Whenever possible, each provision or portion
------------
of any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
Section 5.12 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same instrument and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other parties.
[signature page follows]
12
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
signed as of the day and year first written above.
STERLING SOFTWARE, INC.
By: /s/ Xxx X. XxXxxxxxx, Xx.
------------------------------------------
Xxx X. XxXxxxxxx, Xx.
Senior Vice President and General Counsel
STOCKHOLDERS:
GENERAL ATLANTIC PARTNERS II, L.P.
By: General Atlantic Partners, LLC,
------------------------------------------
General Partner
---------------
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxx
General Partner
GAP-SYNON PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxxx
General Partner
GAP COINVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxx
General Partner
ADVENT ATLANTIC & PACIFIC LIMITED PARTNERSHIP
By: TA Associates AAP Limited Partnership, its
------------------------------------------
General Partner
---------------
By: TA Associates AAP Venture Limited
--------------------------------------
Partnership, its General Partner
--------------------------------
By: TA Associates, Inc., its
General Partner
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx
Managing Director
13
ADVENT INDUSTRIAL II, L.P.
By: TA Associates VI, L.P.,
--------------------------------------
its General Partner
--------------------------------------
By: TA Associates, Inc.,
----------------------------------
its General Partner
----------------------------------
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
ADVENT VI, L.P.
By: TA Associates VI, L.P.,
--------------------------------------
its General Partner
--------------------------------------
By: TA Associates, Inc.,
----------------------------------
its General Partner
----------------------------------
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
CHESTNUT III LIMITED PARTNERSHIP
By: TA Associates VI, L.P.,
its Attorney-in-Fact
By: TA Associates, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
Managing Director
DESIFTA LIMITED
By: TA Associates V Limited Partnership,
its Attorney-in-Fact
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
Authorized Signator
T.A. VENTURE INVESTORS LIMITED PARTNERSHIP
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
General Partner
/s/ Xxxxx Xxxxxxxx
--------------------------------------
XXXXX XXXXXXXX
[Signature Page to Stockholder Agreement]
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/s/ Xxxxxxx Xxxxxx
-----------------------------------
XXXXXXX XXXXXX
/s/ Xxxxxxx Xxxxxxxx
-----------------------------------
XXXXXXX XXXXXXXX
/s/ Xxxxxxx Xxxxx
-----------------------------------
XXXXXXX XXXXX
[Signature Page to Stockholder Agreement]
15
SCHEDULE A
Total No. of
Total No. of Total No. of Series Total No. of Series Common Shares
Name and Address Common Shares A Preferred Shares D Preferred Shares Subject to Options
of Stockholder Beneficially Owned Beneficially Owned Beneficially Owned Beneficially Owned
---------------- ------------------ ------------------ ------------------ ------------------
General Atlantic Partners II, L.P. 1,484,575 2,411,064 3,150,165 -0-
c/o Xxxxx Xxxxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
GAP-Synon Partners, L.P. 26,823 143,556 109,895 -0-
c/o Xxxxx Xxxxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
GAP Coinvestment Partners, L.P. 50,490 -0- -0- -0-
c/o Xxxxx Xxxxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Advent Atlantic & Pacific 19,250 19,250 51,796 -0-
Limited Partnership
x/x Xxxxx Xxxxxx
Xxxx Xxxxxx Tower
000 Xxxx Xxxxxx Xxxxx 0000
Xxxxxx, XX 00000
Advent Industrial II, L.P. 9,500 9,500 25,561 -0-
x/x Xxxxx Xxxxxx
Xxxx Xxxxxx Tower
000 Xxxx Xxxxxx Xxxxx 0000
Xxxxxx, XX 00000
Advent VI, L.P. 88,750 88,750 238,797 -0-
x/x Xxxxx Xxxxxx
Xxxx Xxxxxx Tower
000 Xxxx Xxxxxx Xxxxx 0000
Xxxxxx, XX 00000
Xxxx & Co. 10,000 10,000 26,907 -0-
x/x Xxxxx Xxxxxx
Xxxx Xxxxxx Tower
000 Xxxx Xxxxxx Xxxxx 0000
Xxxxxx, XX 00000
Saturn & Co. 4,130 4,130 11,112 -0-
x/x Xxxxx Xxxxxx
Xxxx Xxxxxx Tower
000 Xxxx Xxxxxx Xxxxx 0000
Xxxxxx, XX 00000
16
T.A. Venture Investors 1,500 1,500 4,036 -0-
Limited Partnership
x/x Xxxxx Xxxxxx
Xxxx Xxxxxx Tower
000 Xxxx Xxxxxx Xxxxx 0000
Xxxxxx, XX 00000
Xxxxx Xxxxxxxx 1,990,316 -0- -0- -0-
0 Xxxxxxx Xxxxx West
00 Xxxx Xxxxxx
Xxxxxx, XX0 0XX
Xxxxxxx
Xxxxxxx Xxxxxx 715,473 -0- -0- -0-
0 Xxxxxxx Xxxxx West
00 Xxxx Xxxxxx
Xxxxxx, XX0 0XX
Xxxxxxx
Xxxxxxx Xxxxxxxx -0- -0- -0- 500,000
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxx -0- -0- -0- 360,000
Xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
17
ANNEX I
[Name] [Date]
On _______________ __, ____, Stockholder sold the securities of
Sterling Software, Inc., a Delaware corporation ("Parent"), described below in
the space provided for that purpose (the "Securities"). The Securities were
received by Stockholder in connection with the merger of Synon Corporation, a
Delaware corporation, with and into Sterling Software (Southern), Inc., a
Georgia corporation and wholly owned subsidiary of Parent.
Based upon the most recent report or statement filed by Parent with
the Securities and Exchange Commission, the Securities sold by Stockholder were
within the prescribed limitations set forth in paragraph (e) of Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
Stockholder hereby represents that the Securities were sold in
"brokers' transactions" within the meaning of Section 4(4) of the Securities Act
or in transactions directly with a "market maker" as that term is defined in
Section 3(a)(38) of the Securities Exchange Act of 1934, as amended.
Stockholder further represents that Stockholder has not solicited or arranged
for the solicitation of orders to buy the Securities, and that Stockholder has
not made any payment in connection with the offer or sale of the Securities to
any person other than to the broker who executed the order in respect of such
sale.
Very truly yours,
[Space to be provided for description of the Securities.]
18
