1
EXHIBIT 10.5.1
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
among
EXULT, INC.
and
CERTAIN OF ITS STOCKHOLDERS IDENTIFIED HEREIN
Dated: December 23, 1999
2
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, is
made and entered into on December 23, 1999 (this "Agreement"), among EXULT, Inc.
(f/k/a/BPO-US, Inc.), a Delaware corporation (the "Company"), General Atlantic
Partners 54, L.P., a Delaware limited partnership ("GAP LP"), General Atlantic
Partners 57, L.P., a Delaware limited partnership ("GAP 57"), GAP Coinvestment
Partners, L.P., a New York limited partnership ("GAP Coinvestment I"), GAP
Coinvestment Partners II, L.P., a Delaware limited partnership ("GAP
Coinvestment II"), General Atlantic Partners 60, L.P., a Delaware limited
partnership ("GAP 60"), Xxxxx Xxxxxx ("Xxxxxx") and BP International Limited, a
company incorporated in England ("BPI").
WHEREAS, the Company and certain of its stockholders are
parties to a Registration Rights Agreement, dated April 27, 1999, as the same
has been amended by Amendment No. 1 thereto, dated October 22, 1999 and
Amendment No. 2 thereto, dated December 7, 1999 (as so amended, the "Original
Agreement"); and
WHEREAS, the Company is issuing certain shares, par value
$.0001 per share, of its Series C Convertible Preferred Stock (the "Series C
Preferred Stock") to GAP 60, GAP Coinvestment II and JRO Consulting, Inc, an
Illinois corporation ("JRO"), pursuant to the Stock Purchase Agreement, dated
the date hereof ("Stock Purchase Agreement 3"), by and among the Company, GAP
60, GAP Coinvestment II and JRO;
WHEREAS, the parties hereto desire to amend and restate the
Original Agreement to add GAP 60 as a party and to incorporate the substance of
the amendments made to the Original Agreement;
WHEREAS, certain of the parties hereto have the authority
pursuant to Section 10(d) of the Original Agreement to amend and restate the
Original Agreement and to bind the parties to the Original Agreement to such
amendment and restatement; and
WHEREAS, in order to induce GAP 60 and GAP Coinvestment II to
purchase their respective shares of Series C Preferred Stock pursuant to Stock
Purchase Agreement 3, the Company and the other parties to the Original
Agreement have agreed to amend and restate the Original Agreement on the terms
and conditions contained herein and to grant GAP 60 registration rights with
respect to the Registrable Securities (as hereinafter defined) as set forth in
this Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement the following terms
have the meanings indicated:
"Affiliate" shall mean any Person who is an "affiliate" as
defined in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act. In addition, the following shall be deemed to be Affiliates of GAP LP, GAP
57 and GAP 60: (a) GAP LLC, the members of GAP
2
3
LLC, the limited partners of GAP LP, the limited partners of GAP 57 and the
limited partners of GAP 60; (b) any Affiliate of GAP LLC, the members of GAP
LLC, the limited partners of GAP LP, the limited partners of GAP 57 or the
limited partners of GAP 60; and (c) any limited liability company or partnership
a majority of whose members or partners, as the case may be, are members of -GAP
LLC. In addition, GAP LP, GAP 57, GAP 60, GAP LLC, GAP Coinvestment I and GAP
Coinvestment II shall be deemed to be Affiliates of one another. Notwithstanding
the foregoing, for the purposes of this Agreement, none of the portfolio
companies of GAP LLC shall be considered an "Affiliate" of GAP LP, GAP 57, GAP
60, GAP LLC, GAP Coinvestment I or GAP Coinvestment II. Furthermore, the
following shall be deemed to be Affiliates of BPI: (i) any trust, corporation,
partnership, unincorporated joint venture or limited liability company, in which
BP Amoco holds directly or indirectly a beneficial interest in excess of 20
percent and (ii) any pension, benefit or incentive plan for the benefit of BPI
employees of the BP Amoco Group.
"Approved Underwriter" has the meaning set forth in Section
3(f) of this Agreement.
"BP Amoco" means BP Amoco plc, a company incorporated in
England whose registered office is at Xxxxxxxxx Xxxxx, 0 Xxxxxxxx Xxxxxx, Xxxxxx
XX0X 0XX, and any successor to such entity.
"BP Amoco Group" means any entity in which BP Amoco holds
directly or indirectly a beneficial interest in excess of fifty percent (50%).
"BPI" means BP International Limited, a company incorporated
in England whose registered office is at Xxxxxxxxx Xxxxx, 0 Xxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX, and any successor to such entity.
"BPI Common Stock Warrant" means that Common Stock Warrant
dated December 7, 1999 whereby the Company granted BPI the right to purchase
667,844 shares of Common Stock subject to adjustments to the amount of
securities obtainable thereunder, pursuant to the terms thereof.
"BPI Series C Stock Warrant" means that Series C Convertible
Preferred Stock Warrant dated December 7, 1999 whereby the Company granted BPI
the right to purchase 667,844 shares of Series C Convertible Preferred Stock
subject to adjustments to the amount of securities obtainable thereunder,
pursuant to the terms thereof.
"BPI Stockholders" means BPI and any Permitted Transferee (as
defined in the Stockholders Agreement) thereof to which Shares (as defined in
the Stockholders Agreement) are transferred in accordance with Section 2.2 of
the Stockholders Agreement, and the term "BPI Stockholder" shall mean any such
Person.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
3
4
"Closing Price" means, with respect to the Registrable
Securities, as of the date of determination, (a) the closing price per share of
a Registrable Security on such date published in the Wall Street Journal or, if
no such closing price on such date is published in the Wall Street Journal, the
average of the closing bid and asked prices on such date, as officially reported
on the principal national securities exchange (including, without limitation,
The Nasdaq Stock Market, Inc.) on which the Registrable Securities are then
listed or admitted to trading; or (b) if the Registrable Securities are not then
listed or admitted to trading on any national securities exchange but are
designated as national market system securities by the NASD, the last trading
price per share of a Registrable Security on such date; or (c) if there shall
have been no trading on such date or if the Registrable Securities are not so
designated, the aver-age of the reported closing bid and asked prices of the
Registrable Securities on such date as shown by The Nasdaq Stock Market, Inc.
(or its successor) and reported by any member firm of the New York Stock
Exchange, Inc. selected by the Company; or (d) if none of (a), (b) or (c) is
applicable, a market price per share determined in good faith by the Company's
Board of Directors or, if such determination is not satisfactory to the
Designated Holder for whom such determination is being made, by a nationally
recognized investment banking firm selected by the Company and such Designated
Holder, the expenses for which shall be borne equally by the Company and such
Designated Holder.
"Common Stock" means the Common Stock, par value $.0001 per
share, of the Company or any other capital stock of the Company into which such
stock is reclassified or reconstituted and any other common stock of the
Company.
"Company" has the meaning set forth in the recitals to this
Agreement.
"Company Underwriter" has the meaning set forth in Section
4(c) of this Agreement.
"Demand Registration" has the meaning set forth in Section
3(a) of this Agreement.
"Designated Holder" means each of the Madden Stockholders, the
General Atlantic Stockholders and the BPI Stockholders and any transferee of any
of them to whom Registrable Securities have been transferred in accordance with
the provisions of the Stockholders Agreement and Section 10(f) of this
Agreement, other than a transferee to whom Registrable Securities have been
transferred pursuant to a Registration Statement under the Securities Act or
Rule 144 or Regulation S under the Securities Act (or any successor rule
thereto).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"GAP 57" has the meaning set forth in the recitals to this
Agreement.
"GAP 60" has the meaning set forth in the recitals to this
Agreement.
4
5
"GAP Coinvestment I" has the meaning set forth in the recitals
to this Agreement.
"GAP Coinvestment II" has the meaning set forth in the
recitals to this Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware
limited liability company and the general partner of GAP LP, GAP 57 and GAP 60,
and any successor to such entity.
"GAP LP" has the meaning set forth in the recitals to this
Agreement.
"General Atlantic Stockholders" means GAP LP, GAP Coinvestment
I, GAP Coinvestment II, GAP 57, GAP 60 and any Permitted Transferee (as defined
in the Stockholders Agreement) of any of them to which Shares (as defined in the
Stockholders Agreement) are transferred in accordance with Section 2.2 of the
Stockholders Agreement, and the term "General Atlantic Stockholder" shall mean
any such Person.
"Holders' Counsel" has the meaning set forth in Section
7(a)(i) of this Agreement.
"Incidental Registration" has the meaning set forth in Section
4(c) of this Agreement.
"Indemnified Party" has the meaning set forth in Section 8(c)
of this Agreement.
"Indemnifying Party" has the meaning set forth in Section 8(c)
of this Agreement.
"Initial Public Offering" means an underwritten initial public
offering of the shares of Common Stock of the Company pursuant to an effective
Registration Statement filed under the Securities Act.
"Initiating Holders" has the meaning set forth in Section 3(a)
of this Agreement.
"Inspector" has the meaning set forth in Section 7(a)(vii) of
this Agreement.
"IPO Effectiveness Date" means the date upon which the Company
closes its Initial Public Offering.
"IPO Registration" has the meaning set forth in Section 4(a).
"Liability" has the meaning set forth in Section 8(a) of this
Agreement.
"Madden" has the meaning set forth in the recitals to this
Agreement.
"Madden Shares" has the meaning set forth in the recitals to
this Agreement.
5
6
"Madden Stockholders" means Madden and any Permitted
Transferee (as defined in the Stockholders Agreement) of Madden to which
Registrable Securities are transferred in accordance with Section 2.2 of the
Stockholders Agreement and the term "Madden Stockholders" shall mean any such
Person.
"Market Price" means, on any date of determination, the
average of the daily Closing Price of the Registrable Securities for the
immediately preceding 30 days on which the national securities exchanges are
open for trading.
"NASD" has the meaning set forth in Section 7(a)(xiii) of this
Agreement.
"Permitted Transferee" has the meaning set forth in the
Stockholders Agreement.
"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, limited liability company, government (or an
agency or political subdivision thereof) or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.
"Post-IPO Registration" has the meaning set forth in Section
4(b).
"Preferred Stock" means the Series A Preferred Stock, the
Series B Preferred Stock and the Series C Preferred Stock.
"Records" has the meaning set forth in Section 7(a)(vii) of
this Agreement.
"Registrable Securities" means each of the following: (a) any
and all shares of Common Stock owned by the Designated Holders or issued or
issuable upon conversion of shares of Preferred Stock, and any shares of Common
Stock issued or issuable upon conversion of any shares of preferred stock or
exercise of any warrants or conversion of any shares of Preferred Stock issued
upon the exercise of any warrants acquired by any of the Designated Holders
after the date hereof, (b) any other shares of Common Stock acquired or owned by
any of the Designated Holders prior to the IPO Effectiveness Date, or acquired
or owned by any of the Designated Holders after the IPO Effectiveness Date if
such Designated Holder is an Affiliate of the Company and (c) any shares of
Common Stock issued or issuable to any of the Designated Holders with respect to
the Registrable Securities by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise and any shares of Common Stock or voting
common stock issuable upon conversion, exercise or exchange thereof.
"Registration Expenses" has the meaning set forth in Section
7(d) of this Agreement.
"Registration Statement" means a Registration Statement filed
pursuant to the Securities Act.
6
7
"S-3 Initiating Holders" has the meaning set forth in Section
5(a) of this Agreement.
"S-3 Registration" has the meaning set forth in Section 5(a)
of this Agreement.
"SEC" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Series A Preferred Stock" means the Series A Convertible
Preferred Stock, par value $.0001 per share, of the Company. (The par value of
such shares of Series A Preferred Stock having been changed from $.01 per share
to $.0001 per share pursuant to the Amended and Restated Certificate of
Incorporation of the Company).
"Series B Preferred Stock" means the Series B Convertible
Preferred Stock, par value $.0001 per share, of the Company.
"Series C Preferred Stock" has the meaning set forth in the
recitals to this Agreement.
"Stockholders Agreement" means the Amended and Restated
Stockholders Agreement, dated the date hereof, among the Company and certain
stockholders of the Company identified therein.
"Stock Purchase Agreement 1" means the Stock Purchase
Agreement, dated April 27, 1999, by and among the Company, certain of the
General Atlantic Stockholders and certain other Persons named therein pursuant
to which the Company issued and sold shares of its Series B Preferred Stock to
such General Atlantic Stockholders and such other Persons, as amended.
"Stock Purchase Agreement 2" means the Stock Purchase
Agreement, dated October 22, 1999, by and among the Company, certain of the
General Atlantic Stockholders and certain other Persons named therein pursuant
to which the Company issued and sold shares of its Series C Preferred Stock to
such General Atlantic Stockholders and such other Persons.
"Stock Purchase Agreement 3" has the meaning set forth in the
recitals to this Agreement.
"Stock Purchase Agreements" means Stock Purchase Agreement 1,
Stock Purchase Agreement 2 and Stock Purchase Agreement 3.
2. General; Securities Subject to this Agreement.
7
8
(a) Grant of Rights. The Company hereby grants registration
rights to the Madden Stockholders, the General Atlantic Stockholders and the BPI
Stockholders upon the terms and conditions set forth in this Agreement.
(b) Registrable Securities. For the purposes of this
Agreement, Registrable Securities will cease to be Registrable Securities when
(i) a Registration Statement covering such Registrable Securities has been
declared effective under the Securities Act by the SEC and such Registrable
Securities have been disposed of pursuant to such effective Registration
Statement, (ii) the entire amount of Registrable Securities held by a Designated
Holder are eligible, in the opinion of counsel to the Designated Holder, who
shall be reasonably satisfactory to the Company, to be distributed to the public
during any 90-day period without any limitation as to volume pursuant to Rule
144 (or any successor provision then in effect) under the Securities Act or
(iii) the Registrable Securities are proposed to be sold or distributed by a
Person not entitled to the registration rights granted by this Agreement.
(c) Holders of Registrable Securities. A Person is deemed to
be a holder of Registrable Securities whenever such Person owns of record
Registrable Securities, or holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities
whether or not such acquisition or conversion has actually been effected. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company may act
upon the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities. Registrable Securities issuable
upon exercise of an option or upon conversion of another security shall be
deemed outstanding for the purposes of this Agreement.
3. Demand Registration.
(a) Request for Demand Registration. At any time after the IPO
Effectiveness Date, if the Company is not eligible to use Form S-3 (or any
successor form thereto) in connection with a public offering of its securities,
then one or more of the General Atlantic Stockholders as a group, acting through
GAP LLC or its written designee (the "Initiating Holders"), may make a written
request to the Company to register, under the Securities Act (other than
pursuant to a Registration Statement on Form S-4 or S-8 or any successor
thereto) (a "Demand Registration"), the number of Registrable Securities stated
in such request; provided, however, that the Company shall not be obligated to
effect more than two such Demand Registrations for the General Atlantic
Stockholders. For purposes of the preceding sentence, two or more Registration
Statements filed in response to one demand shall be counted as one Registration
Statement. If at the time of any request to register Registrable Securities
pursuant to this Section 3(a), the Company is engaged in, or has fixed plans to
engage in within 60 days of the time of such request, a registered public
offering or is engaged in any other activity which, in the good faith
determination of the Board of Directors of the Company, would be materially
adversely affected by the requested registration to the material detriment of
the Company, then the Company may at its option direct that such request be
delayed for a reasonable period not in excess of three months from the effective
date of such offering or the date of completion of such other material activity,
as the case may be, such right to delay a request to be exercised by the Company
not more than once in any six month period. In addition, the Company shall not
be
8
9
required to effect any registration within 90 days (or 180 days in the case of
the Company's Initial Public Offering) after the effective date of any other
Registration Statement of the Company. Each request for a Demand Registration by
the Initiating Holders shall state the amount of the Registrable Securities
proposed to be sold and the intended method of disposition thereof.
(b) Incidental or "Piggy-Back" Rights with Respect to a Demand
Registration. Each of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3(a)) may request inclusion of
its or his Registrable Securities under any Demand Registration pursuant to this
Section 3(b). Within 10 days after the receipt of a request for a Demand
Registration from an Initiating Holder, the Company shall (i) give written
notice thereof to all of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3(a)) and (ii) subject to
Section 3(e), include in such registration all of the Registrable Securities
held by such Designated Holders from whom the Company has received a written
request for inclusion therein within 10 days of the receipt by such Designated
Holders of such written notice referred to in clause (i) above. Each such
request by such Designated Holders shall specify the number of Registrable
Securities proposed to be registered and the intended method of disposition
thereof. The failure of any Designated Holder to respond within such 10-day
period referred to in clause (ii) above shall be deemed to be a waiver of such
Designated Holder's rights under this Section 3 with respect to such Demand
Registration, provided that any Designated Holder may waive its rights under
this Section 3 prior to the expiration of such 10-day period by giving written
notice to the Company, with a copy to the Initiating Holders. If a Designated
Holder sends the Company a written request for inclusion of part or all of such
Designated Holder's Registrable Securities in a registration, such Designated
Holder shall not be entitled to withdraw or revoke such request without the
prior written consent of the Company in its sole discretion unless, as a result
of facts or circumstances arising after the date on which such request was made
relating to the Company or to market conditions, such Designated Holder
reasonably determines that participation in such registration would have a
material adverse effect on such Designated Holder.
(c) Effective Demand Registration. The Company shall use its
reasonable best efforts to cause any such Demand Registration to become and
remain effective not later than 90 days after it receives a request under
Section 3(a) hereof. A registration shall not constitute a Demand Registration
until it has become effective and remains continuously effective for the lesser
of (i) the period during which all Registrable Securities registered in the
Demand Registration are sold and (ii) 120 days; provided, however, that a
registration shall not constitute a Demand Registration if (x) after such Demand
Registration has become effective, such registration or the related offer, sale
or distribution of Registrable Securities thereunder is interfered with by any
stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason not attributable to the Initiating
Holders and such interference is not thereafter eliminated or (y) the conditions
specified in the underwriting agreement, if any, entered into in connection with
such Demand Registration are not satisfied or waived, other than by reason of a
failure by the Initiating Holder.
(d) Expenses. In any registration initiated as a Demand
Registration, the Company shall pay all reasonable Registration Expenses (other
than underwriters' discounts and
9
10
commissions) in connection therewith, whether or not such Demand Registration
becomes effective, provided, however, that the Company shall not be required to
pay for any expenses of a Demand Registration begun pursuant to Section 3 if the
Demand Registration request is subsequently withdrawn at the request of the
Initiating Holders who requested such Demand Registration (in which case all of
such Initiating Holders shall bear such expenses), unless such Initiating
Holders agree to forfeit their right to one demand registration pursuant to
Section 3; and provided, further, that if at the time of such withdrawal, such
Initiating Holders reasonably determine in good faith that there is, or is
pending, either (i) a material adverse change in the condition, business or
prospects of the Company or (ii) a material activity by the Company which would
materially adversely affect the Demand Registration, in either case from that
known to such Initiating Holders at the time of their request and such
Initiating Holders have withdrawn the request with reasonable promptness
following their determination of such material adverse change or disclosure by
the Company of such material adverse change or such material activity, then such
Initiating Holders shall not be required to pay any of such expenses and shall
retain their rights pursuant to Section 3.
(e) Underwriting Procedures. If the Company or the Initiating
Holders holding a majority of the Registrable Securities held by all of the
Initiating Holders to which the requested Demand Registration relates so elect,
the Company shall use its reasonable best efforts to cause such Demand
Registration to be in the form of a firm commitment underwritten offering and
the managing underwriter or underwriters selected for such offering shall be the
Approved Underwriter selected in accordance with Section 3(f). In connection
with any Demand Registration under this Section 3 involving an underwritten
offering, none of the Registrable Securities held by any Designated Holder
making a request for inclusion of such Registrable Securities pursuant to
Section 3(b) hereof shall be included in such underwritten offering unless such
Designated Holder accepts the terms of the offering as agreed upon by the
Company, the Initiating Holders and the Approved Underwriter, and then only in
such quantity as will not, in the opinion of the Approved Underwriter,
jeopardize the success of such offering by the Initiating Holders. If the
Approved Underwriter advises the Company that marketing factors require a
limitation on the aggregate amount of such Registrable Securities to be included
in such offering, then the Company shall include in such registration only the
aggregate amount of Registrable Securities that the Approved Underwriter
believes may be sold without jeopardizing the success of such offering and shall
reduce the amount of Registrable Securities to be included in such registration,
first as to the Company, second as to the Designated Holders (who are not
Initiating Holders and who requested to participate in such registration
pursuant to Section 3(b) hereof) as a group, if any, and third as to the
Initiating Holders as a group, pro rata within each group based on the number of
Registrable Securities owned by each such Designated Holder or Initiating
Holder, as the case may be.
(f) Selection of Underwriters. If any Demand Registration or
S-3 Registration, as the case may be, of Registrable Securities is in the form
of an underwritten offering, the Company shall select and obtain an investment
banking firm of national reputation to act as the managing underwriter of the
offering (the "Approved Underwriter"); provided, however, that the Approved
Underwriter shall, in any case, also be approved by the Initiating Holders or
S-3 Initiating Holders, as the case may be, such approval not to be unreasonably
withheld.
10
11
4. Incidental or "Piggy-Back" Registration.
(a) If the Company proposes to file a Registration Statement
with respect to its Initial Public Offering, then the Company shall give written
notice of such proposed filing to each of the Madden Stockholders and the BPI
Stockholders at least 20 days before the anticipated filing date thereof, and
such notice shall offer to each of the Madden Stockholders and the BPI
Stockholders the opportunity to register a reasonable number (determined in
consultation with GAP LLC) of the Registrable Securities held by such Madden
Stockholders and BPI Stockholders (the "IPO Registration").
(b) At any time after the consummation of the Initial Public
Offering, in the event of any registered public offering of the Common Stock of
the Company, if the Company proposes to file a Registration Statement with
respect to an offering by the Company for its own account (other than a
Registration Statement on Form S-4 or S-8 or any successor thereto) or for the
account of another stockholder of the Company who was granted registration
rights by the Company other than pursuant to this Agreement, then the Company
shall give written notice of such proposed filing to each of the Designated
Holders at least 20 days before the anticipated filing date, and such notice
shall describe the proposed registration and distribution and offer such
Designated Holders the opportunity to register the number of Registrable
Securities as each such holder may request (a "Post-IPO Registration and,
together with the IPO Registration, an "Incidental Registration").
(c) The Company shall use its reasonable best efforts to cause
the managing underwriter or underwriters selected by the Company for a proposed
underwritten offering (the "Company Underwriter") to permit each of the Madden
Stockholders and the BPI Stockholders (in the case of an IPO Registration) and
the Designated Holders (in the case of a Post-IPO Registration) who have
requested in writing within 10 calendar days of receipt of the notice provided
for in subsection (a) or subsection (b) above, as the case may be, to
participate in the IPO Registration (in the case of the Madden Stockholders and
the BPI Stockholders) or the Post-IPO Registration (in the case of the
Designated Holders) to include its or his Registrable Securities in such
offering on the same terms and conditions as the securities of the Company
included therein. In connection with any Incidental Registration under this
Section 4 involving an underwritten offering, the Company shall not be required
to include any Registrable Securities in such underwritten offering unless the
holders thereof accept the terms of the underwritten offering as agreed upon
between the Company and the Company Underwriter, and then only in such quantity
as the Company Underwriter believes will not jeopardize the success of the
offering by the Company. If the Company Underwriter determines that marketing
factors require a limitation on all or part of the Registrable Securities which
the Designated Holders have requested to be included in such offering, then the
Company shall be required to include such Incidental Registration to the extent
of the amount that the Company Underwriter believes may be sold without
jeopardizing the success of such offering, first, all of the securities to be
offered for the accounts of the Company; second, the Registrable Securities to
be offered for the account of the Madden Stockholders and the BPI Stockholders,
pro rata based on the number of Registrable Securities owned thereby (in the
case of the IPO Registration) or the Designated Holders (in the case of the
Post-IPO Registration) pursuant to this Section 4, pro rata based on
11
12
the number of Registrable Securities owned thereby; and third, any other
securities requested to be included in such underwritten offering.
(d) Expenses. The Company shall pay all Registration Expenses
in connection with any Incidental Registration pursuant to this Section 4,
whether or not such Incidental Registration becomes effective.
(e) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 4 prior to the effectiveness of such registration whether or not any
Designated Holder has elected to include Registrable Securities in such
registration.
5. Form S-3 Registration.
(a) Request for a Form S-3 Registration. Upon the Company
becoming eligible for use of Form S-3 in connection with a public offering of
its securities, in the event that the Company shall receive from one or more of
the General Atlantic Stockholders as a group, acting through GAP LLC or its
written designee (the "S-3 Initiating Holders"), a written request that the
Company register, under the Securities Act, on Form S-3 (or any successor form
then in effect) (an "S-3 Registration"), all or a portion of the Registrable
Securities owned by such S-3 Initiating Holders, the Company shall give written
notice of such request to all of the Designated Holders (other than S-3
Initiating Holders which have requested an S-3 Registration under this Section
5(a)) at least 20 days before the anticipated filing date of such Form S-3, and
such notice shall describe the proposed registration and offer such Designated
Holders the opportunity to register the number of Registrable Securities as each
such Designated Holder may request in writing to the Company, within 10 days
after their receipt from the Company of the written notice of such registration.
With respect to each S-3 Registration, the Company shall (i) subject to Sections
5(b) and 5(c), include in such offering the Registrable Securities of the S-3
Initiating Holders, and (ii) subject to Sections 5(b) and 5(c), use its
reasonable best efforts to (x) cause such registration pursuant to this Section
5(a) to become and remain effective as soon as practicable, but in any event not
later than ninety (90) days after it receives a request therefor and (y) include
in such offering the Registrable Securities of the Designated Holders (other
than S-3 Initiating Holders which have requested an S-3 Registration under this
Section 5(a)) who have requested in writing to participate in such registration
on the same terms and conditions as the Registrable Securities of the S-3
Initiating Holders included therein.
(b) Form S-3 Underwriting Procedures. If the Company or the
S-3 Initiating Holders holding a majority of the Registrable Securities held by
all of the S-3 Initiating Holders to which the requested S-3 Registration
relates so elect, the Company shall use its reasonable commercial efforts to
cause such S-3 Registration pursuant to this Section 5 to be in the form of a
firm commitment underwritten offering and the managing underwriter or
underwriters selected for such offering shall be an Approved Underwriter
selected in accordance with Section 3(f). In connection with any S-3
Registration under Section 5(a) involving an underwritten offering, the Company
shall not be required to include any Registrable Securities in such underwritten
offering unless the Designated Holders thereof accept the terms of the
underwritten offering as agreed upon between the Company, the Approved
Underwriter and the S-3 Initiating Holders,
12
13
and then only in such quantity as such underwriter believes will not jeopardize
the success of such offering by the S-3 Initiating Holders. If the Approved
Underwriter believes that marketing factors require a limitation on the number
of Registrable Securities which the S-3 Initiating Holders and the other
Designated Holders have requested to be included in such public offering, then
the Company shall be required to include in the underwritten offering, to the
extent of the amount that the Approved Underwriter believes may be sold without
jeopardizing the success of such offering, first, all of the Registrable
Securities to be offered for the account of the S-3 Initiating Holders, pro rata
based on the number of Registrable Securities owned by such S-3 Initiating
Holders; second, the Registrable Securities to be offered for the account of the
other Designated Holders who requested inclusion of their Registrable Securities
pursuant to Section 5(a), pro rata based on the number of Registrable Securities
owned by such Designated Holders; and third, any other securities requested to
be included in such underwritten offering.
(c) Limitations on Form S-3 Registrations. If at the time of
any request to register Registrable Securities pursuant to Section 5(a), the
Company is engaged in, or has fixed plans to engage in within 60 days of the
time of such request, a registered public offering or is engaged or has fixed
plans to engage in any other activity which, in the good faith determination of
the Board of Directors of the Company, would be materially adversely affected by
the requested S-3 Registration to the material detriment of the Company, then
the Company may at its option direct that such request be delayed for a
reasonable period not in excess of three months from the effective date of such
offering or the date of completion of such other material activity, as the case
may be, such right to delay a request to be exercised by the Company not more
than once in any six month period. In addition, the Company shall not be
required to effect any registration pursuant to Section 5(a), (i) within 90 days
after the effective date of any other Registration Statement of the Company,
(ii) if within the 12-month period preceding the date of such request, the
Company has effected two registrations on Form S-3 pursuant to Section 5(a),
(iii) if Form S-3 is not available for such offering by the S-3 Initiating
Holders or (iv) if the S-3 Initiating Holders, together with the Designated
Holders (other than S-3 Initiating Holders which have requested an S-3
Registration under Section 5(a)) registering Registrable Securities in such
registration, propose to sell their Registrable Securities at an aggregate price
(calculated based upon the Market Price of the Registrable Securities on the
date of filing of the Form S-3 with respect to such Registrable Securities) to
the public of less than $5,000,000.
(d) Expenses. The Company shall pay all reasonable
Registration Expenses (other than underwriters' discounts and commissions) in
connection with any S-3 Registration pursuant to this Section 5, whether or not
such S-3 Registration becomes effective.
(e) No Demand Registration. No registration requested by any
Designated Holder pursuant to this Section 5 shall be deemed a Demand
Registration pursuant to Section 3.
6. Holdback Agreements.
(a) Restrictions on Public Sale by Designated Holders. If and
to the extent requested by the Company, the Initiating Holders or the S-3
Initiating Holders, as the case may be, in the case of a non-under-written
public offering or if and to the extent requested by the Approved Underwriter or
the Company Underwriter, as the case may be, in the case of an
13
14
underwritten public offering, each Designated Holder of Registrable Securities
agrees (i) not to effect any sale, short sale, loan, grant any option for the
purchase of, or otherwise dispose of any Registrable Securities or of any
securities convertible into or exchangeable or exercisable for such Registrable
Securities, including a sale pursuant to Rule 144 under the Securities Act, and
(ii) not to make any request for a Demand Registration or S-3 Registration under
this Agreement, during the 90 day period (or 180 day period in the case of the
Company's Initial Public Offering) or such shorter period, if any, mutually
agreed upon by such Designated Holder and the requesting party beginning on the
effective date of such Registration Statement (except as part of such
registration) or the IPO Effectiveness Date. The Company may impose
stop-transfer instructions with respect to such securities subject to the
foregoing restrictions until the end of such period.
(b) Restrictions on Public Sale by the Company. The Company
agrees not to effect any public sale or distribution of any of its securities,
or any securities convertible into or exchangeable or exercisable for such
securities (except pursuant to registrations on Form S-4 or S-8 or any successor
thereto), during the period beginning on the effective date of any Registration
Statement in which the Designated Holders of Registrable Securities are
participating and ending on the earlier of (i) the date on which all Registrable
Securities registered on such Registration Statement are sold and (ii) 90 days
after the effective date of such Registration Statement (except as part of such
registration).
7. Registration Procedures.
(a) Obligations of the Company. Whenever registration of
Registrable Securities has been requested pursuant to Section 3, Section 4 or
Section 5 of this Agreement, the Company shall use its reasonable commercial
efforts to effect the registration and sale of such Registrable Securities in
accordance with the intended method of distribution thereof as quickly as
practicable, and in connection with any such request, the Company shall, as
expeditiously as possible:
(i) prepare and file with the SEC a Registration Statement
on any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available for the sale of
such Registrable Securities in accordance with the intended method of
distribution thereof, and cause such Registration Statement to become effective;
provided, however, that (x) before filing a Registration Statement or
prospectus or any amendments or supplements thereto, if counsel for the Company
does not make itself available to serve as counsel for the Designated Holders or
if counsel for the Company makes itself available to serve as counsel for the
Designated Holders, but the representation of such Designated Holders by the
Company's counsel would be inappropriate under applicable standards of
professional conduct, then the Company shall provide one counsel selected by the
Designated Holders holding a majority of the Registrable Securities being
registered in such registration ("Holders' Counsel") and any other Inspector
with an adequate and appropriate opportunity to review and comment on such
Registration Statement and each prospectus included therein (and each amendment
or supplement thereto) to be filed with the SEC, subject to such documents being
under the Company's control, and (y) the Company shall notify the Holders'
Counsel and each seller of Registrable Securities of any stop order issued or
14
15
threatened by the SEC and take all action required to prevent the entry of such
stop order or to remove it if entered;
(ii) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
the lesser of (x) 90 days and (y) such shorter period which will terminate when
all Registrable Securities covered by such Registration Statement have been
sold, and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement;
(iii) furnish to each seller of Registrable Securities,
prior to filing a Registration Statement, at least one copy of such Registration
Statement as is proposed to be filed, and thereafter such number of copies of
such Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), and the prospectus included in such
Registration Statement (including each preliminary prospectus) as each such
seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(iv) register or qualify such Registrable Securities under
such other securities or "blue sky" laws of such jurisdictions as any seller of
Registrable Securities may request, and to continue such qualification in effect
in such jurisdiction for as long as permissible pursuant to the laws of such
jurisdiction, or for as long as any such seller requests or until all of such
Registrable Securities are sold, whichever is shortest, and do any and all other
acts and things which may be reasonably necessary or advisable to enable any
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller; provided, however, that the Company
shall not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 7(a)(iv), (y) subject itself to taxation in any such jurisdiction or (z)
consent to general service of process in any such jurisdiction;
(v) notify each seller of Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits 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 and the
Company shall promptly prepare a supplement or amendment to such prospectus and
furnish to each seller a reasonable number of copies of such supplement to or an
amendment of such prospectus as may be necessary so that, after delivery to the
purchasers of such Registrable Securities, such prospectus shall not contain an
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, in light of
the circumstances under which they were made, not misleading;
15
16
(vi) enter into and perform customary agreements
(including an underwriting agreement in customary form with the Approved
Underwriter or Company Underwriter, if any, selected as provided in Section 3,
Section 4 or Section 5, as the case may be) and take such other actions as are
prudent and reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities;
(vii) (x) if such sale is pursuant to an underwritten
offering, use its best efforts to obtain a "cold comfort" letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by "cold comfort" letters as the
managing underwriter reasonably requests and (y) furnish, at the request of any
seller of Registrable Securities on the date such securities are delivered to
the underwriters for sale pursuant to such registration or, if such securities
are not being sold through underwriters, on the date the Registration Statement
with respect to such securities becomes effective, an opinion, dated such date,
of counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the seller making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as such seller may reasonably request and are
customarily included in such opinions;
(viii) make available at reasonable times for inspection
by any seller of Registrable Securities, any managing under-writer participating
in any disposition of such Registrable Securities pursuant to a Registration
Statement, Holders' Counsel and any attorney, accountant or other agent retained
by any such seller or any managing underwriter (each, an "Inspector" and
collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's and its
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspector in connection with such Registration Statement. Records that
the Company determines, in good faith, to be confidential and which it notifies
the Inspectors are confidential shall not be disclosed by the Inspectors (and
the Inspectors shall confirm their agreement in writing in advance to the
Company if the Company shall so request) unless (x) the disclosure of such
Records is necessary, in the Company's judgment, to avoid or correct a
misstatement or omission in the Registration Statement, (y) the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction after exhaustion of all appeals therefrom or (z) the
information in such Records was known to the Inspectors on a non-confidential
basis prior to its disclosure by the Company or has been made generally
avail-able to the public. Each seller of Registrable Securities agrees that it
shall, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;
(ix) comply with all applicable rules and regulations of
the SEC, and make available to its security holders, as soon as reason-ably
practicable but no later than fifteen (15) months after the effective date of
the Registration Statement, an earnings statement covering a period of twelve
(12) months beginning after the effective date of the Registration Statement,
16
17
in a manner which satisfies the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder;
(x) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed, provided that the applicable listing requirements are satisfied;
(xi) keep Holders' Counsel advised in writing as to the
initiation and progress of any registration under Section 3, Section 4 or
Section 5 hereunder;
(xii) cooperate with each seller of Registrable Securities
and each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the National Association of Securities Dealers, Inc. (the
"NASD"); and
(xiii) take all other steps reasonably necessary to effect
the registration of the Registrable Securities contemplated hereby.
(b) Seller Information. The Company may require each seller of
Registrable Securities as to which any registration is being effected to
furnish, and such seller shall furnish, to the Company such information
regarding the distribution of such securities as the Company may from time to
time reason-ably request in writing.
(c) Notice to Discontinue. Each Designated Holder of
Registrable Securities agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 7(a)(v), such
Designated Holder shall forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Designated Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 7(a)(v) and, if so
directed by the Company, such Designated Holder shall deliver to the Company (at
the Company's expense) all copies, other than permanent file copies then in such
Designated Holder's possession, of the prospectus covering such Registrable
Securities which is current at the time of receipt of such notice. If the
Company shall give any such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective pursuant to this
Agreement (including, without limitation, the period referred to in Section
7(a)(ii)) by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 7(a)(v) to and including the date
when sellers of such Registrable Securities under such Registration Statement
shall have received the copies of the supplemented or amended prospectus
contemplated by and meeting the requirements of Section 7(a)(v).
(d) Registration Expenses. The Company shall pay all expenses
arising from or incident to its performance of, or compliance with, this
Agreement, including, without limitation, (i) SEC, stock exchange and NASD
registration and filing fees, (ii) all fees and expenses incurred in complying
with securities or "blue sky" laws (including reasonable fees, charges and
disbursements of counsel to any underwriter incurred in connection with "blue
sky" qualifications of the Registrable Securities as may be set forth in any
underwriting agreement),
17
18
(iii) all printing, messenger and delivery expenses, (iv) the fees, charges and
disbursements of counsel to the Company and of its independent public
accountants and any other accounting fees, charges and expenses incurred by the
Company (including, without limitation, any expenses arising from any "cold
comfort" letters or any special audits incident to or required by any
registration or qualification) and any legal fees, charges and expenses incurred
by the Company and, in the case of a Demand Registration and S-3 Registration,
any reasonable fees of Holders' counsel, if any, one law firm representing the
Initiating Holders and (v) any liability insurance or other premiums for
insurance obtained in connection with any Demand Registration or piggy-back
registration thereon, Incidental Registration or S-3 Registration pursuant to
the terms of this Agreement, regardless of whether such Registration Statement
is declared effective. All of the expenses described in the preceding sentence
of this Section 7(d) are referred to herein as "Registration Expenses." The
Designated Holders of Registrable Securities sold pursuant to a Registration
Statement shall bear the expense of any broker's commission or underwriter's
discount or commission relating to registration and sale of such Holders'
Registrable Securities and, subject to clause (iv) above, shall bear the fees
and expenses of their counsel.
8 Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Designated Holder and each Person who controls
(within the meaning of Section 15 of the Securities Act) such Designated Holder
from and against any and all losses, claims, damages, liabilities and expenses
(including reason-able costs of investigation) (collectively, "liability"),
arising out of or based upon any untrue, or allegedly untrue, statement of a
material fact contained in any Registration Statement, prospectus or preliminary
prospectus or notification or offering circular (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading under the circumstances such statements were made, except
insofar as such liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission contained in such
Registration Statement, preliminary prospectus or final prospectus made in
reliance upon information concerning such Designated Holder furnished in writing
to the Company by such Designated Holder expressly for use therein, including,
without limitation, the information furnished to the Company pursuant to Section
8(b). The Company shall also provide customary indemnities to any underwriters
of the Registrable Securities, their officers, directors and employees and each
Person who controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders of Registrable Securities.
(b) Indemnification by Designated Holders. In connection with
any Registration Statement in which a Designated Holder is participating
pursuant to Section 3, Section 4 or Section 5 hereof, each such Designated
Holder shall promptly furnish to the Company in writing such information with
respect to such Designated Holder as the Company may reason-ably request or as
may be required by law for use in connection with any such Registration
Statement or prospectus and all information required to be disclosed in order to
make the information previously furnished to the Company by such Designated
Holder not
18
19
materially misleading or necessary to cause such Registration Statement not to
omit a material fact with respect to such Designated Holder necessary in order
to make the statements therein not misleading. Each Designated Holder agrees to
indemnify and hold harmless the Company, any underwriter retained by the Company
and each Person who controls the Company or such underwriter (within the meaning
of Section 15 of the Securities Act) to the same extent as the foregoing
indemnity from the Company to the Designated Holders, but only with respect to
any such information with respect to such Designated Holder furnished in writing
to the Company by such Designated Holder expressly for use therein, including,
without limitation, the information furnished to the Company pursuant to this
Section 8(b); provided, however, that (i) the total amount to be indemnified by
such Designated Holder pursuant to this Section 8(b) shall be limited to the net
proceeds received by such Designated Holder in the offering to which the
Registration Statement or prospectus relates unless the obligations of such
Designated Holder hereunder arise out of or are based upon willful misconduct of
such Designated Holder, and (ii) such Designated Holder shall only be liable for
its pro rata share of any amounts to be indemnified pursuant to this Section
8(b).
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder (the "Indemnified Party") agrees to give
prompt written notice to the indemnifying party (the "Indemnifying Party") after
the receipt by the Indemnified Party of any written notice of the commencement
of any action, suit, proceeding or investigation or threat thereof made in
writing for which the Indemnified Party intends to claim indemnification or
contribution pursuant to this Agreement; provided, however, that the failure so
to notify the Indemnifying Party shall not relieve the Indemnifying Party of any
liability that it may have to the Indemnified Party hereunder except to the
extent that the Indemnifying Party is materially prejudiced or otherwise
forfeits substantive rights or defenses by reason of such failure. If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such Indemnified Party. The
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party
agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense
of such action with counsel reasonably satisfactory to the Indemnified Party or
(iii) the named parties to any such action (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party and such parties
have been advised by such counsel that either (x) representation of such
Indemnified Party and the Indemnifying Party by the same counsel would be
inappropriate under applicable standards of professional conduct or (y) there
may be one or more legal defenses available to the Indemnified Party which are
different from or additional to those available to the Indemnifying Party. In
any of such cases, the Indemnifying Party shall not have the right to assume the
defense of such action on behalf of such Indemnified Party, it being understood,
however, that the Indemnifying Party shall not be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all Indemnified Parties. No Indemnifying Party shall be liable for
any settlement entered into without its written consent, which consent shall not
be unreasonably withheld. No Indemnifying Party shall, without the consent of
such
19
20
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which such Indemnified Party is a party and indemnity has been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability for claims
that are the subject matter of such proceeding.
(d) Contribution. If the indemnification provided for in this
Section 8 from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any liabilities referred to therein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such liabilities in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions which resulted in such liabilities as well as any other relevant
equitable considerations. The relative faults of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any 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, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the liabilities referred to above shall be
deemed to include, subject to the limitations set forth in Sections 8(a), 8(b)
and 8(c), any legal or other fees, charges or expenses reasonably incurred by
such party in connection with any investigation or proceeding; provided that (i)
the total amount to be contributed by such Designated Holder shall be limited to
the net proceeds received by such Designated Holder in the offering unless the
obligations of such Designated Holder hereunder arise out of or are based upon
willful misconduct of such Designated Holder, and (ii) such Designated Holder
shall only be liable for its pro rata shares of any amounts to be contributed
pursuant to this Section 8(d).
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) 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. 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.
(e) Notwithstanding the foregoing provisions of this Section
8, to the extent that the provisions relating to indemnification and
contribution in an underwriting agreement entered into by the Company in
connection with an underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control; provided, however, that the Company shall use its best efforts to cause
any such underwriting agreement to provide for the limitations on each
Designated Holder's indemnification and contribution obligations set forth in
Sections 8(b) and 8(d) hereof.
9 Rule 144. The Company covenants that from and after the IPO
Effectiveness Date it shall (a) file any reports required to be filed by it
under the Exchange Act and (b) take such further action as each Designated
Holder of Registrable Securities may reasonably request (including providing any
information necessary to comply with Rule 144 under the Securities Act), all to
the extent required from time to time to enable such Designated Holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the
20
21
exemptions provided by (i) Rule 144 under the Securities Act, as such rule may
be amended from time to time, or (ii) any similar rules or regulations
here-after adopted by the SEC. The Company shall, upon the request of any
Designated Holder of Registrable Securities, deliver to such Designated Holder a
written statement as to whether it has complied with such requirements.
10 Miscellaneous.
(a) Recapitalizations, Exchanges, etc. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to (i)
the shares of Common Stock, (ii) any and all shares of voting common stock of
the Company into which the shares of Common Stock are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, the shares of Common Stock and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof. The Company
shall cause any successor or assign (whether by sale, merger or otherwise) to
enter into a new registration rights agreement with the Designated Holders on
terms substantially the same as this Agreement as a condition of any such
transaction.
(b) No Inconsistent Agreements. The Company represents and
warrants that it has not granted to any Person the right to request or require
the Company to register any securities issued by the Company, other than the
rights granted to the Designated Holders herein. The Company shall not enter
into any agreement with respect to its securities that is inconsistent with the
rights granted to the Designated Holders in this Agreement or grant any
additional registration rights to any Person or with respect to any securities
which are not Registrable Securities which are prior in right to or inconsistent
with the rights granted in this Agreement.
(c) Remedies. The Designated Holders, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
shall be entitled to specific performance of their rights under this Agreement.
The Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive in any action for specific performance the
defense that a remedy at law would be adequate.
(d) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless consented to in writing by (i) the Company, (ii) the
Madden Stockholders holding Registrable Securities representing (after giving
effect to any adjustments) at least a majority of the aggregate number of
Registrable Securities owned by all of the Madden Stockholders, (iii) the
General Atlantic Stockholders holding Registrable Securities representing (after
giving effect to any adjustments) at least a majority of the aggregate number of
Registrable Securities owned by all of the General Atlantic Stockholders, and
(iv) the BPI Stockholders, holding Registrable Securities representing (after
giving effect to any adjustments) at least a majority of the aggregate number of
Registrable
21
22
Securities owned by all of the BPI Stockholders. Any such written consent shall
be binding upon the Company and all of the Designated Holders.
(e) Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be made
by registered or certified first-class mail, return receipt requested,
telecopier, courier service, overnight mail or personal delivery:
(i) if to the Company or the Madden Stockholders:
EXULT, Inc.
0 Xxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxx
with a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
00 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxx, Esq.
(ii) if to the General Atlantic Stockholders:
c/o General Atlantic Service Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
(iii) if to the BPI Stockholders:
BP International Limited
Xxxxxxxxx Xxxxx
0 Xxxxxxxx Xxxxxx
22
23
Xxxxxx XX0X 0XX
Telecopy: 44 171 496 4517
Attention: Xxxxx Xxxxxx, Treasurer
with a copy to:
Linklaters & Alliance
Xxx Xxxx Xxxxxx
Xxxxxx XX0X 0XX
Telecopy: 44 171 456 2222
Attention: Xxx Xxxxxx
(iv) if to any other Designated Holder, at its address as
it appears on the record books of the Company.
All such notices and communications shall be deemed to
have been duly given when delivered by hand, if personally delivered; when
delivered by courier or overnight mail, if delivered by commercial courier
service or overnight mail; five (5) Business Days after being deposited in the
mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged,
if properly telecopied.
(f) Successors and Assigns; Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the heirs, legatees,
legal representatives, successors and permitted assigns of each of the parties
hereto as hereinafter provided. The Demand Registration Rights and the S-3
Registration Rights of the General Atlantic Stockholders contained in Sections 3
and 5 hereof, respectively, and the other rights of each of the General Atlantic
Stockholders, the Madden Stockholders and the BPI Stockholders (other than the
incidental registration rights of the BPI Stockholders with respect to an
Initial Public Offering, which such registration rights may only be assigned to
an Affiliate in which BPI holds an ownership interest of 50% or greater) with
respect thereto shall be, with respect to any Registrable Security, (i)
automatically transferred, in the case of such rights of the General Atlantic
Stockholders, among the General Atlantic Stockholders, in the case of such
rights of the Madden Stockholders, among the Madden Stockholders, and in the
case of such rights of the BPI Stockholders, among the BPI Stockholders and (ii)
in all other cases, transferred only with the consent of the Company, except as
set forth below. The incidental or "piggy-back" registration rights of the
Madden Stockholders contained in Section 4(a) hereof may be transferred only
with the consent of the Company, which consent shall not be unreasonably
withheld. The incidental or "piggy-back" registration rights of the Designated
Holders contained in Sections 3(b) and 4(b) hereof and the other rights of each
of the Designated Holders with respect thereto shall be, with respect to any
Registrable Security, automatically transferred by such Designated Holder to any
Person who is the transferee of such Registrable Security provided that such
transferee holds at least $2.5 million of Registrable Securities (subject to
appropriate adjustments for stock splits, stock dividends, combinations and
other recapitalizations), and (A) the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which registration
rights are being assigned; (B) such transferee or assignee agrees in writing to
be bound by and subject to the
23
24
terms and conditions of this Agreement; and (C) such assignment shall be
effective only if immediately following such transfer the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act. For the purposes of determining the number of Registrable Securities held
by a transferee or assignee, the holders of transferees and assignees of a
partnership who are partners or retired partners of such partnership (including
spouses and ancestors, lineal descendants and siblings of such partners or
spouses who acquire Registrable Securities by gift, will or intestate
succession) shall be aggregated together and with the partnership; provided that
all assignees and transferees who would not qualify individually for assignment
of registration rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices or taking actions under this Agreement.
All of the obligations of the Company hereunder shall survive any such transfer.
No Person other than the parties hereto and their heirs, legatees, legal
representatives, successors and permitted assigns is intended to be a
beneficiary of the rights granted hereunder.
(g) Termination. This Agreement shall terminate and be of no
further force or effect at such time as there shall no longer be any Registrable
Securities outstanding. In addition, the right of any Designated Holder to
request registration or inclusion in any registration pursuant to Section 3,
Section 4 or Section 5 of this Agreement shall terminate on such date that such
Designated Holder no longer holds any Registrable Securities.
(h) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION
(k) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, it being
intended that all of the rights and privileges of the Designated Holders shall
be enforceable to the fullest extent permitted by law.
(l) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and in the Stock Purchase Agreements, the Stockholders Agreement, the BPI
Common Stock Warrant and the BPI Series C Stock Warrant. This Agreement
supersedes
24
25
all prior agreements and understandings between the parties with respect to such
subject matter, including, without limitation, the Original Agreement.
(m) Further Assurances. Each of the parties shall execute such
documents and perform such further acts as may be reasonably required or
necessary to carry out or to perform the provisions of this Agreement.
(n) Other Agreements. Nothing contained in this Agreement
shall be deemed to be a waiver of, or release from, any obligations any party
hereto may have under, or any restrictions on the transfer of Registrable
Securities or other securities of the Company imposed by, any other agreement
including, but not limited to, the Stock Purchase Agreements, the Stockholders
Agreement, the BPI Common Stock Warrant or the BPI Series C Stock Warrant.
25
26
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Agreement on the date first written above.
EXULT, INC.
By:
---------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
GENERAL ATLANTIC PARTNERS 54, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By:
---------------------------------------------
Name:
Title:
GENERAL ATLANTIC PARTNERS 57, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By:
---------------------------------------------
Name:
Title:
GENERAL ATLANTIC PARTNERS 60, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By:
---------------------------------------------
Name:
Title:
27
GAP COINVESTMENT PARTNERS, L.P.
By:
---------------------------------------------
Name:
Title:
GAP COINVESTMENT PARTNERS II, L.P.
By:
---------------------------------------------
Name:
Title:
BP INTERNATIONAL LIMITED
By:
---------------------------------------------
Name:
Title:
---------------------------------------------
Xxxxx Xxxxxx
