Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT, dated as of August __,
1998, between ACCPAC INTERNATIONAL, INC., a Delaware
corporation (the "Company"), and COMPUTER ASSOCIATES
INTERNATIONAL, INC., a Delaware corporation ("Computer
Associates").
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INTRODUCTION
The Company was incorporated in Delaware in October 1997 and became a
subsidiary of Computer Associates effective January 1998. As of the date
hereof, Computer Associates owns 5,250,000 shares (adjusted for the 2,000-for-1
stock split effective August 17, 1998) of the Company's Common Stock, par
value $.01 per share ("Common Stock").
The parties are contemplating that the Company will issue and sell
additional shares of its Common Stock in an initial public offering (the
"Offering") registered under the Securities Act of 1933, as amended (the
"Securities Act").
The parties desire to enter into this Agreement to set forth their
agreement regarding certain registration rights with respect to the Common Stock
(and any other securities issued in respect thereof or in exchange therefor)
owned by Computer Associates.
The parties hereto agree as follows:
Section 1. DEMAND REGISTRATION - REGISTRABLE SECURITIES.
(a) Upon written notice provided by Computer Associates to the
Company at any time after the 180-day period following the completion of the
initial sale of Common Stock in the Offering (the "IPO Date") (or such earlier
date as permitted by X.X. Xxxxxx Securities, Inc.) requesting that the Company
effect the registration under the Securities Act of any or all of the Common
Stock (and any stock or other securities into which or for which such Common
Stock may hereafter be changed, converted or exchanged and any other shares or
securities issued to Computer Associates (or such shares or other securities
into which or for which such shares are so changed, converted or exchanged) upon
any reclassification, share combination, share subdivision, share dividend,
share exchange, merger, consolidation or similar transaction or event) held by
Computer Associates (the "Registrable Securities"), which notice shall specify
the intended method or methods of disposition of such Registrable Securities,
the Company shall use its best efforts to effect the registration under the
Securities Act and applicable state securities laws of such Registrable
Securities for disposition in accordance with the intended method or methods of
disposition stated in such request (including in an offering on a delayed or
continuous basis pursuant to Rule 415 (or any successor rule to similar effect)
promulgated under the Securities Act (a "Rule 415 Offering"), if the Company is
then eligible to register such Registrable Securities on Form S-3 (or a
successor form) for such offering); provided that:
(i) with respect to any registration statement filed, or to be
filed, pursuant to this Section 1, if the Company shall furnish to Computer
Associates a certified resolution of the Board of Directors of the Company
adopted by the affirmative vote of the directors not designated by
Computer Associates stating that in the Board of Directors' good faith
judgment it would (because of the existence of, or in anticipation of, any
acquisition or financing activity, or the unavailability for reasons beyond
the Company's reasonable control of any required financial statements, or
any other event or condition of similar significance to the Company) be
significantly disadvantageous (a "Disadvantageous Condition") to the
Company for such a registration statement to be filed and become effective,
or to be maintained effective, and setting forth the general reasons for
such judgment, the Company shall be entitled not to file any such
registration statement, or, if a registration statement has been filed, to
cause such registration statement to be withdrawn and the effectiveness of
such registration statement terminated, until such Disadvantageous
Condition no longer exists (notice of which the Company shall promptly
deliver to Computer Associates). Upon receipt of any such notice of a
Disadvantageous Condition, Computer Associates shall forthwith discontinue
use of the prospectus contained in such registration statement and, if so
directed by the Company, Computer Associates will deliver to the Company
all copies, other than permanent file copies then in Computer Associates'
possession, of the prospectus then covering such Registrable Securities
current at the time of receipt of such notice; provided, that the filing of
any such registration statement may not be delayed for a period in excess
of three months due to the occurrence of any particular Disadvantageous
Condition or for more than a total of three months in any 12-month
period for any reason pursuant to this paragraph (a);
(ii) Except as otherwise provided herein, Computer
Associates shall not have the right to exercise registration rights
pursuant to this Section 1 within the 180-day period following the
registration and sale of Registrable Securities effected pursuant to a
prior exercise of the registration rights provided in this Section 1; and
(iii) Computer Associates may exercise its rights under this
Section 1 on not more than three occasions.
(b) Notwithstanding any other provision of this Agreement to the
contrary, a registration requested by Computer Associates pursuant to this
Section 1 shall not be deemed to have been effected (and, therefore, not
requested for purposes of paragraph (a) above), (i) unless it has become
effective, (ii) if after it has become effective such registration is interfered
with by any stop order, injunction or other order or requirement of the
Securities and Exchange Commission ("SEC") or other governmental agency or court
for any reason other than a misrepresentation or an omission by Computer
Associates and, as a result thereof, the Registrable Securities requested to be
registered cannot be completely distributed in accordance with the plan of
distribution set forth in the related registration statement or (iii) if the
conditions to closing specified in any purchase agreement or underwriting
agreement entered into in connection with any such registration are not
satisfied or waived other than by reason of some act or omission by Computer
Associates.
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(c) In the event that any registration pursuant to this Section 1
shall involve, in whole or in part, an underwritten offering, Computer
Associates shall have the right to designate an underwriter or underwriters
reasonably acceptable to the Company as the lead or managing underwriters of
such underwritten offering and, in connection with each registration pursuant to
this Section 1, Computer Associates may select one counsel reasonably acceptable
to the Company to represent Computer Associates.
(d) The Company shall have the right to cause the registration of
additional equity securities for sale for its account or the account of any of
its existing directors, officers or employees in any registration of Registrable
Securities requested by Computer Associates pursuant to paragraph (a) above;
provided, however, that if Computer Associates is advised in writing (with a
copy to the Company) by a nationally recognized investment banking firm selected
by Computer Associates reasonably acceptable to the Company (which shall be the
lead underwriter or a managing underwriter in the case of an underwritten
offering) that, in such firm's good faith view, all or a part of such additional
equity securities cannot be sold and the inclusion of such additional equity
securities in such registration would be likely to have an adverse effect on the
price, timing or distribution of the offering and sale of the Registrable
Securities then contemplated by Computer Associates, the registration of such
additional equity securities or part thereof shall not be permitted. Computer
Associates may require that any such additional equity securities be included in
the offering proposed by Computer Associates on the same conditions as the
Registrable Securities included therein. In the event that the number of
Registrable Securities requested to be included in a registration statement by
Computer Associates exceeds the number which, in the good faith view of such
investment banking firm, can be sold without adversely affecting the price,
timing, distribution or sale of securities in the offering, the number shall be
reduced accordingly.
(e) As to any particular Registrable Securities, such Registrable
Securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale by Computer Associates shall have been
declared effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (ii) such securities
shall have been distributed to the public in accordance with Rule 144
promulgated under the Securities Act ("Rule 144"), (iii) such securities shall
have been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any state securities or blue sky law then in
effect or (iv) such securities shall have ceased to be outstanding.
Section 2. PIGGYBACK REGISTRATION. In the event that the Company
at any time after the IPO Date proposes to register any of its Common Stock, any
other of its equity securities or securities convertible into or exchangeable
for its equity securities (collectively, including Common Stock, "Other
Securities") under the Securities Act, whether or not for sale for its own
account, in a manner that would permit registration of Registerable Securities
for sale for cash to the public under the Securities Act, it shall at each such
time give prompt written notice to Computer Associates of its intention to do
so. Subject to the terms and conditions hereof, such
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notice shall offer Computer Associates the opportunity to include in such
registration statement such number of Registerable Securities as Computer
Associates may request. Upon the written request of Computer Associates made
within 15 days after the receipt of the Company's notice (which request shall
specify the number of Registrable Securities intended to be disposed of and the
intended method of disposition thereof), the Company shall use its best efforts
to effect, in connection with the registration of the Other Securities, the
registration under the Securities Act of all Registerable Securities which the
Company has been so requested to register, to the extent required to permit the
disposition (in accordance with such intended method of disposition thereof) of
the Registrable Securities so requested to be registered; provided, that:
(a) if, at any time after giving such written notice of its intention
to register any Other Securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register the Other Securities, the Company
may, at its election, give written notice of such determination to Computer
Associates and thereupon the Company shall be relieved of its obligation to
register such Registrable Securities in connection with the registration of such
Other Securities, without prejudice, however, to the rights of Computer
Associates immediately to request that such registration be effected as a
registration under Section 1 to the extent permitted thereunder;
(b) if the registration referred to in the first sentence of this
Section 2 is to be an underwritten registration on behalf of the Company, and a
nationally recognized investment banking firm selected by the Company advises
the Company in writing that, in such firm's good faith view, all or a part of
such Registrable Securities cannot be sold and that the inclusion of all or a
part of such Registrable Securities in such registration would be likely to have
an adverse effect upon the price, timing or distribution of the offering and
sale of the Other Securities then contemplated, the Company shall include in
such registration: (i) first, all Other Securities the Company proposes to sell
for its own account ("Company Securities"), (ii) second, up to the full number
of Registrable Securities which, in the good faith view of such investment
banking firm, can be sold without adversely affecting such offering (and if such
number is less than the full number of such Registrable Securities requested to
be registered by Computer Associates, such number shall be reduced accordingly;
provided that, in such case, Computer Associates may withdraw its request for
registration of its Registrable Securities under this Section 2 and 90 days
subsequent to the effective date of the registration statement for the
registration of such Other Securities request that such registration be effected
as a registration under Section 1 to the extent permitted thereunder), and (iii)
third, up to the full number of the Other Securities (other than Company
Securities), if any, in excess of the number of Company Securities and
Registrable Securities to be sold in such offering which, in the good faith view
of such investment banking firm, can be so sold without so adversely affecting
such offering (and, if such number is less than the full number of such Other
Securities, such number shall be allocated pro rata among the holders of such
Other Securities (other than Company Securities) on the basis of the number of
securities requested to be included therein by each such other holder);
(c) if the registration referred to in the first sentence of this
Section 2 is to be an underwritten secondary registration on behalf of holders
of Other Securities (the "Other Holders"), and the lead underwriter or managing
underwriter advises the Company in writing that
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in their good faith view, all or a part of such additional securities cannot be
sold and the inclusion of such additional securities in such registration would
be likely to have an adverse effect on the price, timing or distribution of the
offering and sale of the Other Securities then contemplated, the Company shall
include in such registration the number of securities (including Registrable
Securities) that such underwriters advise can be so sold without adversely
affecting such offering, allocated pro rata among the Other Holders and Computer
Associates on the basis of the number of securities (including Registrable
Securities) requested to be included therein by each Other Holder and Computer
Associates. If such Other Holders have requested that such registration
statement be filed pursuant to demand registration rights granted to them by the
Company, the Company shall include in such registration (i) first, Other
Securities sought to be included therein by the Other Holders pursuant to the
exercise of such demand registration rights and (ii) second, the number of
Registrable Securities sought to be included in such registration in excess of
the number of Other Securities sought to be included in such registration by the
Other Holders which in the good faith view of such investment banking firm, can
be so sold without so adversely affecting such offering (and (x) if such number
is less than the full number of such Registrable Securities, such number shall
be reduced accordingly and (y) in the event that such investment banking firm
advises that less than all of such Registrable Securities may be included in
such offering, Computer Associates may withdraw its request for registration of
the Registrable Securities under this Section 2 and 90 days subsequent to the
effective date of the registration statement for the registration of such Other
Securities request that such registration be effected as a registration under
Section 1 to the extent permitted thereunder);
(d) the Company shall not be required to effect any registration of
Registrable Securities under this Section 2 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
executive or employee benefit or compensation plans; and
(e) no registration of Registrable Securities effected under this
Section 2 shall relieve the Company of its obligation to effect a registration
of Registrable Securities pursuant to Section 1.
3. EXPENSES. With respect to a particular registration (or proposed
registration) hereunder, the Company shall pay any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
this Agreement, including, without limitation, (i) the fees, disbursements and
expenses of the Company's counsel and accountants and the reasonable fees and
expenses of counsel selected by Computer Associates in accordance with this
Agreement in connection with the registration of the securities to be disposed
of; (ii) all expenses, including filing fees, in connection with the
preparation, printing and filing of the registration statement, any preliminary
prospectus or final prospectus, any other offering document and amendments and
supplements thereto and the mailing and delivering of copies thereof to any
underwriters and dealers; (iii) the cost of printing or producing any
underwriting agreements and blue sky or legal investment memoranda and any other
documents in connection with the offering, sale or delivery of the securities to
be disposed of; (iv) all expenses in connection with the qualification of the
securities to be disposed of for offering and sale under state securities laws,
including the fees and disbursements of counsel for the underwriters or
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Computer Associates in connection with such qualification and in connection with
any blue sky and legal investment surveys; (v) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the securities to be disposed of; (vi) transfer
agents' and registrars' fees and expenses and the fees and expenses of any other
agent or trustee appointed in connection with such offering; (vii) all security
engraving and security printing expenses; (viii) all fees and expenses payable
in connection with the listing of the securities on any securities exchange or
automated interdealer quotation system or the rating of such securities, (ix)
any other fees and disbursements of underwriters customarily paid by the sellers
of securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, and (x) other reasonable out-of-pocket expenses of Computer
Associates other than legal fees and expenses referred to in clause (i) above.
Notwithstanding the foregoing, each of Computer Associates and the Company shall
be responsible for its own internal administrative and similar costs.
4. REGISTRATION AND QUALIFICATION. If and whenever the Company is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Section 1 or 2, the Company shall as promptly as
practicable:
(a) prepare, file and use its reasonable best efforts to cause to
become effective a registration statement under the Securities Act relating to
the Registrable Securities to be offered;
(b) 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 and to comply
with the provisions of the Securities Act with respect to the disposition of all
Registrable Securities until the earlier of (A) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition set forth in such registration statement and (B) the
expiration of six months after such registration statement becomes effective;
provided, that such six-month period shall be extended for such number of days
that equals the number of days elapsing from (x) the date the written notice
contemplated by paragraph (f) below is given by the Company to (y) the date on
which the Company delivers to Computer Associates the supplement or amendment
contemplated by paragraph (f) below;
(c) furnish to Computer Associates and to any underwriter of such
Registrable Securities such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus and any
summary prospectus), in conformity with the requirements of the Securities Act,
such documents incorporated by reference in such registration statement or
prospectus, and such other documents, as Computer Associates or such underwriter
may reasonably request, and upon request a copy of any and all transmittal
letters or other correspondence to or received from, the SEC or any other
governmental agency or self-regulatory body or other body having jurisdiction
(including any domestic or foreign securities exchange) relating to such
offering;
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(d) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such U.S. jurisdictions as Computer Associates or
any underwriter to such Registrable Securities shall request, and use its
reasonable best efforts to obtain all appropriate registrations, permits and
consents in connection therewith, and do any and all other acts and things which
may be necessary or advisable to enable Computer Associates or any such
underwriter to consummate the disposition in such jurisdictions of its
Registrable Securities covered by such registration statement; provided, that
the Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any such jurisdiction wherein it is not
so qualified or to consent to general service of process in any such
jurisdiction;
(e)(i) use its best efforts to furnish to Computer Associates and
to any underwriter of such Registrable Securities an opinion of counsel for the
Company addressed to Computer Associates and dated the date of the closing under
the underwriting agreement (if any) (or if such offering is not underwritten,
dated the effective date of the registration statement) and (ii) use its best
efforts to furnish to Computer Associates and to any underwriter of such
Registrable Securities a "cold comfort" letter addressed to Computer Associates
and signed by the independent public accountants who have audited the financial
statements of the Company included in such registration statement, in each such
case covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as Computer Associates may reasonably request and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements;
(f) as promptly as practicable, notify Computer Associates in writing
(i) at any time when a prospectus relating to a registration pursuant to
Sections 1 or 2 is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state 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 (ii) of any request by the SEC or any
other regulatory body or other body having jurisdiction for any amendment of or
supplement to any registration statement or other document relating to such
offering, and in either such case, at the request of Computer Associates,
prepare and furnish to Computer Associates a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading;
(g) if reasonably requested by Computer Associates or the lead or
managing underwriters, use its best efforts to list all such Registrable
Securities covered by such registration on each securities exchange and
automated inter-dealer quotation system on which a class of common equity
securities of the Company is then listed;
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(h) to the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of the Company to attend any "road
shows" scheduled in connection with any such registration, with all
out-of-pocket costs and expense incurred by the Company or such officers in
connection with such attendance to be paid by the Company; and
(i) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected pursuant
to Sections 1 or 2 unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested by
Computer Associates or the underwriters.
5. UNDERWRITING; DUE DILIGENCE. (a) If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant to
a registration requested under this Agreement, the Company shall enter into an
underwriting agreement with such underwriters for such offering, which agreement
will contain such representations and warranties by the Company and such other
terms and provisions as are customarily contained in underwriting agreements of
the Company to the extent relevant and as are customarily contained in
underwriting agreements generally with respect to secondary distributions to the
extent relevant, including, without limitation, indemnification and contribution
provisions substantially to the effect and to the extent provided in Section 6,
and agreements as to the provision of opinions of counsel and accountants'
letters to the effect and to the extent provided in Section 4(e). Computer
Associates shall be a party to any such underwriting agreement and the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters, shall also be made to and
for the benefit of Computer Associates. Such underwriting agreement shall also
contain such representations and warranties by Computer Associates and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, when relevant, including,
without limitation, indemnification and contribution provisions substantially to
the effect and to the extent provided in Section 6.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Agreement, the Company shall give Computer Associates and
the underwriters, if any, and their respective counsel and accountants, such
reasonable and customary access to its books and records and such opportunities
to discuss the business of the Company with its officers and the independent
public accountants who have certified the financial statements of the Company as
shall be necessary, in the opinion of Computer Associates and such underwriters
or their respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
6. INDEMNIFICATION AND CONTRIBUTION. (a) In the case of each
offering of Registrable Securities made pursuant to this Agreement, the Company
agrees to indemnify and hold harmless, to the extent permitted by law, Computer
Associates, each underwriter of Registrable Securities so offered and each
individual, partnership, limited liability company, joint venture, corporation,
trust, unincorporated organization, government (and any department or agency
thereof) or other entity (each a "Person"), if any, who controls any of the
foregoing Persons within the meaning of the Securities Act and the officers,
directors, affiliates, employees
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and agents of each of the foregoing, against any and all losses, liabilities,
costs (including reasonable attorney's fees and disbursements), claims and
damages, joint or several, to which they or any of them may become subject,
under the Securities Act or otherwise, including any amount paid in settlement
of any litigation commenced or threatened, insofar as such losses, liabilities,
costs, claims and damages (or actions or proceedings in respect thereof, whether
or not such indemnified Person is a party thereto) arise out of or are based
upon any untrue statement by the Company or alleged untrue statement by the
Company of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or in any offering memorandum
or other offering document relating to the offering and sale of such Registrable
Securities prepared by the Company or at its direction, or any amendment thereof
or supplement thereto, or in any document incorporated by reference therein, or
any omission by the Company or alleged omission by the Company to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that the Company shall not be liable
to any Person in any such case to the extent that any such loss, liability,
cost, claim or damage arises out of or relates to any untrue statement or
alleged untrue statement, or any omission or alleged omission, if such statement
or omission shall have been made in reliance upon and in conformity with
information relating to Computer Associates or an underwriter furnished to the
Company by or on behalf of Computer Associates or such underwriter specifically
for use in the registration statement (or in any preliminary or final prospectus
included therein), offering memorandum or other offering document, or any
amendment thereof or supplement thereto. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
Computer Associates or any underwriter and shall survive the transfer of such
securities. The foregoing indemnity agreement is in addition to any liability
that the Company may otherwise have to Computer Associates or any underwriter of
the Registrable Securities or any controlling Person of the foregoing and the
officers, directors, affiliates, employees and agents of each of the foregoing;
provided, further, that, in the case of an offering with respect to which
Computer Associates has designated the lead or managing underwriters (or
Computer Associates is offering Registrable Securities directly, without an
underwriter), this indemnity does not apply to any loss, liability, cost, claim
or damage arising out of or relating to any untrue statement or alleged untrue
statement or omission or alleged omission in any preliminary prospectus or
offering memorandum if a copy of a final prospectus or offering memorandum was
not sent or given by or on behalf of any underwriter (or Computer Associates) to
such Person asserting such loss, liability, cost, claim or damage at or prior to
the written confirmation of the sale of the Registrable Securities as required
by the Securities Act and such untrue statement or omission had been corrected
in such final prospectus or offering memorandum.
(b) In the case of each offering made pursuant to this Agreement,
Computer Associates, by exercising its registration rights hereunder, agrees to
indemnify and hold harmless, and to cause each underwriter of Registrable
Securities included in such offering (in the same manner and to the same extent
as set forth in Section 6(a)) to agree to indemnify and hold harmless, the
Company, each other underwriter who participates in such offering, each other
holder with securities included in such offering, each Person, if any, who
controls any of the foregoing within the meaning of the Securities Act and the
officers, directors, affiliates, employees and agents of each of the foregoing,
against any and all losses, liabilities, costs
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(including reasonable attorney's fees and disbursements), claims and damages to
which they or any of them may become subject, under the Securities Act or
otherwise, including any amount paid in settlement of any litigation commenced
or threatened, insofar as such losses, liabilities, costs, claims and damages
(or actions or proceedings in respect thereof, whether or not such indemnified
Person is a party thereto) arise out of or are based upon any untrue statement
or alleged untrue statement by Computer Associates or underwriter, as the case
may be, of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or in any offering memorandum
or other offering document relating to the offering and sale of such Registrable
Securities prepared by the Company or at its direction, or any amendment thereof
or supplement thereto, or any omission by Computer Associates or underwriter, as
the case may be, or alleged omission by Computer Associates or underwriter, as
the case may be, of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that such untrue statement of a material fact is contained in, or such
material fact is omitted from information relating to Computer Associates or
underwriter, as the case may be, furnished to the Company by or on behalf of
Computer Associates or underwriter, as the case may be, specifically for use in
such registration statement (or in any preliminary or final prospectus included
therein), offering memorandum or other offering document, or any amendment
thereof or supplement thereto. The foregoing indemnity is in addition to any
liability which Computer Associates or underwriter, as the case may be, may
otherwise have to the Company, or controlling persons and the officers,
directors, affiliates, employees, and agents of each of the foregoing; provided
that, in the case of an offering made pursuant to this Agreement with respect to
which the Company has designated the lead or managing underwriters (or the
Company is offering securities directly, without an underwriter), this indemnity
does not apply to any loss, liability, cost, claim, or damage arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus or offering memorandum if a copy
of a final prospectus or offering memorandum was not sent or given by or on
behalf of any underwriter (or the Company, as the case may be) to such Person
asserting such loss, liability, cost, claim or damage at or prior to the written
confirmation of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been corrected in such
final prospectus or offering memorandum.
(c) Each party indemnified under paragraph (a) or (b) above shall,
promptly after receipt of notice of a claim or action against such indemnified
party in respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the claim or action; provided, that the failure
to notify the indemnifying party shall not relieve it from any liability that it
may have to an indemnified party on account of the indemnity agreement contained
in paragraph (a) or (b) above otherwise than under such subsection. If any such
claim or action shall be brought against an indemnified party, and it shall have
notified the indemnifying party thereof, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified party and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate therein, and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume the
defense thereof with counsel satisfactory to the indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party). After notice from the
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indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation. If the indemnifying party
does not assume the defense of such claim or action, it is understood that the
indemnifying party shall not, in connection with any one such claim or action or
separate but substantially similar or related claims or actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to one separate firm of local attorneys in each such jurisdiction) at
any time for all such indemnified parties. Any indemnifying party against whom
indemnity may be sought under this Section 6 shall not be liable to indemnify an
indemnified party if such indemnified party settles such claim or action without
the consent of the indemnifying party, which consent shall not be unreasonably
withheld.
(d) If the indemnification provided for in this Section 6 shall for
any reason be unavailable (other than in accordance with its terms) to an
indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, cost, claim or damage in
such proportion as shall be appropriate to reflect (i) the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other hand or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the indemnified party failed to give the
notice required under paragraph (c) above, the relative benefits and the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other with respect to the statements or omissions which resulted in
such loss, liability, cost, claim or damage as well as any other relevant
equitable considerations. The relative benefits received by the indemnifying
party and the indemnified party shall be deemed to be in the same respective
proportion as the net proceeds (before deducting expenses) of the offering
received by such party (or, in the case of an underwriter, such underwriter's
discounts and commissions) bear to the aggregate offering price of the
Registrable Securities or Other Securities. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the indemnifying party on the one hand or the
indemnified party on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, but not by reference to any indemnified party's stock
ownership in the Company. The amount paid or payable by an indemnified party as
a result of the loss, cost, claim, damage or liability, or action in respect
thereof, referred to above in this paragraph (d) shall be deemed to include, for
purposes of this paragraph (d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. 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) Indemnification and contribution similar to that specified in the
preceding paragraphs of this Section 6 (with appropriate modifications) shall be
given by the Company,
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Computer Associates and underwriters with respect to any required registration
or other qualification of securities under any state law or regulation or
governmental authority.
(f) The obligations of the parties under this Section 6 shall be in
addition to any liability which any party may otherwise have to any other party.
7. RULE 144 AND FORM S-3. Commencing 90 days after the consummation
of the Offering, the Company shall use its best efforts to ensure that the
conditions to the availability of Rule 144 set forth in paragraph (c) thereof
shall be satisfied. Upon the request of Computer Associates, the Company will
deliver to Computer Associates a written statement as to whether it has complied
with such requirements. The Company further agrees to use its reasonable efforts
to cause all conditions to the availability of Form S-3 (or any successor form)
under the Securities Act for the filing of registration statements under this
Agreement to be met as soon as practicable after the consummation of the
Offering. Notwithstanding anything contained in this Section 7, the Company may
deregister under Section 12 of the Securities Exchange Act of 1934, as amended,
if it then is permitted to do so pursuant to said Act and the rules and
regulations thereunder.
8. HOLDBACK AGREEMENT. If any registration pursuant to this
Agreement shall be in connection with an underwritten public offering of
Registrable Securities, Computer Associates agrees not to effect any public sale
or distribution, including any sale under Rule 144, of any equity security of
the Company or any security convertible into or exchangeable or exercisable for
any equity security of the Company, in the case of Registrable Securities
(otherwise than through the registered public offering then being made), within
7 days prior to or 90 days (or such lesser period as the lead or managing
underwriters may permit) after the effective date of the registration statement
(or the commencement of the offering to the public of such Registrable
Securities in the case of any Rule 415 Offering). The Company hereby also so
agrees; provided, that, subject to Section 5(a) hereof, the Company shall not be
so restricted from effecting any public sale or distribution of any security in
connection with any merger, acquisition, exchange offer, subscription offer,
dividend reinvestment plan or stock option or other executive or employee
benefit or compensation plan.
9. MISCELLANEOUS.
(a) Entire Agreement. This Agreement constitutes the entire
agreement between the Company and Computer Associates with respect to the
transactions contemplated hereby and supersedes all prior agreements or
understandings among the parties with respect thereto.
(b) Headings. Descriptive headings are for convenience only and
shall not control or affect the meaning or construction of any provision of this
Agreement.
(c) Notices. All notices or other communications provided for in
this Agreement shall be in writing and shall be sent by confirmed telecopy (with
an undertaking to
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provide a hard copy) or delivered by hand or sent by overnight courier service
prepaid to the address specified below.
If to the Company:
ACCPAC INTERNATIONAL, INC.
0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: General Counsel
Telecopy: (000) 000-0000
If to Computer Associates:
Computer Associates International, Inc.
Xxx Xxxxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: President
Telecopy: (000) 000-0000
with a copy to:
Computer Associates International, Inc.
Xxx Xxxxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Telecopy: (000) 000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(e) Amendments. This Agreement shall not be altered or otherwise
amended except pursuant to an instrument in writing signed by the Company and
Computer Associates.
(f) Transferability. The registration and other rights granted to
Computer Associates hereunder may be transferred or assigned by Computer
Associates to a third party in connection with a sale or other transfer of all
shares of Common Stock then owned by Computer Associates to such third party.
Except as otherwise set forth in the immediately preceding sentence, the
registration and other rights granted to Computer Associates hereunder are
non-transferable and cannot be assigned or transferred in any manner to any
third party without the prior written consent of the Company.
(H) CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed and delivered as of the date first above written.
ACCPAC INTERNATIONAL, INC.
By:
-------------------------
Name:
Title:
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By:
-------------------------
Name:
Title:
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