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EXHIBIT 10.9
EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
among
BINDVIEW DEVELOPMENT CORPORATION
GENERAL ATLANTIC PARTNERS 44, L.P.,
GAP COINVESTMENT PARTNERS, L.P.,
JMI EQUITY FUND III, L.P.
and
XXXX X. XXXXXXX
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Dated: October 16, 1997
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TABLE OF CONTENTS
Page
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. General; Securities Subject to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Grant of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Registrable Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Holders of Registrable Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Demand Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(a) Request for Demand Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Incidental or "Piggy-Back" Rights with Respect to a Demand
Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Effective Demand Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(d) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(e) Underwriting Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(f) Selection of Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. Incidental or "Piggy-Back" Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Request for Incidental Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. Form S-3 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(a) Request for a Form S-3 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) Form S-3 Underwriting Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Limitations on Form S-3 Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(d) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(e) No Demand Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. Holdback Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Restrictions on Public Sale by Designated Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) Restrictions on Public Sale by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7. Registration Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Obligations of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) Seller Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Notice to Discontinue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Registration Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8. Indemnification; Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Indemnification by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Indemnification by Designated Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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(c) Conduct of Indemnification Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9. Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Recapitalizations, Exchanges, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(c) Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(f) Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(g) Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(h) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(i) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(j) GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(k) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(l) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(m) Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated October 16, 1997 (this
"AGREEMENT"), among BindView Development Corporation, a Texas corporation (the
"COMPANY"), General Atlantic Partners 44, L.P., a Delaware limited partnership
("GAP LP"), GAP Coinvestment Partners, L.P., a New York limited partnership
("GAP COINVESTMENT"), JMI Equity Fund III, L.P., a Delaware limited partnership
("JMI") and Xxxx X. Xxxxxxx ("PULASKI").
This Agreement is made in connection with the Preferred Stock and
Warrant Purchase Agreement, dated October 16, 1997 (the "STOCK PURCHASE
AGREEMENT"), among the Company, GAP LP, GAP Coinvestment and JMI, pursuant to
which the Company has agreed to, among other things, issue and sell to (a) GAP
LP, GAP Coinvestment and JMI, pursuant to which the Company has agreed to,
among other things, issue and sell to (a) GAP LP, and GAP LP has agreed to
purchase from the Company, (i) an aggregate of 1,398,328 shares of Series A
Convertible Preferred Stock, par value $.01 per share, of the Company (the
"PREFERRED STOCK") and (ii) a warrant (the "GAP LP WARRANT") to purchase,
subject to the terms and conditions thereof, an aggregate of up to 165,935
shares of Common Stock, no par value per share, of the Company (the "COMMON
STOCK") and (b) GAP Coinvestment, and GAP Coinvestment has agreed to purchase
from the Company, (i) an aggregate of 287,065 shares of Preferred Stock and
(ii) a warrant (the "GAPCO WARRANT") to purchase, subject to the terms and
conditions thereof, an aggregate of up to 34,065 shares of Common Stock and (c)
JMI, and JMI has agreed to purchase from the Company, (i) an aggregate of
842,697 shares of Preferred Stock and (ii) a Warrant (the "WARRANT" and
together with the GAP LP Warrant and the GAPCO Warrant, the "WARRANTS") to
purchase, subject to the terms and conditions thereof, an aggregate of up to
100,000 shares of Common Stock.
WHEREAS, concurrently herewith, the Company GAP LP, GAP Coinvestment,
JMI and Pulaski are entering into the Shareholders' Agreement (as hereinafter
defined), pursuant to which the parties thereto have agreed to, among other
things, certain first offer, tag-along and preemptive rights, and corporate
governance rights and obligations.
WHEREAS, in order to induce (i) Pulaski to enter into the
Shareholders' Agreement and (ii) each of GAP LP, GAP Coinvestment and JMI to
purchase its shares of Preferred Stock and to enter into the Shareholders'
Agreement, the Company has agreed to grant 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:
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2. "Affiliate" shall mean, with respect to any Person, any other
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: (a) GAP LLC, the members of GAP LLC and the limited
partners of GAP LP; (b)any Affiliate of GAP LLC, the members of GAP LLC and the
limited partners of GAP LP; 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 and GAP Coinvestment shall be deemed
to be Affiliates of one another. In addition, the following shall be deemed to
be Affiliates of JMI: (a) JMI L.L.C., the members of JMI L.L.C. and the limited
partners of JMI; and (b)any Affiliate of JMI L.L.C., the members of JMI L.L.C.
and the limited partners of JMI.
"Approved Underwriter" has the meaning set forth in Section
3(f) of this Agreement.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of Texas are authorized or
required by law or executive order to close.
"Common Stock" has the meaning assigned to such term in the
recital to this Agreement. "Common Stock" shall also include any other equity
securities of the Company into which such securities are converted,
reclassified, reconstituted or exchanged.
"Company" has the meaning assigned to such term in the recital
to this Agreement.
"Company Underwriter" has the meaning set forth in Section
4(a) of this Agreement.
"Demand Registration" has the meaning set forth in Section
3(a) of this Agreement.
"Designated Holder" means each of the Pulaski Shareholders,
each of the General Atlantic Shareholders and each of the JMI Shareholders and
any transferee of any of them to whom Registrable Securities have been
transferred in accordance with the provisions of the Shareholders' Agreement
and Section 9(f) of this Agreement, other than a transferee to whom such
securities have been transferred pursuant to a registration statement under the
Securities Act or Rule 144 or Regulation S under the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
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"GAP Coinvestment" has the meaning assigned to such term in
the recital to this Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware
limited liability company and the general partner of GAP LP, and any successor
to such entity.
"GAP LP" has the meaning assigned to such term in the recital
to this Agreement.
"GAP LP Warrant" has the meaning assigned such term in the
recital to this Agreement.
"GAPCO Warrant" has the meaning assigned such term in the
recital to this Agreement.
"General Atlantic Shareholders" means GAP LP, GAP Coinvestment
and any Affiliate thereof to which Registrable Securities are transferred in
accordance with Section 2.2 of the Shareholders' Agreement.
"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(a) 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 pursuant to an effective Registration Statement flied under the
Securities Act covering the offer and sale of shares of Common Stock for the
account of the Company.
"Initiating Holder" 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
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"IPO Effectiveness Date" means the date upon which the Company
commences its Initial Public Offering.
"JMI L.L.C." means JMI Associates III, L.L.C., a Delaware
limited liability company and the general partner of JMI and any successor to
such entity.
"JMI Shareholders" means JMI and any Affiliate thereof and any
Permitted Transferee (as defined in the Shareholders' Agreement) thereof to
which Registrable Securities are transferred in accordance with Section 2.2 of
the Shareholders Agreement.
"JMI Warrants" has the meaning assigned to such term in the
recital to this Agreement.
"NASD" has the meaning set forth in Section 7(a)(xii) of this
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.
"Preferred Stock" has the meaning assigned to such term in the
recital to this Agreement.
"Pulaski" has the meaning assigned to such term in the recital
to this Agreement.
"Pulaski Shareholders" means Pulaski and any Permitted
Transferee (as defined in the Shareholders' Agreement) thereof to which
Registrable Securities are transferred in accordance with Section 2.2 of the
Shareholders' Agreement.
"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 or acquired after the date hereof by the
Designated Holders or issued or issuable upon conversion of shares of Preferred
Stock or exercise:of the Warrants, including, without limitation, any
additional shares of Common Stock issuable upon conversion or exercise of any
warrants or preferred stock acquired by any of the Designated Holders after the
date hereof, (b) any other
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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 shares of Common Stock or
shares of Preferred Stock 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 shares of 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.
"SEC" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to embrace the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Shareholders' Agreement" means the Shareholders' Agreement,
dated the date hereof, among the Company, GAP LP, GAP Coinvestment, JMI and
Pulaski.
"Stock Purchase Agreement" has the meaning assigned to such
term in the recital to this Agreement.
2. General: Securities Subject to this Agreement.
(a) Grant of Rights. The Company hereby grants
registration rights to the Pulaski Shareholders, the General Atlantic
Shareholders and the JMI Shareholders 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 proposed to be sold
by a Designated Holder in a single sale, in the opinion of counsel satisfactory
to the Company and the Designated Holder, each in their reasonable judgment,
may be distributed to the public 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
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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 and
disregarding any legal restrictions upon the exercise of such rights. 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, (i) one or more of the General Atlantic
Shareholders as a group, acting through GAP LLC or its written designee, (ii)
one or more of the JMI Shareholders as a group, acting through JMI or its
written designee or (iii) the Pulaski Shareholders as a group, acting through
Pulaski (the "Initiating Holder(s)") 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) and under the securities
or "blue sky" laws of any jurisdiction designated by such holder or holders (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 one (1) Demand Registration for each of the General Atlantic
Shareholders, the JMI Shareholders and the Pulaski Shareholders pursuant to
this Section 3; provided, further, however, that the Company shall not be
obligated to effect more than one such Demand Registration in any twelve month
period. 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 thirty (30) 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 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 (3) 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 one-year period. In addition, the
Company shall not be required to effect any registration within ninety (90)
days after the effective date of any other Registration Statement of the
Company. Each request for a Demand Registration by the Initiating Holder(s)
shall state the amount of the Registrable Securities proposed to
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be sold and the intended method of disposition thereof. Upon a request for a
Demand Registration, the Company shall promptly take such steps as are
necessary or appropriate to prepare for the registration of the Registrable
Securities to be registered.
(b) Incidental or "Piggy-Back" Rights with Respect to a
Demand Registration. Each of the Designated Holders (other than the
Initiating Holders) may offer its or his Registrable Securities under any
Demand Registration pursuant to this Section 3. Within ten (10) days after the
receipt from an Initiating Holder of a request for a Demand Registration, the
Company shall (i) give written notice thereof to all of the Designated Holders
(other than the Initiating Holder) 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 ten (10) days of the receipt by such Designated Holders of such
written notice referred to 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, 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 Holder.
(c) Effective Demand Registration. The Company shall
use its reasonable efforts to cause any such Demand Registration to become and
remain effective as soon as practicable, but in any event not later than 120
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, (y) the conditions to closing 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 Holders or (z) if the request for such Demand Registration is
withdrawn by the Initiating Holder and such Initiating Holder reimburses the
Company for any expenses incurred in relation thereto.
(d) Expenses. In any registration initiated as a Demand
Registration, the Company shall pay all Registration Expenses (other than
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underwriting discounts and commissions) in connection therewith, whether or not
such Demand Registration becomes effective.
(e) Underwriting Procedures. If 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
offering of such Registrable Securities pursuant to such Demand Registration
shall 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 (as hereinafter defined) selected in accordance with
Section 3(f). In connection with any Demand Registration under this Section 3
involving an underwriting, 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 underwriting unless
such Designated Holder accepts the terms of the underwriting 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 in writing that in its opinion the
aggregate amount of such Registrable Securities requested to be included in
such offering is sufficiently large to have a material adverse effect on the
success of such offering, then the Company shall include in such registration
only the aggregate amount of Registrable Securities that in the opinion of the
Approved Underwriter may be sold without any such material adverse effect and
shall reduce, first 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 second as to the Initiating
Holders as a group, pro rata within each group based on the number of
Registrable Securities included in the request for Demand Registration, the
amount of Registrable Securities to be included in such registration; provided,
however, that if the number of Registrable Securities to be included in a
Demand Registration by an Initiating Holder is reduced by the Approved
Underwriter, then such Initiating Holder shall be entitled to retain a Demand
Registration with respect to such number of Registrable Securities excluded by
the Approved Underwriter, provided that such Initiating Holder may not initiate
such Demand Registration within nine months of the effective date of the
Registration Statement with respect to the Demand Registration in which the
Approved Underwriter excluded such Initiating Holder's Registrable Securities.
(f) Selection of Underwriters. If any Demand
Registration 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, be reasonably acceptable to the Initiating Holders holding
a majority of the Registrable Securities to be included in such registration
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4. Incidental or "Piggy-Back" Registration.
(a) Request for Incidental Registration. At any time
after the IPO Effectiveness Date, if the Company proposes to file a
Registration Statement under the Securities Act 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), then the Company shall give written
notice of such proposed filing to each of the Designated Holders of Registrable
Securities at least thirty (30) 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 (an "INCIDENTAL REGISTRATION"). The
Company shall, and shall use its reasonable efforts (within ten (10) days of
the notice provided for in the preceding sentence) to cause the managing
underwriter or underwriters of a proposed underwritten offering (the "COMPANY
UNDERWRITER") to permit each of the Designated Holders who have requested in
writing to participate in the Incidental Registration 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(a) involving an underwriting, the Company
shall not be required to include any Registrable Securities in such
underwriting unless the holders thereof accept the terms of the underwriting as
reasonably agreed upon between the Company and the Company Underwriter, and
then only in such quantity as will not, in the opinion of the Company
Underwriter, jeopardize the success of the offering by the Company. If in the
written opinion of the Company Underwriter the registration of all or part of
the Registrable Securities which the Designated Holders have requested to be
included would materially adversely affect such offering, then the Company
shall be required to include in such Incidental Registration, to the extent of
the amount that the Company Underwriter believes may be sold without causing
such adverse effect, first, all of the securities to be offered for the account
of the Company; second, the Registrable Securities to be offered for the
account of the Designated Holders pursuant to this Section 4, pro rata based on
the amount recommended by the Company Underwriter; and third, any other
securities requested to be included in such underwriting.
(b) Expenses. The Company shall bear all Registration
Expenses (other than underwriting discounts and commissions) in connection with
any Incidental Registration pursuant to this Section 4, whether or not such
Incidental Registration becomes effective.
5. Form S-3 Registration
(a) Request for a Form S-3 Registration. In the event
that the Company shall receive from any Designated Holder (the "S-3 Initiating
Holder") a written request that the Company register, under the Securities Act
and the
13
securities and "blue sky" laws of any jurisdiction reasonably designated by
such Designated Holder, on Form S-3 (or any successor form then in effect), all
or a portion of the Registrable Securities owned by such S-3 Initiating Holder,
the Company shall give written notice of such request to each of the other
Designated Holders at least 30 days before the anticipated filing date of such
Form S-3, and such notice shall describe the proposed registration and offer
such other Designated Holders the opportunity to register the number of
Registrable Securities as each such Designated Holder may request in writing to
the Company, given within 15 days after their receipt from the Company of the
written notice of such registration. The Company shall (i) take such steps as
are necessary or appropriate to prepare for the registration of the Registrable
Securities to be registered and (ii) 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 three months
after it receives a request therefor and (y)cause the Company Underwriter to
permit the Designated Holders who have requested in writing to participate in
such registration to include their Registrable Securities in such offering on
the same terms and conditions as the Registrable Securities of the S-3
Initiating Holder included therein.
(b) Form S-3 Underwriting Procedures. If the S-3
Initiating Holder so elects, the Company shall use its reasonable efforts to
cause the offering on Form S-3 pursuant to this Section 5 to be in the form of
a firm commitment underwritten offering and the Company shall select an
investment banking firm of national reputation to act as the managing
underwriter of such offering; provided, however, that such underwriter shall,
in any cases be acceptable to the S-3 Initiating Holder in its reasonable
judgment. In connection with any offering under Section 5(a) involving an
underwriting, the Company shall not be required to include any Registrable
Securities in such underwriting unless the Designated Holders thereof accept
the terms of the underwriting as agreed upon between the Company, such selected
underwriter and the S-3 Initiating Holder, and then only in such quantity as
will not, in the opinion of such underwriter, jeopardize the success of the
offering by the S-3 Initiating Holder. If in the written opinion of such
underwriter the registration of all or part of the Registrable Securities which
the S-3 Initiating Holder and the other Designated Holders have requested to be
included would materially adversely affect such public offering, then the
Company shall be required to include in the underwriting, to the extent of the
amount that such underwriter believes may be sold without causing such adverse
effect, first, all of the Registrable Securities to be offered for the account
of the S-3 Initiating Holder; 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 proposed to be offered for the account of such
Designated Holders; and third, any other securities requested to be included in
such underwriting.
14
(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 three
months (3) 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 adversely affected by the requested
registration on Form S-3 (or any successor form then in effect) 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 (3) 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 one-year period. In
addition, the Company shall not be required to effect any registration pursuant
to Section 5(a), (i) within three months 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 S-3 Initiating Holder has included its
Registrable Securities in an offering on Form S-3, (iii) if Form S-3 is not
available for such offering by the Initiating S-3 Holder, (iv) if the S-3
Initiating Holder has already requested one registration on Form S-3 and all of
the Registrable Securities requested to be included in such registration were
so included or (v) if the S-3 Initiating Holder, together with the Designated
Holders (other than the S-3 Initiating Holder) 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 $15,000,000. The
parties acknowledge and agree that the limitation in subsection (iv) of the
preceding sentence is for the purpose of limiting the General Atlantic
Shareholders (acting as a group through GAP LLC), the JMI Shareholders (acting
as a group through JMI) and the Pulaski Shareholders (acting as a group through
Pulaski) to one registration each on From S-3, regardless of the number of
Designated Holders in each group.
(d) Expenses. In connection with any registration
pursuant to this Section 5, the Company shall pay all Registration Expenses
(other than underwriting discounts and commissions), whether or not such
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.
15
6. Holdback Agreements.
(a) Restrictions on Public Sale by Designated Holders.
Each of the Designated Holders agrees not to effect any public sale or
distribution of any Registrable Securities being registered 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,
during the 90-day period beginning on the effective date of such registration
statement (except as part of such registration), (i) in the case of a
non-underwritten public offering, if and to the extent requested by the
Initiating Holders (in the event of a Demand Registration pursuant to Section
3) or the Company (in the event of an Incidental Registration pursuant to
Section 4(a)), as the case may be, or (ii) in the case of an underwritten
public offering, if and to the extent requested by the Approved Underwriter (in
the event of a Demand Registration pursuant to Section 3) or the Company
Underwriter (in the event of an Incidental Registration pursuant to Section
4(a)), as the case may be.
(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-5 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) 180 days after the effective date of such registration statement.
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 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
reasonably possible:
(i) use its reasonable efforts to 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 use its best
efforts to cause such registration statement to become effective; provided,
however, that (x) before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall provide counsel selected
by the Designated Holders holding a majority of the Registrable Securities
being registered in such registration ("Holders' Counsel")
16
and any other Inspector (as hereinafter defined) with an adequate and
appropriate opportunity to participate in the preparation of such registration
statement and each prospectus included therein (and each amendment or
supplement thereto) to be filed with the SEC, which documents shall be subject
to the review of Holders' Counsel, and (y) the Company shall notify the
Holders' Counsel and each seller of Registrable Securities of any stop order
issued or threatened by the SEC and take all reasonable 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) 180 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) as soon as reasonably possible, furnish to
each seller of Registrable Securities, prior to filing a registration
statement, copies 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),
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as each such seller may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller;
(iv) use its reasonable efforts to register or
qualify such Registrable Securities under such other securities or "blue sky"
laws of such jurisdictions as any seller of Registrable Securities may
reasonably request, and to continue such qualification in effect in such
jurisdiction for 180 days 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) use its reasonable efforts to cause the
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the
17
business and operations of the Company to enable the seller or sellers of
Registrable Securities to consummate the disposition of such Registrable
Securities;
(vi) 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 not misleading in light of the circumstances under which they were
made, and the Company shall promptly prepare a supplement or amendment to such
prospectus and furnish to each seller a reasonable number of copies of a
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 not misleading in light of the circumstances under which
they were made;
(vii) 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;
(viii) make available for inspection by any seller
of Registrable Securities, any managing underwriter participating in any
disposition pursuant to such 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 unless (x)
the disclosure of such Records is necessary 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 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 available 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
18
and allow the Company, at the Company's expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential;
(ix) 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 Holders'
Counsel or the managing underwriter reasonably request;
(x) use its reasonable efforts to 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 and are
reasonably acceptable to counsel representing the Company;
(xi) otherwise use its reasonable efforts to
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably 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, in a manner which satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(xii) 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
able to be satisfied;
(xiii) keep Holders' Counsel advised in writing as
to the initiation and progress of any registration under Section 3 or Section 4
hereunder;
(xiv) 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
(xv) use reasonable efforts to take all other
steps necessary to effect the registration of the Registrable Securities
contemplated hereby.
19
(b) Seller Information. The Company may require each
seller of Registrable Securities as to which any registration is being effected
to furnish to the Company such information regarding the distribution of such
securities as the Company may from time to time reasonably request in writing.
Failure of any seller of Registrable Securities to provide any requested
information in a reasonably timely manner shall be grounds for removal of the
Registrable Securities of such seller from the offering.
(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)(vi), 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)(vi) 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) (vi) to and
including the date when the Designated Holder shall have received the copies of
the supplemented or amended prospectus contemplated by and meeting the
requirements of Section 7(a) (vi).
(d) Registration Expenses. The Company shall pay all
expenses (other than as set forth in Sections 3(d), 4(b) and 5(d)) arising from
or incident to the 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 in connection with "blue sky" qualifications of the
Registrable Securities), (iii) all printing, messenger and delivery expenses,
(iv) the fees, charges and expenses 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 and any special audits incident to or
required by any registration or qualification) and the reasonable legal fees,
charges and expenses of one counsel engaged by the Initiating Holders to
represent their interests in connection with a Demand Registration and (v) any
liability insurance or other premiums for insurance obtained by the Company in
connection with any Demand Registration, Incidental Registration or
registration on Form S-3 pursuant to the terms of this Agreement, regardless of
whether such registration statement is declared
20
effective. All of the expenses described in this Section 7(d) are referred to
herein as "REGISTRATION EXPENSES."
8. Indemnification: Contribution.
(a) Indemnification by the Company. The Company agrees
to indemnify and hold harmless, to the fullest extent permitted by law, each
Designated Holder, its officers, directors, trustees, partners, employees,
advisors and agents and each Person who controls (within the meaning of the
Securities Act or the Exchange Act) such Designated Holder from arid against
any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) 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 Supplement( 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, except
insofar as the same are caused by or contained in any information concerning
such Designated Holder furnished in writing to the Company by such Designated
Holder expressly for use therein. 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 the Securities Act and the Exchange 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 furnish to the Company in writing such information with respect to
such Designated Holder as the Company may reasonably request or as may be
required by law for use in connection with any such registration statement or
prospectus and each Designated Holder agrees to indemnify and hold harmless to
the fullest extent permitted by law, the Company, any underwriter, retained by
the Company and their respective directors, officers, employees, advisors and
agents and each Person who controls the Company or such underwriter (within the
meaning of the Securities Act and the Exchange 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; provided, however, that 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.
21
(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. 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 (other than reasonable costs of
investigation) 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 in its reasonable judgment or (iii) the named parties to any
such action (including any impleaded 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 it which are different from or additional to those available to the
Indemnifying Party. In either of such cases, the Indemnifying Party shall not
have the right to assume the defense of such action on behalf of such
Indemnified Party. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld.
(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 losses, claims, damages, liabilities or
expenses 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 losses, claims, damages,
liabilities or expenses 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 losses, claims, damages, liabilities or
expenses, 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
22
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses 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 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.
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.
9. Rule 144. The Company hereby covenants that after it has
filed (and such Registration Statement has become effective) a Registration
Statement pursuant to Section 12 of the Exchange Act or a Registration
Statement pursuant to the Securities Act in respect of any Shares it shall file
(a) 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 Rules 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 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 hereafter 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 and (ii) 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
merger, consolidation or otherwise) to enter into a new registration rights
agreement with the Designated Holders on terms substantially similar to this
Agreement as a condition of any such transaction.
23
(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 and (ii) the
Designated Holders holding Registrable Securities representing (after giving
effect to any adjustments) at least 85% of the aggregate number of Registrable
Securities owned by all of the Designated Holders; provided, however, that any
such amendment, modification, supplement, waiver or consent shall not be
effective to withdraw, deny or adversely affect the rights of any Designated
Holder who has not consented in writing thereto. Subject to the proviso in the
preceding sentence, 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:
BindView Development Corporation
0000 Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxx,
President
24
with a copy to:
Xxxxx, Xxxxxx & Xxxxx, L.L.P.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx, Esq.
(ii) if to the Pulaski Shareholders:
BindView Development Corporation
0000 Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telecopy:
Attention: Xxxx X. Xxxxxxx, President
with a copy to:
Xxxxx, Xxxxxx & Xxxxx, L.L.P.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx, Esq.
(iii) if to GAP LP or GAP Coinvestment:
c/o General Atlantic Service Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
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.
25
(iv) if to JMI:
c/o JMI Equity Fund III, L.P.
00000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, III
(v) 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
telecopied.
(f) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and permitted assigns of
each of the parties hereto. The Demand Registration rights of the General
Atlantic Shareholders, the JMI Shareholders and the Pulaski Shareholders
contained in Section 3 hereof and the other rights of each of the General
Atlantic Shareholders, JMI Shareholders and the Pulaski Shareholders with
respect thereto shall be, with respect to any Registrable Security, (i)
automatically transferred among the General Atlantic Shareholders, (ii)
automatically transferred among the JMI Shareholders, (iii) automatically
transferred among the Pulaski Shareholders and (iv) in all other cases,
transferred only with the consent of the Company. The incidental or
"piggy-back" registration rights of the Designated Holders contained in
Sections 3(b) and 4 hereof, the Form S-3 registration rights contained in
Section 5 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. All of the obligations of the Company
hereunder shall survive any such transfer; provided, however, that the
"piggyback" registration rights of the Other Shareholders (as set forth in
subsection (g) below) may be transferred only with the consent of the Company.
(g) Third Party Beneficiaries. The parties to this
Agreement agree that the shareholders of the Company listed on Schedule 1 (the
"OTHER SHAREHOLDERS") shall be entitled to certain "piggy-back" registration
rights under Sections 3(b), 4(a) and 5(a) of this Agreement. The rights
granted pursuant to the preceding sentence are expressly conditioned on the
agreement of each such Other Shareholder to abide by the obligations set forth
herein as if such Other Shareholder was an original signatory to this Agreement
including, without limitation, the
26
obligations set forth in Sections 3(b), 4(a), 5(b), 6(a) 7(a) and 8(b). The
Company shall provide notice to the Other Shareholders of an event that
triggers the Other Shareholders' "piggy-back" registration rights. The number
of Registrable Securities of the Other Shareholders requested to be included in
any such registration shall be included in the Registrable Securities of the
Pulaski Shareholders for purposes of any calculation the number of Registrable
Securities that may be included in such registration. Other than as set forth
in this Section 10(g) and Sections 8(a) and 8(b), no Person other than the
parties hereto and their successors and permitted assigns is intended to be a
beneficiary of any of the rights granted hereunder.
(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 TEXAS, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
(k) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstances, 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 Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(m) Further Assurances. Each of the parties shall
execute such documents and perform such further acts as may be reasonably
required or desirable to carry out or to perform the provisions of this
Agreement.
27
IN WITNESS WHEREOF, the undersigned have executed, or have caused to
be executed, this Agreement on the date first written above.
BINDVIEW DEVELOPMENT CORPORATION
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
GENERAL ATLANTIC PARTNERS 44, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: A Managing Member
GAP COINVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: A General Partner
JMI EQUITY FUND III, L.P.
By: JMI ASSOCIATES III, L.L.C.
Its General Partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Member
/s/ Xxxx X. Xxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxx
28
SCHEDULE 1
29
OTHER SHAREHOLDERS
Xxxxx X. Xxxxxxxxxx
Xxxxxx Xxxxx
Irl Xxxxxx
Xxxxxxxxxxx J. Sole
Xxxxx Xxxxxxx
