REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of May 1, 1995, by and between INTERSOLV, Inc., a
Delaware corporation (the "Company") and Michael I. Goldman (the
"Investor").
WHEREAS, the Investor concurrently with the execution of this
Agreement is acquiring shares of the Company's
common stock, par value $.01 per share ("Common Stock"); and
WHEREAS, as a condition to such acquisition, the
parties are willing to enter into the agreements contained herein.
NOW, THEREFORE, in consideration of the foregoing and
of the mutual covenants and agreements set forth herein, and other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
Section 1. Definitions.
"Affiliate" means, with respect to
any Person, any other Person which, directly or indirectly, controls, is
controlled by or is under common control with such Person.
"Agreement" is defined in the Preamble to this
Agreement.
"Common Stock" is defined in the
Recitals to this Agreement.
"Company" is defined in the Preamble
to this Agreement.
"Holder" is defined in section 3.1 hereof. "Investor" is defined in
the Preamble to this Agreement.
"Lock-Up Period" is defined in section 2.1 hereof.
"Other Holders" is defined in section 5.3 hereof.
"Permitted Transfer" is defined in section 2.2 hereof.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and government or
any department or agency thereof.
"Piggyback Notice" is defined in section 5.1 hereof.
"Piggyback Registration" is defined in section 5.1 hereof.
"Registrable Securities" means (i) the Common Stock issued to the
Investor pursuant to the Stock Purchase Agreement dated simultaneously
herewith (the "Stock Purchase Agreement") by and among the Company, and
Michael I. Goldman ("Purchase Common Stock"), (ii) any Purchase Common
Stock issued to the Investor's transferees pursuant to a Permitted
Transfer, and (iii) any Common Stock issued or issuable with respect to
the Common Stock referred to in clauses (i) or (ii) by way of
replacement, share dividend, share split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization.
"Registration Expenses" is defined in section 7.1 hereof.
"Registration Notice" is defined in section 3.3 hereof.
"Restricted Shares" is defined in section 2.1 hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Shelf Period" is defined in section 3.1 hereof.
"Shelf Registration Statement" is defined in section 3.1 hereof.
"Transfer" is defined in section 2.1 hereof. Section 2. Restrictions
on Transfer of Common Stock.
2.1 Lock-Up Period. Without the express
prior written consent of the Company, the Investor agrees that, except
as set forth in Section 2.2 below, he will not (a) directly or
indirectly, offer, sell, contract to sell or otherwise dispose of (or
announce any offer, sale, contract of sale or other disposition of)
("Transfer") any Registrable Securities ("Restricted Shares") prior to
August 21, 1995 and (b) Transfer more than 49% of the Restricted Shares
received by him concurrently with the execution of this Agreement prior
to December 31. 1995 (the "Lock-Up Period").
2.2 Permitted Transfers. The restrictions
contained in this Section 2 will not apply with respect to any of the
following transactions (each, a "Permitted Transfer"):
2.2.1 an Investor who is a
natural person may Transfer Restricted Shares to his or her spouse,
siblings, parents or any natural or adopted children or other
descendants or to any personal trust in which such family members or
such Investor retains the entire beneficial interest;
2.2.2 an Investor may Transfer
Restricted Shares on his or her death or mental incapacity to such
Investor's estate, executor, administrator or personal representative or
to such Investor's beneficiaries pursuant to a devise or bequest or by
the laws of descent and distribution; or
If the Investor Transfers Restricted Shares as described in this Section
2.2, such Restricted Shares shall remain subject to this Agreement and,
as a condition of the validity of such Transfer, the transferee shall be
required to execute and deliver a counterpart of this Agreement.
Thereafter, such transferee shall be deemed to be an Investor for
purposes of this Agreement.
2.3 Rights of Subsequent Holder. Subject to
the foregoing restrictions, the Company and the Investor hereby agree
that any subsequent holder of Registrable Securities shall be entitled
to all benefits hereunder as a holder of such securities.
Section 3. Shelf Registration.
3.1 Shelf Period. Subject to the terms and conditions set
forth herein, the Company shall prepare and file a shelf registration
statement with the SEC and shall use its reasonable best efforts to
cause such registration statement to become effective on or before
August 21, 1995, and to remain effective until the second anniversary of
the Effective Time of the Agreement of Merger (the "Shelf Period"),
pursuant to Rule 415 of Regulation C promulgated under the Securities
Act (or any successor rule) (the "Shelf Registration Statement")
providing for the sale by holders of Registrable Securities (each, a
"Holder") of all of the Registrable Securities in accordance with the
terms hereof. The Company agrees to use its reasonable efforts to keep
the Shelf Registration Statement continuously effective for a period
expiring on the earlier of (i) the date on which all of the Registrable
Securities covered by the Shelf Registration Statement have been sold
pursuant thereto or (ii) the end of the Shelf Period. The Company
further agrees to promptly amend the Shelf Registration Statement if and
as required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration
Statement or by the Securities Act or any rules and regulations
thereunder. The Company may, in the exercise of its sole discretion,
extend the Shelf Registration Statement for a period beyond the Shelf
Period but shall in no event be required to do so.
3.2 Inclusion in Shelf Registration Statement. Any
Holder who does not provide the information reasonably requested by the
Company in connection with the Shelf Registration Statement as promptly
as practicable after receipt of such request, but in no event later than
ten (10) days thereafter, shall not be entitled to have its Registrable
Securities included in the Shelf Registration Statement.
3.3 Registration Notice.
3.3.1 Any Holder intending to make offers or sales of
Registrable Securities pursuant to a Shelf Registration Statement
prepared in connection with this Section 3 shall provide the Company
with written notice (the "Registration Notice") of such intent at least
five (5) business days prior to commencing such offers or sales. Once a
Holder has delivered a Registration Notice to the Company, such Holder
shall promptly provide the Company such information as the Company
reasonably requests in order to identify such Holder and the method of
distribution in any necessary post-effective amendment to the Shelf
Registration Statement. Such Holder shall also notify the Company in
writing upon completion of such offer or sale or at such time as such
Holder no longer intends to make offers or sales under the Shelf
Registration Statement. A sample Registration Notice to be completed,
signed and delivered to the Company is attached hereto as Exhibit A.
3.3.2. Once a Holder has provided a Registration Notice
(the "Initiating Holder"), during the following sixty (60) day period
specified in subsection 3.4.2 any additional Holder may provide a
Registration Notice concurrent with commencing offers or sales, provided
that (i) any such Holder providing such a subsequent Registration Notice
shall complete all offers and sales under the Shelf Registration
Statement within the sixty (60) day period commenced by the Registration
Notice given by the Initiating Holder and (ii) if the method of
distribution to
be used by such additional Holder differs from that set forth in the
Shelf Registration Statement, such additional Holder prior to commencing
offers or sales shall provide the Company with such information as the
Company reasonably requests with respect to such method of distribution.
3.4 Conditions to Sale.
3.4.1 In connection with and as a condition to the
Company's obligations with respect to any Shelf Registration Statement
prepared pursuant to this Section 3, each Holder covenants and agrees
that (i) it will not offer or sell any Registrable Securities under the
Shelf Registration Statement until it has provided a Registration
Notice, received copies of the Prospectus as then amended or
supplemented and received notice from the Company that the Registration
Statement and any post-effective amendments thereto have become
effective; and (ii) upon receipt of any notice from the Company as
provided by Section 6.3 hereof, such Holder shall not offer or sell any
Registrable Securities pursuant to the Shelf Registration Statement
until such Holder receives copies of the supplemented or amended
Prospectus and receives notice that any post effective amendment has
become effective, and, if so directed by the Company, such Holder will
deliver to the Company (at the expense of the Company) all copies in its
possession, other than permanent file copies then in such Holder's
possession, of the Prospectus as amended or supplemented at the time of
receipt of such notice.
3.4.2 All offers and sales under the Shelf
Registration Statement shall be completed within sixty (60) days after
the date on which offers or sales can be made pursuant to subsection
3.4.1 above, and upon expiration of such sixty (60) day period, the
Holder will not offer or sell any Registrable Securities under the
Registration Statement until it has again complied with the provisions
of subsection 3.4.1 above.
Section 4. Demands for Registration.
4.1 Demand Period. From September 4, 1995 until the date
which is two (2) years from the date hereof (the "Demand Period"),
subject to the terms and conditions set forth herein, all Holders, will
have three (3) opportunities, in addition to other rights enumerated in
this Agreement, to request registration under the Securities Act of all
or part of their Registrable Securities (a "Demand Registration");
provided, however, that (i) between the date hereof and the first
effectiveness of the Shelf Registration Statement, provided that the
Company is diligently pursuing the effectiveness of such Shelf
Registration Statement, and (ii) for so long as the Company maintains an
effective Shelf Registration Statement covering all Registrable
Securities and otherwise complies with the terms of this Agreement,
Holders shall not be entitled to request a Demand Registration.
4.2 Demand Procedure.
4.2.1 Subject to subsections 4.2.2 and 4.2.4 below,
during the Demand Period any Holder or combination of Holders (the
"Demanding Shareholders") may deliver to the Company a written request
(a "Demand Registration Request") that the Company register any or all
of such Demanding Shareholders' Registrable Shares.
4.2.2 Holders, in the aggregate, may only make one
Demand Registration Request in each nine-month period during the Demand
Period (the "Interim Demand Periods"). The Company shall only be
required to file one registration statement (as distinguished from
supplements or pre-effective or post-effective amendments thereto) in
response to each Demand Registration Request.
4.2.3 A Demand Registration Request from Demanding
Shareholders shall (i) set forth the number of Registrable Securities
intended to be sold pursuant to the Demand Registration Request (ii)
disclose whether all or any portion of a distribution pursuant to such
registration will be sought by means of an underwriting, and (iii)
identify any underwriter or underwriters proposed for the underwritten
portion, if any, of such registration.
4.2.4 If during any Interim Demand Period, the Company
receives a Demand Registration Request from Demanding Shareholders for
the registration of Registrable Securities having an aggregate market
value of $500,000 or greater, as determined according to the closing
price of the Common Stock on the NASDAQ National Market on the date of
such Demand Registration Request, then the Company shall, subject to the
limitations in subsection's 4.2.5 and 6 hereof, (i) use its reasonable
best efforts to prepare and file within thirty (30) days of receipt of
the Demand Registration Request with the SEC a registration statement
under the Securities Act with respect to all the Registrable Securities
that the Demanding Shareholders requested to be registered in the Demand
Registration Request, (ii) use its reasonable best efforts to cause such
registration statement to become effective within forty-five (45) days
of receipt of the Demand Registration Request, and (iii) if such
registration can be accomplished by means of a registration statement on
Form S-3, keep such registration statement effective until the earlier
of (x) such time as the Demanding Shareholders shall have sold or
otherwise disposed of all of their Registrable Securities included in
the registration or (y) the end of the Shelf Period. If such
registration cannot be accomplished by means of a registration statement
on Form S-3, the Company shall use its reasonable best efforts to keep
such registration statement effective for up to 120 days.
4.2.5 It is anticipated that the
registration contemplated under this Section 4 will be accomplished by
means of the filing of a Form S-3, and that registration on such a form
will allow for different means of distribution, including sales by means
of an underwriting as well as sales into the open market. If the
Demanding Shareholders desire to distribute all or part of the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company in writing in their
initial Demand Registration Request as described in Section 4.2.3 above.
A determination of whether all or part of the distribution will be by
means of an underwriting shall be made by Demanding Shareholders holding
a majority of the Registrable Securities to be included in the
registration. If all or part of the distribution is to be by means of
an underwriting, all subsequent decisions concerning the underwriting
which are to be made by the Demanding Shareholders pursuant to the terms
of this Agreement, which shall include the selection of the underwriter
or underwriters to be engaged and the
representative, if any, of the underwriters so engaged, shall be made by
the Demanding Shareholders who hold a majority of the Registrable
Securities to be included in the underwriting, subject to approval by
the Board of Directors of the Company.
4.2.6 Upon the receipt by the Company of a Demand
Registration Request in accordance with subsection 4.2.4 hereof, the
Company shall, within ten (10) days following receipt of such Demand
Registration Request, give written notice of such request to all
Holders. The Company shall include in such notice information concerning
whether all, part or none of the distribution is expected to be made by
means of an underwriting, and, if more than one means of distribution is
contemplated, may require Holders to notify the Company of the means of
distribution of their Registrable Securities to be included in the
registration. If any Holder who is not a Demanding Shareholder desires
to sell any Registrable Securities owned by such Holder, such Holder may
elect to have all or any portion of their Registrable Securities
included in the registration statement by notifying the Company in
writing (a "Supplemental Demand Registration Request") within 20 days of
receiving notice of the Demand Registration Request from the Company.
The right of any Holder to include all or any portion of its Registrable
Securities in an underwriting shall be conditioned upon the Company's
having received a timely written request for such inclusion by way of a
Demand Registration Request or Supplemental Demand Registration Request
(which right shall be further conditioned to the extent provided in this
Agreement). All Holders proposing to distribute their Registrable
Securities through an underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters
selected for such underwriting.
4.2.7 Notwithstanding any other provision of this
Section 4, if an underwriter advises the Company in writing that
marketing factors require a limitation on the number of shares to be
underwritten, then the number of shares of Registrable Securities that
may be included in the underwriting shall be allocated among the Holders
in proportion (as nearly as practicable) to the respective amounts of
Registrable Securities each Holder otherwise sought to have registered
pursuant to its Demand Registration Request or Supplemental Demand
Registration Request (or in such other proportion as they shall mutually
agree). Registrable Securities excluded or withdrawn from the
underwriting in accordance with this section 4.2.7 shall be withdrawn
from the registration.
4.3 Priority on Request Registration. The
Company will not include in any Demand Registration any securities which
are not Registrable Securities without the prior written consent of the
Holders of a majority of the shares of Registrable Securities included
in such registration. If a Demand Registration is an underwritten
offering and the managing underwriters advise the Company in writing
that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such
offering exceeds the number of securities that can be sold in an orderly
manner in such offering within a price range acceptable to the Holders
of a majority of the shares of Registrable Securities initially
requesting registration, the Company will include in such registration
prior to the inclusion of any securities which
are not Registrable Securities the number of shares of Registrable
Securities requested to be included that in the opinion of such
underwriters can be sold in an orderly manner within such acceptable
price range, pro rata among the respective Holders thereof on the basis
of the number of shares of Registrable Securities owned by each such
Holder.
Section 5. Piggyback Registrations.
5.1 Right to Piggyback. After the end of the Lock-Up
Period, if the Company proposes to undertake an offering of shares of
Common Stock for its account or for the account of Other Holders and the
registration form to be used for such offering may be used for the
registration of Registrable Securities (a "Piggyback Registration"),
each such time the Company will give prompt written notice to all
Holders of Registrable Securities of its intention to effect such a
registration (each, a "Piggyback Notice") and, subject to sections 5.3
and 5.4 hereof, the Company will use its best efforts to cause to be
included in such registration all Registrable Securities with respect to
which the Company has received written requests for inclusion therein
within 20 days after the date of sending the Piggyback Notice.
5.2 Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Company, and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be included
in such registration exceeds the number that can be sold in an orderly
manner within a price range acceptable to the Company, the Company will
include in such registration (a) first, the securities the Company
proposes to sell and (b) second, the Registrable Securities requested to
be included in such registration and any other securities requested to
be included in such registration that are held by Persons other than the
Holders of Registrable Securities pursuant to registration rights, pro
rata among the holders of Registrable Securities and such other
securities requesting such registration on the basis of the number of
shares of such securities owned by each such Holder.
5.3 Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of
holders of the Company's securities other than the Holders of
Registrable Securities (the "Other Holders"), and the managing
underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration
exceeds the number that can be sold in an orderly manner in such
offering within a price range acceptable to the Other Holders requesting
such registration, the Company will include in such registration (a)
first, the securities requested to be included therein by the Other
Holders requesting such registration and (b) second, the Registrable
Securities requested to be included in such registration hereunder, pro
rata among the Holders of Registrable Securities requesting such
registration on the basis of the number of shares of such securities
owned by each such Holder.
5.4 Selection of Underwriters. In the case of an
underwritten Piggyback Registration, the Company will have the right to
select the investment banker(s) and manager(s) to administer the
offering.
Section 6. Registration Procedures. Whenever the Holders of
Registrable Securities have requested that any
Registrable Securities be sold pursuant to this Agreement, the Company
will use its reasonable best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible:
6.1.1 Registration Statement. Prepare and file with the
SEC a registration statement with respect to such Registrable Securities
and use its reasonable best efforts to cause such registration statement
to become effective.
6.1.2 Amendments and Supplements. Promptly 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 period
required by the intended method of disposition and the terms of this
Agreement or to describe the terms of any offering made from an
effective Shelf Registration Statement, 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;
6.1.3 Provision of Copies. Promptly furnish to each
seller of Registrable Securities the number of copies of such
registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
6.1.4 Blue Sky Laws. Use its reasonable best efforts to
register or qualify such Registrable Securities under the securities or
blue sky laws of such jurisdictions as any seller reasonably requests
and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by
such seller, provided, that the Company will not be required to (a)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection 6.1.4, (b)
subject itself to taxation in any such jurisdiction or (c) consent to
general service of process in any such jurisdiction.
6.1.5 Anti-Fraud Rules. Promptly notify each seller of
such Registrable Securities when a prospectus relating thereto 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 contains an untrue statement of a material fact
or omits any material fact necessary to make the statements therein not
misleading, and in such event, at the request of any such seller, the
Company will promptly prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading;
6.1.6 Securities Exchange Listings. Use its
reasonable best efforts to cause all such Registrable Securities to be
listed on each securities exchange on which securities of the same class
issued by the Company are then listed and use its reasonable best
efforts to qualify such Registrable Securities for trading on each
system on which securities of the same class issued by the Company are
then qualified;
6.1.7 Underwriting Agreements. Enter into such
customary agreements (including underwriting agreements in customary
form) and take all such other actions as the holders of a majority of
the shares of Registrable Securities being sold or the underwriters, if
any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
6.1.8 Due Diligence. Make available for inspection by
any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent
retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors, employees and independent accountants
to supply all information reasonably requested by any such underwriter,
attorney, accountant or agent in connection with such registration
statement;
6.1.9 Earning Statement. Otherwise use its best efforts
to comply with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable, an
earning statement covering the period of at least twelve months
beginning with the first day of the Company's first full calendar
quarter after the effective date of the registration statement, which
earning statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
6.1.10 Deemed Underwriters or Controlling Persons.
Permit any Holder of Registrable Securities which Holder, in such
Holder's reasonable judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of
such registration or comparable statement and to require the insertion
therein of material in form and substance satisfactory to such Holder
and to the Company and furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be included;
6.1.11 Management Availability. In connection with
underwritten offerings, make available appropriate management personnel
for participation in the preparation and drafting of such registration
or comparable statement, for due diligence meetings and for "road show"
meetings;
6.1.12 Stop Orders. Promptly notify Holders of the
Registrable Securities of the threat of issuance by the SEC of any stop
order suspending the effectiveness of the registration statement or the
initiation of any proceeding for that purpose, and make every reasonable
effort to prevent the entry of any order suspending the effectiveness of
the registration statement. In the event of the issuance of any stop
order suspending the effectiveness of a registration statement, or of
any order suspending or preventing the use of any related prospectus
or suspending the qualification of any Registrable Securities included
in such registration statement for sale in any jurisdiction, the Company
will use its reasonable best efforts promptly to obtain the withdrawal
of such order; and
6.1.13 Opinions. At each closing of an underwritten
offering, request opinions of counsel to the Company and updates thereof
(which opinions and update shall be reasonably satisfactory to the
underwriters of the Registrable Securities being sold) addressed to the
underwriters covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such Holders or their counsel.
6.1.14 Comfort Letter. Obtain a cold comfort letter
from the Company's independent public accountants addressed to the
selling Holders of Registrable Securities in customary form and covering
such matters of the type customarily covered by cold comfort letters as
the Holders of a majority of the Registrable Securities being sold
reasonably request.
6.2 Further Information. The Company may require each Holder of
Registrable Securities to furnish to the Company in writing such
information regarding the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably
request.
6.3 Notice to Suspend Offers and Sales. Each Investor severally
agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subsections 6.1.5 or
6.1.12 hereof, such Investor will forthwith discontinue disposition of
shares of Common Stock pursuant to a registration hereunder until
receipt of the copies of an appropriate supplement or amendment to the
prospectus under subsection 6.1.5 or until the withdrawal of such order
under subsection 6.1.12. If any such registration or comparable
statement refers to any Holder by name or otherwise as the holder of any
securities of the Company and if, in the Holder's reasonable judgment,
such Holder is or might be deemed to be a controlling person of the
Company, such Holder shall have the right to require (a) the insertion
therein of language in form and substance satisfactory to such Holder
and the Company and presented to the Company in writing, to the effect
that the holding by such Holder of such securities is not to be
construed as a recommendation by such Holder of the investment quality
of the Company's securities covered thereby and that such holding does
not imply that such Holder will assist in meeting any future financial
requirements of the Company, or (b) in the event that such reference to
such Holder by name or otherwise is not required by the Securities Act
or any similar Federal statute then in force, the deletion of the
reference to such Holder; provided that with respect to this clause (b)
such Holder shall furnish to the Company an opinion of counsel to such
effect, which opinion and counsel shall be reasonably satisfactory to
the Company.
6.4 Company's Ability to Postpone. Notwithstanding anything to
the contrary contained herein, the Company shall have the right once in
any twelve month period to postpone the filing of any registration
statement under sections 3, 4 or 5 hereof for a reasonable period of
time (not exceeding 75 days) if the Company furnishes the Holders of
Registrable Securities a certificate signed by the Chairman of the Board
of Directors or the President of the Company stating that, in its good
faith judgment, the Company's Board of Directors (or the executive
committee thereof) has determined that effecting the registration at
such time would adversely affect a material financing, acquisition,
disposition of assets or stock, merger or other comparable transaction,
or would require the Company to make public disclosure of information
the public disclosure of which would have a material adverse effect upon
the Company.
Section 7. Registration Expenses.
7.1 Expenses Borne by Company. Except as specifically
otherwise provided in section 7.2 hereof, the Company will be
responsible for payment of all expenses incident to any registration
hereunder, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws,
printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified
public accountants and other Persons retained by the Company in
connection with such registration (all such expenses borne by the
Company being herein called the "Registration Expenses").
7.2 Expenses Borne by Selling Security Holders. The
selling security holders will be responsible for payment of brokerage
discounts, commissions and other sales expenses incident to any
registration hereunder. In addition, the selling security holders will
be responsible for the payment of their own legal fees if they retain
legal counsel separate from that of the Company, unless the Company
requires the selling security holders to obtain their own legal counsel,
in which case the reasonable fees and expenses of one counsel
representing the security holders jointly shall be paid by the Company.
The selling security holders shall also be responsible for payment of
any underwriting fees if the selling security holders have requested
participation of an underwriter with respect to an offering subject to
the Shelf Registration or a Demand Registration or have elected to
participate in a Piggyback Registration using an underwriter. Any such
expenses which are common to the selling security holders shall be
divided among such security holders (including the Company and holders
of the Company's securities other than Registrable Securities, to the
extent that securities are being registered on behalf of such Persons)
pro rata on the basis of the number of shares being registered on behalf
of each such security holder, or as such security holders may otherwise
agree.
Section 8. Indemnification.
8.1 Indemnification by Company. The Company agrees to
indemnify, to the fullest extent permitted by law, each Holder of
Registrable Securities and each Person who controls (within the meaning
of the Securities Act) such Holder against all losses, claims, damages,
liabilities and expenses in connection with defending against any such
losses, claims, damages and liabilities or in connection with any
investigation or inquiry, in each case caused by or based on any untrue
or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arise out of any
violation by the Company of any rules or regulation
promulgated under the Securities Act applicable to the Company and
relating to action or inaction required of the Company in connection
with such registration except in so far as the same are caused by or
contained in (i) any information furnished in writing to the Company by
such Holder expressly for use therein, (ii) such Holder's failure to
deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto, or (iii) such Holder's failure to
discontinue disposition of shares after receiving notice from the
Company pursuant to section 6.3 hereof. In connection with an
underwritten offering, the Company will indemnify such underwriters,
their officers and directors and each Person who controls (within the
meaning of the Securities Act) such underwriters at least to the same
extent as provided above with respect to the indemnification of the
Holders of Registrable Securities.
8.2 Indemnification by Holder. In connection with any
registration statement in which a Holder of Registrable Securities is
participating, each such Holder will furnish to the Company in writing
such information as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to
the extent permitted by law, will indemnify the Company, its directors
and officers and each Person who controls (within the meaning of the
Securities Act) the Company against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue
statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information so furnished in
writing by such Holder expressly for use in connection with such
registration; provided that the obligation to indemnify will be
individual to each Holder and will be limited to the net amount of
proceeds received by such Holder from the sale of Registrable Securities
pursuant to such registration statement. In connection with an
underwritten offering, each such Holder will indemnify such
underwriters, their officers and directors and each Person who controls
(within the meaning of the Securities Act) such underwriters at least to
the same extent as provided above with respect to the indemnification of
the Company.
8.3 Assumption of Defense by Indemnifying Party. Any Person
entitled to indemnification hereunder will (a) give prompt written
notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (b) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but
such consent will not be unreasonably withheld). An indemnifying party
who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties
with respect to such claim.
8.4 Binding Effect. The indemnification provided for
under this Agreement will remain in full force and effect regardless of
any investigation made by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party and
will survive the transfer of securities. The Company also agrees to make
such provisions, as are reasonably requested by any indemnified party,
for contribution to such party in the event the Company's
indemnification is unavailable for any reason. Each Holder of
Registrable Securities also agrees to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such
party in the event such Holder's indemnification is unavailable for any
reason.
Section 9. Participation in Underwritten Registrations. No
Person may participate in any registration hereunder which is
underwritten unless such Person (a) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements
approved by the Person or Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
Section 10. Miscellaneous.
10.1 No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which
violates the rights granted to the Holders of Registrable Securities in
this Agreement.
10.2 Remedies. Any Person having rights under any
provision of this Agreement will be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by
law. The parties hereto agree and acknowledge that money damages may
not be an adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any
bond or other security) for specific performance and for other
injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
10.3 Term. Except as specifically otherwise provided
herein, the provisions of this Agreement shall apply until such time as
all Registrable Securities have ceased to be Registrable Securities
hereunder but in no event later than 3 years from the Effective Time of
the Purchase Agreement.
10.4 Amendments and Waivers. Except as otherwise
specifically provided herein, this Agreement may be amended or waived
only upon the prior written consent of the Company and of the Holders of
a majority of the then outstanding shares of Registrable Securities.
10.5 Successors and Assigns. Subject to Section 2
hereof, all covenants and agreements in this Agreement by or on behalf
of any of the parties hereto will bind and
inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not. In addition, whether or not
any express assignment has been made, but subject in any case to Section
2 hereof, the provisions of this Agreement which are for the benefit of
Investor or Holders of Registrable Securities are also for the benefit
of, and enforceable by, any subsequent holder of such securities so long
as such securities continue to be restricted securities, as that term is
defined in Securities Act Rule 144.
10.6 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is
held to be prohibited by or invalid under applicable law, such provision
will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
10.7 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, any one of which need not
contain the signatures of more than one party, but all such counterparts
taken together will constitute one and the same Agreement.
10.8 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
10.9 Governing Law. All questions concerning the
construction, validity and interpretation of this Agreement will be
governed by and construed in accordance with the domestic laws of the
State of Delaware, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Delaware.
10.10 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 with respect of the subject matter
contained herein. This agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
10.11 Notices. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this
Agreement shall be in writing and shall be deemed to have been given
when delivered personally to the recipient, sent to the recipient by
reputable express courier service (charges prepaid) or mailed to the
recipient by certified or registered mail, return receipt requested and
postage prepaid. Such notices, demands and other communications will be
sent to each Investor at the address indicated on the records of the
Company and to the Company at the address indicated below:
(a) If to the Company:
INTERSOLV, Inc.
3200 Tower Oaks Boulevard Rockville, MD 20852
Attn: General Counsel
with a copy, which shall not constitute notice, to:
Arent Fox Kintner Plotkin & Kahn 1050 Connecticut Avenue N.W.
Washington, DC 20036
Attn: Robert B. Hirsch, Esq.
(b) If to the Investor:
Mr. Michael I. Goldman
170 Glenview Road
South Orange, New Jersey 07079
with a copy, which shall not
constitute notice, to:
Robert A. Sochor, Esq. Carchman, Sochor
23 Vreeland Road
Union, New Jersey 07083
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending
party.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
THE COMPANY:
INTERSOLV, Inc.
By: s/s Kevin J. Burns
Its: President
THE INVESTOR:
s/s Michael I.
Goldman Michael I.
Goldman
EXHIBIT A
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