Exhibit 7.03
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of June 28, 1996 by and among Astea International Inc., a
Delaware corporation ("ASTEA" or the "COMPANY"), and the former shareholders of
Abalon AB, a corporation organized under the laws of Sweden, including its
affiliated corporations or subsidiaries ("ABALON"), Per Edtsrom, Orjan Grinndal
and Henrik Lindberg (collectively the "SHAREHOLDERS" and individually a
"SHAREHOLDER").
RECITALS
A. The Company, Abalon and the Shareholders are parties to a certain
Share Purchase Agreement dated as of June 20, 1996 (the "SHARE AGREEMENT")
pursuant to which Astea will acquire Abalon and its affiliated corporations
through an acquisition from the Shareholders of all of the outstanding stock of
Abalon and/or its affiliated entities in exchange for cash consideration of
US$8,550,000 and the issuance of 233,236 shares of Astea's Common Stock, $.01
par value per share (the "ASTEA COMMON STOCK"), as set forth in the Share
Agreement.
B. The execution and delivery of this Agreement by the parties hereto
is a condition precedent to the obligations of the parties to consummate the
transactions under the Share Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties hereto agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings indicted below:
1933 ACT. The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time
1934 ACT. The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, as in effect from time to
time.
BUSINESS DAY. Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York are
authorized or obligated by law or executive order to close.
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COMMISSION. The United States Securities and Exchange
Commission.
CHANGE IN CONTROL. A change in control of Astea shall mean the
sale of all or substantially all of the capital stock or assets of Astea, or any
reorganization, merger, tender offer, consolidation or other form of business
combination involving Astea where Astea is not the surviving entity, or effect a
change in the composition of a majority of the Board of Directors due to any
proxy solicitation of shareholders desiring a change in the composition of the
Board of Directors with the intent of changing or influencing control of Astea.
HOLDER. Any person owning Registrable Securities who is a
party to this Agreement, and any transferee thereof in accordance with Section 7
or 11 of this Agreement.
PROSPECTUS. The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement (including,
without limitation, any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement), and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
REGISTER, REGISTRATION AND REGISTERED. A registration effected
by preparing and filing a registration statement or similar document with the
Commission in compliance with the 1933 Act, and the declaration or ordering of
effectiveness of such registration statement or document.
REGISTRABLE SECURITIES. The shares of Astea Common Stock
issued to and received by the Shareholders pursuant to the Share Agreement and
any securities that may be issued by the Company or any successor to the Company
from time to time with respect to, in exchange for, or in replacement of such
shares of Astea Common Stock, including, without limitation, securities issued
as a stock dividend on or pursuant to a stock split or similar recapitalization
of such shares of Astea Common Stock; provided, however, that those shares as to
which the following apply shall cease to be Registrable Securities: (a) a
Registration Statement with respect to the sale of such Registrable Securities
shall have become effective under the 1933 Act and such Registrable Securities
shall have been disposed of under such Registration Statement; (b) such
Registrable Securities shall have become transferable, or have become eligible
for transfer (whether or not so transferred), in accordance with the resale
provisions of
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Regulation S or any successor rule or provision, under the 1933 Act; (c) such
Registrable Securities shall have been transferred in a transaction in which the
Shareholder's rights and obligations under this Agreement were not properly
assigned in accordance with this Agreement; (d) such Registrable Securities
shall have ceased to be outstanding; or (e) the shares of Astea Common Stock
have previously been sold, transferred or assigned by a Shareholder in
accordance with this Agreement and permitted by Section 4 hereof.
REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with Sections 2 and 4 hereof, including, without
limitation, all registration and filing fees (including filing fees with respect
to the Commission and to the National Association of Securities Dealers, Inc.
and listing fees of the Nasdaq National Market System), all fees and expenses of
complying with state securities or "blue sky" laws (including fees and
disbursements of underwriters' counsel in connection with any "blue sky"
memorandum or survey, but excluding any fees and expenses for foreign
qualification in such jurisdictions), all printing expenses, all registrars' and
transfer agents' fees and all fees and disbursements of the Company's counsel
and independent public accountants; provided, however, that Registration
Expenses shall not include the fees and expenses of counsel to the holders of
Registrable Securities, or underwriters' discounts or commissions associated
with the sale of the Registrable Securities.
REGISTRATION STATEMENT. A registration statement prepared and
filed with the Commission in compliance with the 1933 Act.
REGULATION S. Regulation S promulgated under the 1933 Act and
the rules, regulations and interpretations thereof issued by the Commission as
may be in effect from time to time.
SELLER. Any person, including any Holder, participating in an
offering of any Registrable Securities of the Company pursuant to this
Agreement.
SELLING EXPENSES. All applicable transfer taxes and any fees
and disbursements of any counsel, accountants or other advisors for any Seller
of the Registrable Securities being registered.
SHELF REGISTRATION. A registration effected pursuant to a
shelf Registration Statement of the Company, on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the
Commission, all amendments and
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supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein. A Registration Statement
relating to a Shelf Registration shall be referred to herein as the "SHELF
REGISTRATION STATEMENT." The Shelf Registration Statement shall be effected on
Form S-3 or any successor form prescribed by the Commission.
U.S. PERSON shall mean those individuals or entities described
in Rule 902(o) and (p) of Regulation S of the 1933 Act and as further set forth
on Appendix A to this Agreement..
2. "PIGGY-BACK" REGISTRATION RIGHTS
Subject in all instances to the resale restrictions set forth in
Section 4, commencing on and after January 1,, 1997, if at any time thereafter
Astea shall determine to register in a public offering under the 1933 Act any of
its Common Stock for its own account, or the account of other shareholders of
the Company, it shall send to the Shareholders written notice of such
determination and, if within 15 calendar days after receipt of such notice, any
Shareholder shall so request in writing, Astea shall include in such
registration statement all or any part of the Registrable Securities the
Shareholder requests to be registered (subject to the resale restrictions set
forth in Section 4 as to number of Registrable Securities which may be resold
under this agreement at any time). This right shall not apply to a registration
of shares of Astea Common Stock on Form S-8 or Form S-4 (or their then
equivalents or successor forms) relating to shares of Astea Common Stock to be
issued by Astea in connection with any acquisition of any entity or business, or
shares of Astea Common Stock issuable in connection with any stock option, stock
purchase plan or other employee benefit plan.
If, in connection with any offering involving an underwriting of Astea
Common Stock to be issued for the account of the Company or selling
securityholders, the managing underwriter shall impose a limitation on the
number of shares of such Astea Common Stock which may be included in any such
registration statement because, in its judgment, such limitation is necessary to
effect an orderly public distribution of the Astea Common Stock and to maintain
a stable market for the securities of the Company, then the Company shall be
obligated to include in such registration statement only such limited portion of
the stock with respect to which the Shareholder has requested inclusion
hereunder, on a pro rata basis based on the number of shares of Common Stock
originally requested for inclusion therein by the Company, the Shareholders, and
all other selling securityholders possessing contractual registration rights.
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The provisions of this Section 2 shall expire with respect to any
Shareholder at such time as any such Shareholder shall be eligible to resell the
Registrable Securities in the United States or to a U.S. Person (as defined in
Appendix A) pursuant to the resale provisions of Regulation S.
3. SHELF REGISTRATION
3.1 DEMAND REGISTRATION RIGHT
Subject to the limitations set forth elsewhere in this Section 3,
commencing on or after January 1, 1997, and subject to the resale restrictions
and limitations set forth in Section 4 hereof, Astea will, upon the written
request of the Shareholders holding a majority of the Registrable Securities,
use its reasonable efforts to promptly effect qualification and registration of
the Registrable Securities under the Securities Act on a Form S-3 registration
statement (or any other registration statement form for which it is then
eligible, other than Form S-1) as a Shelf Registration. Astea shall not be
required to effect more than two registrations on Form S-3 pursuant to the
provisions of this Section 3. The rights to demand registration of the
Registrable Securities set forth in this Section 3 shall expire on December 31,
1998, except that this date shall be extended by the number of days beginning on
January 1, 1997 through December 31, 1998 during which a registration statement
by the Company is not available for sales of the Registrable Securities because
of (i) the operation of this Section 3; or (ii) the failure of the Company to
qualify for the use of Form S-3 because of its failure to file on a timely basis
all reports required to be filed under the 1934 Act; or (iii) the nonfiling by
the Company of a current report on Form 8-K (and any amendments thereto)
containing pro forma combined financial statements and results of operations of
Astea and Abalon. Astea and the Shareholders shall use reasonable efforts to
coordinate sales of the Registrable Securities pursuant to a Form S-3
registration statement with Astea's market makers in a manner to ensure
stability in the trading price of Astea Common Stock.
3.2 LIMITATION ON SHELF REGISTRATION OBLIGATION
Notwithstanding the provisions of Section 3.1, and subject to the
limitations described below in this Section 3 and Section 4, if, prior to the
filing or effective date of the Shelf Registration Statement referred to in
Section 3.1 above, the Company shall furnish to such Holders a certificate
issued by the Board of Directors upon the advice of counsel and signed by the
President of the Company stating that, in their good faith judgment:
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(a) the filing of the Shelf Registration Statement or the
offering of securities pursuant thereto would materially and adversely affect
(i) a pending or scheduled public offering of Astea's securities, (ii) a pending
or proposed acquisition, merger, consolidation, reorganization, strategic
alliance, corporate partnership, restructuring or similar transaction of or by
Astea, which in each case is material to the business of Astea, (iii) bona fide
negotiations, discussions or proposals with respect to any of the foregoing
types of transactions, or (iv) the financial condition, position, prospects,
stock price or strategy of Astea in connection with the proposed disclosure of
any pending or threatened litigation, claim, assessment or government
investigation which may be required thereby; and
(b) in the event the Shelf Registration Statement were then
effective and sales of Registrable Securities were being made or offered
thereunder, and disclosure of all material information with respect to the
foregoing transactions had not been made, such circumstances would cause a
violation of the 1933 Act or the 1934 Act and result in potential liability to
Astea and/or the Shareholders; then the Company shall have the right, subject to
the limitations set forth in Section 3.3(d) hereof, to defer the filing or
effectiveness, as the case may be, of such Shelf Registration Statement for such
period of time as such the above circumstances shall continue, such period not
to exceed 75 days following the date of suspension, provided that the Company
may not exercise such right to defer the filing or effectiveness more than once
in any six-month period.
3.3 SELLING PROCEDURES; SUSPENSION
Each Holder of Registrable Securities agrees to give written notice to
the General Counsel and the Chief Accounting Officer of the Company at least
five (5) Business Days prior to any intended sale or distribution of Registrable
Securities under the Shelf Registration Statement referred to in Section 3.1,
which notice shall specify the date on which such Holder intends to begin such
sale or distribution. As soon as practicable after the date such notice is
received by the Company, and in any event within three (3) Business Days after
such date, the Company shall comply with either paragraph (a) or (b) below.
(a) Except in the event that paragraph (b) below applies, the
Company shall (i) if deemed necessary by the Company, prepare and file with the
Commission a post-effective amendment to the Shelf Registration Statement or a
supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein
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by reference or file any other required document so that such Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and so that, as thereafter delivered to
purchasers of the Registrable Securities being sold thereunder, such Prospectus
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (ii) provide the Holders of the Registrable Securities who gave such
notice copies of any documents filed pursuant to Section 3.3(a)(i); and (iii)
inform each such Holder that the Company has complied with its obligations in
Section 3.3(a)(i) (or that, if the Company has filed a post-effective amendment
to the Shelf Registration Statement which has not yet been declared effective,
the Company will notify each such Holder to that effect, will use its best
efforts to secure the effectiveness of such post-effective amendment and will
immediately notify each such Holder pursuant to Section 3.3(a)(i) hereof when
the amendment has become effective). Each Holder who has given notice of
intention to distribute such Holder's Registrable Securities in accordance with
Section 3.3 hereof (a "NOTICE HOLDER") shall sell all or any of such Registrable
Securities pursuant to the Shelf Registration Statement and related Prospectus
only during the 90-day period commencing with the date on which the Company
gives notice, pursuant to Section 3.3(a)(i), that the Registration Statement and
Prospectus may be used for such purpose (such 90-day period is referred to as a
"SELLING PERIOD"). The Notice holders will not sell any Registrable Securities
pursuant to such Registration Statement or Prospectus after such Selling Period
without giving a new notice of intention to sell pursuant to Section 3.3 hereof
and receiving a further notice from the Company pursuant to Section 3.3(a)(i)
hereof or paragraph (b) below.
(b) In the event of (i) any request by the Commission or any
other federal or state governmental authority during the period of effectiveness
of the Shelf Registration Statement for amendments or supplements to a Shelf
Registration Statement or related Prospectus or for additional information; (ii)
the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Shelf Registration
Statement or the initiation of any proceedings for that purpose; (iii) the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) any event or circumstance which necessitates
the making of any changes in the Shelf Registration Statement or Prospectus, or
any document incorporated or deemed to be incorporated therein by reference, so
that, in the
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case of the Shelf Registration Statement, it will not contain any untrue
statement of a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and that in the case of the Prospectus, it will not contain any untrue statement
of a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (v) that, in the good
faith judgment of the Company's Board of Directors, upon the advice of counsel,
in accordance with the provision of Section 3.2, , it is advisable to suspend
use of the Prospectus for a discrete period of time due to pending corporate
developments, public filings with the Commission or similar events; then,
subject to paragraph (d) below, the Company shall deliver a certificate in
writing to the Notice Holders (the "SUSPENSION NOTICE") to the effect of the
foregoing and, upon receipt of such Suspension Notice, each such Notice Holder's
Selling Period will not commence (a "SUSPENSION") until such Notice Holder's
receipt of copies of the supplemented or amended Prospectus provided for in
Section 3.3(a)(i) hereof, or until it is advised in writing by the Company that
the Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus.
(c) In the event any of the events or circumstances listed in
the foregoing paragraph (b) occur or exist after a Selling Period has commenced,
subject to paragraph (d) below, the Company shall have the same right to suspend
such Selling Period by delivery of a Suspension Notice as the Company would have
had if the Selling Period had not yet commenced, and any such suspension of a
Selling Period shall be deemed included within the meaning of the term
"Suspension" for all purposes under this Agreement.
(d) In the event of any Suspension, or any delay in effecting
the Shelf Registration under Section 3.2 above, the Company will use its best
efforts to ensure that the use of the Prospectus so suspended or delayed may be
commenced or resumed, as the case may be, and that any Selling Period so
suspended will commence or resume, as the case may be, as soon as practicable
and, in the case of a pending development, filing or event referred to in
Section 3.3(b)(iv) or (v) hereof, as soon, in the judgment of the Company's
Board of Directors (in accordance with the provisions of Section 3.2), as
disclosure of the material relating to such pending development, filing or event
would not have an adverse effect on the Company's ability to consummate the
transaction, if any, to which such development, filing or event relates.
Notwithstanding any other provision of this Agreement, the Company shall have
the right to cause a maximum of two (2) Suspensions, neither of which may be
within 30 days of the other, as provided
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above (including for this purpose a delay in effecting the Shelf Registration
pursuant to Section 3.2 above) during any 12-month period after the initial
effective date of the Shelf Registration Statement, and the total number of days
in any 12-month period during which a Suspension or Suspensions (including for
this purpose a delay in effecting the Shelf Registration Statement pursuant to
Section 3.2 above) may be in effect shall not exceed 90 days.
(e) Subject to the provisions of Section 3.2, the Company will
use its best efforts to maintain the effectiveness for (i) up to 180 days, (or
such shorter period of time as the underwriters need to complete the
distribution of the registered offering in any Company-primary or secondary
offering), in the case of a registration pursuant to Section 2, or (ii) or
twenty-four (24) months in the case of a Shelf Registration statement on Form
S-3 pursuant to Section 3.1, of any registration statement pursuant to which any
of the Registrable Securities are being offered. The Company from time to time
will amend or supplement such registration statement and the prospectus
contained therein to the extent necessary to comply with the 1933 Act and any
applicable state securities statue or regulation. The Company will also provide
each holder of Registrable Securities with as many copies of the prospectus
contained in any such registration statement as it may reasonably request.
3.4 UNDERWRITING AGREEMENT
If in connection with any proposed distribution by the Shareholders
under the "piggy back" registration referred to in Section 2, the Company in its
discretion shall determine that it is in the best interests of the Company to
effect distribution by means of an underwriting, the Company shall promptly
notify the Shareholders of such determination. In such event, the right of any
Shareholder to participate in such distribution shall be conditioned upon such
Shareholder's participation in the underwriting arrangements required by this
Section 3.4, including without limitation, the requirement that the Shareholder
enter into an underwriting agreement in customary form with the managing
underwriter selected for the underwriting by the Company.
4. RESTRICTIONS ON TRANSFER OF SHARES
Notwithstanding any other provision in this Agreement, each Shareholder
agrees not to sell, assign, transfer, grant an option for, engage in any
derivative security transaction with respect to, or otherwise dispose of in any
manner any of the Registrable Securities, whether to the public or in
privately-negotiated transactions, except with respect to those shares for which
the restrictions on transfer set forth in this Section shall
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lapse in the following increments and on the dates set forth below. The amount
of Registrable Securities held by each Shareholder listed on Exhibit A shall
then become eligible for the registration rights and be released from the
restrictions on transfer set forth in this Agreement in the following increments
on the following dates set forth below:
On and after January 1, 1997: 15% of the Registrable Shares
On and after April 30, 1997: 19% of the Registrable Shares
On and after September 30, 1997: 19% of the Registrable Shares
On and after December 31, 1997: 15% of the Registrable Shares
On and after June 30, 1998: 16% of the Registrable Shares
On and after December 31, 1998: 16% of the Registrable Shares
In the event of any attempted transfer of the Registrable Shares in
violation of the foregoing restrictions, the registration rights set forth in
this Agreement shall automatically expire with respect to each Shareholder who
transfers such Registrable Shares in violation of the foregoing restrictions. In
the event of any violation of these restrictions, the Company shall have to
right to issue stop transfer instructions to its transfer agent to prevent any
threatened or continuing violation of these transfer restrictions and to seek a
decree for specific performance of the provisions of this Agreement.
Notwithstanding the foregoing, a Shareholder may (i) transfer up to 30%
of his Registrable Securities by way of gift for estate planning purposes to any
member of his immediate family or to any trust for the benefit of any such
family member, provided that any transferee shall agree in writing with the
Company, as a condition precedent to such transfer, to be bound by all of the
provisions of this Agreement to the same extent as if such transferee were the
original shareholder hereunder, or (ii) transfer any of his Registrable
Securities by will or the laws of descent and distribution to the heirs of the
Shareholder, or in the event of the disability of the Shareholder, to the legal
representatives of the Shareholder, in which event each such transferee shall
also be bound (and shall agree in writing to be bound) by all of the provisions
of this Agreement to the same extent as if such transferee were the original
Shareholder hereunder.
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THE PROVISIONS OF THIS SECTION 4 SHALL EXPIRE AND TERMINATE
WITH RESPECT TO ANY SHAREHOLDER UPON (i) A CHANGE IN CONTROL
OF ASTEA; (ii) THE DEATH OR DISABILITY OF A SHAREHOLDER; (iii)
A TERMINATION, WITHOUT CAUSE, OF THE SHAREHOLDER UNDER THE
EMPLOYMENT AGREEMENT BETWEEN THE SHAREHOLDER AND ABALON; OR
(iv) A MATERIAL BREACH BY ASTEA OF ANY OF THE MATERIAL
PROVISIONS OF THIS AGREEMENT, THE SHARE AGREEMENT, THE
EMPLOYMENT AGREEMENT BETWEEN A SHAREHOLDER AND ABALON, OR THE
ESCROW AGREEMENT. THE PROVISIONS OF THIS SECTION 4 SHALL NOT
APPLY TO A PLEDGE, MORTGAGE OR OTHER ENCUMBRANCE OF THE
REGISTRABLE SECURITIES PURSUANT TO A BONA FIDE LOAN
TRANSACTION IN WHICH THE REGISTRABLE SECURITIES ARE GIVEN AS
ADDITIONAL COLLATERAL TO SECURE THE LOAN AND THE LOAN
OBLIGATION IS A FULL RECOURSE OBLIGATION WITH RESPECT TO
COLLATERAL OTHER THAN THE REGISTRABLE SECURITIES.
5. EXPENSES
The Company will pay all Registration Expenses in connection with the
registration of Registrable Securities effected by the Company pursuant to
Sections 2 and 3. Holders of Registrable Securities registered pursuant to this
Agreement shall pay all Selling Expenses associated with such registration, with
each Holder bearing a pro rata portion of the Selling Expenses based upon the
number of Registrable Securities registered by each Holder.
6. EXPIRATION OF REGISTRATION RIGHTS
The obligations of the Company under Section 2 and 3 of this Agreement
to register the Registrable Securities shall expire and terminate at such time
as the Shareholder shall be entitled or eligible to sell all such securities in
the United States or to a U.S. Person without restriction and without a need for
the filing of a registration statement under the Securities Act, including
without limitation, for any resales of restricted securities made pursuant to
Regulation S as promulgated by the Commission. The determination as to whether
the Shareholder is entitled or eligible to sell all Registrable Securities
without the need for registration under the Securities Act shall be based on a
written opinion of counsel that registration of the Registrable Securities is
not required under the Securities Act, sufficient to permit the transfer agent
to transfer such securities upon a sale by the Shareholder. The obligations of
the Company under Section 3 of this Agreement shall expire on December 31, 1998
(provided no stop
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transfer orders are in place with the transfer agent), except that this date
shall be extended by the number of days beginning on January 1, 1997 through
December 31, 1998 during which a registration statement by the Company is not
available for sales of the Registrable Securities because of (i) the operation
of Section 3.2 and 3.3; or (ii) the failure of the Company to qualify for the
use of Form S-3 because of its failure to file on a timely basis all reports
required to be filed under the 1934 Act; or (iii) the nonfiling by the Company
of a current report on Form 8-K (and any amendments thereto) containing pro
forma combined financial statements and results of operations of Astea and
Abalon.
7. REGISTRATION PROCEDURES
In connection with the registration of Registrable Securities under
this Agreement, and subject to the other provisions of this Agreement, the
Company shall:
(a) use its best efforts to cause the Registration Statement
filed in accordance with Section 2 or Section 3 to become effective as soon as
practicable after the date of filing thereof;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective for the shorter of (i) the duration of its registration obligations,
or (ii) until there are no Registrable Securities outstanding, and to comply
with the provisions of the 1933 Act with respect to the disposition of the
Registrable Securities;
(c) furnish to each Seller of such Registrable Securities such
number of copies of the Prospectus included in such Registration Statement as
such Seller may reasonably request in order to facilitate the sale or
disposition of such Registrable Securities;
(d) use its best efforts to register or qualify all securities
covered by such Registration Statement under such other securities or "blue sky"
laws of such jurisdictions as each Seller shall reasonably request, and do any
and all other acts and things that may be necessary to enable such Seller to
consummate the disposition in such jurisdictions of its Registrable Securities
covered by such Registration Statement, except that the Company shall not for
any such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified, or to subject
itself to taxation in respect of doing business in any such jurisdiction, or to
consent to general service of process in any such jurisdiction;
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(e) notify each Seller of Registrable Securities covered by
such Registration Statement, at any time when a Prospectus relating thereto is
required to be delivered under the 1933 Act, of the happening of any event as a
result of which the Prospectus included in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing or if it is
necessary to amend or supplement such Prospectus to comply with the law, and at
the request of any such Seller, prepare and furnish to such Seller a reasonable
number of copies of a supplement to or an amendment of such Prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities or securities, such Prospectus, as amended or supplemented, will
comply with the law;
(f) timely file with the Commission such information as the
Commission may prescribe under Section 13 or 15(d) of the 1934 Act and otherwise
use its best efforts to ensure that the public information requirements of Rule
144 under the 1933 Act are satisfied with respect to the Company. The Company
shall furnish to any Holder of Registrable Securities, upon request, copies of
the Company's most recent annual and quarterly reports and other publicly
available documents filed with the Commission as a Holder may reasonably request
in availing itself of any rule or regulation of the Commission allowing such
Holder to sell Registrable Securities without registration.
(g) use its best efforts to qualify such securities for
inclusion in the Nasdaq National Market, and provide a transfer agent and
registrar for such Registrable Securities not later than the effective date of
such Registration Statement; and
(h) issue to any person to which any Holder of Registrable
Securities may sell such Registrable Securities in connection with such
registration certificates evidencing such Registrable Securities without any
legend restricting the transferability of the Registrable Securities.
From time to time, the Company will amend or supplement such
registration statement and the prospectus contained therein to the extent
necessary to comply with the 1933 Act and any applicable state securities
statute or regulation. The Company will also provide the holder of Registrable
Securities with as many copies of the prospectus contained in any such
registration statement as it may reasonably request.
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8. 1934 ACT REGISTRATION
The Company shall timely file with the Commission such information as
the Commission may require under Section 13 or 15(d) of the 1934 Act; and in
such event, the Company shall use its best efforts to take all action pursuant
to Rule 144(c) as may be required as a condition to the availability of Rule 144
under the 1933 Act (or any successor exemptive rule hereinafter in effect) with
respect to such Common Stock. The Company shall furnish to any holder of
Registrable Securities forthwith upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144(c),
(ii) a copy of the most recent annual or quarterly report of the Company as
filed with the Commission, and (iii) such other publicly-filed reports and
documents as a holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a holder to sell any such Registrable
Securities without registration.
9. SHAREHOLDER INFORMATION
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement that all Shareholders of Registrable
Securities shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them and the intended method of disposition
of such Registrable Securities as shall be reasonably required to effect the
registration of their Registrable Securities and to execute such documents in
connection with such registration as the Company may reasonably request.
10. INDEMNIFICATION AND CONTRIBUTION
In the event any Registrable Securities are included in a registration
statement under this Agreement:
(a) The Company will indemnify and hold harmless each Seller,
the officers, directors, partners, agents and employees of each Seller, any
underwriter (as defined in the 1933 Act) for such Seller and each person, if
any, who controls such Seller or underwriter within the meaning of the 1933 Act
or the 1934 Act, against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the 1933 Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively, a
"VIOLATION"): (i) any untrue statement or alleged untrue statement of a material
fact
-15-
contained in such Registration Statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; or (iii) any
violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any
state securities law or any rule or regulation promulgated under the 1933 Act,
the 1934 Act or any state securities law; and the Company will reimburse each
such Seller, officer, director, partner, agent, employee, underwriter or
controlling person for any reasonable legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 6(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld or delayed), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly for use in
connection with such registration by any such Seller, underwriter or controlling
person.
(b) Each Seller will indemnify and hold harmless the Company,
each of its officers, directors, partners, agents or employees, each person, if
any, who controls the Company within the meaning of the 1933 Act, any
underwriter and any other Seller or any of its directors, officers, partners,
agents or employees or any person who controls such Seller, against any losses,
claims, damages or liabilities (joint or several) to which the Company or any
such director, officer, partner, agent, employee, controlling person or
underwriter, or other such Seller or director, officer, partner, agent, employee
or controlling person may become subject, under the 1933 Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Seller expressly for use in connection with such registration;
and each such Seller will reimburse any reasonable legal or other expenses
reasonably incurred by the Company or any such director, officer, partner,
agent, employee, controlling person or underwriter, other Seller, officer,
director, partner, agent, employee or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
Notwithstanding anything contained in this Agreement to the contrary, the
indemnity agreement contained in this Section 6(b) shall not apply to amounts
paid in settlement of any such loss, claim,
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damage, liability or action if such settlement is effected without the consent
of the Seller, which consent shall not be unreasonably withheld or delayed;
provided further, that the aggregate liability of each Seller in connection with
any sale of Registrable Securities pursuant to a Registration Statement in which
a Violation occurred shall be limited to the net proceeds from such sale.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing or conflicting interests between such indemnified party
and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action, to the extent prejudicial to its ability to
defend such action, shall relieve such indemnifying party of liability to the
indemnified party under this Section 6 to the extent of such prejudice, but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 10.
(d) If recovery is not available under the foregoing
indemnification provisions of this Section 10, for any reason other than as
specified therein, the parties entitled to indemnification by the terms thereof
shall be entitled to contribution to liabilities and expenses in such proportion
as is appropriate to reflect the relative fault of the indemnifying parties and
the indemnified parties, except to the extent that contribution is not permitted
under Section 11(f) of the 1933 Act. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, the parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to correct
and prevent any statement or omission and any other equitable considerations
appropriate under the circumstances, including, without limitation, whether any
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, on the one hand,
-17-
or by the Holder of Registrable Securities, on the other hand. The Company and
the Shareholders of the Registrable Securities covered by such Registration
Statement agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation. No seller of
Registrable Securities covered by such Registration Statement or person
controlling such Seller shall be obligated to make any contribution hereunder
which in the aggregate exceeds the net proceeds of the securities sold by such
seller, less the aggregate amount of any damages which such seller and its
controlling persons have otherwise been required to pay in respect of the same
claim or any substantially similar claim. The obligations of such Shareholders
to contribute are several in proportion to their respective ownership of the
Registrable Securities covered by such Registration Statement and not joint.
11. TRANSFERABILITY
The registration rights set forth in this Agreement are not
transferable except to the persons permitted in Section 4. All transferees shall
agree in writing to be bound by all of the provisions of this Agreement. The
Company may issue stop transfer instructions to its transfer agent to inform the
transfer agent of the resale restrictions imposed by the provisions of Section 4
hereof.
12. LEGENDS
Each Holder understands and agrees that the certificates evidencing the
Registrable Securities will bear a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
PURSUANT TO REGULATION S PROMULGATED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND HAVE NOT BEEN REGISTERED
UNDER THE ACT. THESE SHARES MAY NOT BE OFFERED OR SOLD WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OF A "U.S. PERSON"
(AS THAT TERM IS DEFINED IN REGULATION S) UNTIL AFTER AUGUST
8, 1996. AFTER SUCH DATE, THIS LEGEND SHALL HAVE NO FURTHER
EFFECT."
13. REGULATION S REPRESENTATIONS
13.1 SHAREHOLDER'S REPRESENTATIONS. (a) In order to induce the Company
to issue the Registrable Securities to the Shareholders pursuant to the Share
Agreement and this Agreement, each Shareholder severally represents and warrants
to, and covenants
-18-
with, the Company as follows: (i) the Shareholder is not a U.S. person1* as that
term is defined under Regulation S; (ii) at the time of the issuance of the
Registrable Securities, the Shareholder was located outside the United States
and will be outside of the United States as of the date of the execution and
delivery of this Agreement or any permitted resales of the Registrable
Securities pursuant to regulation S; (iii) the Shareholder is acquiring the
Registrable Securities for his own account and not on behalf of any U.S. person
or any other person, and the issuance of the Registrable Securities has not been
pre-arranged with a purchaser in the United States and Shareholder is acquiring
the Registrable Securities for investment purposes and not with a current view
towards distribution to the public and has no present arrangement or intention
to sell the Registrable Securities; (iv) the Shareholder represents and warrants
and hereby agrees that all sales of the Registrable Securities (permitted under
Section 4) prior to the expiration of a period commencing on the date of
issuance of the Registrable Securities to the Shareholders and ending 40 days
thereafter (the "RESTRICTED PERIOD") shall only be made in compliance with the
safe harbor provisions contained in Regulation S, or pursuant to the
registration of such securities under the 1933 Act or pursuant to an exemption
from registration under the 1933 Act, and the Shareholder shall not take a short
position directly or indirectly with respect to the Company's common stock
during the Restricted Period, and that all offers and sales after the expiration
of the Restricted Period in the United States or to U.S. person shall be made
only pursuant to such a registration or to such exemption from registration; (v)
the Shareholder acknowledges and agrees that the Registrable Securities have not
been registered under the 1933 Act and may not be offered or sold in the United
States or to U.S. Persons unless the Registrable Securities are registered under
the 1933 Act or an exemption from the registration requirements of the 1933 Act
is available; (vi) the Shareholder has received and carefully reviewed the
Company's 1995 Annual Report to shareholders and its most recent Annual Report
on Form 10-K, as amended and its subsequent quarterly reports on Form 10-Q
(collectively, the "SEC REPORTS"); (vii) the Shareholder has had a reasonable
opportunity to ask questions of and receive answers from the Company concerning
the Company; (viii) the Shareholder has such knowledge and expertise in
financial and business matters that the Shareholder is capable of evaluating the
merits and risks involved in an acquisition in the Registrable Securities; (ix)
except as set forth in this Agreement and the Share Agreement, no
representations or warranties have been made to the Shareholder by the Company
or any agent, employee or affiliate of the
______________________________________
*See Appendix A attached hereto for definitions of "U.S. person" and
"United States" under Regulation S.
-19-
Company and in entering into this Agreement the Shareholder is not relying upon
any information, other than that contained in this Agreement, the SEC Reports
and the results of independent investigation made by the Shareholder or his
representatives.
(b) The Shareholder understands that the Registrable
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of the United States Federal securities laws
and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
the Shareholder set forth herein in order to determine the applicability of such
exemptions and the suitability of the Shareholder to acquire the Registrable
Securities and the Shareholder acknowledges that it is Shareholder's
responsibility to satisfy itself as to the full observance by this issuance of
the Registrable Securities to Shareholder of the laws of any jurisdiction
outside the United States.
(c) Each Shareholder understands that in the view of the
Commission, the statutory basis for the exemption claimed for the transaction
would not be present if the sale, although in technical compliance with
Regulation S, is part of a plan or scheme to evade the registration provisions
of the 1933 Act and Shareholder confirms that its acquisition of the Registrable
Securities is not part of any such plan or scheme. The Shareholder is acquiring
the Registrable Securities for investment purposes and has not present intention
to sell the Registrable Securities in the United States or to a U.S. Person or
for the account or benefit of a U.S. Person either now or promptly now or
promptly after the expiration of the Restricted Period.
(d) Shareholder acknowledges that the Company may have its
counsel prepare a legal opinion to authorize the Company's transfer agent to
issue the Registrable Securities with a restrictive legend.
13.2 COMPANY'S REPRESENTATIONS. At the time the Registrable Securities
were committed to be issued, the Company reasonably believed that each
Shareholder was outside of the United States and was not a U.S. Persons; and the
Company reasonably believes that the issuance of the Registrable Securities has
not been pre-arranged with a purchaser in the United States. The Company is a
"Reporting Company" as defined by Rule 902 of Regulation S. The Company is in
full compliance, to the extent applicable, with all reporting obligations under
either Section 12(b), 12(g) or 15(d) of 1934 Act. The Company has registered its
Common Stock pursuant to Section 12 of the 1934 Act and the Common Stock trades
on NASDAQ.
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14. MISCELLANEOUS
14.1 AMENDMENTS AND WAIVERS
Any provision of this Agreement may be amended and the observance
thereof may only be waived (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company
and the Holders of a majority of the Registrable Securities then outstanding.
Any amendment or waiver effected in accordance with this Section 9.1 shall be
binding upon each Holder of Registrable Securities at the time outstanding, each
future Holder of Registrable Securities, and the Company.
14.2 NOTICES
Any notice required or permitted to be given hereunder shall be in
writing and shall be deemed given at the opening of business on the first
Business Day following the time (a) delivery is made, if by hand delivery, (b)
the facsimile is successfully transmitted, if by telecopier or facsimile
machine, or (c) the Business Day after such notice is deposited with a reputable
overnight courier service, postage prepaid, for next-day delivery, addressed as
respectively set forth below or to such other address as any party shall have
previously designated by such a notice.
14.3 GOVERNING LAW
This Agreement shall for all purposes be governed by and construed in
accordance with the internal laws of the State of Delaware with respect to the
enforceability of contracts and in accordance with the United States securities
laws with respect to matters involving securities laws regarding the
registration of the Registrable Shares, both without regard to conflicts-of-laws
principles. The parties hereto agree to submit to the jurisdiction of the
federal and state courts of the State of Delaware with respect to the breach or
interpretation of this Agreement or the enforcement of any and all rights,
duties, liabilities, obligations, powers and other relations between parties
arising under this Agreement.
14.4 SEVERABILITY
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excised from this
Agreement, and the remainder of this Agreement shall be interpreted as if such
provision were so excised and shall be enforceable in accordance with its
remaining terms.
-21-
14.5 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
ASTEA INTERNATIONAL INC.
BY: /s/ Caesar J. Belbel
___________________________
TITLE: Vice President and
General Counsel
_____________________
SHAREHOLDERS:
/s/ Per Edstrom
--------------------------------
PER EDSTROM
/s/ Orjann Grinndal
--------------------------------
ORJANN GRINNDAL
/s/ Henrik Lindberg
--------------------------------
HENRIK LINDBERG
-23-
SCHEDULE A
HOLDERS REGISTRABLE
- ------- SECURITIES
----------
Per Edstrom 77,746
Orjann Grinndal 77,745
Henrik Lindberg 77,745
-24-
APPENDIX A
Pursuant to Rule 902(o) and (p) of Regulation S, the terms
"U.S. Person" and "United States" are defined as follows:
(o) U.S. Person. (1) "U.S. Person" means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated
under the laws of the United States;
(iii) Any estate of which any executor or administrator is a
U.S. person;
(iv) Any trust of which any trustee is a U.S. person;
(v) Any agency or branch of a foreign entity located in the
United States;
(vi) Any non-discretionary account or similar account (other
than an estate or trust (held by a dealer or other fiduciary organized,
incorporated or (if an individual) resident in the United States; and
(vii) Any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign jurisdiction; and (B) formed by a
U.S. person principally for the purpose of investing in securities not
registered under the Securities Act of 1933, unless it is organized or
incorporated and owned, by accredited investors (as defined in Rule 501(a)) who
are not natural persons, estates or trusts.
(1) Notwithstanding paragraph (o)(1) of this rule, any
discretionary account or similar account (other than an estate or trust) held
for the benefit or account of a non-U.S. person by a dealer or other
professional fiduciary organized, incorporated, or (if an individual) resident
in the United States shall not be deemed a "U.S. person."
(2) Notwithstanding paragraph (o)(1), any estate of which any
professional fiduciary acting as executor or administrator is a U.S. person
shall not be deemed a U.S. person if:
(i) An executor or administrator of the estate who is
not a U.S. person has sole or shared investment discretion with respect to the
corpus of the estate; and
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(ii) The estate is governed by foreign law.
(3) Notwithstanding paragraph (o)(1), any trust of which any
professional fiduciary acting as trustee is a U.S. person shall not be deemed a
U.S. person if a trustee who is not a U.S. person has sole or shared investment
discretion with respect to the trust assets, and no beneficiary of the trust
(and no settlor if the trust is revocable) is a U.S. person.
(4) Notwithstanding paragraph (o)(1), an employee benefit plan
established and administered in accordance with the law of a country other than
the United States and customary practices and documentation of such country
shall not be deemed a U.S. person.
(5) Notwithstanding paragraph (o)(1), any agency or branch of
a U.S. person located outside the United States shall not be deemed a "U.S.
person" if:
(i) The agency or branch operates for valid business
reasons; and
(ii) The agency or branch is engaged in the business
of insurance or banking and is subject to substantive insurance or banking
regulation, respectively, in the jurisdiction where located.
(6) The International Monetary Fund, the International Bank
for Reconstruction and Development, the Inter-American Development Bank, the
Asian Development Bank, the African Development Bank, the United Nations, and
their agencies, affiliates and pension plans, any other similar international
organizations, their agencies, affiliates and pension plans shall not be deemed
"U.S. persons."
(p) United States. "United States" means the United States of America,
its territories and possessions, any State of the United States, and the
District of Columbia.