REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of March __, 2000 by and between HNC SOFTWARE INC., a
Delaware corporation ("HNC"), on the one hand, and the undersigned
individuals who have executed and delivered to HNC a counterpart signature
page to this Agreement (collectively, the "SECURITY HOLDERS" and each
individually, a "SECURITY HOLDER"), on the other hand. The Security Holders
are, on the above date, all of the shareholders of ONYX Technologies, Inc.
("ONYX").
R E C I T A L S
A. ONYX, HNC and a wholly-owned subsidiary of HNC ("SUB") have
entered into an Agreement and Plan of Reorganization dated as of March __,
2000 (the "PLAN"). Pursuant to the Plan, Sub is to be merged with and into
ONYX in a statutory merger (the "MERGER"), with ONYX to be the surviving
corporation of the Merger and thus to become a wholly-owned subsidiary of
HNC. The date on which the Merger becomes effective shall be the effective
date of this Agreement (the "EFFECTIVE DATE"), and no party shall have any
rights or obligations under this Agreement until the Merger becomes effective.
B. This Agreement is entered into in connection with and
concurrently with the execution and delivery of the Plan in order to provide
for the grant by HNC to the Security Holders certain Form S-3 registration
rights to resell at the earliest practicable time a portion of the shares of
HNC Common Stock that are issued to them in connection with the Merger
pursuant to the Plan, all subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the facts stated in the foregoing
recitals and the mutual promises hereinafter set forth, the parties hereto
agree as follows:
1. REGISTRATION RIGHTS
1.1 CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) SECURITIES ACT. The term "SECURITIES ACT" means the U.S.
Securities Act of 1933, as amended, or any successor law.
(b) EXCHANGE ACT. The term "EXCHANGE ACT" means the U.S.
Securities Exchange Act of 1934, as amended, or any successor law.
(c) REGISTRATION. The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement.
(d) REGISTRABLE SECURITIES. The term "REGISTRABLE
SECURITIES" means: (i) for each Security Holder, 30,000 of the shares of HNC
Common Stock (OTHER THAN shares placed in escrow pursuant to the Plan and
related agreements) that are issued to the Security Holder in the Merger
pursuant to the Plan upon the conversion in the Merger of the outstanding
shares of ONYX Common Stock that are owned and held by Security Holder
immediately prior to the
Effective Time; the aggregate number of shares of HNC Common Stock for all
Security Holders is 90,000; plus (ii) any shares of HNC Common Stock that may
be issued as a dividend or other distribution (including without limitation
shares of HNC Common Stock issued in a subdivision and split of HNC's
outstanding Common Stock) with respect to, or in exchange for, or in
replacement of, shares of HNC Common Stock described in clause (i) of this
Section 1.1(d); PROVIDED, HOWEVER, that notwithstanding the foregoing, the
term "Registrable Securities" shall NOT include any such shares described in
clauses (i) or (ii) above that are: (v) shares placed in escrow pursuant to
the Plan and related agreements; (w) registered under the Securities Act
OTHER THAN pursuant to a registration statement filed pursuant to this
Agreement; (x) sold by a person in a transaction in which rights under this
Agreement with respect to such shares are not assigned in accordance with the
terms of this Agreement; (y) sold pursuant to a registration statement filed
pursuant to this Agreement; or (z) sold pursuant to Rule 144 promulgated
under the Securities Act or otherwise sold to the public. Only shares of HNC
Common Stock shall be Registrable Securities. Except as provided in clause
(ii) of the first sentence of this Section 1.1(d), without limitation, the
term "Registrable Securities" does not include any shares of HNC Common Stock
that were not issued in connection with the Merger.
(e) HOLDER. The term "HOLDER" means: (i) a Security Holder
who has executed and delivered to HNC a counterpart signature page to this
Agreement and is the original holder of any Registrable Securities; (ii) any
assignee of record of Registrable Securities that were originally held by
such a Security Holder and to whom rights under this Agreement have been duly
assigned in accordance with the provisions of this Agreement.
(f) SEC. The term "SEC" or the term "COMMISSION" means the
U.S. Securities and Exchange Commission.
(g) FORM S-3. The term "FORM S-3" means a registration
statement filed under Form S-3 under the Securities Act, as such is in effect
on the Effective Date, or any successor form of registration statement under
the Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of a substantial amount of information by reference to other
documents filed by HNC with the SEC.
(h) RULE 415. The term "RULE 415" means Rule 415 promulgated
under the Securities Act, as such Rule may be amended from time to time, or
any similar or successor rule or regulation hereafter adopted by the SEC.
(i) DEFINED TERMS FROM PLAN. Capitalized terms used in this
Agreement but not defined in this Section 1 or elsewhere in this Agreement
shall have the same meanings given to such terms in the Plan.
1.2 FORM S-3 SHELF REGISTRATION.
(a) FILING AND REGISTRATION PERIOD. Subject to the terms and
conditions of this Agreement, as promptly as reasonably practicable following
the Effective Time of the Merger, and consistent with the requirements of
applicable law, HNC shall prepare and file with the SEC a registration
statement on Form S-3 for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Registrable Securities (the "SHELF
REGISTRATION"). HNC shall use its
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diligent efforts to have such Shelf Registration declared effective as soon
as reasonably practicable after its filing and to keep the Shelf Registration
continuously effective under the Securities Act for a continuous period of
time (such period of time being hereinafter called the "REGISTRATION PERIOD")
commencing on the date the Shelf Registration is declared effective under the
Securities Act by the SEC (the "DATE OF EFFECTIVENESS") and ending no earlier
than the conclusion of the Permitted Window provided for in Section 1.2(h)
below. HNC shall have no duty or obligation to keep the Shelf Registration
(or any Subsequent Registration, as defined below) effective after the
expiration of the Registration Period. Accordingly, the Security Holders
acknowledge that registration of the Registrable Securities under the
Securities Act will cease to be effective (and that the Shelf Registration
will be cancelled and withdrawn) after the conclusion of the Permitted Window.
(b) LIMITATIONS. Notwithstanding the provisions of Section
1.2(a) above, HNC shall not be obligated to effect any registration,
qualification or compliance of Registrable Securities pursuant to Section 1.2
of this Agreement, and the Holders shall not be entitled to sell Registrable
Securities pursuant to any registration statement filed under Section 1.2 of
this Agreement, as applicable:
(i) if HNC ceases to be eligible to use Form S-3 for
such offering by the Holders; PROVIDED that HNC will use commercially
reasonable diligent efforts to continue its eligibility to use Form S-3
during the Registration Period;
(ii) if Form S-3 does not then permit the registration
on such form of registration statement of an offering by the Holders of the
type contemplated by this Agreement;
(iii) if HNC is acquired and its Common Stock ceases to
be publicly traded;
(iv) in any particular jurisdiction in which HNC would
be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or
compliance, unless HNC is already subject to service of process in such
jurisdiction;
(v) if the SEC refuses to declare such registration
effective due to the participation of any particular Holder in such
registration (unless such Holder withdraws all such Holder's Registrable
Securities from such registration statement); or
(vi) if the manner in which any Registrable Securities
are disposed of pursuant to the Shelf Registration (or Subsequent
Registration, as applicable) is not included within the plan of distribution
set forth in the prospectus for the Shelf Registration (or Subsequent
Registration, as applicable); PROVIDED that the plan of distribution in the
Shelf Registration (or Subsequent Registration as applicable) shall be in
standard and customary form for non-underwritten re-sale offerings pursuant
to registration statements on Form S-3.
(c) SUBSEQUENT REGISTRATION. If the Shelf Registration
becomes effective under the Securities Act, and the Shelf Registration or a
Subsequent Registration (as defined below) thereafter ceases to be effective
for any reason at any time during the Registration Period,
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then HNC shall use its diligent efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in any event shall,
within 30 days after such cessation of effectiveness, file an amendment to
the Shelf Registration seeking to obtain the withdrawal of the order
suspending the effectiveness thereof, or file an additional "shelf"
registration statement pursuant to Rule 415 covering all of the then
outstanding Registrable Securities (a "SUBSEQUENT REGISTRATION"). If a
Subsequent Registration is filed, HNC shall use its diligent efforts to cause
the Subsequent Registration to be declared effective as soon as practicable
after such filing and to keep such registration statement continuously
effective until the end of the Registration Period.
(d) SUPPLEMENTS AND AMENDMENTS. Subject to the provisions of
Section 1.2(h) and Section 1.3, during the Registration Period HNC shall
supplement and amend the Shelf Registration if, as and when required by the
Securities Act, the rules and regulations promulgated thereunder or the
rules, regulations or instructions applicable to the registration form used
by HNC for such Shelf Registration.
(e) TIMING AND MANNER OF SALES. No sale of Registrable
Securities pursuant to a Shelf Registration or a Subsequent Registration
under this Section 1.2 may be made except during the Permitted Window (as
defined in Section 1.2(h) below). In addition, any sale of Registrable
Securities pursuant to a Shelf Registration or a Subsequent Registration
under this Section 1.2 may only be made in accordance with the method or
methods of distribution of such Registrable Securities that are described in
the registration statement (which methods of distribution shall be in
standard and customary form for non-underwritten re-sale offerings pursuant
to registration statement on Form S-3) for the Shelf Registration (or
Subsequent Registration, as applicable) and permitted by such form of
registration statement, which methods of distribution will be specified by
the Holders in their Notice of Resale (as defined below). A Holder may also
sell Registrable Securities in a bona fide private offering if the selling
Holder provides HNC with a written opinion of counsel, satisfactory to
counsel to HNC, that such offer and sale is an exempt transaction under the
Securities Act and applicable state securities laws, complies with all
requirements for such exemption(s) and is not made with use of the prospectus
for the Shelf Registration (or Subsequent Registration, if applicable).
(f) NO UNDERWRITINGS. No sale of Registrable Securities
under any Shelf Registration (or Subsequent Registration) effected pursuant
to this Section 1.2 may be effected pursuant to any underwritten offering
without HNC's prior written consent, which may be withheld in HNC's sole and
absolute discretion.
(g) NOTICE OF RESALE. Each Holder hereby notifies HNC of
such Holder's intention to sell, transfer or otherwise dispose of some or all
of such Holder's Registrable Securities in the Permitted Window (as defined
below), pursuant to the Shelf Registration (or Subsequent Registration, as
applicable) and that such Holder's intended plan of distribution of such
Registrable Securities will conform to the plan of distribution contained in
the prospectus for the Shelf Registration (or Subsequent Registration, as
applicable).
(h) PERMITTED WINDOW; SALE PROCEDURES.
(i) The "PERMITTED WINDOW" is a period of 30
consecutive calendar days (subject to Sections 1.3 and 1.6(c)) commencing
upon HNC's giving written notice to the
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Security Holders that the prospectus contained in the Form S-3 registration
statement filed pursuant to Section 1.2 of this Agreement is available to be
used for the resale of Registrable Securities pursuant to the Shelf
Registration (or a Subsequent Registration, as applicable) (the "WINDOW
NOTICE"). Upon receipt of notification from the SEC that the Shelf
Registration is effective, HNC will give the Window Notice to all Holders as
soon as practicable, but in no event more than four business days after HNC's
receipt of such notification from the SEC, that the Registration Statement is
effective and that the prospectus contained in the registration statement for
the Shelf Registration (or Subsequent Registration, if applicable) is current
(it being acknowledged that it may be necessary for HNC during this four-day
period to supplement the prospectus or make an appropriate filing under the
Exchange Act so as to cause the prospectus to become current).
(ii) HNC shall not be obligated to keep the
registration statement for the Shelf Registration (or any Subsequent
Registration) current during any period other than the Permitted Window.
(iii) If, pursuant to Section 1.3(a) or Section 1.6(c),
HNC postpones the Permitted Window before it commences, then the Permitted
Window shall be postponed as provided in Section 1.3(c) or Section 1.6(c), as
applicable.
(iv) If pursuant to Section 1.3(b) or Section 1.6(c),
HNC suspends the Permitted Window after the Permitted Window has commenced,
then the remaining portion of the Permitted Window shall be postponed as
provided in Section 1.3(c) or Section 1.6(c), as applicable.
(i) TRADING WINDOW COMPLIANCE. The Holders acknowledge that
HNC maintains an Insider Trading Compliance Program and an Insider Trading
Policy, as such may be amended (the "HNC TRADING POLICY") and that the HNC
Trading Policy requires that those directors, officers, employees and other
persons whom HNC determines to be "Insiders" or "Access Personnel" or
otherwise subject to the "trading window" and pre-clearance requirements of
the HNC Trading Policy (and members of their immediate families and
households) are permitted to effect trades in HNC securities: (i) only during
those specified time periods ("TRADING WINDOWS") in which such persons are
permitted to make sales, purchases or other trades in HNC's securities under
the "trading window" provisions of the HNC Trading Policy; and (ii) only
after pre-clearance of such sales, purchases or other trades with HNC's
Insider Trading Compliance Officer. It is not anticipated that any of the
Holders will be subject to the "trading window" and/or "pre-clearance"
provisions of the HNC Trading Policy described above, but if any Holder does
become subject to such provisions then, notwithstanding anything herein to
the contrary, (i) such Holder may sell, transfer or dispose of Registrable
Securities only during those trading windows during which such HNC "Insiders"
or "Access Personnel" are permitted to effect trades in HNC stock under the
HNC Trading Policy and only after pre-clearing such trades with HNC's Insider
Trading Compliance Officer as provided in the HNC Trading Policy, and (ii) if
the effect of subpart (i) is to defer or interrupt the Permitted Window for
such Holder, then the Permitted Window for such Holder will be extended by a
period of time sufficient to provide the Holder with at least 22 trading days
in such Holder's Permitted Window.
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1.3 POSTPONEMENT OR TERMINATION OF PERMITTED WINDOW. If following
HNC's receipt from the SEC of notification of effectiveness of the Shelf
Registration and before the termination of the Permitted Window, HNC shall
give to the Holders, as provided in Section 3.1, a certificate, or a copy
thereof (a "SECTION 1.3 CERTIFICATE"), signed by the Chief Executive Officer
or the Chief Financial Officer of HNC stating that, in the good faith
judgment of the Board of Directors of HNC, it would be seriously detrimental
to HNC and its security holders for the Permitted Window to be in effect at
such time (due, for example, and without limitation, to the existence of a
material development or potential material development involving HNC which
HNC would be obligated to disclose in the prospectus contained in the Shelf
Registration (or Subsequent Registration, as applicable), which disclosure
would, in the good faith judgment of the Board of Directors of HNC, be
premature or otherwise inadvisable at such time or would have a material
adverse affect upon HNC and its security holders), then:
(a) if the Permitted Window has not yet commenced, HNC will
have the right to postpone the commencement of the Permitted Window for up to
45 days, as provided in Section 1.3(c); and
(b) if the Permitted Window has already commenced, HNC will
have the right to suspend the Permitted Window for up to 45 days, as provided
in Section 1.3(c);
(c) if the Permitted Window is postponed or suspended as
provided in this Section 1.3, the Permitted Window will not commence or
recommence, as applicable, until, in the good faith judgement of the
Company's Board of Directors or the Company's Chief Executive Officer or
Chief Financial Officer, the circumstances no longer require such
postponement, but in no event shall the period of such postponement or
suspension be longer than 45 days after the date on which such Section 1.3
Certificate is given as provided in Section 3.1; HNC will promptly notify the
Holders of the commencement or recommencement, as applicable, of the
Permitted Window, and the Permitted Window will commence or recommence, as
applicable, when such notice is given and will continue, subject to the terms
of this Agreement, until a full 30 trading days have been included in the
Permitted Window.
All Holders shall be bound by HNC's postponement or termination
of the Permitted Window.
1.4 SHARES OTHERWISE ELIGIBLE FOR RESALE. Notwithstanding anything
herein to the contrary, HNC shall not be obligated to effect or continue to
keep effective any such registration, registration statement, qualification
or compliance with respect to the Registrable Securities held by any
particular Holder:
(a) if HNC or its legal counsel shall have received a
"no-action" letter or similar written confirmation from the SEC that all the
Registrable Securities then held by such Holder may be resold by such Holder
within a three month period without registration under the Securities Act
pursuant to the provisions of Rule 144 promulgated under the Securities Act
(or successor provisions), or otherwise;
(b) if legal counsel to HNC shall deliver a written opinion
to HNC, its transfer agent and the Holders, in form and substance reasonably
acceptable to HNC, to the effect that all
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the Registrable Securities then held by such Holder may be resold by such
Holder within a three month period without registration under the Securities
Act pursuant to the provisions of Rule 144 promulgated under the Securities
Act, or otherwise; or
(c) after expiration or termination of the Registration
Period.
1.5 EXPENSES. HNC shall pay all expenses incurred in connection
with any registration effected by HNC pursuant to this Agreement (excluding
brokers' discounts and commissions), including without limitation all filing,
registration and qualification, printers', legal and accounting fees.
1.6 OBLIGATIONS OF HNC. Subject to Sections 1.2, 1.3 and 1.4 above,
when required to effect the registration of any Registrable Securities under
the terms of this Agreement, HNC will, as expeditiously as reasonably
possible:
(a) furnish to the Holders such number of copies of the
prospectus for the Shelf Registration (or Subsequent Registration, as
applicable), including a preliminary prospectus (and amendments or
supplements thereto), in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by them;
(b) use its diligent efforts to register and qualify the
securities covered by the Shelf Registration (or any, Subsequent
Registration) under such other securities or Blue Sky laws of such
jurisdictions as will be reasonably requested by the Holders; PROVIDED that
HNC will not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in
any such state or jurisdiction unless HNC is already so qualified or subject
to service of process, respectively, in such jurisdiction; and
(c) promptly notify each Holder of Registrable Securities
covered by the Shelf Registration (or any, Subsequent Registration), at any
time during the Permitted Window when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event known to HNC's Chief Executive Officer 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 a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and
the Holders shall hold all such information in strict confidence until it is
made publicly available; in the event HNC gives the Holders such notice, the
Permitted Window will be postponed or suspended immediately until HNC
notifies the Holders in writing that the prospectus is current (HNC will use
diligent efforts to cause the prospectus to become current, subject to the
circumstances provided for in Section 1.3), whereupon the Permitted Window
will commence or recommence and the Permitted Window will continue as
provided in the Agreement until a full 30 trading days have been included in
the Permitted Window (including any full trading days during which the
Permitted Window was open before the postponement or suspension);
(d) cause all such Registrable Securities to be listed on
each securities exchange or National Association of Securities Dealers, Inc.
Automated Quotation System on which HNC's Common Stock is then listed;
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(e) for so long as the Shelf Registration (or Subsequent
Registration, as applicable) remains effective, promptly prepare, file and
furnish to the Holders a reasonable number of copies of any supplement to or
an amendment of such prospectus prepared by HNC and filed with the SEC as may
be necessary so that, as thereafter delivered to the purchasers of the
Registrable Securities, such prospectus shall not, during the Permitted
Window, include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(f) notify the Holders promptly after HNC shall receive
notice thereof, of the date and time on which the Shelf Registration (or
Subsequent Registration, as applicable) and each post-effective amendment
thereto has become effective or a supplement to any prospectus forming a part
of such Shelf Registration (or Subsequent Registration, as applicable) has
been filed;
(g) notify the Holders promptly of any request by the SEC
for the amending or supplementing of the Shelf Registration (or Subsequent
Registration, as applicable) or the prospectus contained therein or for any
material additional information; and
(h) advise the Holders promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
SEC suspending the effectiveness of the Shelf Registration (or Subsequent
Registration, as applicable) or the initiation or threatening of any
proceeding for that purpose and promptly use commercially reasonable efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued.
1.7 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of HNC to take any action pursuant to this Agreement that the
selling Holders will furnish to HNC such information regarding themselves,
the Registrable Securities held by them, and the intended method of
disposition and plan of distribution of such Registrable Securities as shall
be required to timely effect the registration of their Registrable Securities.
1.8 DELAY OF REGISTRATION. No Holder will have any right to obtain
or seek an injunction restraining or otherwise delaying any registration that
is the subject of this Agreement as the result of any controversy that might
arise with respect to the interpretation or implementation of this Agreement.
1.9 INDEMNIFICATION.
(a) BY HNC. To the extent permitted by law, HNC will
indemnify, defend and hold harmless each Holder against any losses, claims,
damages, or liabilities (joint or several) to which such Holder may become
subject under the Securities Act, the Exchange Act or other U.S. 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 contained in a registration statement filed by HNC
pursuant to this Agreement pursuant to which
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Registrable Securities are sold, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements thereto;
(ii) the omission or alleged omission to state in such
registration statement, preliminary prospectus or final prospectus or any
amendments or supplements thereto, a material fact required to be stated
therein, or necessary to make the statements therein not misleading; or
(iii) any violation or alleged violation by HNC of the
Securities Act, the Exchange Act, any U.S. federal or state securities law or
any rule or regulation promulgated under the Securities Act, the Exchange Act
or any U.S. federal or state securities law in connection with the offering
of Registrable Securities covered by such registration statement;
PROVIDED HOWEVER, that the indemnity agreement contained in this subsection
1.9(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
written consent of HNC (which consent shall not be unreasonably withheld),
nor shall HNC 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 such Holder.
(b) BY SELLING HOLDERS. To the extent permitted by law, each
selling Holder will indemnify and hold harmless HNC, each of its directors,
each of its officers who have signed the registration statement, each person,
if any, who controls HNC within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement, against any losses, claims, damages or liabilities (joint or
several) to which HNC or any such director, officer, controlling person,
underwriter or other such Holder may become subject under the Securities Act,
the Exchange 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 Holder expressly for use in connection
with such registration; and each such Holder will indemnify and reimburse HNC
or any such director, officer, controlling person, underwriter or other
Holder for any reasonable attorneys' fees and other expenses reasonably
incurred by HNC or any such director, officer, controlling person,
underwriter or other Holder in connection with investigating or defending any
such loss, claim, damage, liability or action, as incurred; PROVIDED,
HOWEVER, that the indemnity agreement contained in this subsection 1.9(b)
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 indemnifying Holder, which consent shall not be unreasonably
withheld; and PROVIDED FURTHER that the total amounts payable in indemnity by
a Holder under this subsection 1.9(b) in respect of any Violation shall not
exceed the net proceeds received by such Holder in the registered offering
out of which such Violation arises.
(c) NOTICE. Promptly after receipt by an indemnified party
under this Section 1.9 of notice of the commencement of any action (including
any governmental action) against such indemnified party, such indemnified
party will, if a claim for indemnification or contribution in respect thereof
is to be made against any indemnifying party under this Section
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1.9, deliver to the indemnifying party a written notice of the commencement
thereof and, if the indemnifying party is HNC, HNC shall have the right and
obligation to control the defense of such action, and if HNC fails to defend
such action it shall indemnify and reimburse the Selling Holders for any
reasonable attorneys' fees and other expenses reasonably incurred by them in
connection with investigating or defending such action; PROVIDED, HOWEVER,
that: (i) HNC shall also have the right, at its option, to assume and control
the defense of any action with respect to which HNC or any person entitled to
be indemnified by the Selling Holders under Section 1.9(b) is entitled to
indemnification from the Selling Holders; (ii) the indemnified party or
parties shall have the right to participate at its own expense in the defense
of such action and (but only to the extent agreed in writing with HNC and any
other indemnifying party similarly noticed) to assume the defense thereof
with counsel mutually satisfactory to the parties; and (iii) an indemnified
party shall have the right to retain its own counsel, with the fees and
expenses of such counsel 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 an actual or potential
conflict of interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure of an indemnified
party to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action, if materially prejudicial to the
ability of the indemnifying party to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 1.9, but the omission so to deliver written notice to the
indemnifying party will not relieve the indemnifying party of any liability
that it may have to any indemnified party otherwise than under this Section
1.9.
(d) DEFECT ELIMINATED IN FINAL PROSPECTUS. The foregoing
indemnity agree-ments of HNC and the Holders are subject to the condition
that, insofar as they relate to any Violation made in a preliminary
prospectus but eliminated or remedied in the amended or supplemented
prospectus on file with the SEC and effective at the time the sale of
Registrable Securities under such registration statement occurs (the "AMENDED
PROSPECTUS"), such indemnity agreement shall not inure to the benefit of any
person if a copy of the Amended Prospectus was furnished to the indemnified
party and was not furnished to the person asserting the loss, liability,
claim or damage in the action giving rise to indemnity claims under this
Section 1.9, at or prior to the time such action is required by the
Securities Act.
(e) SURVIVAL. The obligations of HNC and Holders under this
Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement pursuant to this Agreement, and
otherwise.
1.10 DURATION AND TERMINATION OF HNC'S OBLIGATIONS. HNC will have no
obligations pursuant to Section 1.2 of this Agreement with respect to any
request or requests for registration (or inclusion in a registration) made by
any Holder or to maintain or continue to keep effective any registration or
registration statement pursuant hereto: (a) after the expiration or
termination of the Registration Period; (b) if the Permitted Window pursuant
to this Agreement has been completed as provided herein; or (c) if all
Registrable Securities have been registered and sold pursuant to a
registration effected pursuant to this Agreement and/or have been transferred
in transactions in which registration rights hereunder have not been assigned
in accordance with this Agreement.
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1.11 ACKNOWLEDGMENT OF OTHER AGREEMENTS. The Holders acknowledge
that other security holders may hold registration rights that may allow them
to participate in a registration and registration statement effected pursuant
to this Agreement and that HNC may enter into one or more agreements pursuant
to which HNC grants registration rights to a third party or parties that may
be exercised during the Registration Period and/or at other times.
2. ASSIGNMENT
Notwithstanding anything herein to the contrary, the rights of a
Holder under this Agreement may be assigned only with HNC's express prior
written consent, which may be withheld in HNC's sole discretion and only to a
person who executes and delivers to HNC a writing reasonably satisfactory in
form and substance to HNC in which such person agrees to be bound by all the
obligations of the Holders under this Agreement; PROVIDED, however, that the
rights of a Holder under this Agreement may be assigned without HNC's express
prior written consent: (a) to a Permitted Assignee (as defined below); or (b)
(if applicable) by will or by the laws of intestacy, descent or distribution,
PROVIDED that, in each case, the assignee executes and delivers to HNC a
writing reasonably satisfactory in form and substance to HNC in which such
assignee agrees to be bound by all the obligations of the Holders under this
Agreement. Any attempt to assign any rights of a Holder under this Agreement
without HNC's express prior written consent in a situation in which such
consent is required by this Section shall be null and void and without
effect. Subject to the foregoing restrictions, all rights, covenants and
agreements in this Agreement by or on behalf of the parties hereto will bind
and inure to the benefit of the respective permitted successors and assigns
of the parties hereto. Each of the following parties are "PERMITTED
ASSIGNEES" for purposes of this Section 2: (a) a trust whose beneficiaries
consist solely of a Holder and such Holder's immediate family; (b) the
personal representative (such as an executor of a Holder's will), custodian
or conservator of a Holder, in the case of the death, bankruptcy or
adjudication of incompetency of that Holder; or (c) immediate family members
of a Holder.
3. GENERAL PROVISIONS
3.1 NOTICES. Unless otherwise provided herein, all notices,
instructions and other communications required or permitted to be given
hereunder or necessary or convenient in connection herewith must be in
writing and shall be deemed to have been given (a) when personally served or
when delivered by facsimile (to the facsimile number of the person to whom
the notice is given), (b) the first business day following the date of
deposit with a nationally recognized overnight courier service or (c) on the
earlier of actual receipt or the third business day following the date on
which the notice is deposited in the United States mail, via first class
certified or registered mail, postage prepaid, addressed as follows:
(i) IF TO HNC, at 5935 Cornerstone Court West, San Diego,
California 92121, Attention: President; Fax Number: (619) 799-1501; and
(ii) IF TO A HOLDER, at such Holder's respective address or
facsimile number as set forth on the signature page of this Agreement.
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Any party hereto (and such party's permitted assigns) may by
notice so given change its address and fax number for future notices
hereunder.
3.2 ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties with
respect to the subject matter hereof.
3.3 AMENDMENT OF RIGHTS. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of HNC and Holders who have executed this Agreement and own a
majority of all the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this Section 3.3 shall be binding upon
each Holder, each permitted successor or assignee of each Holder and HNC.
3.4 GOVERNING LAW. This Agreement will be governed by and construed
exclusively in accordance with the internal laws of the State of California
as applied to agreements among California residents entered into and to be
performed entirely within California, excluding that body of law relating to
conflict of laws and choice of law.
3.5 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, then such provision(s) will be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and will be enforceable
in accordance with its terms.
3.6 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, is intended to confer upon any person, other than the
parties hereto and their permitted successors and assigns, any rights or
remedies under or by reason of this Agreement.
3.7 CAPTIONS. The headings and captions to sections of this
Agreement have been inserted for identification and reference purposes only
and will not be used to construe or interpret this Agreement.
3.8 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
3.9 EFFECTIVENESS OF AGREEMENT. Regardless of when signed, this
Agreement will not become effective or binding unless and until the Effective
Time of the Merger.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the Effective Date.
HNC SOFTWARE INC. SECURITY HOLDERS
BY: /s/ Kenneth J. Saunders /s/ James Kell Canty
---------------------------------- ----------------------------------
James Kell Canty
NAME: KENNETH J. SAUNDERS
-------------------------------- ADDRESS:
--------------------------
TITLE: CHIEF FINANCIAL OFFICER
------------------------------- --------------------------
FACSIMILE NO.:
-------------------
/s/ Jeffrey A. Collins
----------------------------------
Jeffrey A. Collins
ADDRESS:
--------------------------
--------------------------
FACSIMILE NO.:
-------------------
/s/ Peter Hoeve
----------------------------------
Peter Hoeve
ADDRESS:
--------------------------
--------------------------
FACSIMILE NO.:
-------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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