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EXHIBIT 4.01
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of April 6, 1998 (the "EFFECTIVE DATE") by and between HNC
SOFTWARE INC., a Delaware corporation ("HNC"), and the persons and entities
listed on Exhibit A hereto (collectively, the "STOCKHOLDERS" and each
individually, a "STOCKHOLDER") who immediately prior to the Effective Time of
the Merger (as defined below) were all of the stockholders of FINANCIAL
TECHNOLOGY, INC., an Illinois corporation ("FTI").
R E C I T A L S
A. FTI, HNC and FW2 Merger Corp., a Delaware corporation that is a
wholly-owned subsidiary of HNC ("SUB") and J. Michael Thompson, Paul P. Koziarz
and Thomas R. Snow, the stockholders of FTI, have entered into an Agreement and
Plan of Reorganization dated as of April 6, 1998 (the "PLAN"). Pursuant to the
Plan, Sub is to be merged with and into FTI in a statutory merger (the
"MERGER"), with FTI 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.
B. As a condition precedent to the consummation of the Merger, the Plan
provides that, if HNC elects a Stock Conversion, HNC and the Stockholders shall
enter into this Agreement in order to grant the Stockholders certain Form S-3
registration rights with respect to the shares of HNC Common Stock that are
issued to them in connection with the Merger pursuant to Section 2.1.2(a) of the
Plan, 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) 1933 Act. The term "1933 ACT" means the U.S. Securities Act
of 1933, as amended, or any successor law.
(b) 1934 Act. The term "1934 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 1933 Act, and the declaration or
ordering of effectiveness of such registration statement.
(d) Registrable Securities. The term "REGISTRABLE SECURITIES"
means: (i) the shares of HNC Common Stock that are issued to the Stockholders in
the Merger pursuant to Section 2.1.2(a) of the Plan upon the conversion of the
outstanding shares of FTI Common Stock that are owned and held by the
Stockholders immediately prior to the Effective Time; and (ii) any
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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) or in this clause (ii); excluding in all
cases, however, from the definition of "Registrable Securities" any such shares
that are: (w) registered under the 1933 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 1933 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: (i) any
shares of HNC Common Stock that were not issued in connection with the Merger;
or (ii) shares of HNC Common Stock (if any) that are issued pursuant to Section
2.2.2(a) of the Plan.
(e) Holder. The term "HOLDER" means a Stockholder who is the
original holder of any Registrable Securities or any assignee of record of any
Registrable Securities 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 1933 Act, as such is in effect on the Effective
Date, or any successor form of registration statement under the 1933 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 1933 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) 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 then outstanding Registrable Securities (the "SHELF
REGISTRATION"). HNC shall use its reasonable good faith efforts to have such
Shelf Registration declared effective
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as soon as practicable after its filing and to keep the Shelf Registration
continuously effective under the 1933 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 1933 Act by the
SEC (the "DATE OF EFFECTIVENESS") and ending on the date that is the first (1st)
anniversary of the Effective Time of the Merger. 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 Stockholders acknowledge that the Registrable Securities will
not be registered under the 1933 Act beginning one (1) year after the Effective
Time of the Merger.
(b) Subsequent Registration. If the Shelf Registration is filed
with the SEC and becomes effective under the 1933 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, then
HNC shall use its best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall, within thirty (30)
days of 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 best 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.
(c) Supplements and Amendments. Subject to the provisions of
Section 1.2(g), during the Registration Period HNC shall supplement and amend
the Shelf Registration if, as and when required by the 1933 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.
(d) Timing and Manner of Sales. Any sale of Registrable
Securities pursuant to a Shelf Registration or a Subsequent Registration under
this Section 1.2 may be made only during a "Permitted Window" (as defined in
Section 1.2(g) 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 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 1933
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).
(e) Trading Limits; No Underwritings. During any calendar quarter
during the Registration Period, the Holders, collectively, may not sell an
amount of Registrable Securities that, in the aggregate, exceeds one percent
(1%) of the outstanding shares of HNC Common
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Stock (as indicated in HNC's then most recent published report) without HNC's
prior written consent. 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 its sole and absolute discretion.
(f) Notice of Resale. Before any Holder may make any sale,
transfer or other disposition of any Registrable Securities under the Shelf
Registration (or a Subsequent Registration) during the Registration Period, a
Holder or Holders who own at least a majority of the Registrable Securities then
outstanding must first give written notice to HNC (a "NOTICE OF RESALE") of such
Holder's or Holders' present intention to so sell, transfer or otherwise dispose
of some or all of such Holder's or Holders' Registrable Securities, and the
number of Registrable Securities such Holder or Holders propose(s) to so sell,
transfer or otherwise dispose of. In addition, a Notice of Resale shall contain
the information required to be included therein under Section 1.2(g).
(g) Permitted Window; Sale Procedures.
(i) A "PERMITTED WINDOW" is a period of twenty (20)
consecutive calendar days commencing upon HNC's written notification to the
Stockholders in response to a Notice of Resale 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 resales of Registrable Securities pursuant
to the Shelf Registration (or a Subsequent Registration, as applicable).
(ii) Before a Holder can make a sale of any Registrable
Securities pursuant to the Shelf Registration (or a Subsequent Registration),
and in order to cause a Permitted Window to commence, such Holder must first
give HNC a Notice of Resale indicating such Holder's intention to sell
Registrable Securities pursuant to the Shelf Registration (or Subsequent
Registration, as applicable) and such Holder's intended plan of distribution of
such Registrable Securities (which must conform to the plan of distribution
contained in the prospectus for the Shelf Registration (or Subsequent
Registration, as applicable)).
(iii) Upon receipt of such Notice of Resale (unless a
certificate of the President or the Chief Financial Officer of HNC is delivered
as provided in Section 1.3(b) below), HNC will give written notice to all
Holders as soon as practicable, but in no event more than seven (7) business
days after HNC's receipt of such Notice of Resale that either: (A) 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 period to supplement the prospectus
or make an appropriate filing under the 1934 Act so as to cause the prospectus
to become current) and that (as applicable) (1) the Permitted Window will
commence on the date of such notice by HNC; or (B) HNC is required under the
1933 Act and the regulations thereunder to amend the registration statement for
the Shelf Registration (or Subsequent Registration, as applicable) in order to
cause the prospectus to be current. In the event that HNC determines that an
amendment to the registration statement is necessary as provided above, it will
file and cause such amendment to become effective as soon
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as practicable; whereupon it will notify the Holders that the Permitted Window
will then commence.
(iv) There will be no more than two (2) Permitted Windows
during the Registration Period and there will be at least a 60-day interval
between any two (2) Permitted Windows. HNC shall not be obligated to keep the
registration statement for the Shelf Registration (or any Subsequent
Registration) current during any period other than a Permitted Window. If,
pursuant to Section 1.3(b), HNC defers a Permitted Window, and the Holders
withdraw their Notice of Resale, then such withdrawal shall not count as a
Permitted Window. The Holders may elect to withdraw a request for registration
pursuant to a Notice of Resale; provided however, that if HNC has commenced
preparation of any supplement or amendment to the registration statement or any
part thereof in response to such Notice of Resale prior to receiving written
notice from the Holders' of the withdrawal of their request for registration,
then the Holders who originally gave HNC such Notice of Resale will promptly
reimburse HNC for its actual costs and expenses incurred in preparing and/or
filing such supplement and/or amendment.
(h) 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 "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. If a Holder is or becomes
subject to the "trading window" and/or "pre-clearance" provisions of the HNC
Trading Policy described above, then, notwithstanding anything herein to the
contrary, such Holder may sell, transfer and dispose of Registrable Securities
only during those trading windows during which such HNC 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.
1.3 LIMITATIONS. Notwithstanding the provisions of Section 1.2 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:
(a) if Form S-3 is not then available for such offering by the
Holders;
(b) if HNC shall furnish to the Holders a certificate signed by
the President or 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 stockholders for such Permitted
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Window to be in effect at such time, due, for example, 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 stockholders, in which event HNC will have the right to defer a
Permitted Window for a period of not more than sixty (60) days after receipt of
a Notice of Resale from the Holder or Holders pursuant to this Section 1.3(b);
provided, however, that (i) HNC may so postpone a Permitted Window no more than
twice during the Registration Period; (ii) the two authorized 60-day
postponements of Permitted Windows may not be consecutive; (iii) if HNC so
postpones a Permitted Window, then notwithstanding the last sentence of Section
1.2(a), the Registration Period of the Shelf Registration shall be extended by a
period of time equal to the period of postponement (subject to the provisions of
Sections 1.4 and 1.10 below); and (iv) if HNC defers a Permitted Window as
provided herein and the Holders withdraw their Notice of Resale, then such
withdrawal shall not count as a Permitted Window;
(c) if HNC is acquired and its Common Stock ceases to be publicly
traded;
(d) 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;
(e) 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
(f) 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).
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
(3) month period without registration under the 1933 Act pursuant to the
provisions of Rule 144 promulgated under the 1933 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 the Registrable Securities then held
by such Holder may be resold by such Holder within a three
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(3) month period without registration under the 1933 Act pursuant to the
provisions of Rule 144 promulgated under the 1933 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 1933 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 best efforts to register and qualify the securities
covered by such registration statement 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 such registration statement, at any time during a Permitted Window when a
prospectus relating thereto is required to be delivered under the 1933 Act, of
the happening of any event known to FTI'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.
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.
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(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
1933 Act, the 1934 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 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
1933 Act, the 1934 Act, any U.S. federal or state securities law or any rule or
regulation promulgated under the 1933 Act, the 1934 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 1933 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 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 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,
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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 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 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 1933 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.
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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 Notice
of Resale or other 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 HNC has already
effected two (2) Permitted Windows pursuant to this Agreement; (c) with respect
to a particular Holder if, in the opinion of counsel to HNC, all such
Registrable Securities proposed to be sold by such Holder may be sold in a three
(3) month period without registration under the 1933 Act pursuant to Rule 144
promulgated under the 1933 Act or otherwise; or (d) 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.
1.11 ACKNOWLEDGMENT OF OTHER AGREEMENTS. The Holders acknowledge that
they have been informed by HNC that other stockholders of HNC currently hold
certain Form S-3 and other registration rights that may enable such other
stockholders to sell shares of HNC during one or more Permitted Windows or at
other times (thus potentially adversely affecting the receptivity of the market
to the sale of the Registrable Securities pursuant to a registration effected
pursuant to this Agreement) and that certain stockholders hold "piggyback
registration rights" that may allow them to participate in a registration
effected pursuant to this Agreement. If after the date of this Agreement and
prior to expiration of the Registration Period, HNC enters into an agreement
pursuant to which HNC grants registration rights to a third party or parties
that may be exercised during the Registration Period, then, within thirty (30)
days after it enters into such agreement, HNC will notify the Holders of the
grant of such registration rights and their general terms.
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; 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 the assignee agrees in writing 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.
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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 delivered (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
(3rd) 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 5930 Cornerstone Court West, San Diego,
California 92121-3278, Attention: President; Telecopier: (619) 452-3220; and
(ii) if to a Holder, at such Holder's respective address as set
forth on Exhibit A hereto.
Any party hereto (and such party's permitted assigns) may by
notice so given change its address for future notices hereunder.
3.2 ENTIRE AGREEMENT. This Agreement and the provisions of Section 2.12
of the Plan constitute and contain the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersede 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 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,
United States of America, 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.
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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.
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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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the Effective Date.
HNC SOFTWARE INC. THE STOCKHOLDERS
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Raymond V. Thomas J. Michael Thompson
Chief Financial Officer
-------------------------------
Paul P. Koziarz
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Thomas R. Snow
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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EXHIBIT A
TO
REGISTRATION RIGHTS AGREEMENT
NUMBER OF REGISTRABLE SECURITIES
STOCKHOLDER OWNED BY THE STOCKHOLDER
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J. Michael Thompson
c/o Financial Technology, Inc.
70 East Lake Street, Suite 1200
Chicago, IL 60601 356,956
Paul P. Koziarz
4131 Franklin St.
Western Springs, IL 60558 23,797
Thomas R. Snow
4834 N. Leavitt St.
Chicago, IL 60625 15,864