REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), made as of the
23rd day of June, 1997 by and among FAIR, ISAAC AND COMPANY, INCORPORATED, a
Delaware corporation (the "Company"), and the persons listed on the signature
pages hereto,
W I T N E S S E T H:
WHEREAS, the Company, the Holders (as hereinafter defined) and Risk
Management Technologies, a California corporation ("RMT"), are parties to that
certain Agreement and Plan of Reorganization, dated the date hereof (the "Merger
Agreement"), pursuant to which, among other things, the Company has agreed to
issue to the shareholders of RMT shares of common stock, $.01 par value, of the
Company ("Common Stock") pursuant to a merger of a wholly owned subsidiary of
the Company and RMT in which RMT will become a wholly owned subsidiary of the
Company, and
WHEREAS, in connection with the transactions referred to above, the
Company and the Holders desire to provide for the rights of the Holders with
respect to the registration of shares of the Company's Common Stock (the
"Shares") constituting forty-five percent 45% of the Merger Shares (as such term
is defined in the Merger Agreement), according to the terms of this Agreement:
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Definitions.
1.1 The term "Commission" means the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
1.2 The term "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to time.
1.3 The term "Holder" means each of the persons listed on the signature
pages hereto and any person to whom the registration rights conferred by this
Agreement have been transferred in accordance with Section 9.1 hereof.
1.4 The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
1.5 The term "Registrable Securities" means (i) the Shares, and (ii)
any shares of Common Stock issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, the Shares; provided,
however, that any shares previously sold to the public pursuant to a registered
public offering or pursuant to Rule 144 or Rule 145 under the Securities Act,
and any shares otherwise sold or transferred in a transaction in which the
transferor's rights under this Agreement are not assigned in accordance with
this Agreement, shall cease to be Registrable Securities.
1.6 The term "Securities Act" means the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
2. Registration.
2.1 After the Company has publicly released a report including the
combined financial results of the Company and RMT for a period of at least 30
days of combined operations of the Company and RMT within the meaning of
Accounting Series Release No. 135, as amended, of the Commission (the date of
such release being referred to as the "Release Date"), and upon prior written
notice to the Holders, the Company shall file a registration statement covering
such of the Holders' Registrable Securities as are the subject of the Notices
defined below, for an offering to be made on a continuous basis pursuant to Rule
415 under the Securities Act; provided, that the Company shall have no
obligation to file or effect any such registration unless the Holder or Holders
submitting Notices (as defined below) propose to sell less than five thousand
(5,000) Shares pursuant to such registration; and provided, further, that the
Company shall have no obligation to register any Registrable Securities as to
which it has not received, a reasonable time prior to the filing of the
foregoing registration statement, a written notice (each, a "Notice") stating
the name and address of the Holder of such Registrable Securities, the number of
shares of Registrable Securities to be disposed of pursuant to such registration
(in each case not to exceed 45% of such Holder's Shares) and the intended
methods of distribution. The Company's obligations under this Section 2 are
subject to the further conditions and limitations set forth below.
2.2 The registration provided for in this Section 2 shall not be
underwritten.
2.3 So long as the Company has complied with its obligations hereunder,
any registration proceeding commenced pursuant to this Agreement which is
subsequently withdrawn by the Holders shall be counted as the single
registration required of the Company for purposes of Section 2.1 hereof.
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3. Obligations of the Company.
When obligated under Section 2.1 of this Agreement to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
3.1 Prepare and file with the Commission a registration statement with
respect to such Registrable Securities and use reasonable efforts to cause such
registration statement to become effective on or before December 1, 1997 and to
keep such registration statement continuously effective under the Securities Act
until the earlier of the expiration of sixty (60) days after the date of
declaration of effectiveness of such registration statement by the Commission
(the "Expiration Date") or the date on which this Agreement has terminated with
respect to all Holders of Registrable Securities. The Company's obligations
hereunder to file a registration statement and to keep a registration statement
continuously effective under the Securities Act shall be suspended if (i) the
fulfillment of such obligations would require the Company to make a disclosure
that would, in the sole discretion and judgment of the Company's Board of
Directors, be detrimental to the Company or premature, (ii) the Company has
filed, or proposes to file within ninety (90) days after the Release Date, a
registration statement with respect to any of its securities to be distributed
in an underwritten public offering and it is advised by its lead or managing
underwriter that an offering by a Holder or Holders of Registrable Securities
would materially adversely affect the distribution of such securities, or (iii)
the fulfillment of such obligations would require the Company to prepare
financial statements not required to be prepared for the Company to comply with
its obligations under the Exchange Act. Such obligations shall be reinstated (x)
in the case of clause (i) above, upon the making of such disclosure by the
Company (or, if earlier, when such disclosure would either no longer be
necessary for the fulfillment of such obligations or no longer be detrimental or
premature), (y) in the case of clause (ii) above, upon the conclusion of any
period during which the Company would not, pursuant to the terms of its
underwriting arrangements, be permitted to sell Registrable Securities for its
own account and (z) in the case of clause (iii) above, as soon as it would no
longer be necessary to prepare such financial statements to comply with the
Securities Act. The Expiration Date shall be tolled for the duration of any
suspension pursuant to this Section 3.1 and for the duration of any period
described in clauses (i)-(iv) of Section 4.2 below. In the event that the
Company's obligations are suspended as provided above, the Company shall notify
in writing each Holder participating in such registration, which notice shall
state that its obligations hereunder have been suspended in accordance with this
Section 3.1.
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3.2 Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
3.3 Furnish to the Holders covered by such registration statement such
numbers of copies of a prospectus, including a preliminary prospectus, 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 such
Registrable Securities.
3.4 Use all reasonable efforts to register and qualify the securities
covered by such registration statement under the securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders thereof,
provided that the Company shall 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 states or jurisdictions.
3.5 Use all reasonable efforts to cause the Registrable Securities
registered pursuant to such registration to be listed on the principal
securities exchange on which the Common Stock is then listed.
4. Obligations of the Holders.
4.1 It shall be a condition precedent to the obligations of the Company
to take any action pursuant to this Agreement that the Holders requesting
inclusion of securities in the Company's registration statement shall furnish to
the Company such information regarding themselves, the Registrable Securities
held by them and to be disposed of by them, and the intended method of
disposition of such securities as shall be required to effect the registration
of the Registrable Securities.
4.2 Upon the receipt by a Holder of any notice from the Company of (i)
the existence of any fact or the happening of any event as a result of which the
prospectus included in a registration statement filed pursuant to Section 2, as
such registration statement is 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, (ii) the existence of any facts or events resulting
in the suspension of the Company's obligations to file and keep effective a
registration statement as provided in Section 3.1 above, (iii) the issuance by
the Commission of any stop order or injunction suspending or enjoining the use
or the effectiveness of such registration statement or the initiation of any
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proceedings for that purpose, or the taking of any similar action by the
securities regulators of any state or other jurisdiction, or (iv) the request by
the Commission or any other federal or state governmental agency for amendments
or supplements to such registration statement or related prospectus or for
additional information related thereto, such Holder shall immediately
discontinue disposition of such Holder's Registrable Securities covered by such
registration or prospectus (other than in transactions exempt from the
registration requirements under the Securities Act) until such Holder's receipt
of the supplemented or amended prospectus or until such Holder is advised in
writing by the Company that the use of the applicable prospectus may be resumed
or, in the case of a notice pursuant to clause (ii) above, until the Company's
obligations referred to therein are no longer suspended.
4.3 Each Holder shall notify the Company in writing within five (5)
calendar days of the disposition of a Holder's Registrable Securities covered by
a registration statement as provided in Section 3.1 above.
5. Expenses.
The Company shall bear and pay all expenses incurred by the Company in
connection with any registration, filing or qualification of Registrable
Securities with respect to any registration pursuant to Section 2 hereof,
including (without limitation) all registration, filing and qualification fees,
printers' and accounting fees relating or apportionable thereto, fees and
disbursements of counsel for the Company, Blue Sky fees and expenses, including
fees and disbursements of counsel related to all Blue Sky matters, but excluding
(i) the fees and disbursements of counsel for the selling Holders, (ii) stock
transfer taxes that may be payable by the selling Holders, and (iii) all
brokerage or similar commissions relating to Registrable Securities, all of
which shall be borne by the Holders whose Registrable Securities are covered by
such registration statement.
6. Indemnification.
In the event any Registrable Securities are included in a registration
statement under this Agreement:
6.1 To the extent permitted by law, the Company will indemnify and hold
harmless each Holder of such Registrable Securities and each person, if any, who
controls such Holder within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages or liabilities (joint or several) to
which they 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 thereof) arise out of or are based upon any
of the following
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statements, omissions or violations (collectively, a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact 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 not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law; and the
Company will reimburse each such Holder or controlling person for any 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 6.1 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), nor shall the Company be liable in any such
case for any such loss, claim, damage, expense, liability or action to the
extent that it arises out of or is based upon a Violation which arises out of or
is based upon information furnished in writing expressly for use in connection
with such registration by any such Holder or controlling person; provided,
further, that the Company will not be liable to any Holder or controlling person
with respect to any loss, claim, damage, expense or liability arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission to state a material fact in any preliminary prospectus which is
corrected in an amended, supplemented or final prospectus provided to such
Holder if the purchaser asserting such loss, claim, damage, expense or liability
purchased from such Holder and was not sent or given a copy of such amended,
supplemented or final prospectus at or prior to the sale of Registrable
Securities to such purchaser.
6.2 To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act, and any other Holder selling
securities in such registration statement or any of its directors or officers or
any person who controls such Holder, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer or controlling person, or other such Holder or director, officer or
controlling person 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 arises out of or is based upon information furnished in writing by
such Holder expressly for use in connection with such registration; and each
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such Holder will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer, controlling person, underwriter or
controlling person, other Holder, officer, director, or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this Section 6.2 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 Holder, which consent shall not be unreasonably withheld.
6.3 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 6, 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
interests between such indemnified party and any other party represented by such
counsel in such proceeding. It is understood, however, that an indemnifying
party shall not, in connection with any proceeding or related proceedings, be
liable for the reasonable fees and expenses of more than one separate firm for
all indemnified parties. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
6, 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 6.
6.4 The obligations of the Company and Holders under this Section 6
shall survive the completion of any offering of Registrable Securities pursuant
to a registration statement under this Agreement, and otherwise.
7. Termination of Registration Rights.
The Company's obligations pursuant to this Agreement shall terminate as
to any Holder of Registrable Securities on the earlier of (i) the date when such
Holder is eligible to sell all of such Holder's Registrable Securities pursuant
to Rule 144 or
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Rule 145 under the Securities Act during any 90-day period or (ii) the first
anniversary of the date hereof.
8. Representations and Warranties of the Company.
The Company hereby represents and warrants to the Holders that the
Company is current in making all filings with the Commission required by law,
and in the last 12 months, on a timely basis, has made all such filings, and as
of the date hereof is eligible to register the resale of the Shares by the
Holders on Form S-3 under the Securities Act.
9. Miscellaneous.
9.1 Successors and Assigns. This Agreement and all of the provisions
hereof shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto, but neither this Agreement nor any
of the rights, interests or obligations hereunder may be assigned, transferred
or delegated by any Holder to any person other than (i) executors,
administrators, legatees or heirs of such Holder upon the death of such Holder
and (ii) to a charitable remainder trust described in Section 664 of the
Internal Revenue Code all of the income beneficiaries of which are such Holder
or members of such Holder's immediate family or to a trust for the benefit of
one or more members of such Holder's immediate family; provided in either such
case that the Company is given written notice at the time of or within a
reasonable time after said transfer or assignment, stating the name and address
of the permitted transferee or assignee and identifying the Registrable
Securities to which such registration rights are being transferred or assigned
and, provided further, that the transferee or assignee of such rights assumes in
writing the obligations of such Holder under this Agreement; and provided,
further, that no rights, interests or obligations hereunder may be assigned,
transferred or delegated except to a transferee or assignee of at least 5,000
shares of Registrable Securities (as presently constituted and subject to
subsequent adjustments for stock splits, reverse stock splits and the like).
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors or permitted
assigns, any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
9.2 Legends.
(a) Each certificate representing Registrable Securities shall (unless
otherwise permitted by the provisions of this Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws):
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"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
SUCH ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR
OTHER EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
(b) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel at such Holder's expense (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect that
the securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend.
(c) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the related stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate Blue Sky authority authorizing such removal.
9.3 Notices. Unless otherwise provided, any notice, request, demand or
other communication required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given upon personal delivery to the
party to be notified, or when sent by telecopier (with receipt confirmed), or
overnight courier service, or upon deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed as follows (or at
such other address as a party may designate by notice to the other):
If to the Company:
Fair, Isaac and Company, Incorporated
120 North Redwood Drive
San Rafael, CA 94903
Telecopier: (415) 479-6320
Attention: Peter L. McCorkell
with a copy to:
Pillsbury Madison & Sutro LLP
2700 Sand Hill Road
Menlo Park, CA 94025
Telecopier: (415) 233-4545
Attention: Jorge A. del Calvo, Esq.
If to the Holders:
to their respective addresses shown on the signature pages hereto
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with a copy to:
Whitehead & Porter LLP
220 Montgomery Street, Suite 1850
San Francisco, CA 94104
Telecopier: (415) 788-6521
Attention: David Whitehead, Esq.
9.4 Waivers. The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the party against whom such
waiver is sought to be enforced. No waiver by any party of any default with
respect to any provision, condition or requirement hereof shall be deemed to be
a continuing waiver in the future thereof or a waiver of any other provision,
condition or requirement hereof; nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
9.5 Severability. If one or more provisions of this Agreement are held
to be unenforceable, invalid or void by a court of competent jurisdiction, such
provision shall be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
9.6 Entire Agreement; Amendments.
(a) This Agreement contains the entire understanding of the parties
with respect to the matters covered herein and supersedes all prior agreements
and understandings, written or oral, between the parties relating to the subject
matter hereof.
(b) Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only 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 paragraph shall be binding upon each holder of any Registrable Securities
then outstanding, each future Holder of all such Registrable Securities, and the
Company.
9.7 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California (irrespective of its choice of law
principles).
9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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9.9 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. Any reference in this Agreement to a
statutory provision or rule or regulation promulgated thereunder shall be deemed
to include any similar successor statutory provision or rule or regulation
promulgated thereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FAIR, ISAAC AND COMPANY,
INCORPORATED
By
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Name
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Title
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HOLDERS:
David LaCross and Kathleen O. LaCross
Trustees U/D/T dated April 2, 1997
Address: 59 Singingwood Lane
Orinda, CA 94563
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By: David LaCross, Co-Trustee
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By: Kathleen O. LaCross, Co-Trustee
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Name of Holder: Jefferson Braswell
Address: 2800 Regent St.
Berkeley, CA 94705
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Name of Holder: Software Alliance LLC
Address: P.O. Box 7370
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Incline Village, NY 89452
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Name of Holder: Robert Ferguson
Address: 1040 Greenwich St.
San Francisco, CA 94133
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Name of Holder: James T. Fan
Address: 5112 Amberwood Court
Fremont, CA 94555
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Name of Holder: Leland Prussia
Address: 16 Redondo Court
Alameda, CA 94501
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