Exhibit 4.2
FORM OF REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT (this "Agreement") is made effective as of
________ ___, 1999, between The Metzler Group, Inc., a Delaware corporation (the
"Company"), and each of the holders who execute and deliver a signature page
hereto (individually a "Holder" and collectively, the "Holders").
RECITAL
The parties to this Agreement are parties to that certain Stock Exchange
Agreement dated as of ______ ___, 1998 (the "Stock Exchange Agreement") by and
among the Company, _______________, an __________ corporation ("XXX"), and the
Holders, pursuant to which the Company is acquiring from the Holders all of the
capital stock of XXX and in connection therewith the Company is issuing shares
of Common Stock (as defined below) to the Holders. In order to induce the
Holders to enter into the Stock Exchange Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement. Unless otherwise
provided in this Agreement, capitalized terms used herein shall have the
meanings set forth in Section 7 hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recital and the mutual
covenants and agreements herein contained and intending to be legally bound
hereby, the parties hereby agree as follows:
1. Piggyback Registrations.
(a) Right to Piggyback. If, at any time during which any Registrable
Securities remain outstanding (other than during a Lock-Up Period (as defined in
the Stock Exchange Agreement)), the Company proposes to register any of its
Common Stock under the Securities Act in an underwritten public offering, other
than pursuant to a registration on Form S-8 or Form S-4 or any similar forms
then in effect, (a "Piggyback Registration"), the Company will give prompt
written notice to all Holders of its intention to effect such a registration
(the "Registration Notice") and will, subject to the terms of this Agreement,
include in such registration all Registrable Securities of the Holders with
respect to which the Company has received written requests for inclusion therein
within 15 days after the receipt of the Company's notice, not to exceed a
maximum number of shares for each such Holder equal to 20% of such Holder's
Registrable Securities.
(b) Priority on Primary Registrations. If a Piggyback Registration
includes primary shares to be sold on behalf of the Company, and the managing
underwriter or underwriters advise the Company that in their opinion the number
of securities requested to be included in such registration exceeds the number
which can be sold in such offering without materially adversely affecting the
marketability of the offering, the Company will include in such registration,
(i) first, the securities the Company proposes to sell and (ii) second, the
Registrable Securities requested to be included in such registration and all
other Common Stock requested to be included in such
registration (the "Other Common Stock"), to be included pro rata on the basis of
the number of shares of such securities for which the Company has been given
written requests for inclusion therein by each such holder thereof.
(c) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities (not including primary shares), and the managing underwriter or
underwriters advise the Company that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without adversely affecting the marketability of the
offering, the Company will include in such registration (i) first, the
securities requested to be included therein by the Priority Holders, and (ii)
second, the Registrable Securities requested to be included in such registration
by the Holders and all Other Common Stock requested to be included in such
registration, to be included pro rata on the basis of the number of shares of
such securities for which the Company has been given written requests for
inclusion therein by each such holder thereof.
(d) Holdback Agreements. Each holder of Registrable Securities agrees
not to effect any public sale or distribution (including sales pursuant to Rule
144) of equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 90-day period beginning on the effective date of any Piggyback
Registration, whether or not such Holder's Registrable Securities are included
therein (except as part of such underwritten registration), unless the Company
and the underwriters managing the registered public offering otherwise agree.
2. Certain Procedures. In connection with any Piggyback Registration, the
Company will, as expeditiously as possible but subject to the terms hereof:
(a) furnish each seller of Registrable Securities such number of
copies of such Registration Statement, each amendment and supplement thereto,
the prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(b) use all commercially reasonable efforts to register or qualify
such Registrable Securities under the securities or blue sky laws of such states
and the District of Columbia as any seller of Registrable Securities reasonably
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such states and the District of Columbia of the Registrable Securities owned by
Holder (provided that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection (b), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(c) notify each seller of such Registrable Securities of the happening
of any event (other than a possible acquisition) of which the Company becomes
aware, as a result of which the prospectus included in such Registration
Statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading,
2
(d) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the Nasdaq National Market; and
(e) otherwise use all commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full calendar quarter after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder.
3. Holder Procedures.
(a) In connection with any Registration Statement, the Company may
require each Holder to furnish to the Company such information regarding such
Holder and his or her proposed distribution of Registrable Securities, to the
extent necessary to comply with the Securities Act, as the Company may from time
to time reasonably request in writing.
(b) Each Holder agrees to cooperate with the Company in all reasonable
respects in connection with the preparation and filing of each Registration
Statement and any amendment thereof, any prospectus relating thereto and any
prospectus supplement relating thereto with respect to the offer and sale of
Registrable Securities of such Holder.
4. Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement, including all NASD
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, listing fees, printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for the Company and all independent
certified public accountants, and other Persons retained by the Company (all
such expenses being herein called "Registration Expenses"), will be borne by the
Company; provided, that Registration Expenses shall not include, and the Holders
of Registrable Securities shall pay, any underwriting discounts or brokers fees
and commissions applicable to Registrable Securities sold by them pursuant to
this Agreement and all legal fees and expenses of counsel retained by the
Holders.
5. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless, to the fullest
extent permitted by law, each Holder against all losses, claims, damages,
liabilities and expenses (including reasonable fees and legal expenses)
resulting from any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any prospectus, or any amendment or
supplement thereto, or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except in
each case insofar as the same arises out of or is based upon an untrue statement
or alleged untrue statement of a material fact or an omission or alleged
omission to state a material fact in such Registration Statement, prospectus,
amendment or supplement, as the case may be, made or omitted, as the case may
be, in reliance upon and in conformity with information furnished to the Company
by such Holder for use therein or by such Holder's failure to deliver a copy of
the Registration Statement or
3
prospectus or any amendments or supplements thereto after the Company has
furnished Holder with a sufficient number of copies of the same.
(b) The Holders participating in any Registration Statement shall
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its officers, directors, employees, representatives and agents, and
each Person who controls (within the meaning of the Securities Act) the Company,
against all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation and legal expenses) resulting from any untrue
or alleged untrue statement of a material fact contained in any Registration
Statement, any prospectus, or any amendment or supplement thereto, and any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, to the extent the same arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
or any omission or alleged omission to state a material fact in such
Registration Statement, prospectus, amendment or supplement, as the case may be,
made or omitted, as the case may be, in reliance upon and in conformity with
information furnished to the Company by such Holder for use therein.
(c) Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who will conduct the defense of such claim or litigation, is approved by
the Indemnified Party (whose approval will not be unreasonably withheld or
delayed); and provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations except to the extent that its defense of the claim or litigation
involved is prejudiced by such failure. The Indemnified Party may participate in
such defense at such Indemnified Party's expense. No Indemnifying Party, in the
defense of any such claim or litigation, except with the prior consent of each
Indemnified Party, shall consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of any claim or litigation, and no Indemnified Party will
consent to entry of any judgment or settle any claim or litigation without the
prior written consent of the Indemnifying Party. Each Indemnified Party shall
furnish such information regarding himself, herself or itself and the claim in
question as the Indemnifying Party may reasonably request and as shall be
reasonably required in connection with the defense of such claim and litigation
resulting therefrom.
(d) If for any reason the indemnification provided for in this Section
5 from an Indemnifying Party, although otherwise applicable by its terms, is
determined by a court of competent jurisdiction to be unavailable to an
Indemnified Party hereunder, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by the Indemnified Parties as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of such Indemnifying Party and the Indemnified Parties in
connection with the actions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
4
considerations. The relative fault of such Indemnifying Party and the
Indemnified Parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact, has been made by, or relates to information supplied by,
such Indemnifying Party or the Indemnified Parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 5(c), any legal or
other fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
6. Participation in Underwritten Registrations. No Person may participate
in any registration hereunder which is underwritten unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Company and other Person or Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, share custody agreements, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
7. Definitions.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in the City of Chicago
are authorized or obligated by law or executive order to close.
"Common Stock" means the Company's Common Stock, par value $0.001 per
share.
"Commission" means the Securities and Exchange Commission.
"Person" means any natural person and any corporation, partnership,
limited liability company or other business entity.
"Registration Statement" means a registration statement filed with the
Commission under the Securities Act in connection with a Piggyback Registration.
"Registrable Securities" means, with respect to each Holder, (i) the
Metzler Common (as defined in the Stock Exchange Agreement) issued to such
Holder pursuant to the Stock Exchange Agreement, and (ii) any Common Stock or
other equity securities issued or issuable with respect to the securities
referred to in clause (i) by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any particular Registrable Securities, such
securities will cease to be Registrable Securities (A) when they have been
distributed to the public pursuant to a offering registered under the Securities
Act or (B) after the Registrable Securities held by such Holder first become
eligible for sale pursuant to Rule 144 under the Securities Act (or any similar
rule then in force), subject to any restrictions in the amount and manner of
sale and notice requirements contained therein.
"Securities Act" means the Securities Act of 1933, as amended.
5
8. Miscellaneous.
(a) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of at least a majority of the
Registrable Securities.
(b) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and permitted assigns; provided,
however, that rights to cause the Company to register Registrable Securities
pursuant to this Agreement may be assigned by a Holder to a transferee or
assignee of such securities only if (i) such assignment is made with all related
obligations, (ii) the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; (iii) such transferee or assignee agrees in writing to be bound
by and subject to the terms and conditions of this Agreement; and (iv)
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Securities Act.
(c) Construction. The parties have jointly participated in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumptions or burdens of proof
shall arise favoring any party by virtue of the authorship of any of the
provisions of this Agreement. The term "include" and its derivatives shall have
the same construction as the phrase "include, without limitation," and its
derivatives. The section headings contained in this Agreement are inserted for
convenience or reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Severability. It is the intent and desire of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the laws and public policies as applied in each jurisdiction in which
enforcement of the provisions of this Agreement are sought. If any particular
provision of this Agreement shall be adjudicated by a court of competent
jurisdiction to be invalid or unenforceable, such provision shall be amended,
without any action on the part of any party hereto, to delete therefrom the
portion so adjudicated to be invalid or unenforceable, such deletion to apply
only with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made. If any provision of this
Agreement is adjudicated by a court of competent jurisdiction to be invalid or
unenforceable in its entirety, this Agreement shall be amended to delete such
provision therefrom and the remainder of this Agreement shall remain in full
force and effect in such jurisdiction and without such deletion in all other
jurisdictions.
(e) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same agreement.
(f) Governing Law. The corporate law of Delaware will govern all
issues concerning the relative rights of the Company and its stockholders. All
other questions concerning
6
the construction, validity and interpretation of this Agreement and the exhibits
and schedules hereto will be governed by the internal law, and not the law of
conflicts, of Illinois.
(i) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given (i) three (3)
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid; (ii) one day after receipt is electronically
confirmed, if sent by fax (provided that a hard copy shall be promptly sent by
first class mail); or (iii) one (1) business day following deposit with a
recognized national overnight courier service for next day delivery charges
prepaid, and, in each case, addressed to the intended recipient as set forth
below:
If to Metzler: With a copy to:
-------------- ----------------
The Metzler Group, Inc. Sachnoff & Weaver, Ltd.
615 N. Wabash Suite 2900
Chicago, Illinois 60611 Chicago, Illinois 60606
Attn: General Counsel Attn: J. Todd Arkebauer
Fax: 312/573-5676 Fax: 312/207-6400
If to the Holders: With a copy to:
----------------- --------------
To their respective addresses --------------------------
set forth on the signature --------------------------
page hereto --------------------------
Attn:_____________________
Fax: _____________________
Any party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is delivered to the individual for whom it is intended. Any party may
change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(g) Aggregation of Stock. All shares of Registrable Securities held or
acquired by affiliated Persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
(h) Termination. The Company's obligations hereunder shall terminate
upon the earlier of (i) with respect to a particular Holder, such Holder having
sold 20% of the Registrable Securities and (ii) after the Registrable Securities
held by such Holder first become eligible for sale pursuant to Rule 144 under
the Securities Act (or any similar rule then in force), subject to any
restrictions in the amount and manner of sale and notice requirements contained
therein.
7
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
THE COMPANY:
THE METZLER GROUP, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
HOLDERS:
----------------------------------
----------------------------------
Address:
--------------------------
--------------------------
Fax:
_____________________
----------------------------------
----------------------------------
Address:
--------------------------
--------------------------
Fax:
_____________________
----------------------------------
----------------------------------
Address:
--------------------------
--------------------------
Fax:
_____________________
----------------------------------
----------------------------------
8