1
Exhibit 99.1
REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of February 4, 2000 is entered into by and
among Concord Communications, Inc., a Massachusetts corporation (the "Company"),
and Timothy Barrows, as the Securityholder Agent (the "Securityholder Agent") on
behalf of the stockholders (the "Stockholders") of FirstSense Software, Inc.
("FirstSense").
Recitals
WHEREAS, the Company, F Acquisition Corp., and FirstSense have entered
into an Agreement and Plan of Reorganization dated as of January 20, 2000 (the
"Merger Agreement"); and
WHEREAS, the Company and the Stockholders desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" means the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value per
share, of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"Registration Expenses" means the expenses described in
Section 2.4.
2
-2-
"Registration Statement" means a registration statement filed
by the Company with the Commission for a public offering and sale of securities
of the Company, including, without limitation, any public offering on behalf of
any other person granted registration rights by the Company and any registration
statement covering securities proposed to be issued in exchange for securities
or assets of another corporation (other than a registration statement on Form
S-8 or Form S-4, or their successors, or any other form for a similar limited
purpose).
"Registrable Shares" means the shares of Common Stock issued
to the Stockholders in connection with the Merger; provided, however, that
shares of Common Stock which are Registrable Shares shall cease to be
Registrable Shares upon any sale pursuant to a Registration Statement.
"Securities Act" means the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Selling Stockholder" means any Stockholder owning Registrable
Shares included in a Registration Statement.
Capitalized terms not otherwise defined herein shall have the meanings
provided in the Merger Agreement.
2. Registration Rights
2.1 Incidental Registration.
(a) If the Company proposes to file a
Registration Statement after February 4, 2000 but prior to April 1, 2000 it
will, prior to such filing, give written notice to the Securityholder Agent of
its intention to do so. Upon the written request of the Securityholder Agent
given within 7 days after the Company provides such notice (which request shall
state the intended method of disposition of such Registrable Shares), the
Company shall use its commercially reasonable efforts to cause all Registrable
Shares which the Company has been requested by the Securityholder Agent to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of the Securityholder Agent; provided
that the Company shall have the right to postpone or withdraw any registration
effected pursuant to this Section 2.1 without obligation to any Stockholder.
(b) If the registration for which the Company
gives notice pursuant to Section 2.1(a) is a registered public offering
involving an underwriting, the Company shall so advise the Securityholder Agent
as a part of the written notice given pursuant to Section 2.1(a). In such event,
the right of any Stockholder to include its Registrable Shares in such
registration pursuant to Section 2.1 shall be conditioned upon such
Stockholder's participation in such underwriting on the terms set forth herein.
All Stockholders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary
3
-3-
form with the underwriter or underwriters selected for the underwriting by the
Company. Notwithstanding any other provision of this Section 2.1, if the
managing underwriter determines that the inclusion of all shares requested to be
registered would adversely affect the offering, the Company may limit the number
of Registrable Shares to be included in the registration and underwriting and
the Company shall so advise the Securityholder Agent. The securities of the
Company held by the Stockholders shall be excluded from such registration and
underwriting to the extent deemed advisable by the managing underwriter, and the
underwriting shall be allocated among all Stockholders requesting registration
in proportion, as nearly as practicable, to the respective number of shares of
Common Stock which they held at the time the Company gives the notice specified
in Section 2.1(a). If any Stockholder would thus be entitled to include more
securities than such holder requested to be registered, the excess shall be
allocated among other requesting Stockholders pro rata in the manner described
in the preceding sentence. If any holder of Registrable Shares or any officer or
director disapproves of the terms of any such underwriting, such person may
elect to withdraw therefrom by written notice to the Company, and any
Registrable Shares or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
2.2. Registrations on Form S-3.
If at any time after April 1, 2000 and prior to February 15, 2001, (i)
the Securityholder Agent requests in writing that the Company file a
registration statement on Form S-3 for a public offering of all or any portion
of the Registrable Shares held by the Stockholders, the reasonably anticipated
aggregate price to the public of which would exceed $5,000,000, and (ii) the
Company is a registrant entitled to use Form S-3 to register such shares, then
the Company shall use its best efforts to register under the Securities Act on
Form S-3 for public sale the number of Registrable Shares; provided, however,
that (A) the number of registrations on Form S-3 which may be requested and
obtained under this Section 2.2 shall be limited to two and (B) the Company
shall not be obligated to file a registration statement on Form S-3 if at the
time of any such request the Registrable Shares are eligible for sale pursuant
to Rule 144. The registration rights in this Section 2.2 are in addition to the
registration rights afforded under Section 2.1. Notwithstanding anything to the
contrary contained herein, the Company may include in any such registration
(without obtaining the consent of the Securityholder Agent) shares of
unregistered Common Stock previously issued to other persons. Notwithstanding
anything to the contrary contained herein, in no event shall the Company be
required to keep on file with the Commission any such Form S-3 Registration
Statement beyond June 30, 2001.
2.3 Registration Procedures.
(a) If and whenever the Company is required by
the provisions of this Agreement to effect the registration of any Registrable
Shares under the Securities Act pursuant to Section 2.2 hereof, the Company
shall:
(i) file with the Commission a
Registration Statement on Form S-3 with respect to such Registrable Shares and
use its commercially reasonable efforts to cause that Registration Statement to
become effective as soon as possible;
4
-4-
(ii) as expeditiously as possible prepare
and file with the Commission any amendments and supplements to the Registration
Statement on Form S-3 and the prospectus included in the Registration Statement
on Form S-3 as may be necessary to comply with the provisions of the Securities
Act (including the anti-fraud provisions thereof) and to keep the Registration
Statement on Form S-3 effective until June 30, 2001;
(iii) as expeditiously as possible furnish
to the Securityholder Agent such reasonable numbers of copies of the Prospectus,
including any preliminary Prospectus, in conformity with the requirements of the
Securities Act, and such other documents as the Securityholder Agent may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Shares owned by the Selling Stockholders;
(iv) as expeditiously as possible use its
commercially reasonable efforts to register or qualify the Registrable Shares
covered by the Registration Statement under the securities or Blue Sky laws of
such states as the Securityholder Agent shall reasonably request, and do any and
all other acts and things that may be necessary or desirable to enable the
Selling Stockholders to consummate the public sale or other disposition in such
states of the Registrable Shares owned by the Selling Stockholders; provided,
however, that the Company shall not be required in connection with this
paragraph (iv) to qualify as a foreign corporation or execute a general consent
to service of process in any jurisdiction;
(v) as expeditiously as possible, cause
all such Registrable Shares to be listed on each securities exchange or
automated quotation system on which similar securities issued by the Company are
then listed;
(vi) promptly provide a transfer agent
and registrar for all such Registrable Shares not later than the effective date
of such registration statement;
(vii) as expeditiously as possible, notify
the Securityholder Agent, promptly after it shall receive notice thereof, of the
time when such Registration Statement has become effective or a supplement to
any Prospectus forming a part of such Registration Statement has been filed; and
(viii) as expeditiously as possible
following the effectiveness of such Registration Statement, notify the
Securityholder Agent of any request by the Commission for the amending or
supplementing of such Registration Statement or Prospectus.
(b) If the Company has delivered a Prospectus to
the Securityholder Agent and after having done so the Prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the Securityholder Agent and, if requested, the Securityholder Agent
shall cause the Selling Stockholders immediately to cease making offers of
Registrable Shares and return all Prospectuses to the Company. The Company shall
promptly, and in any event within five days, provide the Securityholder Agent
with revised Prospectuses and, following receipt of the revised Prospectuses,
the Selling Stockholders shall be free to resume making offers of the
Registrable Shares.
5
-5-
(c) In the event that, in the reasonable
judgment of the Company, it is advisable to suspend use of a Prospectus included
in a Registration Statement due to pending material developments or other events
that have not yet been publicly disclosed and as to which the Company believes
public disclosure would be seriously detrimental to the Company, the Company
shall notify the Securityholder Agent to such effect, and, upon receipt of such
notice, the Securityholder Agent shall cause each such Selling Stockholder
immediately to discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Selling Stockholder has received copies of a
supplemented or amended Prospectus or until the Securityholder Agent is advised
in writing by the Company that the then current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under this
Section 2.3(c) to suspend sales of Registrable Shares for a period in excess of
120 days in any 365-day period.
2.4 Allocation of Expenses. The Company will pay all
Registration Expenses for all registrations under this Agreement; provided,
however, that if a registration under Section 2.2 is withdrawn at the request of
the Securityholder Agent (other than as a result of information concerning the
business or financial condition of the Company which is made known to the
Securityholder Agent after the date on which such registration was requested)
and if the Securityholder Agent, on behalf of the Stockholders, elects not to
have such registration counted as a registration requested under Section 2.2,
the requesting Stockholders shall pay the Registration Expenses of such
registration pro rata in accordance with the number of their Registrable Shares
included in such registration. For purposes of this Section, the term
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with this Agreement, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the Company and the reasonable fees and expenses of one counsel
selected by the Securityholder Agent to represent the Selling Stockholders,
state Blue Sky fees and expenses, and the expense of any special audits incident
to or required by any such registration, but excluding underwriting discounts,
selling commissions and the fees and expenses of Selling Stockholders' own
counsel (other than the counsel selected to represent all Selling Stockholders).
2.5 Indemnification and Contribution.
(a) In the event of any registration of any of
the Registrable Shares under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless each Selling Stockholder, each
underwriter of such Registrable Shares, and each other person, if any, who
controls such Selling Stockholder or underwriter within the meaning of the
Securities Act or the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such Selling Stockholder, underwriter or
controlling person may become subject under the Securities Act, the Exchange
Act, state securities or Blue Sky laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable Shares
were
6
-6-
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse such Selling Stockholder, underwriter and each such
controlling person for any legal or any other expenses reasonably incurred by
such Selling Stockholder, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such Selling Stockholder, underwriter or controlling
person specifically for use in the preparation thereof.
(b) In the event of any registration of any of
the Registrable Shares under the Securities Act pursuant to this Agreement, each
Selling Stockholder, severally and not jointly, will indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any)
and each person, if any, who controls the Company or any such underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company, such
directors and officers, underwriter or controlling person may become subject
under the Securities Act, Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such Selling Stockholder
furnished in writing to the Company by or on behalf of such Selling Stockholder
specifically for use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; provided, however, that the
obligations of a Selling Stockholder hereunder shall be limited to an amount
equal to the net proceeds to such Selling Stockholder of Registrable Shares sold
in connection with such registration.
(c) Each party entitled to indemnification under
this Section (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 shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); 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 under this Section except to the extent
that the
7
-7-
Indemnifying Party is adversely affected by such failure. The Indemnified Party
may participate in such defense at such party's expense; provided, however, that
the Indemnifying Party shall pay such expense 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 the
Indemnified Party and any other party represented by such counsel in such
proceeding; provided further that in no event shall the Indemnifying Party be
required to pay the expenses of more than one law firm per jurisdiction as
counsel for the Indemnified Party. The Indemnifying Party also shall be
responsible for the expenses of such defense if the Indemnifying Party does not
elect to assume such defense. No Indemnifying Party, in the defense of any such
claim or litigation shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which 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 such
claim or litigation, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent of
the Indemnifying Party, which consent shall not be unreasonably withheld.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in this
Section 2.5 is due in accordance with its terms but for any reason is held to be
unavailable to an Indemnified Party in respect to any losses, claims, damages
and liabilities referred to herein, then the Indemnifying Party shall, in lieu
of indemnifying such Indemnified Party, contribute to the amount paid or payable
by such Indemnified Party as a result of such losses, claims, damages or
liabilities to which such party may be subject in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and the
Selling Stockholders on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company and
the Selling Stockholders shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact related
to information supplied by the Company or the Selling Stockholders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Selling
Stockholders agree that it would not be just and equitable if contribution
pursuant to this Section 2.5 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph of Section 2.5, (a) in no case shall any one Selling Stockholder be
liable or responsible for any amount in excess of the net proceeds received by
such Selling Stockholder from the offering of Registrable Shares and (b) the
Company shall be liable and responsible for any amount in excess of such
proceeds; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve such
party from any other obligation it or they may have thereunder or otherwise
under this Section. No party shall be liable for contribution with
8
-8-
respect to any action, suit, proceeding or claim settled without its prior
written consent, which consent shall not be unreasonably withheld.
2.6 Information by Holder. The Securityholder Agent shall
cause each holder of Registrable Shares included in any registration to furnish
to the Company such information regarding such holder and the distribution
proposed by such holder as the Company may reasonably request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to in this Agreement.
2.7 [Reserved.]
2.8 Rule 144 Requirements. The Company agrees to:
(a) make and keep current public information
about the Company available, as those terms are understood and defined in Rule
144;
(b) use its best efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements); and
(c) furnish to any holder of Registrable Shares
upon request (i) a written statement by the Company as to its compliance with
the reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents of the Company as such
holder may reasonably request to avail itself of any similar rule or regulation
of the Commission allowing it to sell any such securities without registration.
2.9 [Reserved.]
3. Transfer. The registration rights of any Stockholder (and of
any transferee of any Stockholder or its transferees) under this Agreement with
respect to any Registrable Shares may be transferred to any transferee who
acquires at least 25,000 of such Registrable Shares or who is a partner, member
or stockholder of a Stockholder that is a partnership, limited liability company
or corporation, respectively; provided that the Company is given written notice
by the Stockholder at the time of such transfer stating the name and address of
the transferee and identifying the Registrable Shares with respect to which the
rights under this Agreement are being assigned and such transferee executes and
delivers such agreements as the Company may reasonably require in order to
confirm that such transferee agrees to be bound by this Agreement.
4. Representations, Warranties and Covenants of the Company. The
Company represents and warrants to the Securityholder Agent as follows:
(a) The execution, delivery and performance of
this Agreement by the Company have been duly authorized by all requisite
corporate action and will not violate any
9
-9-
provision of law, any order of any court or other agency of government, the
Charter or By-laws of the Company or any provision of any indenture, agreement
or other instrument to which it or any or its properties or assets is bound,
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the properties or assets of the Company.
(b) This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with its terms.
5. General.
(a) Severability. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.
(b) Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of the
Commonwealth of Massachusetts (without reference to the conflicts of law
provisions thereof).
(c) Notices. All notices, requests, consents,
and other communications under this Agreement shall be in writing and shall be
deemed delivered (i) two business days after being sent by registered or
certified mail, return receipt requested, postage prepaid or (ii) one business
day after being sent via a reputable nationwide overnight courier service
guaranteeing next business day delivery, in each case to the intended recipient
as set forth at the address indicated in the Merger Agreement.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
(d) Complete Agreement. This Agreement
constitutes the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter.
(e) Amendments and Waivers. Any term of this
Agreement may be amended or terminated and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), with the written consent of the Company and the
Securityholder Agent (or any successor to the Securityholder Agent). Any such
amendment, termination or waiver effected in accordance with this Section
10
-10-
6(e) shall be binding on all Stockholders. No waivers of or exceptions to any
term, condition or provision of this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.
(f) Pronouns. Whenever the context may require,
any pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural, and vice versa.
(g) Counterparts; Facsimile Signatures. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, and all of which together shall constitute one and the
same document. This Agreement may be executed by facsimile signatures.
(h) Section Headings. The section headings are
for the convenience of the parties and in no way alter, modify, amend, limit or
restrict the contractual obligations of the parties.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK.]
11
Executed as of the date first written above.
CONCORD COMMUNICATIONS, INC.
By: /s/ Gary E. Haroian
---------------------------------
Name: Gary E. Haroian
Title: Sr. V.P. and CFO
SECURITYHOLDER AGENT
/s/ Timothy A. Barrows
--------------------------------------