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AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
among
PREDICTIVE SYSTEMS, INC.
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
GENERAL ATLANTIC PARTNERS 54, L.P.
GAP COINVESTMENT PARTNERS II, L.P.
GENERAL ATLANTIC PARTNERS 57, L.P.
CISCO SYSTEMS, INC.
and
THE STOCKHOLDERS NAMED HEREIN
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Dated: _________ __, 2000
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TABLE OF CONTENTS
Page
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1. DEFINITIONS..............................................................1
2. GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT............................6
(a) GRANT OF RIGHTS..............................................6
(b) REGISTRABLE SECURITIES.......................................7
(c) HOLDERS OF REGISTRABLE SECURITIES............................7
3. DEMAND REGISTRATION......................................................7
(a) REQUEST FOR DEMAND REGISTRATION..............................8
(b) INCIDENTAL OR "PIGGY-BACK" RIGHTS WITH RESPECT TO
A DEMAND REGISTRATION........................................8
(c) EFFECTIVE DEMAND REGISTRATION................................8
(d) EXPENSES.....................................................9
(e) UNDERWRITING PROCEDURES......................................9
(f) SELECTION OF UNDERWRITERS....................................9
4. INCIDENTAL OR "PIGGY-BACK" REGISTRATION.................................10
5. FORM S-3 REGISTRATION...................................................10
(a) REQUEST FOR A FORM S-3 REGISTRATION.........................11
(b) FORM S-3 UNDERWRITING PROCEDURES............................11
(c) LIMITATIONS ON FORM S-3 REGISTRATIONS.......................12
(d) NO DEMAND REGISTRATION......................................12
6. HOLDBACK AGREEMENTS.....................................................12
(a) RESTRICTIONS ON PUBLIC SALE BY DESIGNATED HOLDERS...........12
(b) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY..................12
7. REGISTRATION PROCEDURES.................................................12
(a) OBLIGATIONS OF THE COMPANY..................................12
(b) SELLER INFORMATION..........................................15
(c) NOTICE TO DISCONTINUE.......................................16
(d) REGISTRATION EXPENSES.......................................16
8. INDEMNIFICATION; CONTRIBUTION...........................................16
(a) INDEMNIFICATION BY THE COMPANY..............................17
(b) INDEMNIFICATION BY DESIGNATED HOLDERS.......................17
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS......................18
(d) CONTRIBUTION................................................18
9. RULE 144................................................................19
10. MISCELLANEOUS...........................................................19
(a) RECAPITALIZATIONS, EXCHANGES, ETC...........................19
(b) NO INCONSISTENT AGREEMENTS..................................19
(c) REMEDIES....................................................19
(d) AMENDMENTS AND WAIVERS......................................19
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(e) NOTICES.....................................................20
(f) SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES...........21
(g) COUNTERPARTS................................................22
(h) HEADINGS....................................................22
(i) GOVERNING LAW...............................................22
(j) SEVERABILITY................................................22
(k) ENTIRE AGREEMENT............................................22
(l) FURTHER ASSURANCES..........................................22
(m) OTHER AGREEMENTS............................................22
(n) TERMINATION OF PRIOR REGISTRATION RIGHTS....................22
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AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as
of _________ ___, 2000 (this "Agreement"), among Predictive Systems, Inc., a
Delaware corporation (the "Company"), Science Applications International
Corporation ("SAIC"), General Atlantic Partners 54, L.P., a Delaware limited
partnership ("GAP LP"), General Atlantic Partners 57, L.P., a Delaware limited
partnership ("GAP 57"), GAP Coinvestment Partners II, L.P., a Delaware limited
partnership ("GAP Coinvestment"), Ronald Pettengill ("Pettengill"), Robert Belau
("Belau"), Meyer, Duffy & Associates, L.P. ("MDA"), Dulcinea Beheer B.V.
("Dulcinea"), W. Van Haeren Holdings B.V. ("Van Haeren") and Cisco Systems,
Inc., a California corporation ("Cisco").
WHEREAS, the Company, GAP LP, GAP Coinvestment, Pettengill,
Belau, MDA and the persons signatory thereto are parties to the Registration
Rights Agreement, dated as of March 5, 1999, as amended by an Amendment No. 1 to
Registration Rights Agreement, dated September 22, 1999 by and among the
Company, GAP LP, GAP 57, GAP Coinvestment, Pettengill, Belau and MDA (the
"Original Registration Rights Agreement").
WHEREAS, the Company, Dulcinea and Van Haeren are parties to a
Registration Rights Agreement, dated as of August 10, 1999 (the "NRCC
Registration Rights Agreement"), and the Company, Dulcinea and Van Haeren wish
to terminate such NRCC Registration Rights Agreement.
WHEREAS, the Company and Cisco are parties to an Investor's
Rights Agreement, dated as of September 16, 1999 (the "Investor's Rights
Agreement"), and the Company and Cisco wish to terminate Section 1 of such
Investor's Rights Agreement; provided that the remainder of the Investor's
Rights Agreement shall remain unchanged and in full force and effect.
WHEREAS, the Company, SAIC, Grape Acquisition Corporation and
Global Integrity Corporation, a Delaware corporation ("Global") are parties to
an Agreement and Plan of Reorganization, dated as of October 17, 2000 (the
"Merger Agreement").
WHEREAS, pursuant to the Merger Agreement, the Company is
acquiring Global through the statutory merger of Global with and into a
subsidiary of the Company, pursuant to which SAIC, as sole stockholder of
Global, will acquire shares of common stock of the Company.
WHEREAS, in order to induce SAIC to enter into the Merger
Agreement, the Company has agreed to grant registration rights with respect to
the Registrable Securities (as hereinafter defined) as set forth in this
Agreement.
WHEREAS, the parties with to amend, restate and integrate the
Original Registration Rights Agreement, the NRCC Registration Rights Agreement
and terminate Section
1 of the Investor's Rights Agreement to include registration rights granted to
Cisco, Dulcinea, Van Haeren and SAIC.
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement the following terms
have the meanings indicated:
"AFFILIATE" shall mean any Person who is an "affiliate" as
defined in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act. The following shall be deemed to be Affiliates of GAP LP and GAP 57: (a)GAP
LLC, the members of GAP LLC and the limited partners of GAP LP or GAP 57; (b)
any Affiliate of GAP LLC, the members of GAP LLC and the limited partners of GAP
LP or GAP 57; and (c) any limited liability company or partnership a majority of
whose members or partners, as the case may be, are members of GAP LLC. In
addition, GAP LP, GAP 57 and GAP Coinvestment shall be deemed to be Affiliates
of one another. Also, the following shall be deemed to be Affiliates of MDA: (a)
MD Strategic, L.P.; (b)any general or limited partner of MDA; (c) any Affiliate
of the general or limited partners of MDA; and (d) any limited liability company
or partnership a majority of whose members or partners, as the case may be, are
partners of MDA.
"APPROVED UNDERWRITER" has the meaning set forth in Section
3(f) of this Agreement.
"BELAU" has the meaning set forth in the preamble to this
Agreement.
"BELAU STOCKHOLDERS" means Belau and any Permitted Transferee
thereof to which Registrable Securities are transferred.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"CERTIFICATE OF INCORPORATION" means the Amended and Restated
Certificate of Incorporation of Predictive.
"CISCO" has the meaning set forth in the preamble of this
Agreement.
"CLOSING PRICE" means, with respect to the Registrable
Securities, as of the date of determination, (a) the closing price per share of
the Registrable Security on the principal national securities exchange on which
such security is listed at the time (or if there have been no sales on such
exchange on such day, the average of the highest bid and lowest asked prices on
such exchange on such day), or (b) if the Registrable Security is not listed on
a national securities exchange at the time, the sales price of such Registrable
Security as reported on the Nasdaq National Market as of 4:00 p.m., New York
City time, on such date (or, if there is no reported sales price of such
Registrable Security on the Nasdaq National Market on such date, the average of
the representative bid and asked prices quoted on the Nasdaq National Market as
of 4:00 p.m. New York City time on such date), or (c) if such Registrable
Security is not reported on the
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Nasdaq National Market at the time, the average of the representative bid and
asked prices quoted in the Nasdaq System as of 4:00 p.m., New York City time, on
such date, or (d) if the Registrable Security is not quoted on the Nasdaq System
at the time, the average of the highest bid and lowest asked prices on such date
in the over-the-counter market as reported by the National Quotation Bureau
Incorporated or any similar successor organization; or (e) if none of (a), (b),
(c) or (d) is applicable, a market price per share determined in good faith by
the Company's Board of Directors or, if such determination is not satisfactory
to the Designated Holder for whom such determination is being made, by a
nationally recognized investment banking firm selected by the Company and such
Designated Holder, the expenses for which shall be borne equally by the Company
and such Designated Holder.
"COMMON STOCK" means the common stock, par value $.001 per
share, of the Company or any other capital stock of the Company into which such
stock is reclassified or reconstituted and any other common stock of the
Company.
"COMPANY" has the meaning set forth in the recitals to this
Agreement.
"COMPANY UNDERWRITER" has the meaning set forth in Section
4(a) of this Agreement.
"DEMAND REGISTRATION" has the meaning set forth in Section
3(a) of this Agreement.
"DESIGNATED HOLDER" means each of the SAIC Holders, the Major
Stockholders, the General Atlantic Stockholders, Dulcinea, Van Haeren and Cisco,
and any transferee of any of them to whom Registrable Securities have been
transferred in accordance with Section 10(f) of this Agreement, as applicable,
other than a transferee to whom Registrable Securities have been transferred
pursuant to a Registration Statement under the Securities Act or Rule 144 or
Regulation S under the Securities Act (or any successor rule thereto).
"DULCINEA" has the meaning set forth in the recitals to this
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"GAP COINVESTMENT" has the meaning set forth in the recitals
to this Agreement.
"GAP 57" has the meaning set forth in the recitals to this
Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware
limited liability company and the general partner of GAP LP and GAP 57, and any
successors to such entity.
"GAP LP" has the meaning set forth in the recitals to this
Agreement.
"GENERAL ATLANTIC STOCKHOLDERS" means GAP LP, GAP 57, GAP
Coinvestment and any Permitted Transferee of any of them to which Registrable
Securities are transferred.
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"HOLDERS' COUNSEL" has the meaning set forth in
Section 7(a)(i) of this Agreement.
"INCIDENTAL REGISTRATION" has the meaning set forth in
Section 4(a) of this Agreement.
"INDEMNIFIED PARTY" has the meaning set forth in Section
8(c)of this Agreement.
"INDEMNIFYING PARTY" has the meaning set forth in Section 8(c)
of this Agreement.
"INITIATING HOLDERS" has the meaning set forth in Section 3(a)
of this Agreement.
"INSPECTOR" has the meaning set forth in Section 7(a)(vii) of
this Agreement.
"LIABILITY" has the meaning set forth in Section 8(a) of this
Agreement.
"MAJOR STOCKHOLDERS" means the Pettengill Stockholders, the
Belau Stockholders and the MDA Stockholders, and the term "Major Stockholder"
shall mean any such Person.
"MARKET PRICE" means, on any date of determination, the
average of the daily Closing Price of the Registrable Securities for the
immediately preceding 30 days on which the national securities exchanges are
open for trading.
"MDA" has the meaning set forth in the preamble to this
Agreement.
"MDA STOCKHOLDERS" means MDA, Eric Meyer, Donald Duffy and any
Permitted Transferee thereof to which Registrable Securities are transferred.
"NASD" has the meaning set forth in Section 7(a)(xi) of this
Agreement.
"ORIGINAL STOCKHOLDERS" means SAIC, GAP LP, GAP 57, GAP
Coinvestment, Pettengill, Belau, MDA, Dulcinea, Van Haeren and Cisco.
"PERMITTED TRANSFEREE" means (i) any Affiliate of an Original
Stockholder, and (ii) an individual Original Stockholder's family member or
trust for the benefit of an individual Original Stockholder.
"PERSON" means any individual, firm, corporation,
partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, limited liability company,
government (or an agency or political subdivision thereof) or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"PETTENGILL" has the meaning set forth in the preamble to this
Agreement.
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"PETTENGILL STOCKHOLDERS" means Pettengill and any Permitted
Transferee thereof to which Registrable Securities are transferred.
"RECORDS" has the meaning set forth in Section 7(a)(vii) of
this Agreement.
"REGISTRABLE SECURITIES" means each of the following: (a)with
respect to the General Atlantic Stockholders and the Major Stockholders (i) any
and all shares of Common Stock owned as of the date of this Agreement by the
General Atlantic Stockholders or the Major Stockholders, as the case may be,
(ii) any other shares of Common Stock acquired after the date of this Agreement
by any of the General Atlantic Stockholders or the Major Stockholders if such
Person is an Affiliate of the Company and (iii) any shares of Common Stock
issued or issuable to any of the General Atlantic Stockholders or the Major
Stockholders with respect to the Registrable Securities by way of stock dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise and any shares of
Common Stock or voting common stock issuable upon conversion, exercise or
exchange thereof, (b) with respect to any SAIC Holders, (i) any and all shares
of Common Stock owned as of the date of this Agreement by the SAIC Holders which
it has received or is entitled to receive pursuant to the terms of the Merger
Agreement, including Annex A thereto, and (ii) any shares of Common Stock issued
or issuable to SAIC with respect to the Registrable Securities by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise and
any shares of Common Stock or voting common stock issuable upon conversion,
exercise or exchange thereof, (c) with respect to Cisco, (i) the 1,242,000
shares of Common Stock issued to Cisco pursuant to a common stock purchase
agreement dated as of September 16, 1999 and (ii) any shares of Common Stock
issued or issuable to Cisco with respect to the Registrable Securities by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise and
any shares of Common Stock or voting common stock issuable upon conversion,
exercise or exchange thereof, and (d) with respect to Dulcinea and Van Haeren,
(i) the 743,970 and 318,844 shares of Common Stock issued to Dulcinea and Van
Haeren, respectively, pursuant to a pooling of interest agreement dated as of
August 10, 1999 and (ii) any shares of Common Stock issued or issuable to
Dulcinea and Van Haeren with respect to the Registrable Securities by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise and
any shares of Common Stock or voting common stock issuable upon conversion,
exercise or exchange thereof.
"REGISTRATION EXPENSES" has the meaning set forth in Section
7(d) of this Agreement.
"REGISTRATION STATEMENT" means a Registration Statement filed
pursuant to the Securities Act.
"S-3 INITIATING HOLDERS" has the meaning set forth in Section
5(a) of this Agreement.
"S-3 REGISTRATION" has the meaning set forth in Section 5(a)of
this Agreement.
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"SAIC" has the meaning set forth in the preamble of this
Agreement.
"SAIC HOLDER" means SAIC or any Permitted Transferee thereof
to which Registrable Securities are transferred.
"SEC" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"VAN HAEREN" has the meaning set forth in the recitals to this
Agreement.
2. GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT.
(a) GRANT OF RIGHTS. The Company hereby grants
registration rights to SAIC, the Major Stockholders, the General Atlantic
Stockholders, Dulcinea, Van Haeren and Cisco upon the terms and conditions set
forth in this Agreement.
(b) REGISTRABLE SECURITIES. For the purposes of this
Agreement, Registrable Securities will cease to be Registrable Securities when
(i) a Registration Statement covering such Registrable Securities has been
declared effective under the Securities Act by the SEC and such Registrable
Securities have been disposed of by the Holder thereof pursuant to such
effective Registration Statement, (ii) the entire amount of Registrable
Securities proposed to be sold in a single sale, in the opinion of counsel
satisfactory to the Company and the Designated Holder, each in their reasonable
judgment, may be distributed to the public without any limitation as to volume
pursuant to Rule 144 (or any successor provision then in effect) under the
Securities Act or (iii) the Registrable Securities are proposed to be sold or
distributed by a Person not entitled to the registration rights granted by this
Agreement.
(c) HOLDERS OF REGISTRABLE SECURITIES. A Person is
deemed to be a holder of Registrable Securities whenever such Person owns of
record Registrable Securities, or holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities
whether or not such acquisition or conversion has actually been effected. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company may act up
on the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities. Registrable Securities issuable
upon exercise of an option or upon conversion of another security shall be
deemed outstanding for the purposes of this Agreement.
3. DEMAND REGISTRATION.
(a) REQUEST FOR DEMAND REGISTRATION. If the Company
is not eligible to use Form S-3 (or any successor form thereto) in connection
with a public offering of its securities, then any SAIC Holder or one or more of
the General Atlantic Stockholders as a group, acting through GAP LLC or its
written designee (the "Initiating Holders"), may make a written request to the
Company to register, under the Securities Act (other than pursuant to a
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Registration Statement on Form S-4 or S-8 or any successor thereto) (a "Demand
Registration"), the number of Registrable Securities stated in such request;
PROVIDED, HOWEVER, that the Company shall not be obligated to (i) effect more
than three such Demand Registrations for SAIC Holders, (ii) effect more than two
such Demand Registration for the General Atlantic Stockholders, (iii) effect a
Demand Registration unless the Registrable Securities to be included therein
have an aggregate sale price (calculated based upon the Market Price of the
Registrable Securities on the date of filing of the Registration Statement with
respect to such Demand Registration) to the public of at least $5,000,000, or
(iv) effect a Demand Registration for a SAIC Holder that is not in the form of a
firm commitment underwritten offering unless such Demand Registration is in
connection with the sale to an institution or institutions that is effected
through a block trade or a privately negotiated transaction. For purposes of the
preceding sentence, two or more Registration Statements filed in response to one
demand shall be counted as one Registration Statement. If at the time of any
request to register Registrable Securities pursuant to this Section 3(a), the
Company is engaged in, or has fixed plans to engage in, within 60 days of the
time of such request, a registered public offering or is engaged in any other
activity which, in the good faith determination of the Board of Directors of the
Company, would be adversely affected by the requested registration to the
material detriment of the Company, then the Company may at its option direct
that such request be delayed for a reasonable period not in excess of three
months from the effective date of such offering or the date of completion of
such other material activity, as the case may be, such right to delay a request
to be exercised by the Company not more than once in any six month period. In
addition, the Company shall not be required to effect any registration within 90
days after the effective date of any other Registration Statement of the
Company. Each request for a Demand Registration by the Initiating Holders shall
state the amount of the Registrable Securities proposed to be sold and the
intended method of disposition thereof.
(b) INCIDENTAL OR "PIGGY-BACK" RIGHTS WITH RESPECT TO
A DEMAND REGISTRATION. Each of the Designated Holders (other than Initiating
Holders which have requested a registration under Section 3(a)) may offer its or
his Registrable Securities under any Demand Registration pursuant to this
Section 3(b). Within 10 days after the receipt of a request for a Demand
Registration from an Initiating Holder, the Company shall (i) give written
notice thereof to all of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3(a)) and (ii) subject to
Section 3(e), include in such registration all of the Registrable Securities
held by such Designated Holders from whom the Company has received a written
request for inclusion therein within 10 days of the receipt by such Designated
Holders of such written notice referred to in clause (i) above. Each such
request by such Designated Holders shall specify the number of Registrable
Securities proposed to be registered and the intended method of disposition
thereof. The failure of any Designated Holder to respond within such 10-day
period referred to in clause (ii) above shall be deemed to be a waiver of such
Designated Holder's rights under this Section 3 with respect to such Demand
Registration, PROVIDED that any Designated Holder may waive its rights under
this Section 3 prior to the expiration of such 10-day period by giving written
notice to the Company, with a copy to the Initiating Holders. If a Designated
Holder sends the Company a written request for inclusion of part or all of such
Designated Holder's Registrable Securities in a registration, such Designated
Holder shall not be entitled to withdraw or revoke such request without the
prior written consent of the Company in its sole discretion unless, as a result
of facts or circumstances arising after the date on which such request was made
relating to the Company or to market
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conditions, such Designated Holder reasonably determines that participation in
such registration would have a material adverse effect on such Designated
Holder.
(c) EFFECTIVE DEMAND REGISTRATION. The Company shall
use its reasonable commercial efforts to cause any such Demand Registration to
become and remain effective not later than 90 days after it receives a request
under Section 3(a) hereof. A registration shall not constitute a Demand
Registration until it has become effective and remains continuously effective
for the lesser of (i) the period during which all Registrable Securities
registered in the Demand Registration are sold and (ii) 90 days (and 270 days in
the case of a SAIC Holder); PROVIDED, HOWEVER, that a registration shall not
constitute a Demand Registration if (x) after such Demand Registration has
become effective, such registration or the related offer, sale or distribution
of Registrable Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or other governmental agency
or court for any reason not attributable to the Initiating Holders and such
interference is not thereafter eliminated or (y) the conditions specified in the
underwriting agreement, if any, entered into in connection with such Demand
Registration are not satisfied or waived, other than by reason of a failure by
the Initiating Holder.
(d) EXPENSES. In any registration initiated as a
Demand Registration, the Company shall pay all Registration Expenses in
connection therewith, whether or not such Demand Registration becomes effective.
If such Demand Registration does not become effective directly as a result of an
action by the Initiating Holders, other than a withdrawal or revocation of the
request for such Demand Registration by the Initiating Holders because of facts
or circumstances arising after the date of such request relating to the Company
or market conditions which the Initiating Holders and the Company reasonably
agree could have a material adverse effect on the likelihood of the success of
the offering, then the Initiating Holders shall either pay the Registration
Expenses or lose one Demand Registration under this Section 3.
(e) UNDERWRITING PROCEDURES. For each Demand
Registration that is in the form of a firm commitment underwritten offering, the
managing underwriter or underwriters selected for such offering shall be the
Approved Underwriter selected in accordance with Section 3(f). In connection
with any Demand Registration under this Section 3 involving an underwritten
offering, none of the Registrable Securities held by any Designated Holder
making a request for inclusion of such Registrable Securities pursuant to
Section 3(b)hereof shall be included in such underwritten offering unless such
Designated Holder accepts the terms of the offering as agreed upon by the
Company, the Initiating Holders and the Approved Underwriter, and then only in
such quantity as will not, in the opinion of the Approved Underwriter,
jeopardize the success of such offering by the Initiating Holders. If the
Approved Underwriter advises the Company that the aggregate amount of such
Registrable Securities requested to be included in such offering is sufficiently
large to have a material adverse effect on the success of such offering, then
the Company shall include in such registration only the aggregate amount of
Registrable Securities that the Approved Underwriter believes may be sold
without any such material adverse effect and shall reduce the amount of
Registrable Securities to be included in such registration, FIRST as to the
Company, SECOND as to the Designated Holders (who are not Initiating Holders and
who requested to participate in such registration pursuant to Section 3(b)
hereof) as a group, pro rata within each group based on
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the number of Registrable Securities owned by each such Designated Holder, if
any, and THIRD as to the Initiating Holders.
(f) SELECTION OF UNDERWRITERS. If any Demand
Registration or S-3 Registration, as the case may be, of Registrable Securities
is in the form of an underwritten offering, the Company shall select and obtain
an investment banking firm of national reputation to act as the managing
underwriter of the offering (the "Approved Underwriter"); PROVIDED, HOWEVER,
that the Approved Underwriter shall, in any case, also be approved by the
Initiating Holders or S-3 Initiating Holders, as the case may be, such approval
not to be unreasonably withheld.
4. INCIDENTAL OR "PIGGY-BACK" REGISTRATION. If the Company
proposes to file a Registration Statement under the Securities Act with respect
to an offering by the Company for its own account (other than a Registration
Statement on Form S-4 or S-8 or any successor thereto), then the Company shall
give written notice of such proposed filing to each of the Designated Holders at
least 20 days before the anticipated filing date, and such notice shall describe
the proposed registration and distribution and offer such Designated Holders the
opportunity to register the number of Registrable Securities as each such holder
may request (an "Incidental Registration"). The Company shall use its reasonable
commercial efforts (within 10 days of the notice provided for in the preceding
sentence) to cause the managing underwriter or underwriters of a proposed
underwritten offering (the "Company Underwriter") to permit each of the
Designated Holders who have requested in writing to participate in the
Incidental Registration to include its or his Registrable Securities in such
offering on the same terms and conditions as the securities of the Company
included therein. In connection with any Incidental Registration under this
Section 4(a) involving an underwritten offering, the Company shall not be
required to include any Registrable Securities in such underwritten offering
unless the holders thereof accept the terms of the underwritten offering as
agreed upon between the Company and the Company Underwriter, and then only in
such quantity as the Company Underwriter believes will not jeopardize the
success of the offering by the Company. If the Company Underwriter determines
that the registration of all or part of the Registrable Securities which the
Designated Holders have requested to be included would materially adversely
affect the success of such offering, then the Company shall be required to
include in such Incidental Registration, to the extent of the amount that the
Company Underwriter believes may be sold without causing such adverse effect,
FIRST, all of the securities to be offered for the account of the Company;
SECOND, the Registrable Securities to be offered for the account of the
Designated Holders pursuant to this Section 4, pro rata based on the number of
Registrable Securities owned by each such Designated Holder; and THIRD, any
other securities requested to be included in such underwritten offering.
5. FORM S-3 REGISTRATION.
(a) REQUEST FOR A FORM S-3 REGISTRATION. Upon the
Company becoming eligible for use of Form S-3 in connection with a public
offering of its securities, in the event that the Company shall receive from (i)
one or more of the General Atlantic Stockholders as a group, acting through GAP
LLC or its written designee or (ii) Cisco or (iii) one or more SAIC Holder (in
any case, the "S-3 Initiating Holders") a written request that the Company
register, under the Securities Act, on Form S-3 (or any successor form then in
9
effect) (an "S-3 Registration"), all or a portion of the Registrable Securities
owned by such S-3 Initiating Holders, the Company shall give written notice of
such request to all of the Designated Holders (other than S-3 Initiating Holders
which have requested an S-3 Registration under this Section 5(a)) at least 30
days before the anticipated filing date of such Form S-3), and such notice shall
describe the proposed registration and offer Designated Holders the opportunity
to register the number of Registrable Securities as each such Designated Holder
may request in writing to the Company, given within 15 days after their receipt
from the Company of the written notice of such registration. With respect to
each S-3 Registration, the Company shall (i) subject to Section 5(b), include in
such offering the Registrable Securities of the S-3 Initiating Holders, and (ii)
subject to Section 5(b), use its best efforts to (x) cause such registration
pursuant to this Section 5(a) to become and remain effective as soon as
practicable, but in any event not later than ninety (90) days after it receives
a request therefor and (y) include in such offering the Registrable Securities
of the Designated Holders (other than S-3 Initiating Holders which have
requested an S-3 Registration under this Section 5(a)) who have requested in
writing to participate in such registration on the same terms and conditions as
the Registrable Securities of the S-3 Initiating Holders included therein.
(b) FORM S-3 UNDERWRITING PROCEDURES. If the Company
or the S-3 Initiating Holders holding a majority of the Registrable Securities
held by all of the S-3 Initiating Holders to which the requested S-3
Registration relates so elect, the Company shall use its reasonable commercial
efforts to cause such S-3 Registration pursuant to this Section 5 to be in the
form of a firm commitment underwritten offering and the managing underwriter or
underwriters selected for such offering shall be the Approved Underwriter
selected in accordance with Section 3(f). In connection with any S-3
Registration under Section 5(a) involving an underwritten offering, the Company
shall not be required to include any Registrable Securities in such underwritten
offering unless the Designated Holders thereof accept the terms of the
underwritten offering as agreed upon between the Company, the Approved
Underwriter and the S-3 Initiating Holders, and then only in such quantity as
such underwriter believes will not jeopardize the success of such offering by
the S-3 Initiating Holders. If the Approved Underwriter believes that the
registration of all or part of the Registrable Securities which the S-3
Initiating Holders and the other Designated Holders have requested to be
included would materially adversely affect the success of such public offering,
then the Company shall be required to include in the underwritten offering, to
the extent of the amount that the Approved Underwriter believes may be sold
without causing such adverse effect, FIRST, all of the Registrable Securities to
be offered for the account of the S-3 Initiating Holders, pro rata based on the
number of Registrable Securities owned by such S-3 Initiating Holders; SECOND,
the Registrable Securities to be offered for the account of the other Designated
Holders who requested inclusion of their Registrable Securities pursuant to
Section 5(a), pro rata based on the number of Registrable Securities owned by
such Designated Holders; and THIRD, any other securities requested to be
included in such underwritten offering.
(c) LIMITATIONS ON FORM S-3 REGISTRATIONS. If at the
time of any request to register Registrable Securities pursuant to Section 5(a),
the Company is engaged in, or has fixed plans to engage in within 60 days of the
time of such request, a registered public offering or is engaged or has fixed
plans to engage in any other activity which, in the good faith determination of
the Board of Directors of the Company, would be adversely affected by the
requested S-3 Registration to the material detriment of the Company, then the
10
Company may at its option direct that such request be delayed for a reasonable
period not in excess of three months from the effective date of such offering or
the date of completion of such other material activity, as the case may be, such
right to delay a request to be exercised by the Company not more than once in
any six month period. In addition, the Company shall not be required to effect
any registration pursuant to Section 5(a), (i) within 90 days after the
effective date of any other Registration Statement of the Company, (ii) if
within the 12-month period preceding the date of such request, the Company has
effected two registrations on Form S-3 pursuant to Section 5(a), (iii) if Form
S-3 is not available for such offering by the S-3 Initiating Holders or (iv) if
the S-3 Initiating Holders, together with the Designated Holders (other than S-3
Initiating Holders which have requested an S-3 Registration under Section 5(a))
registering Registrable Securities in such registration, propose to sell their
Registrable Securities at an aggregate price (calculated based upon the Market
Price of the Registrable Securities on the date of filing of the Form S-3 with
respect to such Registrable Securities) to the public of less than $5,000,000.
(d) NO DEMAND REGISTRATION. No registration requested
by any Designated Holder pursuant to this Section 5 shall be deemed a Demand
Registration pursuant to Section 3.
6. HOLDBACK AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY DESIGNATED
HOLDERS. If and to the extent requested by the Approved Underwriter or the
Company Underwriter, as the case may be, in the case of an underwritten public
offering, each Designated Holder of Registrable Securities agrees (i) not to
effect any public sale or distribution of any Registrable Securities or of any
securities convertible into or exchangeable or exercisable for such Registrable
Securities, including a sale pursuant to Rule 144 under the Securities Act, and
(ii) not to make any request for a Demand Registration or S-3 Registration under
this Agreement, during the 90 day period or such shorter period, if any,
mutually agreed upon by such Designated Holder and the requesting party
beginning on the effective date of such Registration Statement (except as part
of such registration); provided, however, that notwithstanding the foregoing, a
Designated Holder shall not be required to agree to any of the restrictions set
forth in the foregoing clauses (i) or (ii) if the Company's executive officers
and directors are not required to agree to such restriction.
(b) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The
Company agrees not to effect any public sale or distribution of any of its
securities, or any securities convertible into or exchangeable or exercisable
for such securities (except pursuant to registrations on Form S-4 or S-8 or any
successor thereto), during the period beginning on the effective date of any
Registration Statement in which the Designated Holders of Registrable Securities
are participating and ending on the earlier of (i) the date on which all
Registrable Securities registered on such Registration Statement are sold and
(ii) 90 days after the effective date of such Registration Statement (except as
part of such registration).
7. REGISTRATION PROCEDURES.
(a) OBLIGATIONS OF THE COMPANY. Whenever registration
of
11
Registrable Securities has been requested pursuant to Section 3, Section 4 or
Section 5 of this Agreement, the Company shall use its reasonable commercial
efforts to effect the registration and sale of such Registrable Securities in
accordance with the intended method of distribution thereof as quickly as
practicable, and in connection with any such request, the Company shall, as
expeditiously as possible:
(i) prepare and file with the SEC a Registration
Statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate and which form shall be
available for the sale of such Registrable Securities in accordance
with the intended method of distribution thereof, and cause such
Registration Statement to become effective; PROVIDED, HOWEVER, that (x)
before filing a Registration Statement or prospectus or any amendments
or supplements thereto, the Company shall provide counsel selected by
the Designated Holders holding a majority of the Registrable Securities
being registered in such registration ("Holders' Counsel") and any
other Inspector with an adequate and appropriate opportunity to review
and comment on such Registration Statement and each prospectus included
therein (and each amendment or supplement thereto) to be filed with the
SEC, subject to such documents being under the Company's control, and
(y) the Company shall notify the Holders' Counsel and each seller of
Registrable Securities of any stop order issued or threatened by the
SEC and take all action required to prevent the entry of such stop
order or to remove it if entered;
(ii) prepare and file with the SEC such amendments
and supplements to such Registration Statement and the prospectus used
in connection therewith as may be necessary to keep such Registration
Statement effective for the lesser of (x) 90 days or 270 days in the
case of a Registration Statement covering Registrable Securities of a
SAIC Holder and (y) such shorter period which will terminate when all
Registrable Securities covered by such Registration Statement have been
sold, and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration
Statement;
(iii) furnish to each seller of Registrable
Securities, prior to filing a Registration Statement, at least one copy
of such Registration Statement as is proposed to be filed, and
thereafter such number of copies of such Registration Statement, each
amendment and supplement thereto (in each case including all exhibits
thereto), and the prospectus included in such Registration Statement
(including each preliminary prospectus) as each such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(iv) register or qualify such Registrable
Securities under such other securities or "blue sky" laws of such
jurisdictions as any seller of Registrable Securities may request, and
to continue such qualification in effect in such jurisdiction for as
long as permissible pursuant to the laws of such jurisdiction, or for
as long as any such seller requests or until all of such Registrable
Securities are sold, whichever is shortest, and do any and all other
acts and things which may be reasonably necessary or advisable to
12
enable any such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller;
PROVIDED, HOWEVER, that the Company shall not be required to (x)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 7(a)(iv), (y)
subject itself to taxation in any such jurisdiction or (z) consent to
general service of process in any such jurisdiction;
(v) notify each seller of Registrable Securities
at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in
such Registration Statement contains an untrue statement of a material
fact or omits to state any 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 and the
Company shall promptly prepare a supplement or amendment to such
prospectus and furnish to each seller a reasonable number of copies of
such supplement to or an amendment of such prospectus as may be
necessary so that, after delivery to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a
material fact or omit to state any 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;
(vi) enter into and perform customary agreements
(including an underwriting agreement in customary form with the
Approved Underwriter or Company Underwriter, if any, selected as
provided in Section 3, Section 4 or Section 5, as the case may be) and
take such other actions as are prudent and reasonably required in order
to expedite or facilitate the disposition of such Registrable
Securities, including, without limitation, (x) if such sale is pursuant
to an underwritten offering, use its best efforts to obtain a "cold
comfort" letter from the Company's independent public accountants in
customary form and covering such matters of the type customarily
covered by "cold comfort" letters as the managing underwriter
reasonably requests and (y) furnish, at the request of any seller of
Registrable Securities on the date such securities are delivered to the
underwriters for sale pursuant to such registration or, if such
securities are not being sold through underwriters, on the date the
Registration Statement with respect to such securities becomes
effective, an opinion, dated such date, of counsel representing the
Company for the purposes of such registration, addressed to the
underwriters, if any, and to the seller making such request, covering
such legal matters with respect to the registration in respect of which
such opinion is being given as such seller may reasonably request and
are customarily included in such opinions;
(vii) make available at reasonable times for
inspection by any seller of Registrable Securities, any managing
underwriter participating in any disposition of such Registrable
Securities pursuant to a Registration Statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or
any managing underwriter (each, an "Inspector" and collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause
the Company's and its
13
subsidiaries' officers, directors and employees, and the independent
public accountants of the Company, to supply all information reasonably
requested by any such Inspector in connection with such Registration
Statement. Records that the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors (and the Inspectors shall
confirm their agreement in writing in advance to the Company if the
Company shall so request) unless (x) the disclosure of such Records is
necessary, in the Company's judgment, to avoid or correct a
misstatement or omission in the Registration Statement, (y) the release
of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction after exhaustion of all appeals
therefrom or (z) the information in such Records was known to the
Inspectors on a non-confidential basis prior to its disclosure by the
Company or has been made generally available to the public. Each seller
of Registrable Securities agrees that it shall, upon learning that
disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(viii) comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable but no later than fifteen (15) months
after the effective date of the Registration Statement, an earnings
statement covering a period of twelve (12) months beginning after the
effective date of the Registration Statement, in a manner which
satisfies the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder;
(ix) cause all such Registrable Securities to be
listed on each securities exchange on which similar securities issued
by the Company are then listed, PROVIDED that the applicable listing
requirements are satisfied;
(x) keep Holders' Counsel advised in writing as to
the initiation and progress of any registration under Section 3,
Section 4 or Section 5 hereunder;
(xi) cooperate with each seller of Registrable
Securities and each underwriter participating in the disposition of
such Registrable Securities and their respective counsel in connection
with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD"); and
(xii) take all other steps reasonably necessary to
effect the registration of the Registrable Securities contemplated
hereby.
(b) SELLER INFORMATION. The Company may require each
seller of Registrable Securities as to which any registration is being effected
to furnish, and such seller shall furnish, to the Company such information
regarding the distribution of such securities as the Company may from time to
time reasonably request in writing.
(c) NOTICE TO DISCONTINUE. Each Designated Holder of
Registrable Securities agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 7(a)(v), such
Designated Holder shall forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Designated Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 7(a)(v) and, if so
directed by the Company, such Designated Holder shall
14
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Designated Holder's possession, of the
prospectus covering such Registrable Securities which is current at the time of
receipt of such notice. If the Company shall give any such notice, the Company
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement (including, without limitation,
the period referred to in Section 7(a)(ii)) by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 7(a)(v) to and including the date when sellers of such Registrable
Securities under such Registration Statement shall have received the copies of
the supplemented or amended prospectus contemplated by and meeting the
requirements of Section 7(a)(v).
(d) REGISTRATION EXPENSES. The Company shall pay all
expenses arising from or incident to its performance of, or compliance with,
this Agreement, including, without limitation, (i) SEC, stock exchange and NASD
registration and filing fees, (ii) all fees and expenses incurred in complying
with securities or "blue sky" laws (including reasonable fees, charges and
disbursements of counsel to any underwriter incurred in connection with "blue
sky" qualifications of the Registrable Securities as may be set forth in any
underwriting agreement), (iii) all printing, messenger and delivery expenses,
(iv) the fees, charges and disbursements of counsel to the Company and of its
independent public accountants and any other accounting fees, charges and
expenses incurred by the Company (including, without limitation, any expenses
arising from any "cold comfort" letters or any special audits incident to or
required by any registration or qualification) and any legal fees, charges and
expenses incurred by the Company and, in the case of a Demand Registration, one
law firm representing the Initiating Holders and (v) any liability insurance or
other premiums for insurance obtained in connection with any Demand Registration
or piggy-back registration thereon, Incidental Registration or S-3 Registration
pursuant to the terms of this Agreement, regardless of whether such Registration
Statement is declared effective. All of the expenses described in the preceding
sentence of this Section 7(d) are referred to herein as "Registration Expenses."
The Designated Holders of Registrable Securities sold pursuant to a Registration
Statement shall bear the expense of any broker's commission or underwriter's
discount or commission relating to registration and sale of such Registrable
Securities and, subject to clause (iv) above, shall bear the fees and expenses
of their counsel.
8. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company
agrees to indemnify and hold harmless each Designated Holder and each Person who
controls (within the meaning of Section 15 of the Securities Act) such
Designated Holder from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation)
(collectively, "liability"),arising out of or based upon any untrue, or
allegedly untrue, statement of a material fact contained in any Registration
Statement, prospectus or preliminary prospectus or notification or offering
circular (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
15
therein or necessary to make the statements therein not misleading under the
circumstances such statements were made, except insofar as (i) such liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission contained in such Registration Statement,
preliminary prospectus or final prospectus in reliance upon information
concerning such Designated Holder furnished in writing to the Company by such
Designated Holder expressly for use therein, including, without limitation, the
information furnished to the Company pursuant to Section 8(b) or (ii) such
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission contained in such Registration
Statement, preliminary prospectus or final prospectus if such deficiency is
corrected in a final prospectus. The Company shall also provide customary
indemnities to any underwriters of the Registrable Securities, their officers,
directors and employees and each Person who controls such underwriters (within
the meaning of Section 15 of the Securities Act) to the same extent as provided
above with respect to the indemnification of the Designated Holders of
Registrable Securities.
(b) INDEMNIFICATION BY DESIGNATED HOLDERS. In
connection with any Registration Statement in which a Designated Holder is
participating pursuant to Section 3, Section 4 or Section 5 hereof, each such
Designated Holder shall promptly furnish to the Company in writing such
information with respect to such Designated Holder as the Company may reasonably
request or as may be required by law for use in connection with any such
Registration Statement or prospectus and all information required to be
disclosed in order to make the information previously furnished to the Company
by such Designated Holder not materially misleading or necessary to cause such
Registration Statement not to omit a material fact with respect to such
Designated Holder necessary in order to make the statements therein not
misleading. Each Designated Holder agrees to indemnify and hold harmless the
Company, any underwriter retained by the Company and each Person who controls
the Company or such underwriter (within the meaning of Section 15 of the
Securities Act) to the same extent as the foregoing indemnity from the Company
to the Designated Holders, but only with respect to any such information with
respect to such Designated Holder furnished in writing to the Company by such
Designated Holder expressly for use therein, including, without limitation, the
information furnished to the Company pursuant to this Section 8(b); PROVIDED,
HOWEVER, that the total amount to be indemnified by such Designated Holder
pursuant to this Section 8(b) shall be limited to the net proceeds received by
such Designated Holder in the offering to which the Registration Statement or
prospectus relates.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any
Person entitled to indemnification hereunder (the "Indemnified Party") agrees to
give prompt written notice to the indemnifying party (the "Indemnifying Party")
after the receipt by the Indemnified Party of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which the Indemnified Party intends to claim indemnification
or contribution pursuant to this Agreement; PROVIDED, HOWEVER, that the failure
so to notify the Indemnifying Party shall not relieve the Indemnifying Party of
any liability that it may have to the Indemnified Party hereunder; except to the
extent that the Indemnifying Party is materially prejudiced or otherwise
forfeits substantive rights or defenses by reason of such failure. If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party similarly
notified, to
16
assume the defense of such action at its own expense, with counsel chosen by it
and reasonably satisfactory to such Indemnified Party. The Indemnified Party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees
to pay the same, (ii) the Indemnifying Party fails to assume the defense of such
action with counsel reasonably satisfactory to the Indemnified Party or (iii)
the named parties to any such action (including any impleaded parties)include
both the Indemnifying Party and the Indemnified Party and such parties have been
advised by such counsel that either (x) representation of such Indemnified Party
and the Indemnifying Party by the same counsel would be in appropriate under
applicable standards of professional conduct or (y) there may be one or more
legal defenses available to the Indemnified Party which are different from or
additional to those available to the Indemnifying Party. In any of such cases,
the Indemnifying Party shall not have the right to assume the defense of such
action on behalf of such Indemnified Party, it being understood, however, that
the Indemnifying Party shall not be liable for the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) for all
Indemnified Parties. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the consent of such
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which such Indemnified Party is a party and indemnity has been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability for claims
that are the subject matter of such proceeding.
(d) CONTRIBUTION. If the indemnification provided for
in this Section 8 from the Indemnifying Party is unavailable to an Indemnified
Party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
faults of such Indemnifying Party and Indemnified Party 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 or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, 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 Sections 8(a),
8(b)and 8(c), any legal or other fees, charges or expenses reasonably incurred
by such party in connection with any investigation or proceeding; PROVIDED that
the total amount to be indemnified by such Designated Holder shall be limited to
the net proceeds received by such Designated Holder in the offering.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the
17
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.
9. RULE 144. The Company covenants that it shall (a) file any
reports required to be filed by it under the Exchange Act and (b) take such
further action as each Designated Holder of Registrable Securities may
reasonably request (including providing any information necessary to comply with
Rule 144 under the Securities Act), all to the extent required from time to time
to enable such Designated Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or (ii) any similar rules or regulations hereafter adopted by
the SEC. The Company shall, upon the request of any Designated Holder of
Registrable Securities, deliver to such Designated Holder a written statement as
to whether it has complied with such requirements.
10. MISCELLANEOUS.
(a) RECAPITALIZATIONS, EXCHANGES, ETC. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to (i) the shares of Common Stock, (ii) any and all shares of voting common
stock of the Company into which the shares of Common Stock are converted,
exchanged or substituted in any recapitalization or other capital reorganization
by the Company and (iii) any and all equity securities of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in conversion of, in
exchange for or in substitution of, the shares of Common Stock and shall be
appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof.
The Company shall cause any successor or assign (whether by sale, merger or
otherwise) to enter into a new registration rights agreement with the Designated
Holders on terms substantially the same as this Agreement as a condition of any
such transaction.
(b) NO INCONSISTENT AGREEMENTS. The Company
represents and warrants that it has not granted to any Person the right to
request or require the Company to register any securities issued by the Company,
other than the rights granted to the Designated Holders herein. The Company
shall not enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Designated Holders in this Agreement
or grant any additional registration rights to any Person or with respect to any
securities which are not Registrable Securities which are prior in right to or
inconsistent with the rights granted in this Agreement.
(c) REMEDIES. The Designated Holders, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, shall be entitled to specific performance of their rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive in any action for specific
performance the defense that a remedy at law would be adequate.
(d) AMENDMENTS AND WAIVERS. Except as otherwise
provided herein, the provisions of this Agreement may not be amended, modified
or supplemented, and
18
waivers or consents to departures from the provisions hereof may not be given
unless consented to in writing by (i) the Company, (ii) SAIC, (iii) the Major
Stockholders holding Registrable Securities representing (after giving effect to
any adjustments) at least a majority of the aggregate number of Registrable
Securities owned by all of the Major Stockholders, (iv) the General Atlantic
Stockholders holding Registrable Securities representing (after giving effect to
any adjustments) at least a majority of the aggregate number of Registrable
Securities owned by all of the General Atlantic Stockholders, and (v) Cisco. Any
such written consent shall be binding upon the Company and all of the Designated
Holders.
(e) NOTICES. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be made by registered or certified first-class mail, return receipt
requested, telecopier, courier service, overnight mail or personal delivery:
if to the Company or any of the Major Stockholders:
Predictive Systems, Inc.
417 Fifth Avenue
New York, NY 10016
Telecopy: (212) 659-3400
Attention: General Counsel
Robert Belau
Ronald Pettengill
with a copy to:
Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP
733 Third Avenue, Suite 220
New York, NY 10017
Telecopy.: (212) 687-6665
Attention: Babak Yaghmaie
if to any of the General Atlantic Stockholders:
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, Connecticut 06830
Telecopy: (203) 622-8818
Attention: Peter L. Bloom
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Douglas A. Cifu, Esq.
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If to SAIC:
SAIC, Inc.
10260 Campus Point Drive
San Diego, California 92121
Telecopy: (858) 826-7360
Attention: Douglas Scott, Esq.
with a copy to:
Heller Ehrman White & McAuliffe
711 Fifth Avenue
New York, NY 10022
Telecopy: (212) 832-3353
Attention: Stephen M. Davis, Esq.
If to Cisco
with a copy to
if to any other Designated Holder, at its address as it appears on the record
books of the Company.
All such notices and communications shall be deemed to have
been duly given when delivered by hand, if personally delivered; when delivered
by courier or overnight mail, if delivered by commercial courier service or
overnight mail; five (5) Business Days after being deposited in the mail,
postage prepaid, if mailed; and when receipt is mechanically acknowledged, if
properly telecopied.
(f) SUCCESSORS AND ASSIGNS; THIRD PARTY
BENEFICIARIES. This Agreement shall inure to the benefit of and be binding upon
the heirs, legatees, legal representatives, successors and permitted assigns of
each of the parties hereto as hereinafter provided. The Demand Registration
Rights and the S-3 Registration Rights of SAIC and the General Atlantic
Stockholders contained in this Agreement, and the other rights of each of the
General Atlantic Stockholders and the Major Stockholders with respect thereto
shall be, with respect to any Registrable Security, (i) in the case of SAIC,
transferred or assigned by written notice to the Company accompanied by a
written agreement by the transferee or assignee in both cases who is an
Affiliate, to be bound by the terms of this Agreement, (ii) automatically
20
transferred, in the case of such rights of the General Atlantic Stockholders,
among the General Atlantic Stockholders and, in the case of such rights of the
Major Stockholders, among the Major Stockholders, and (iii) in all other cases,
transferred only with the consent of the Company. The incidental or "piggy-back"
registration rights of the Designated Holders contained in Sections 3(b) and 4
hereof and the other rights of each of the Designated Holders with respect
thereto shall be, with respect to any Registrable Security, automatically
transferred by such Designated Holder to any Person who is the transferee of
such Registrable Security. All of the obligations of the Company hereunder shall
survive any such transfer. No Person other than the parties hereto and their
heirs, legatees, legal representatives, successors and permitted assigns is
intended to be a beneficiary of any of the rights granted hereunder.
(g) COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION.
(j) SEVERABILITY. If any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired,
it being intended that all of the rights and privileges of the Designated
Holders shall be enforceable to the fullest extent permitted by law.
(k) ENTIRE AGREEMENT. This Agreement is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter,
including, without limitation, the Original Registration Rights Agreement, the
NRCC Registration Rights Agreement and Section 1 of the Investor's Rights
Agreement. Notwithstanding the foregoing, the remainder of the Investor's Rights
Agreement, excluding Section 1 thereof, shall remain unchanged and in full force
and effect.
(l) FURTHER ASSURANCES. Each of the parties shall
execute such documents and perform such further acts as may be reasonably
required or necessary to carry out or to perform the provisions of this
Agreement.
(m) OTHER AGREEMENTS. Nothing contained in this
Agreement
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shall be deemed to be a waiver of, or release from, any obligations any party
hereto may have under, or any restrictions on the transfer of Registrable
Securities or other securities of the Company imposed by, any other agreement.
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IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Amended and Restated Registration Rights Agreement
on the date first written above.
PREDICTIVE SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION
By:
---------------------------------
Name:
Title:
CISCO SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
GENERAL ATLANTIC PARTNERS 57, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By:
---------------------------------
Name:
Title:
GENERAL ATLANTIC PARTNERS 54, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By:
---------------------------------
Name:
Title:
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GAP COINVESTMENT PARTNERS II, L.P.
By:
---------------------------------
Name:
Title:
---------------------------------
Ronald Pettengill
---------------------------------
Robert Belau
MEYER, DUFFY & ASSOCIATES, L.P.
By:
---------------------------------
its General Partner
By:
---------------------------------
Name: Eric Meyer
Title:
DULCINEA BEHEER B.V.
By:
---------------------------------
Name:
Title:
W. VAN HAEREN HOLDINGS B.V.
By:
---------------------------------
Name:
Title:
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