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EXHIBIT 99.A-4
Form 8-K
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of March 5, 1999 by and between TOUCHSTONE SOFTWARE CORPORATION,
a Delaware corporation (the "Company"), and the individuals listed on the
signature page of this Agreement who, concurrently with the execution hereof,
are becoming stockholders of the Company (individually, a "Stockholder," and
collectively, the "Stockholders").
A. The Company and the Stockholders have entered into an Agreement and
Plan of Acquisition dated as of March 5, 1999 (the "Acquisition Agreement"),
pursuant to which the Stockholders, who currently own all of the issued and
outstanding capital stock of Unicore Software, Inc., a Massachusetts corporation
("Unicore"), have agreed to sell to the Company all of the issued and
outstanding capital stock of Unicore for a specified amount of cash and
3,350,000 shares (the "Shares") of the Company's Common Stock, $.001 par value
(the "Common Stock").
B. The execution and delivery of this Agreement by the Company are
conditions to the obligation of the Stockholders to consummate the transactions
contemplated by the Acquisition Agreement. Accordingly, the Company deems it
necessary and advisable and in the best interests of the Company and its
stockholders to enter into this Agreement with the Stockholders.
C. As a material inducement and consideration to the Stockholders to
enter into and perform their respective obligations under the Acquisition
Agreement, the Company has agreed to enter into and execute this Agreement on
the terms and subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements of the parties contained herein, the Company
hereby grants to each of the Stockholders certain rights with respect to the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Shares acquired by the Stockholders pursuant to the Acquisition
Agreement, on the following terms and subject to the following conditions:
1. (a) If, at any time after the acquisition of the Shares by the
Stockholders, the Company shall determine to register under the Securities Act
any shares of its Common Stock to be offered for cash by it or others, including
registrations relating to proposed public offerings of securities of the
Company, the Company will (i) promptly give written notice of its intention to
file such registration statement to the Stockholders and (ii) subject to the
provisions of subparagraphs (b) through (d) below, include among the shares
covered by the registration statement such portion of the Shares as shall be
specified in a written request given to the Company by one or more of the
Stockholders within 30 days after the date on which the Company gave such
written notice.
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(b) Upon receipt of any written request described in
subparagraph 1(a) above, but subject to the provisions hereof and of
subparagraphs 1(c) and (d) below, the Company shall use its best efforts within
reason to effect the registration, qualification or compliance under the
Securities Act and under other applicable federal law and any applicable
securities or "blue sky" laws of jurisdictions within the United States of the
Shares specified in the request(s) (the Stockholders, and any other holders of
the Company's Common Stock who are entitled to request that any shares of the
Company's Common Stock held by them be included in any such registration, are
herein individually called a "Selling Stockholder" and collectively, the
"Selling Stockholders"); provided, however, that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it is not so
qualified or to take any action that would subject it to tax or the service of
process (other than process in connection with such registration) in any
jurisdiction where it is not subject thereto, nor shall the Company be required
to include the Shares among the securities covered by the registration statement
if (i) the requests of the Selling Stockholders cover, in the aggregate, less
than 5% of the then outstanding shares of the Company's Common Stock; or (ii)
the Board of Directors of the Company determines in good faith that including
shares of Common Stock held by any Selling Stockholder among the securities
covered by the registration statement would have a materially detrimental effect
on the offering and would therefore not be in the best interests of the Company.
(c) The Company shall have priority over any and all of the
Selling Stockholders with respect to the inclusion of shares in any such
registration, and in no event shall the Company be required to reduce or limit
the number of newly to be issued shares of its Common Stock to be covered by any
registration statement for the purpose of permitting the Shares of any Selling
Stockholder to be included in the registration.
(d) The Company alone shall determine and control all
decisions concerning any registration of the Company's securities which might
give rise to the registration rights granted herein, including any registration
in which Shares of any Selling Stockholder are to be included. The Company's
exclusive right to make decisions shall include, without limitation, the
decision as to whether to use underwriters, the selection of underwriters and
arrangements therewith, the size, timing and other terms of any offering, the
provisions of the registration statements and prospectuses and all supplements
and amendments thereto, the selection of accountants and attorneys for the
Company, and the states in which the sale of shares shall occur and be
registered or qualified for sale.
If the offering registered by the Company is to be
underwritten, the Company shall enter into and perform its obligations under an
underwriting agreement in usual and customary form, and each Selling Stockholder
shall sell all shares of the Company's Common Stock included in the registration
statement to or through the underwriter or underwriters selected by the Company
on the same terms and conditions provided in any underwriting agreement entered
into therewith by the Company, and shall
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complete and execute all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements. Notwithstanding anything to the contrary hereunder,
if the underwriter or underwriters selected by the Company reasonably determine
that all or any portion of the shares of Common Stock held by the Selling
Stockholders should not be included in the registration statement, the
determination of the underwriter or underwriters shall be conclusive; provided,
however, that if such underwriter or underwriters determine that some but not
all of the shares of Common Stock of the Selling Stockholders shall be included
in the registration statement, the number of shares owned by each Selling
Stockholder to be included in the registration statement will be proportionately
reduced in accordance with their respective aggregate holdings of the Company's
Common Stock.
2. If and whenever the Company is required by the provisions of this
Agreement to use its best efforts to effect the registration of any of the
Shares under the Securities Act, the Company shall:
(a) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with respect to such
Shares and use its best efforts to cause such registration statement to become
and remain effective under the Securities Act as provided herein;
(b) prepare and file with the Commission 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 and
current and to comply with the provisions of the Securities Act with respect to
the sale or other disposition of all Shares covered by such registration
statement; provided, however, that in the case of any registered distribution
which is not underwritten on a firm commitment basis, then the Company shall not
be required to file a post-effective amendment or supplement the prospectus more
than 180 days after the effective date of the registration statement;
(c) furnish to each Stockholder (and any other person
participating in the registration as a Selling Stockholder) such number of
copies of the prospectus contained in the registration statement filed under the
Securities Act (including each preliminary prospectus) in conformity with the
requirements of the Securities Act, and such other documents as the Selling
Stockholders may reasonably request in order to facilitate the disposition of
the Company's Common Stock held by them which is covered by the registration
statement; and
(d) notify each Stockholder (and any other person
participating in the registration as a Selling Stockholder), at any time when a
prospectus is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus in the registration
statement, as then in effect, includes 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 not misleading, and prepare and furnish to them any
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reasonable number of copies of any supplement to or amendment of such prospectus
as may be necessary so that, as thereafter delivered, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
3. The Company shall bear all costs and expenses relating to or
incurred by it in connection with any registration ("Registration Expenses") in
which any Stockholder participates pursuant hereto, including without limitation
all registration and filing fees, printing expense, fees and disbursements of
counsel and independent accountants for the Company and fees and expenses
incident to compliance with state securities or "blue sky" laws, but
specifically excluding any fees and disbursements of counsel, accountants or
other professionals engaged by any Stockholder. Each Stockholder participating
in such registration shall be responsible for and bear any underwriters'
discounts and commissions properly allocable to the Shares included in a
registration statement at the request of a Stockholder hereunder.
4. (a) The Company shall indemnify and hold harmless, to the extent
permitted by law, each Stockholder participating in any registration effected by
the Company pursuant to any provision of this Agreement against any actions,
losses, claims, damages, liabilities and expenses (including legal fees and
other expenses reasonably incurred in the investigation and defense thereof)
resulting from any untrue or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact in any registration statement,
prospectus, offering circular or other document filed in connection with any
such registration, and against any violation by the Company of the Securities
Act or any state securities or "blue sky" law, or any rule or regulation under
any of them, applicable to the Company in connection with such registration,
unless and to the extent that any such actions, claims, losses, damages,
liabilities or expenses arise out of or are based upon any of the written
information specifically provided by the Stockholder for use in such
registration statement, prospectus, offering circular or other document pursuant
to subparagraph 4(b) below.
(b) In connection with any registration in which any of the
Stockholders is participating, each such Stockholder shall furnish to the
Company such information in writing regarding the Stockholder as the Company
reasonably requests for inclusion in the registration statement, prospectus,
offering circular and other documents filed in connection therewith, and shall
state that such information is provided specifically for use in the registration
statement, prospectus, offering circular or other documents. Each such
Stockholder shall also indemnify and hold harmless, to the extent permitted by
law, the Company, and its directors and officers, and each underwriter of the
offering, if any (in a manner reasonably satisfactory in form and substance to
such underwriter), and each person who controls the Company or each such
underwriter (within the meaning of the Securities Act), against any actions,
losses, claims, damages, liabilities, and expenses (including legal and other
expenses reasonably incurred in the investigation and defense thereof) resulting
from any untrue or alleged untrue statement of a material fact or any omission
or alleged omission of a material fact required to be stated in any such
documents or any supplement or amendment thereto, and against any violation by
the Company of the
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Securities Act or any state securities or "blue sky" law, or any rule or
regulation under any of them, applicable to the Company in connection with such
registration, or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is made in reliance on
and in conformity with the written information furnished to the Company by such
Stockholder specifically for use in any such documents; provided that the
indemnity contained in this Section 4(b) shall not apply to amounts paid in
settlement of any such actions, losses, claims, damages, liabilities and
expenses if such settlement is effected without the consent of the Stockholder,
unless the consent of such Stockholder is unreasonably withheld, and provided,
further, that in no event shall any indemnity under this Section 4(b) exceed the
proceeds from the registration received by the Stockholder
Promptly after receipt by an indemnified party under this Section 4 of
notice of the commencement of any action (including any governmental action),
such indemnified party shall, is a claim in respect thereof is to be made
against any indemnifying party under this Section 4, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent that the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to the
indemnified party and the indemnifying party(s); provided, however, that an
indemnified party shall retain the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party(s), if representation of
such indemnified party by the counsel retained by the indemnifying party(s)
would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party(s) represented by such counsel in
such proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
4, but the omission to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 4.
5. With a view to making available to each Stockholder the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Shares to the public without registration under the Securities Act, the Company
agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are defined in the Commission's Rule 144 or any similar or analogous rule
promulgated under the Securities Act, for so long as the Company's Common Stock
continues to be registered under Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act");
(b) File with the Commission, in a timely manner, all reports
and other documents required to be filed by the Company under the Exchange Act;
and
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(c) So long as any Stockholder owns any Shares, furnish to
such Stockholder forthwith upon request: (i) a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 and of the
Exchange Act; (ii) a copy of the most recent annual or quarterly report of the
Company; and (iii) any such other reports and documents which have publicly been
made available by the Company as the Stockholder may reasonably request in
availing itself of any rule or regulation of the Commission allowing it to sell
any of the Shares without registration under the Securities Act.
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6. (a) Each of the parties hereto shall execute and deliver such other
and further documents and instruments, and take such other and further actions,
as may be reasonably requested of them for the implementation and consummation
of this Agreement and the transactions herein contemplated.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and the heirs, personal representatives,
successors and assigns of all of them, but shall not confer, expressly or by
implication, any rights or remedies upon any other party.
(c) This Agreement is made and shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Delaware. Should any provision of this Agreement be rendered void,
invalid or unenforceable by any court for any reason, such invalidity or
unenforceability shall not void or render invalid or unenforceable any other
provisions of this Agreement.
(d) All notices, requests or demands and other communications
hereunder must be in writing and shall be deemed to have been duly made if
personally delivered or mailed, postage prepaid, to the parties as follows:
If to the Company, to: Xxxxxx Xxxx
TouchStone Software Corporation
0000 Xxxx Xxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
If to any Stockholder, in care of: Xxxxxx Xxxxxx
c/o Unicore Software, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Any party hereto may change its address by written notice to
the other party given in accordance with this subparagraph 5(d).
(e) This Agreement, together with the Acquisition Agreement
and the other exhibits attached thereto, contain the entire agreement between
the parties and supersede all prior agreements, understandings and writings
between the parties with respect to the subject matter hereof and thereof. Each
party hereto acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by any party, or anyone acting
with authority on behalf of any party, which are not embodied herein or in an
exhibit hereto, and that no other agreement, statement or promise may be relied
upon or shall be valid or binding. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally. This Agreement may be
amended or any term hereof may be changed, waived, discharged or terminated by
an agreement in writing signed by all parties hereto.
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(f) The captions and headings used herein are for convenience
only and shall not be construed as a part of this Agreement.
(g) In the event of any litigation between the parties hereto,
the non-prevailing party(s) shall pay the reasonable expenses, including the
attorneys' fees, of the prevailing party(s) in connection therewith.
(h) This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which taken together shall
constitute but one and the same document.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
"The Company"
TOUCHSTONE SOFTWARE CORPORATION
By:
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Title:
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"Stockholders"
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Xxxxxx X. Xxxxxx
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Xxxxx Xxxx
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