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EXHIBIT 10.12
CONSOLIDATING REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of June 3, 1993, is entered into by and among
Best Programs, Inc., a Virginia corporation (the "Company") PNC Capital Corp.,
a Delaware corporation ("PNC"), Edison Venture Fund L.P., a Delaware limited
partnership ("Edison"), Xxxxxxx X. Xxxx Family Trust, a trust, Xxxxxxxx
Irrevocable Trust for Nieces and Nephews, a trust, Xxxxxxxx Irrevocable Trust
for Xxxxx Xxxxxxxx Xxxxxxxx, a trust (each a "Trust" and collectively the
"Trusts"), Xxxxxxx X. Xxxx, an individual ("Xxxx"), and Xxxxx X. Xxxxxxxx, an
individual ("Xxxxxxxx"); (PNC, Edison, each Trust, Xxxx and Xxxxxxxx are
sometimes referred to individually herein as a "Rights Holder" and collectively
as the "Rights Holders").
W I T N E S S E T H:
WHEREAS, Edison, the Trusts and Xxxxxxxx are the owners of certain
shares of Common Stock, no par value, of the Company (the "Common Stock");
WHEREAS, Edison is the owner of certain shares of Class A Preferred
Stock, $0.01 par value per share of the Company (the "Class A Preferred
Stock");
WHEREAS, Xxxx and Xxxxxxxx hold options to purchase Common Stock (the
"Options");
WHEREAS, PNC is the owner of a warrant to purchase Common Stock (the
"Warrant"); and
WHEREAS, Edison, the Trusts, Xxxx and Xxxxxxxx have certain
registration rights with respect to Common Stock pursuant to a Shareholders'
Agreement dated as of October 26, 1988, as amended (the "1988 Agreement");
WHEREAS, PNC has certain registration rights with respect to Common
Stock pursuant to a Registration Rights Agreement dated March 24, 1993 (the
"1993 Agreement"); and
WHEREAS, the Company and the Rights Holders desire to consolidate
their registration rights in a single agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
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1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, no par value per share,
of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Registration Statement" means a registration statement filed
by the Company with the Commission for a public offering and sale of Common
Stock (other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation).
"Registration Expenses" means the expenses described in
Section 5.
"Registration Expenses" means (i) the shares of Common Stock
held by Edison (except for 38,676 shares of Common Stock held by Edison on the
date hereof), the Trusts and Xxxxxxxx on the date hereof, (ii) the shares of
Common Stock issued or issuable upon exercise of Options held on the date
hereof by Xxxxxxxx or Xxxx, (iii) the shares of Common Stock issued or issuable
upon conversion of the Class A Preferred Stock, (iv) the shares of Common Stock
issued or issuable upon the exercise of the Warrant and (v) any other shares of
Common Stock issued in respect of such shares described in (i)-(iv) above
(because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of Common
Stock which are Registrable Shares shall cease to be Registrable Shares (i)
upon any sale pursuant to a Registration Statement, Section 4(l) of the
Securities Act or Rule 144 under the Securities Act, (ii) at such time as
they are eligible for sale by the holder pursuant to Rule 144(k) under the
Securities Act, or (iii) upon any sale in any manner to a person or entity
which, by virtue of Section 12 of this Agreement, is not entitled to the rights
provided by this Agreement. Wherever reference is made in this Agreement to a
request or consent of holders of a certain percentage of Registrable Shares,
the determination of such percentage shall
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include shares of Common Stock issuable upon conversion of the Shares even if
such conversion has not yet been effected.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Stockholders" means the Rights Holders and any persons or
entities to whom the rights granted under this Agreement are transferred by any
Rights Holders, their successors or assigns pursuant to Section 14 hereof.
2. Termination of Prior Registration Rights Provisions. The
Company, Edison, each Trust, Xxxx and Xxxxxxxx hereby acknowledge and agree
that Section 3 of the 1988 Agreement is hereby terminated in its entirety and
shall be of no further force and effect. The Company and PNC hereby acknowledge
and agree that the 1993 Agreement is hereby terminated in its entirety and
shall be of no further force and effect.
3. Incidental Registration.
(a) Whenever the Company proposes to file a Registration
Statement at any time and from time to time, it will, prior to such filing,
give written notice to all Stockholders of its intention to do so and, upon the
written request of a Stockholder or Stockholders given within 20 days after the
Company provides such notice (which request shall state the intended method of
disposition of such Registrable Shares), the Company shall use reasonable good
faith efforts to cause all Registrable Shares which the Company has been
requested by such Stockholder or Stockholders to register to be registered
under the Securities Act to the extent necessary to permit their sale of other
disposition in accordance with the intended methods of distribution specified
in the Company's written notice to the Stockholders; provided that the Company
shall have the right to postpone or withdraw any registration effected
pursuant to this Section 3 without obligation to any Stockholder.
(b) In connection with any registration under this Section 3
involving an underwriting, the Company shall not be required to include any
Registrable Shares in such registration unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided that such terms must be consistent with
this Agreement). If any Stockholder disapproves of the terms of any such
underwriting, the Stockholder may, anytime prior to entering into a binding
commitment to participate in the underwriting,
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elect to withdraw therefrom by written notice to the Company and the managing
underwriter. If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Registrable Shares to be
included in the offering, then the Company shall be required to include in the
registration only that number of Registrable Shares, if any, which the
managing underwriter believes should be included therein; provided that no
persons or entities other than the Company, the Stockholders and persons or
entities other than the Company, the Stockholders and persons or entities
holding registration rights granted in accordance with Section 9 hereof shall
be permitted to include securities in the offering. If the number of
Registrable Shares to be included in the offering in accordance with the
foregoing is less than the total number of shares which the holders of
Registrable Shares who have requested to be included, then the holders of
Registrable Shares have requested registration and other holders of securities
entitled to include them in such registration shall participate in the
registration pro rata based upon their total ownership of shares of Common
Stock (giving effect to the conversion into Common Stock of all securities
convertible thereunto). If any holder would thus be entitled to include more
securities than such holder requested to be registered, the excess shall be
allocated among other requesting holders pro rata in the manner described in
the preceding sentence.
4. Registration Procedures. If and whenever the Company is
required by the provisions of this Agreement to use its reasonable good faith
efforts to effect the registration of any of the Registrable Shares under the
Securities Act, the Company shall, subject to its rights under Section 3(a)
above to postpone or withdraw such registration:
(a) file with the Commission a Registration Statement with
respect to such Registrable Shares and use its reasonable good faith efforts to
cause that Registration Statement to become and remain effective;
(b) as expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective, in the case of a firm commitment
underwritten public offering, until each underwriter has completed the
distribution of all securities purchased by it and, in the case of any
other offering, until the earlier of the sale of all Registrable Shares covered
thereby or 120 days after the effective date thereof;
(c) as expeditiously as possible furnish to each selling
Stockholder such reasonable numbers of copies of the
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prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the selling
Stockholder may reasonable request in order to facilitate the public sale or
other disposition of the Registrable Shares owned by the selling Stockholder;
and
(d) as expeditiously as possible use its reasonable good faith
efforts to register or qualify the Registrable Shares covered by the
Registration Statement under the securities of Blue Sky laws of such states as
the selling Stockholders shall reasonably request, and do any and all other
acts and things that may be necessary or desirable to enable the selling
Stockholders to consummate the public sale or other disposition in such states
of the Registrable Shares owned by the selling Stockholder; provided, however,
that the Company shall not be required in connection with this paragraph (d) to
qualify as a foreign corporation or execute a general consent to service of
process in any jurisdiction.
If the Company has delivered preliminary of final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
5. Allocation of Expenses. The Company will pay all Registration
Expenses of all registrations under this Agreement. For purposes of this
Section 5, the term "Registration Expenses" shall mean all expenses incurred
by the Company in complying with this Agreement, including, without limitation,
all registration and filing fees, exchange listing fees, printing expenses,
fees and expenses of counsel for the Company and the reasonable fees and
expenses (up to an aggregate of $ 20,000) of one counsel selected by the
selling Stockholders to represent the selling Stockholders, state Blue Sky fees
and expenses, and the expense of any special audits incident to or required by
any such registration, but excluding underwriting discounts, selling
commissions and the fees and expenses of selling Stockholders' own counsel
(other than the counsel selected to represent all selling Stockholders).
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6. Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the seller of such Registrable Shares, each
underwriter of such Registrable Shares, and each other person, if any, who
controls such seller of underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state securities or Blue
Sky laws or otherwise, insofar as such losses, claims, damages or
liabilities,(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained in the Registration Statement, or any amendment or supplement to such
Registration Statement, or arise out of or are based upon the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Company will
reimburse such seller, underwriter and each such controlling person for any
legal or any other expenses reasonably incurred by such seller, underwriter or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any untrue statement or omission
made in such Registration Statement, preliminary prospectus or final
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by or on
behalf of such seller, underwriter or controlling person specifically for use
in the preparation thereof.
(b) In the event of any registration of any of the
Registrable Shares under the Securities Act pursuant to this Agreement, each
seller of Registrable Shares, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors and officers and each
underwriter (if any) and each person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to
which the Company, such directors and officers, underwriter or controlling
person may become subject under the Securities Act, Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any
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untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained in the Registration Statement, or any amendment or supplement to the
Registration Statement, or arise out of or are based upon any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, if the statement or
omission was made in reliance upon and in conformity with information relating
to such seller furnished in writing to the Company in an instrument duly
executed by or on behalf of such seller specifically for use in connection with
the preparation of such Registration Statement, prospectus, amendment or
supplement; provided, however, that the obligations of such Stockholders
hereunder shall be limited to an amount equal to the proceeds to each
Stockholder of Registrable Shares sold in connection with such registration.
(c) Each party entitled to indemnification under this Section
6 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting there from; provided, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); and, provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 6. The Indemnified
Party may participate in such defense at such party's expense; provided,
however, that the Indemnifying Party shall pay such expense if representation
of such Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing interests between
the Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any such claim or
litigation shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation, and no Indemnified Party shall consent to entry of any judgment or
settle such claim or litigation without the prior written consent of the
Indemnifying Party.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any
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case in which either (i) any holder of Registrable Shares exercising rights
under this Agreement, or any controlling person of any such holder, makes a
claim for indemnification pursuant to this Section 6 but it is judicially
determined (by the entry of a final judgment of decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 6 provides for indemnification in
such case, or (ii) contribution under the Securities Act may be required on the
part of any such selling Stockholder or any such controlling person in
circumstances for which indemnification is provided under this Section 6; then,
in each such case, the Company and such Stockholder will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportions so that such holder is
responsible for the portion represented by the percentage that the public
offering price of its Registrable Shares offered by the Registration Statement
bears to the public offering price of all securities offered by such
Registration Statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the proceeds to it of all
Registrable Shares sold by it pursuant to such Registration Statement, and (B)
no person or entity guilty of fraudulent misrepresentation, within the meaning
of Section 11(f) of the Securities Act, shall be entitled to contribution from
any person or entity who is not guilty of such fraudulent misrepresentation.
7. Information by Holder. Each Stockholder including Registrable
Shares in any registration shall furnish to the Company such information
regarding such Stockholder and the distribution proposed by such Stockholder as
the Company may reasonably request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.
8. "Stand-Off" Agreement. Each Stockholder, if requested by the
Company and the managing underwriter of an offering by the Company of Common
Stock or other securities of the Company pursuant to a Registration Statement,
shall agree not to sell publicly or otherwise transfer or dispose of any
Registrable Shares or other securities of the Company held by such Stockholder
for a specified period of time (not to exceed 180 days) following the effective
date of such Registration Statement.
9. Limitations on Subsequent Registration Rights. The Company
shall not, without the prior written consent of PNC (if it then holds
Registrable Shares) and other Stockholders holding at
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least 51% of the Registrable Shares (including any Registrable Shares owned by
PNC), enter into any agreement (other than this Agreement) with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder to include securities of the Company in any
Registration Statement, unless under the terms of such agreement, such holder
or prospective holder may include such securities in any such registration only
on terms substantially similar to the terms on which holders of Registrable
Shares may include shares in such registration.
10. Rule 144 Requirements. The Company agrees, upon the request of
any Stockholder, to make available to such Stockholder and to any prospective
transferee of any Registrable Shares of such Stockholder the information
concerning the Company described in Rule 144A(d)(4) under the Securities Act.
After the earliest of (i) the closing of the sale of securities of the Company
of a class of securities under Section 12 of the Exchange Act, or (iii) the
issuance by the Company of an offering circular pursuant to Regulation A under
the Securities Act, the Company agrees to:
(a) comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company;
(b) use its reasonable good faith efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon
request (i) a written statement by the Company as to its compliance with the
requirements of said Rule 144(c), and the reporting requirements of the
Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements), (ii) a copy of the most recent annual or
quarterly report of the Company, and (iii) such other reports and documents of
the Company as such holder may reasonably request to avail itself of any
similar rule or regulation of the Commission allowing it to sell any such
securities without registration.
11. Termination. All of the Company's obligations to register
Registrable Shares held by Stockholders other than PNC under this Agreement
shall terminate on the fifth anniversary of this Agreement.
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12. Transfers of Rights.
(a) The rights granted to a Stockholder under this
Agreement may be transferred by such Stockholder to another person or entity
that is then a Stockholder, to any affiliate of the Company or to any person or
entity acquiring the lesser of (i) all of the Registrable Shares held by such
Stockholder or (ii) 30,000 of the Registrable Shares (as adjusted for stock
splits, stock dividends, recapitalization or similar events).
(b) Any transferee (other than a Rights Holder) to whom
rights under this Agreement are transferred shall, as a condition to such
transfer, deliver to the Company a written instrument by which such transferee
identifies itself, gives the Company notice of the transfer of such rights,
indicates the Registrable Shares owned by it and agrees to be bound by the
obligations imposed upon Stockholders under this Agreement.
(c) A transferee to whom rights are transferred pursuant
to this Section 13 may not again transfer such rights to any other person or
entity, other than as provided in paragraphs (a) or (b) above.
(d) Notwithstanding anything to the contrary herein, (i)
any Stockholder which is a partnership or corporation may transfer rights
granted to such Stockholder under this Agreement to any partner or stockholder
thereof to whom Registrable Shares are transferred and who delivers to the
Company a written instrument in accordance with paragraph (b) above which
contains a representation that the transfer is exempt from registration under
the Securities Act and (ii) any Stockholder who is an individual may transfer
the rights granted to such Stockholder under this Agreement to any trust for
the benefit of members of such Stockholder's family to whom Registrable Shares
are transferred and who delivers to the Company written instrument in
accordance with paragraph (b) above which contains a representation that the
transfer is exempt from registration under the Securities Act. In the event of
such transfer, such partner, or stockholder or trust shall be deemed a
Stockholder for purposes of this Agreement and may again transfer such rights
to any other person or entity which acquires Registrable Shares from such
partner, stockholder or trust, in accordance with, and subject to, the
provisions of paragraphs (a), (b) and (c) above.
(e) Except as provided in this Section 12, no party to
this Agreement may transfer or assign any of its rights hereunder.
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13. General.
(a) Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by first class certified or registered mail, return receipt
requested, postage prepaid:
If to the Company, at 00000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx
00000, Attention: President, or at such other address or addresses as may have
been furnished in writing by the Company to the Rights Holders, with a copy to
Xxxxx Xxxxxxxxx, xxxx and Door, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 0000,
Xxxxxxxxxx, X.X. 00000; or
If to a Stockholder, at his or its address set forth below after his
or its signature, or at such other address or addresses as may have been
furnished to the Company in writing by such Stockholder.
Notices provided in accordance with this Section 13(a) shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
(b) Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect tot the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
(c) Amendments and Waivers. Any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and PNC (if it then
holds Registrable Shares) and other Stockholders holding at least 51% of the
Registrable Shares (including any Registrable Shares owned by PNC); provided,
that this Agreement may be amended with the consent of the holders of less that
all Registrable Shares only in a manner which affects all Registrable Shares in
the same fashion. No waivers of or exceptions to any term, condition or
providing of the Agreement, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
(d) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, but all
of which shall be one and the same document.
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(e) Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity of enforceability
of any other provision of this Agreement.
(f) Governing Laws. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia.
Executed as of the date first written above.
COMPANY,
BEST PROGRAMS, INC.
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
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Title: President
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RIGHTS HOLDERS:
PNC CAPITAL CORP.
By: /s/ XXXXX X. DEL PRESTO
---------------------------------
Name: Xxxxx X. Del Presto
-------------------------------
Title: Vice President
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EDISON VENTURE FUND L.P.
By: /s/ XXXX X. XXXXXXXXX
---------------------------------
Name: Xxxx X. Xxxxxxxxx
-------------------------------
Title: General Partner
of Edison Partners L.P.
and Edison Ventures Fund L.P.
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XXXXXXX X. XXXX FAMILY TRUST
By: /s/ XXXXXXX X. XXXX
---------------------------------
Name: Xxxxxxx X. Xxxx
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Title: Trustee
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XXXXXXXX IRREVOCABLE TRUST FOR
NIECES AND NEPHEWS
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Trustee
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XXXXXXXX IRREVOCABLE TRUST FOR XXXXX
XXXXXXXX XXXXXXXX
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Trustee
------------------------------
/s/ XXXXXXX X. XXXX
------------------------------------
Xxxxxxx X. Xxxx
/s/ XXXXX X. XXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxx
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