EXHIBIT 4.2
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EXECUTION COPY
ON TECHNOLOGY CORPORATION
STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT
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THIS STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT (the
"Agreement") is made and entered into as of the 28th day of January, 1997 by and
among ON TECHNOLOGY CORPORATION, a Delaware corporation (the "Company"), and
each of ▇▇▇▇▇ ▇▇▇▇▇▇, Iska ▇▇▇▇▇▇, ▇▇▇▇-Till Freiherr von Ruxleben, Liliane
Freifrau von Ruxleben, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇. ▇▇▇▇▇▇ Tschunke
(individually, a "Stockholder" and together, the "Stockholders"), who are
holders of Common Stock of the Company, $.01 par value (the "Common Stock").
W I T N E S S E T H :
WHEREAS, ▇▇▇▇▇ 96 Vermogensverwaltungs GmbH, a wholly owned subsidiary
of the Company ("ON Germany"), and the Stockholders have entered into a Stock
Purchase Agreement of even date pursuant to which the Company has agreed to
purchase, and the Stockholders have agreed to sell to the Company, all of the
outstanding stock of csd Software GmbH ("csd") in exchange (inter alia) for an
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aggregate of 1,315,790 shares of Common Stock of the Company, subject to
adjustment as provided in the Stock Purchase Agreement (the "Purchase"); and
WHEREAS, in order to induce the Stockholders to sell their shares in
csd, the Company has agreed to grant to the Stockholders the registration rights
set forth herein; and
WHEREAS, in order to induce ON Germany to purchase the Stockholders'
shares in csd, the Stockholders have agreed to certain restrictions on the
transfer of a portion of the Common Stock they receive in the Purchase.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. The following terms shall be used in this Agreement
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with the following respective meanings:
"Affiliate" shall mean (i) any Person directly or indirectly
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controlling, controlled by or under common control with another Person; (ii) any
Person owning or controlling ten (10%) percent or more of the outstanding voting
securities of such other Person; (iii) any officer, director or partner of such
Person; (iv) if such Person is an officer, director or partner, any such company
for which such Person acts in such capacity; and (v) any Person's spouse,
parents, siblings and descendants (whether natural or adopted) and any trust
solely for the benefit of such Person and/or such Person's spouse, parents,
siblings and/or descendants.
"Commission" shall mean the Securities and Exchange Commission.
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"Escrowed Shares" shall mean the shares of the Company's capital
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stock held in escrow pursuant to that certain Escrow Agreement between the
Company, csd and certain other parties thereto of even date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
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successor Federal statue, and the rules and regulations of the Commission (or of
any other Federal agency then administering the Exchange Act) thereunder, all as
the same shall be in effect at the time.
"First Release Period" shall mean the period beginning on the date of
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this Agreement and ending on the first anniversary date thereof; provided,
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however, that if during such period any of the Stockholders (other than ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ and Prof. Jochen Tschunke, as to whom this provision shall have no force
and effect) voluntarily leaves the employ of the Company or is terminated by the
Company for "cause" as such term is defined in the Employment Agreement by and
between that Stockholder and the Company, then the First Release Period with
respect to such Stockholder, and such Stockholder's spouse, if such spouse is
also a Stockholder, shall mean the period beginning on the date of this
Agreement and ending on the sixth anniversary date thereof; provided, that in
the event that a final non-appealable decision of any court of competent
jurisdiction determines that the Company was in breach of its obligations
pursuant to such Employment Agreement, then the Second Release Period shall end
on the date of such final decision.
"NASD" shall mean the National Association of Securities Dealers, Inc.
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"Offering Shares" shall mean shares of Common Stock to be sold by any
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party pursuant to demand registration rights granted to such party by the
Company, including without limitation such demand registration rights granted
pursuant to that certain Second Restated Registration Rights Agreement by and
among the Company and certain of the Company's Stockholders dated June 1, 1994,
as amended.
"Person" shall mean any natural person, partnership, corporation or
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other legal entity.
"Registrable Stock" shall mean (a) all Common Stock issued to the
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Stockholders in connection with the Purchase, and (b) any other shares of Common
Stock issued in respect of such shares by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger or
consolidation or reorganization; provided, however, that shares of Common Stock
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shall only be treated as Registrable Stock if and so long as they have not been
(i) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (ii) sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act under Section 4(1) thereof so that all transfer restrictions and
restrictive legends with respect to such Common Stock are removed upon the
consummation of such sale and the seller and purchaser of such Common Stock
receive an opinion of counsel for the Company, which shall be in form and
content reasonably satisfactory to the seller and buyer and their respective
counsel, to the effect that such Common Stock in the hands of the purchaser is
freely transferable without restriction or registration under the Securities Act
in any public or private transaction; provided further that in no event shall
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Registrable Stock mean or include any Common Stock then constituting Restricted
Stock.
"Registration Statement" shall mean a registration statement filed by
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the Company with the Commission for a public offering and sale of securities of
the Company (other than a registration statement on Form ▇-▇, ▇▇▇▇ ▇-▇, or
successor forms, or any registration statement covering only securities proposed
to be issued in exchange for securities or assets of another corporation).
"Restricted Stock" shall mean (a) during the First Release Period, 79%
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of the Common Stock held by each of the Stockholders (other than ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇. ▇▇▇▇▇▇ Tschunke, as to whom this provision shall have no force and
effect) on the date of this Agreement, together with 79% of any other shares of
Common Stock issued in respect of such shares by way of a stock dividend, stock
split or in connection with a combination of shares, recapitalization, merger or
consolidation or
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reorganization; and (b) during the Second Release Period, 39% of the Common
Stock held by each of the Stockholders (other than ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Prof.
Jochen Tschunke, as to whom this provision shall have no force and effect) on
the date of this Agreement, together with 39% of any other shares of Common
Stock issued in respect of such shares by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger or
consolidation or reorganization. Notwithstanding anything to the contrary, the
Restricted Stock shall not include any shares constituting Escrowed Shares.
"Second Release Period" shall mean the period beginning on the date of
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this Agreement and ending on the second anniversary date thereof; provided,
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however, that if during such period any of the Stockholder (other than ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ and Prof. Jochen Tschunke, as to whom this provision shall have no force
and effect) voluntarily leaves the employ of the Company or is terminated by the
Company for "cause" as such term is defined in the Employment Agreement by and
between that Stockholder and the Company, then the Second Release Period with
respect to such Stockholder, and such Stockholder's spouse, if such spouse is
also a Stockholder, shall mean the period beginning on the date of this
Agreement and ending on the seventh anniversary date thereof, provided, that in
the event that a final non-appealable decision of any court of competent
jurisdiction determines that the Company was in breach of its obligations
pursuant to such Employment Agreement, then the Second Release Period shall end
on the date of such final decision.
"Securities Act" shall mean the Securities Act of 1933, or any
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successor Federal statute, and the rules and regulations of the Commission (or
of any other Federal agency then administering the Securities Act) thereunder,
all as the same shall be in effect at the time.
2. Restrictions on Transfer of Common Stock. Each Stockholder (other
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than ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇. ▇▇▇▇▇▇ Tschunke, as to whom this provision shall
have no force and effect) severally agrees that he shall not, directly or
indirectly, exchange, encumber, distribute, sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Common Stock of the Company during the period
that such Common Stock constitutes Restricted Stock, or any interest therein,
except for transfers of Restricted Stock pursuant to a will or the laws of
intestacy upon the death of the Stockholder. This covenant against transfer
applies to all attempted transfers of any record or beneficial interest in
Common Stock, and the Company and its transfer agent is hereby authorized and
directed to treat any such attempted transfer as null and void for all purposes.
Each Stockholder (other than ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Prof. Jochen Tschunke, as to
whom this provision shall have no force and effect) agrees that an appropriate
stock legend referencing the restrictions on transfer set forth in this
Agreement shall be placed upon each certificate representing Common Stock held
by the Stockholders and that appropriate stop order instructions preventing any
attempted transfer shall be delivered to the Company's transfer agent.
Notwithstanding anything in this Agreement to the contrary, in the event that
any Stockholder is terminated by the Company without cause, all restrictions on
the transfer of the Restricted Stock held by such Stockholder, as set forth in
this Section 2, shall terminate and be of no further force and effect.
3. Demand Registrations.
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(a) The Stockholders holding 50% or more of then remaining Registrable
Stock may jointly request the Company to register under the Securities Act on
Form S-3 or any successor form thereto all, but not less than all, of the shares
of Registrable Stock held by such Stockholders for sale in the manner specified
in such notice; provided that the Company is a registrant then entitled to use
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Form S-3 or any successor form thereto to register such shares. Upon receipt of
such a request by Stockholders holding 50% or more of the then remaining
Registrable Stock, the Company shall within five days of the receipt thereof
give notice to all Stockholders and shall, subject to the limitations of this
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Section 3, use its best efforts to effect such a registration as soon as
practicable and in any event to file within 75 days of such a request a
registration statement under the 1933 Act covering all the Registrable Stock
which the Stockholders shall in writing request to be included in such
registration and to use its best efforts to have such registration statement
become effective. Notwithstanding anything to the contrary contained herein, no
request may be made under this Section 3(a): (i) during the period starting
with the date 60 days prior to the Company's estimated date of filing of, and
ending on the date six months immediately following the effective date of, any
registration statement pertaining to the securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan); provided that the Company is actively employing in good
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faith all reasonable efforts to cause such registration statement to become
effective; and (ii) if the Company shall furnish to the Stockholder a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be significantly detrimental
to the Company or its shareholders, provided that any impact on the stock price
that such an offer would cause will not be considered detrimental to the
shareholders for a registration statement to be filed in the near future, in
which event the Company's obligation to use all reasonable efforts to register,
qualify or comply under this Section 3(b) shall be deferred for a period not to
exceed 90 days from the date of receipt of written request from the
Stockholders; provided that the Company may not utilize this right more than
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once in any 12-month period. The Company will use its best efforts to insure
that each registration filed pursuant to this Section 3(a) remain in effect for
120 days after the effective date of such filing.
(b) In the event that the Company is not a registrant entitled to use
Form S-3 or any successor form thereto, the Stockholders holding 50% or more of
then remaining Registrable Stock may jointly request the Company to register
under the Securities Act of 1933 on Form ▇-▇, ▇▇▇▇ ▇-▇ or any similar or
successor registration form thereto all, but not less than all, of the shares of
Registrable Stock held by them for sale in the manner specified in such notice;
provided, that such registration shall be underwritten on a firm commitment
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basis. Upon receipt of such a request by any Stockholders holding 50% or more
of the Registrable Stock, the Company shall within five days of the receipt
thereof give notice to all Stockholders and shall, subject to the limitations of
this Section 3, use its best efforts to effect such a registration as soon as
practicable and in any event to file within 75 days of such a request a
registration statement under the 1933 Act covering all the Registrable Stock
which the Stockholders shall in writing request to be included in such
registration and to use its best efforts to have such registration statement
become effective. The Company will use its best efforts to insure that each
registration filed pursuant to this Section 3(a) remain in effect for 120 days
after the effective date of such filing.
(c) If the Stockholders request that the Registrable Stock be sold in
an underwritten offering, then the Company, in consultation with the
Stockholders, shall designate the managing underwriter of such offering. The
Company shall be obligated to register Registrable Stock pursuant to this
Section 3 on two occasions only; provided, however, that such obligation shall
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be deemed satisfied only when a Registration Statement covering all shares of
Registrable Stock specified in the notice received pursuant to Section 3(a) for
sale in accordance with the method of disposition specified by the Stockholders,
shall have become effective.
(d) The Company shall be entitled to include in any registration
statement referred to in this Section 3, for sale in accordance with the method
of disposition specified by the Stockholders, shares of Common Stock to be sold
by the Company for its own account, except as and to the extent that, in the
opinion of the managing underwriter, such inclusion would adversely affect the
marketing of the Registrable Stock to be sold.
4. Incidental Registration. Each time the Company shall determine to
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file a Registration Statement in connection with the proposed offer and sale for
cash of any of its securities by it or any of
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its security holders, the Company will give written notice of its determination
to the Stockholders. Upon the written request of any or all of the Stockholders
given within 30 days after the giving of any such notice by the Company, the
Company will use its best efforts to cause all shares of Registrable Stock which
such Stockholder(s) have requested to register to be included in such
Registration Statement, all to the extent required to permit the sale or other
disposition by the prospective seller of the Registrable Stock to be so
registered. If the Registration Statement is to cover an underwritten
distribution, the Company shall use its best efforts to cause the Registrable
Stock requested for inclusion pursuant to this Section 4 to be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters. If, in the good faith judgment of the managing
underwriter of such public offering, the inclusion of all of the Registrable
Stock requested for inclusion pursuant to this Section 4 and other securities
would interfere with the successful marketing of a smaller number of shares to
be offered, then the number of shares of Registrable Stock and other securities
to be included in the offering, except for shares to be issued by the Company in
an offering initiated by the Company or Offering Shares to be sold by any other
party, shall be reduced to the required level with the participation in such
offering to be pro rata among the holders thereof requesting such registration,
based upon the number of shares of Registrable Stock and other securities owned
by such holders.
5. Limitations on Registration Rights. Notwithstanding anything to
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the contrary in Sections 3 and 4 hereto, in the event that holders of
"Registrable Stock," as such term is defined in that certain Second Restated
Registration Rights Agreement among the Company and certain of the Company's
shareholders dated June 1, 1994, as amended ("Other Registrable Stock"), elect
to participate in any registration contemplated by Sections 3 or 4 hereto of
this Agreement, then the number of shares of Registrable Stock shall be reduced
if and to the extent necessary to permit such other shareholders to include in
such registration that number of shares of Other Registrable Stock equal to one-
third of the total number of Offering Shares.
6. Registration Procedures. If and whenever the Company is required
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by the provisions of Section 3 or 4 hereof to effect the registration of shares
of Registrable Stock under the Securities Act, the Company will, at its expense,
undertake its best efforts as expeditiously as possible:
(a) In accordance with the Securities Act and the rules and
regulations of the Commission, prepare and file with the Commission a
Registration Statement with respect to such securities and use its best efforts
to cause such Registration Statement to become and remain effective until the
earlier of (i) 180 days, in the event of a registration on Form S-3, or (ii) the
date on which all of the securities covered by such Registration Statement have
been sold, and prepare and file with the Commission such amendments to such
Registration Statement and supplements to the prospectus contained therein as
may be necessary to keep such Registration Statement effective and such
Registration Statement and prospectus accurate and complete;
(b) If the offering is to be underwritten in whole or in part,
enter into a written underwriting agreement in form and substance reasonably
satisfactory to the managing underwriter of the public offering and the
Stockholders;
(c) Furnish to the Stockholders and to the underwriters such
reasonable number of copies of the Registration Statement, preliminary
prospectus, final prospectus and such other documents as such underwriters and
the Stockholders may reasonably request in order to facilitate the public
offering of such securities;
(d) Use its best efforts to register or qualify the securities
covered by such Registration Statement under such state securities or blue sky
laws of such jurisdictions (i) as shall be
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reasonably appropriate for the distribution of the securities covered by such
Registration Statement, or (ii) as the Stockholders and the underwriters may
reasonably request within 20 days following the original filing of such
Registration Statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process, to qualify to do
business as a foreign corporation in any jurisdiction where it is not so
qualified, or to subject itself to taxation in such jurisdiction;
(e) Notify the Stockholders, promptly after it shall receive
notice thereof, of the date and time when such Registration Statement and each
post-effective amendment thereto has become effective, or a supplement to any
prospectus forming a part of such Registration Statement has been filed;
(f) Notify the Stockholders, promptly of any request by the
Commission or any state securities commission or agency for the amending or
supplementing of such Registration Statement or prospectus, or for additional
information;
(g) Prepare and file with the Commission, promptly upon the
request of the Stockholders, any amendments or supplements to such Registration
Statement or prospectus which, in the opinion of counsel representing the
Company in such registration (and which counsel is reasonably acceptable to the
Stockholders), is required under the Securities Act or the rules and regulations
thereunder in connection with the distribution of the Registrable Stock by the
Stockholders;
(h) Prepare and promptly file with the Commission, and promptly
notify the Stockholders of the filing of, such amendments or supplements to such
Registration Statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event that
has occurred as the result of which any such prospectus or any other prospectus
as then in effect would include 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;
(i) During the time period during which the Company is required,
pursuant to Section 5(a), to cause a Registration Statement to be effective, in
case the Stockholders or any underwriter for the Stockholders is required to
deliver a prospectus at a time when the prospectus then in circulation is not in
compliance with the Securities Act or the rules and regulations of the
Commission, prepare promptly upon request such amendments or supplements to such
Registration Statement and such prospectus as may be necessary in order for such
prospectus to comply with the requirements of the Securities Act and such rules
and regulations;
(j) Advise the Stockholders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission or any state securities commission or agency suspending the
effectiveness of such Registration Statement or the initiation or threatening of
any proceeding for that purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued and if such a stop order is received, extend the term of this
Agreement by the length of time that such stop order is in effect;
(k) Not file any amendment or supplement to such Registration
Statement or prospectus to which counsel for the Stockholders has reasonably
objected on the grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or the rules and
regulations thereunder, after having been furnished with a copy thereof at least
three business days prior to the filing thereof (which advance furnishing of
copies the Company hereby agrees to);
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(l) At the request of the Stockholders (i) furnish to the
Stockholders on the effective date of the Registration Statement or, if such
registration includes an underwritten public offering, at the closing provided
for in the underwriting agreement, an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the Stockholders, covering such matters with
respect to the registration statement, the prospectus and each amendment or
supplement thereto, proceedings under state and Federal securities laws, other
matters relating to the Company, the securities being registered and the offer
and sale of such securities as are customarily the subject of opinions of
issuer's counsel provided to underwriters in underwritten public offerings, and
(ii) use its best effort to furnish to the Stockholders letters dated each such
effective date and such closing date, from the independent certified public
accountants of the Company, addressed to the underwriters, if any, and to the
Stockholders, stating that they are independent certified public accountants
within the meaning of the Securities Act and dealing with such matters as the
underwriters may request, or, if the offering is not underwritten, that in the
opinion of such accountants the financial statements and other financial data of
the Company included in the Registration Statement or the prospectus or any
amendment or supplement thereto comply in all material respects with the
applicable accounting requirements of the Securities Act, and additionally
covering such other financial matters, including information as to the period
ending not more than five business days prior to the date of such letter with
respect to the Registration Statement and prospectus, as the Stockholder may
reasonably request;
(m) Use its best efforts to ensure the obtaining of all necessary
approvals from the NASD; and
(n) Use its best efforts to cause all shares of Registrable Stock
covered by the Registration Statement to be listed on each securities exchange
or market, if any, on which similar securities issued by the Company are then
listed.
7. Expenses.
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(a) With respect to each registration effected pursuant to
Sections 3 or 4 hereof, all fees, costs and expenses of and incidental to such
registration and the public offering in connection therewith shall be borne by
the Company; provided, however, that the Stockholders shall bear their pro rata
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share of the underwriting discounts and selling commissions.
(b) The fees, costs and expenses of registration to be borne as
provided in paragraph (a) above, shall include, without limitation, all
registration, filing and NASD fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, fees and disbursements of counsel for
the underwriter or underwriters of such securities (if the Company and/or
selling security holders are otherwise required to bear such fees and
disbursements), all legal fees and disbursements and other expenses of complying
with state securities to be offered are to be registered or qualified, the
reasonable fees and disbursements of counsel for the Stockholders, and the
premiums and other costs of policies of insurance insuring the Company against
liability arising out of such public offering.
8. Indemnification and Contribution.
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(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each of the Stockholders, whether or not their
shares have been sold in the offering, and any underwriter (as defined in the
Securities Act) for the Stockholders, and any person who controls the
Stockholders or such underwriter within the meaning of the Securities Act, from
and against, and will reimburse the Stockholders and each such underwriter and
controlling person with respect to, any and
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all claims, actions, demands, losses, damages, liabilities, costs and expenses
to which the Stockholders or any such underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such claims,
actions, demands, losses, damages, liabilities, costs or expenses arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in a Registration Statement covering shares of
Registrable Stock, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or arise out of any
violation by the Company of any rule or regulation under the Securities Act, the
Securities Exchange Act, any state securities act, any rule or regulation
promulgated under such acts applicable to the Company and relating to action or
inaction required of the Company in connection with such registration; provided,
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however, that the Company will not be liable in any such case to the extent that
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any such claim, action, demand, loss, damage, liability, cost or expense is
caused by an untrue statement or alleged untrue statement or omission or alleged
omission so made in reliance upon information furnished by any of the
Stockholders, such underwriter or such controlling person for use in the
preparation thereof.
(b) Each of the Stockholders will severally indemnify and hold
harmless the Company from and against, and will reimburse the Company with
respect to, any and all losses, damages, liabilities, costs or expenses to which
the Company may become subject under the Securities Act or otherwise, insofar as
such losses, damages, liabilities, costs or expenses are caused by any untrue or
alleged untrue statement of any material fact contained in a Registration
Statement covering shares of Registrable Stock or any amendment or supplement
thereto, or are caused by the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made, not misleading,
in each case to the extent, but that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon
information furnished by such Stockholder for use in the preparation thereof.
(c) Promptly after receipt by a party to be indemnified pursuant
to the provisions of paragraph (a) or (b) of this Section 8 (an "indemnified
party") of notice of the commencement of any action involving the subject matter
of the foregoing indemnity provisions, such indemnified party will, if a claim
thereof is to be made against the indemnifying party pursuant to the provisions
of paragraph (a) or (b), notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to an indemnified party otherwise than
under this Section 8 and shall not relieve the indemnifying party from liability
under this Section 8, unless such indemnifying party is prejudiced by such
omission. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party pursuant to the provisions of such paragraph
(a) and (b) for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall be liable to an indemnified
party for any settlement of any action or claim without the consent of the
indemnifying party; no indemnifying party may unreasonably withhold its consent
to any such settlement. No indemnifying party will 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 to such claim or litigation.
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(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i) one or
both of the Stockholders or any controlling person of one or both of the
Stockholders makes a claim for indemnification pursuant to this Section 8, but
it is judicially determined (by the entry of a final judgment or 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 8 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of either or both of the Stockholders or any such
controlling person in circumstances for which indemnification is provided under
this Section 8; then, in each such case, the Company and the Stockholders will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that
either of the Stockholders is responsible for the portion represented by the
percentage that the public offering price of his Registrable Stock 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, no person or
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entity guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.
9. Reporting Requirements Under Securities Exchange Act of 1934. The
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Company shall keep effective its registration under Section 12 of the Exchange
Act and shall timely file such information, documents and reports as the
Commission may require or prescribe under Section 13 of the Exchange Act. The
Company shall (whether or not it shall then be required to do so) timely file
such information, documents and reports as the Commission may require or
prescribe under Section 13 or 15(d) (whichever is applicable) of the Exchange
Act. The Company shall forthwith upon request furnish to the Stockholders: (i)
a written statement by the Company that it has complied with the reporting
requirements of Section 13 or 15(d) of the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other reports
and documents filed by the Company with the Commission as the Stockholders may
reasonably request in availing themselves of an exemption for the sale of
Registrable Stock without registration under the Securities Act. The Company
acknowledges and agrees that the purposes of the requirements contained in this
Section 9 are (a) to enable the Stockholders to comply with the current public
information requirement contained in Paragraph (c) of Rule 144 under the
Securities Act should any of the Stockholders ever wish to dispose of any of the
securities of the Company acquired by him without registration under the
Securities Act in reliance upon Rule 144 (or any other similar or successor
exemptive provision), and (b) to qualify the Company for the use of Registration
Statements on Form S-3. In addition, the Company shall take such other measures
and file such other information, documents and reports, as shall hereafter be
required by the Commission as a condition to the availability of Rule 144 under
the Securities Act (or any similar or successor exemptive provision hereafter in
effect) and the use of Form S-3. The Company also covenants to use its best
efforts, to the extent that it is reasonably within its power to do so, to
qualify for the use of Form S-3. The Company agrees to use its best efforts to
facilitate and expedite transfers of Registrable Stock pursuant to Rule 144
under the Securities Act (or any similar or successor exemptive provision
hereafter in effect), which efforts shall include timely notice to its transfer
agent to expedite such transfers of Registrable Stock.
10. Stockholder Information. The Company may require each
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Stockholder to furnish the Company in a timely manner such information with
respect to himself and the distribution of such Registrable Stock as the Company
may from time to time reasonably request in writing and as shall be required by
law or by the Commission in connection therewith.
11. Specific Enforcement. All of the parties hereto acknowledge that
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the parties will be irreparably damaged in the event that this Agreement is not
specifically enforced. Upon a breach or
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threatened breach of the terms, covenants or conditions of this Agreement by any
of the parties hereto, the other parties shall, in addition to all other
remedies, be entitled to a temporary or permanent injunction, without showing
any actual damage, or a decree for specific performance, in accordance with the
provisions hereof.
12. Notices. Any notices or other communications required or
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permitted hereunder shall be sufficiently given if delivered personally or sent
by facsimile, overnight courier, registered or certified mail, postage prepaid,
addressed as follows or to such other address of which the parties may have
given notice:
If to the Company: ON Technology Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholders: to the respective addresses
set forth on Schedule 15.6 to
the Stock Purchase Agreement.
with a copy to: Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered, if delivered personally or by
facsimile; (b) one business day after being sent, if sent by overnight courier;
or (c) three business days after being sent, if sent by registered or certified
mail.
13. Governing Law. This Agreement shall be governed by, and construed in
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accordance with, the laws of the Commonwealth of Massachusetts.
14. Waivers; Amendments. No waiver of any right hereunder by either party
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shall operate as a waiver of any other right, or of the same right with respect
to any subsequent occasion for its exercise, or of any right to damages. No
waiver by either party of any breach of this Agreement shall be held to
constitute a waiver of any other breach or a continuation of the same breach.
All remedies provided by this Agreement are in addition to all other remedies
provided by law. This Agreement may not be amended except by a writing executed
by the Company and all of the Stockholders.
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15. Miscellaneous. All covenants and agreements in this Agreement by or
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on behalf of any of the parties hereto will bind and inure to the benefit of the
respective transferees, heirs, executors, administrators, legal representatives,
successors and assigns of the parties hereto whether so expressed or not. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement represents the complete agreement of the parties
with respect to the transactions contemplated hereby and supersedes all prior
agreements and understandings. Headings in this Agreement are included for
reference only and shall have no effect upon the construction or interpretation
of any part of this Agreement.
16. Mergers, Etc. The Company shall not, directly or indirectly, enter
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into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation unless the proposed surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in writing to
assume the obligations of the Company under this Agreement, and for that purpose
references hereunder to "Registrable Stock" shall be deemed reference to the
securities that the Stockholders would be entitled to receive in exchange for
Registrable Stock under any such merger, consolidation or reorganization.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
a duly authorized signatory and the Stockholder has duly executed this
Agreement, each as of the date first above recited.
ON TECHNOLOGY CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
/s/ Iska ▇▇▇▇▇▇
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Iska ▇▇▇▇▇▇
/s/ Hans-Till Freiherr von Ruxleben
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Hans-Till Freiherr von Ruxleben
/s/ Liliane Freifrau von Ruxleben
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Liliane Freifrau von Ruxleben
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ Prof. Jochen Tschunke
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Prof. Jochen Tschunke