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Exhibit 4.2 - Opis Investors' Rights Agreement
OPIS INVESTOR RIGHTS AGREEMENT
THIS OPIS INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into
as of the 30th day of December, 1997, by and among SALESLOGIX CORPORATION, a
Delaware corporation (the "Parent"), and the individuals whose names, signatures
and addresses appear on the signature page of this Agreement (collectively, the
"OPIS Investors").
RECITALS
A. Parent, OPIS CORPORATION, an Iowa corporation ("OPIS"), and SLX
ACQUISITION CORPORATION, an Arizona corporation ("Newco") have simultaneously
herewith consummated the transactions contemplated by that certain Plan of
Reorganization and Agreement of Merger dated as of December 23, 1997 (the
"Merger Agreement"), pursuant to which OPIS will merge with and into Newco in a
tax-free reorganization pursuant to Section 368(a)(2)(A) of the Internal Revenue
Code of 1986, as amended. Capitalized terms used herein that are not otherwise
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
B. Immediately prior to the effective date of the Merger Agreement, the
OPIS Investors own, in the aggregate, one hundred percent (100%) of the issued
and outstanding shares of capital stock of OPIS and one hundred percent (100%)
of the issued and outstanding options and other rights of any kind
(collectively, the "OPIS Options") to purchase shares of capital stock of OPIS.
C. In exchange for one hundred percent (100%) of the issued and
outstanding shares of capital stock of OPIS and one hundred percent (100%) of
the OPIS Options, the OPIS Investors will receive in the aggregate: (i)
1,196,256 shares of fully paid and nonassessable Series D Convertible Preferred
Stock, $.001 par value (the "Series D Preferred Stock"), newly issued by Parent
(the "Minimum Merger Shares"), plus that portion of the Additional Merger
Consideration (as that term is defined in Section 2.1(c) of the Merger
Agreement), if any, to which the Shareholders shall be entitled (the "Additional
Merger Shares, and together with the Minimum Merger Shares, the "Total Merger
Shares"), and (ii) the right to purchase 94,284 shares of Series D Preferred
Stock (the "Minimum Option Shares") plus that portion of the Additional Merger
Consideration, if any, to which the Option Holders shall be entitled, under the
terms and conditions set forth in the OPIS Options and herein (the "Additional
Option Shares, and together with the Minimum Option Shares, the "Total Option
Shares"). The Minimum Merger Shares, the Minimum Option Shares and the
Additional Merger Consideration shall be referred to collectively as the
"Shares".
D. Pursuant to the Merger Agreement, certain of the Shares shall be
deposited into escrow (the "Escrowed Shares") pursuant to a certain Escrow
Agreement ("Escrow Agreement") entered into as of the date hereof between the
parties hereto. All Shares deposited into Escrow
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pursuant to the Escrow Agreement shall be subject to the restrictions on
transferability described herein.
E. Parent has previously granted certain registration rights to the
holders the Series A and C Preferred Stock of Parent pursuant to that certain
Investors' Rights Agreement dated as of January 17, 1996, as amended as of
October 14, 1996 and March 24, 1997.
F. Parent and the OPIS Investors desire that OPIS Investors receive the
registration rights set forth in this Agreement and that the Shares be subject
to certain restrictions as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:
SECTION 1
Restrictions on Transferability
Registration Rights
1.1 Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Act" shall mean the Securities Act of 1933, as amended, or
any similar or successor federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Act.
"Holder" shall mean any person holding Registrable Securities,
including without limitation, the OPIS Investors.
The terms "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Act, and the declaration or ordering of the effectiveness of
such registration statement.
"Registration Expenses" shall mean all expenses incurred by
Parent in complying with Section 1.6 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for Parent, blue sky fees and expenses, and
the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of Parent
which shall be paid in any event by Parent).
"Registrable Securities" means (a) any Common Stock of Parent
issued or issuable upon conversion of the Shares; (b) any Common Stock issued or
issuable in respect of
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other securities issued or issuable with respect to the Shares upon any stock
split, stock dividend, recapitalization, or similar event, or any Common Stock
otherwise issued or issuable with respect to the Shares; and (c) any Common
Stock of Parent with respect to which Parent has granted registration rights to
others; provided, however, that shares of Common Stock or other securities shall
only be treated as Registrable Securities if and so long as they have not been
(x) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (y) sold in a transaction
exempt from the registration and prospectus delivery requirements of the Act
under Section 4(l) thereof so that all transfer restrictions and restrictive
legends with respect thereto are removed upon the consummation of such sale.
"Registrable Securities" may include the Escrowed Shares, provided that the
proceeds from the sale of such Escrowed Shares shall remain subject to the
Escrow until qualified for release thereunder.
"Restricted Securities" shall mean the securities of Parent
required to bear the legend set forth in Section 1.4 hereof.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.2 Right of First Refusal. In the event any Shares or any interest
therein, are to be transferred in a bona fide arm's length transaction by an
OPIS Investor, voluntarily or involuntarily other than by will or the laws of
descent (including, without limitation, any sale, encumbrance, foreclosure or
transfer in lieu thereof, or by operation of law, any division of marital
property on account of divorce or legal separation being deemed a "transfer" for
purposes hereof), such OPIS Investor shall provide to Parent promptly written
notice describing in reasonable detail the disposition or transfer, including
without limitation the sale price, if any, and date of transfer or disposition,
and, whether or not such OPIS Investor provides such notice, Parent (or its
nominee) shall have a right of first refusal as follows:
(a) such OPIS Investor (or the holder of such Shares if not an
OPIS Investor) shall give Parent advance written notice detailing all the terms
of the proposed transfer. Parent (or its nominees) shall have the right (but not
the obligation), exercisable upon delivery to the transferring shareholder of
written notice of acceptance within thirty (30) days following receipt of the
notice of proposed transfer described in the preceding sentence, to repurchase
all or any of such Shares on the terms and conditions set forth in such notice;
(i) provided that the per share purchase price shall
be the price, plus the Fair Market Value of any non-cash consideration, stated
in the notice;
(ii) provided further that the purchase price shall
be payable, at the election of Parent (or its nominees), either on the terms set
forth in the transferor's notice or in installments with interest as set forth
in Section 1.2(e). Parent may, at its election, prepay amounts due under this
Section, without premium or penalty; and
(iii) provided further that if the Board in its good
faith determination believes that the purchase price or terms set forth in the
transferor's notice, or both, are not the
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result of a bona fide arm's length transaction, then such matter shall be
subject to the dispute resolution procedures set forth in Section 13.5 of the
Merger Agreement.
(b) The date for consummating such purchase shall be the
sixtieth (60th) day following delivery of Parent's (or its nominees') notice of
exercise. Failure by Parent (or its nominees) (without default by the
transferring shareholder) to close such purchase within the above 60-day period
shall give the transferring shareholder the right to transfer such Shares or
interest therein on the terms and to the person described in the notice, in
compliance with the requirements of Section 1.3 of this Agreement, during the 60
days following expiration of the original 60-day period; provided that the
Shares or interest therein to be transferred shall for all purposes remain
subject to this Agreement. If the transferring shareholder fails to close the
proposed transfer on those terms within such second 60-day period, the proposed
transfer shall again be subject to the terms of this Section 1.2.
Notwithstanding the foregoing, such Shares may be transferred or retransferred
without invoking this right of first refusal between such OPIS Investor and
trusts of which such OPIS Investor and/or such OPIS Investor's spouse and/or
children are the sole beneficiaries by giving prior written notice certifying
such a transfer is to be made; provided that following any such transfer, such
Shares shall remain subject to this right of first refusal and all the other
provisions of this Agreement.
(c) For so long as Parent's right of first refusal set forth
in Section 1.2 remains effective, neither any OPIS Investor, nor his/her/its
personal representative(s), devisee(s), heir(s), successor(s), or assignee(s)
shall sell, assign or otherwise transfer any Shares or interest therein without
obtaining the written agreement of the purchaser, assignee or transferee that
the Shares remain subject to this repurchase right, and each OPIS Investor
agrees that certificates evidencing the Shares may be legended to reflect the
foregoing restrictions. Section 1.2 shall terminate and be of no further force
or effect automatically upon the closing of an initial public stock offering of
Parent's common stock under the Act the result of which is that Parent's common
stock is traded, or quoted, as applicable, on a national securities exchange,
over the counter on NASDAQ, or through the NASD's National Market System (an
"IPO").
(d) The term "Fair Market Value" shall be the fair market
value of a share of Stock or the fair market value of any other asset, as
determined by the Board of Directors of Parent, acting in good faith, which
determination shall be subject to the dispute resolution procedures set forth in
Section 13.5 of the Merger Agreement.
(e) Payment on exercise by Parent pursuant to this Section 1.3
may be made by an initial payment on the Consummation Date (defined below) equal
to 20% of the purchase price, and the balance shall be made in four (4) equal
annual installments of principal and accrued interest commencing on the first
anniversary of the Consummation Date, and on the next four (4) anniversaries of
the Commencement Date. Interest shall commence to accrue from the Consummation
Date at the prime rate of interest in effect on the Consummation Date as
announced in the Wall Street Journal (or a reasonable substitute publication
selected by the Board), and it shall be adjusted annually thereafter to the
then-existing Wall Street Journal-announced prime rate (or a reasonable
substitute publication selected by the Board of
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Directors of Parent), which adjusted rate of interest shall remain in effect for
the entire year then beginning (interim changes in the prime rate during the
year being disregarded). The "Consummation Date" for purposes of this Paragraph
shall be the sixtieth (60th) day following delivery of Parent's notice of
exercise.
1.3 Other Restrictions. The Shares, as long as they are Restricted
Securities, shall not be sold, assigned, pledged, hypothecated or otherwise
transferred except upon the conditions specified in this Agreement, which
conditions are intended to ensure compliance with the provisions of the Act.
Each OPIS Investor will cause any proposed purchaser, assignee, transferee or
pledgee of the Shares to agree to take and hold such securities subject to the
provisions and upon the conditions specified in this Agreement.
1.4 Restrictive Legend. Each certificate representing (a) the Shares
and (b) any other securities issued in respect of the Shares upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar event,
shall (unless otherwise permitted by the provisions of Section 1.4 below) be
stamped or otherwise imprinted with a legend in substantially the following form
(in addition to any other legends required under applicable state securities
laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED
IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT."
"THE SHARES EVIDENCED HEREBY ARE CONVERTIBLE AT THE OPTION OF THE
HOLDER AT ANY TIME INTO SHARES OF COMMON STOCK OF THE COMPANY AND WILL
BE AUTOMATICALLY SO CONVERTED IN CERTAIN SITUATIONS, AT THE RATE OF ONE
SHARE OF COMMON STOCK FOR EACH SHARE OF SERIES D PREFERRED STOCK SO
SURRENDERED, SUBJECT TO ADJUSTMENT IN CERTAIN CIRCUMSTANCES. A FULL
STATEMENT OF RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS GRANTED
TO OR IMPOSED UPON THE RESPECTIVE CLASSES AND SERIES OF SHARES OF THE
COMPANY AND UPON THE HOLDERS THEREOF ARE SET FORTH IN ARTICLE IV OF THE
CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED. THE
CERTIFICATE OF INCORPORATION MAY BE OBTAINED FROM THE SECRETARY OF THE
COMPANY UPON REQUEST AND WITHOUT CHARGE."
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"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
ORIGINAL SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY."
Each OPIS Investor and Holder consent to Parent making a notation on its records
and giving instructions to any transfer agent of the Restricted Securities in
order to implement the restrictions on transfer established in this Section 1.
1.5 Notice of Proposed Transfers. The Holder of each certificate
representing Restricted Securities, by acceptance thereof, agrees to comply in
all respects with the provisions of this Section 1. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities, unless there is in
effect a registration statement under the Act covering the proposed transfer and
in addition to Holder's notice obligations under Section 1.2 above, the Holder
thereof shall give written notice to Parent of such Holder's intention to effect
such transfer, sale, assignment or pledge. Each such notice shall describe the
manner and circumstances of the proposed transfer, sale, assignment or pledge in
sufficient detail, and shall be accompanied at such Holder's expense by either
(a) an unqualified written opinion of legal counsel who shall, and whose legal
opinion shall be, reasonably satisfactory to Parent, addressed to Parent, to the
effect that the proposed transfer of the Restricted Securities may be effected
without registration or qualification under the Act and applicable state "blue
sky" statutes, rules and regulations ("Blue Sky Laws"), or (b) a "no action"
letter from the Commission and applicable state "blue sky" regulators (the
"Regulators") to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
or the Regulators that action be taken with respect thereto, or (c) any other
evidence reasonably satisfactory to counsel to Parent, whereupon the Holder of
such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by the Holder to
Parent. Each certificate evidencing the Restricted Securities transferred as
above provided shall bear, except if such transfer is made pursuant to Rule 144,
the appropriate restrictive legends set forth in this Section 1, except that
such certificate shall not bear such restrictive legend if, in the opinion of
counsel for such Holder and Parent, such legend is not required in order to
establish compliance with any provisions of the Act.
1.6 Company Registration. If (but without any obligation to do so)
Parent proposes to register any of its stock or other securities under the Act
in connection with the public offering of such securities solely for cash (other
than (i) the initial public offering of the Company's securities; (ii) a
registration relating solely to the sale of securities to participants in a
Parent stock plan; (iii) a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities; or (iv)
a registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities which are also being registered);
including any registration made pursuant to Section 1.2(a) of that certain
Investors' Rights Agreement dated as of January 17, 1996 (as amended as of
October 14, 1996 and March
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24, 1997, the "Existing Investors' Rights Agreement."), Parent shall at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after mailing of
such notice by Parent in accordance with Section 2.5, Parent shall, subject to
the provisions of Sections 1.8 and 1.10, cause to be registered under the Act
all of the Registrable Securities that each such Holder has requested to be
registered.
1.7 Obligations of Parent. Whenever required under Section 1.6 to
effect the registration of any Registrable Securities, Parent shall as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to one hundred twenty
(120) days or until the distribution contemplated in the Registration Statement
has been completed; provided, however, that such 120 day period shall be
extended for a period of time equal to the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of Parent; and provided
further that Parent reserves the right, in its discretion to terminate or delay
the registration efforts described in Section 1.6 at any time.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that Parent shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless Parent is already
subject to service in such jurisdiction and except as may be required by the
Act.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act
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of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by Parent are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to Section 1.6, on the date that
such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of the counsel
representing Parent for the purposes of such registration, in form and substance
as is customarily given to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of Parent, in form and substance as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
to the Holders requesting registration of Registrable Securities.
1.8 Furnish Information. It shall be a condition precedent to the
obligations of Parent to take any action pursuant to Section 1.6 with respect to
the Registrable Securities of any selling Holder that such Holder shall furnish
to Parent such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
1.9 Expenses of Company Registration. Parent shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
1.6 for each Holder, including (without limitation) all registration, filing,
and qualification fees, printers and accounting fees relating or apportionable
thereto and the fees and disbursements of one counsel for the selling Holders
selected by them, but excluding underwriting discounts and commissions relating
to Registrable Securities.
1.10 Underwriting Requirements. In connection with any offering
involving an underwriting of Shares of Parent's capital stock, Parent shall not
be required under Section 1.6 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between Parent and the underwriters selected by it (or by other persons entitled
to select the underwriters), and then only in such quantity as the underwriters
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determine in their sole discretion will not, jeopardize the success of the
offering by Parent. If the total amount of securities, including Registrable
Securities, requested by stockholders to be included in such offering exceeds
the amount of securities sold other than by Parent that the underwriters
determine in their sole discretion is compatible with the success of the
offering, then Parent shall be required to include in the offering only that
number of such securities, including Registrable Securities, which the
underwriters determine in their sole discretion will not jeopardize the success
of the offering (the securities so included to be apportioned pro rata among the
selling stockholders according to the total amount of securities requested to be
included therein owned by each selling stockholder or in such other proportions
as shall mutually be agreed to by such selling stockholders, but in no event
shall the amount of securities of the selling Holders included in the offering
be reduced below thirty percent (30%) of the total amount of securities included
in such offering, unless such offering is the initial public offering of
Parent's securities in which case the selling stockholders may be excluded if
the underwriters make the determination described above and no other
stockholder's securities are included. For purposes of the preceding
parenthetical concerning apportionment, for any selling stockholder which is a
holder of Registrable Securities and which is a partnership or corporation, the
partners, retired partners and stockholders of such holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
stockholder," and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of Shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.
1.11 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.12 Indemnification. In the event any Registrable Securities are
included in a registration statement under Section 1.6:
(a) To the extent permitted by law, Parent will indemnify and
hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) 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 (iii) any violation or alleged
violation by Parent of the Act, the 1934 Act, any state securities law or any
rule or regulation promulgated under the Act, the 1934 Act or any state
securities law; and Parent will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other
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expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 1.12(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of Parent (which
consent shall not be unreasonably withheld), nor shall Parent be liable in any
such case for any such loss, claim, damage, liability, or action to the extent
that it arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly for use in
connection with such registration by any such Holder, underwriter or controlling
person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless Parent, each of its directors, each of its officers
who has signed the registration statement, each person, if any, who controls
Parent within the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereto) arise
out of or are based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended to be indemnified
pursuant to this subsection 1.12(b), in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 1.12(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Holder,
which consent shall not be unreasonably withheld; provided, that, in no event
shall any indemnity under this subsection 1.12(b) exceed the gross proceeds from
the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.12 of notice of the commencement of any action (including any
governmental action), such indemnified party will if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.12, 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
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel
with the fees and expenses to be paid by the indemnifying party, 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 such indemnified party and any other party 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 prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party
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under this Section 1.12, but the omission so 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 1.12
(d) If the indemnification provided for in this Section 1.12
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of Parent and Holders under this Section
1.12 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.13 Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of Parent to the public without registration, Parent
agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by Parent for
the offering of its securities to the general public,
(b) file with the SEC in a timely manner all reports and other
documents required of Parent under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by Parent
that it has complied with the reporting requirements of SEC Rule 144 (at any
time after ninety (90) days after the effective date of the first registration
statement filed by Parent), the Act and the 1934 Act (at any time after it has
become subject to such reporting requirements), (ii) a copy of the most recent
annual or quarterly
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report of Parent and such other reports and documents so filed by Parent, and
(iii) such other information as may be reasonably requested in availing any
Holder of any rule or regulation of the SEC which permits the selling of any
such securities without registration or pursuant to such form.
1.14 Assignment of Registration Rights. The rights to cause Parent to
register Registrable Securities pursuant to Section 1.6 may not be assigned by a
Holder, without the prior written consent of Parent, which may be granted or
withheld in its discretion.
1.15 "Market Stand-Off" Agreement. Each Investor hereby agrees that,
during the period of duration specified by Parent and an underwriter of Common
Stock or other securities of Parent, following the effective date of a
registration statement of Parent filed under the Act, it shall not, to the
extent requested by Parent and such underwriter, directly or indirectly sell,
offer to sell contract to sell (including, without limitation, any short sale),
grant any option to purchase or otherwise transfer or dispose of (other than to
donees who agree to be similarly bound) any securities of Parent held by it at
any time during such period except common stock included in such registration;
provided, however, that:
(a) such agreement shall be applicable only to the first such
registration statement of Parent which covers common stock (or other securities)
to be sold on its behalf to the public in an underwritten offering;
(b) all officers and directors of Parent and all other persons
with registration rights (whether or not pursuant to this Agreement) enter into
similar agreements; and
(c) such market stand-off time period shall not exceed 180
days.
In order to enforce the foregoing covenant, Parent may impose
stop-transfer instructions with respect to the Registrable Securities of each
Investor (and the Shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
Notwithstanding the foregoing, the obligations described in
this Section 1.15 shall not apply to a registration relating solely to employee
benefit plans on Form S-l or Form S-8 or similar forms which may be promulgated
in the future, or a registration relating solely to a Commission Rule 145
transaction.
1.16 Termination of Registration Rights.
(a) No Holder shall be entitled to exercise any right provided
for in this Section 1 after six (6) years following the consummation of the sale
of securities pursuant to a registration statement filed by Parent under the Act
in connection with the initial firm commitment underwritten offering of its
securities to the general public.
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(b) In addition, the right of any Holder to request inclusion
in any registration pursuant to Section 1.6 shall terminate on the second
anniversary of the closing of the first Parent-initiated registered public
offering of Common Stock of Parent if all Shares of Registrable Securities held
or entitled to be held upon conversion by such Holder may immediately be sold
under Rule 144 during any 90 day period, or on such date after the second
anniversary of the closing of the first Parent-initiated registered public
offering of Common Stock of Parent as all Shares of Registrable Securities held
or entitled to be held upon conversion by such Holder may immediately be sold
under Rule 144 during any 90 day period; provided, however, that the provisions
of this Section 1.16(b) shall not apply to any Holder who owns more than two
percent (2%) of Parent's outstanding stock until such time as such Holder owns
less than two percent (2%) of the outstanding stock of Parent.
1.17 Acknowledgment of Previous Grants of Registration Rights. OPIS
Investors acknowledge that Parent has previously granted registration rights
relating to Common Stock of Parent, and that OPIS Investors' rights are subject
to the rights of other rights holders.
SECTION 2
Miscellaneous
2.1 Assignment. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and permitted assigns of the parties hereto.
2.2 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person or entity, other than the parties hereto, and
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein. "Holders" who are not parties to this Agreement, or successors or
assigns of such parties, are not third party beneficiaries of this Agreement and
may not enforce this Agreement without the prior written consent of Parent in
its discretion.
2.3 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Arizona as applied to agreements entered into and
performed in the State of Arizona solely by residents thereof.
2.4 Counterparts. 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.
2.5 Notices. Any notice required or permitted by this Agreement shall
be in writing shall be sent by prepaid registered or certified mail, return
receipt requested, addressed to the other party at the address set forth below
such parties signature to this Agreement or at such other address for which such
party gives notice hereunder. Any party giving notice of a change in address
shall also concurrently deliver notice of such change to the Escrow Agent (as
that term
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is defined in the Merger Agreement). Such notice shall be effective when
received, but shall be deemed to have been received four (4) days after deposit
in the mail, postage prepaid.
2.6 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, portions of such provisions, or such
provisions in their entirety, to the extent necessary, shall be severed from
this Agreement, and the balance of this Agreement shall be enforceable in
accordance with its terms.
2.7 Amendment and Waiver. Any provision of this Agreement may be
amended and any right waived with the written consent of Parent and the Holders
of at least two-thirds (2/3rds) of the Shares. Any amendment or waiver effected
in accordance with this paragraph shall be binding upon each Holder of the
Shares and Parent. In addition, Parent may waive performance of any obligation
owing to it, as to some or all of the Holders of the Shares, or agree to accept
alternatives to such performance, without obtaining the consent of any Holder of
Shares. In the event that an underwriting agreement is entered into between
Parent and any Holder, and such underwriting agreement contains terms differing
from this Agreement, as to any such Holder the terms of such underwriting
agreement shall govern.
2.9 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party to this Agreement, upon any breach or
default of the other party, shall impair any such right, power or remedy of such
non-breaching party nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either
under this Agreement, or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
2.10 Dispute Resolutions. The provisions of Section 13.5 of the Merger
Agreement are hereby incorporated into this Agreement.
[SIGNATURES APPEAR ON THE FOLLOWING SIGNATURE PAGES]
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[SIGNATURE PAGE TO THE OPIS INVESTOR RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties have this Agreement as of the date
first above written.
SALESLOGIX CORPORATION
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Title: President
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IOWA SEED CAPITAL CORPORATION
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Title: President
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DOMINION SECURITIES, INC.
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Title: President
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