Document:

Exhibit 10.1

 

 

REGISTRATION RIGHTS AGREEMENT

 

 

dated as of March 26, 1999

 

 

among

 

 

NESS TECHNOLOGIES, INC.

 

 

AND

 

 

THE PERSONS IDENTIFIED ON SCHEDULE I
HERETO

 

 

REGISTRATION RIGHTS AGREEMENT,
dated as of March 26, 1999, among NESS TECHNOLOGIES, INC., a Delaware
corporation (the “Company”) and the Persons identified on Schedule I
hereto (the “Stockholders”).  The
Company has agreed to provide registration rights with respect to the
Registrable Securities (as hereinafter defined) on the terms set forth in this
Agreement.

 

The parties hereto agree as follows:

 

1.             Definitions.

 

As used in this Agreement, the following capitalized terms shall have
the following meanings:

 

“Commission” shall mean the Securities and Exchange Commission.

 

“Common Stock” means the common stock, par value $.01 per share,
of the Company.

 

“Demand Registration” shall have the meaning assigned to such
term in Section 3 hereof.

 

“GLY” shall mean G.L.Y. High-Tech Investments Inc., a Delaware
Corporation, and its Permitted Transferees, provided, however, that, if at any
time Hagai Lavi or his Permitted Transferees shall cease to own at least 51% of
the capital stock of GLY High-Tech Investments, Inc. that entity shall have no
rights under this Agreement at any time thereafter.

 

“Holder” shall mean GLY or a member of the Wolfson Group that
holds Registrable Securities.

 

“Permitted Transferee” of a Stockholder or of Hagai Lavi shall
mean a transferee of Registrable Securities or of capital stock of GLY that is
a “Permitted Transferee” of such Stockholder or of Hagai Lavi within the
meaning of the Securities Sale Agreement among the Stockholders and Hagai Lavi
dated as of the date hereof, provided such transferee agrees in writing to be
bound by the terms and conditions of this Registration Rights Agreement.

 

“Person” shall mean an individual, partnership, corporation,
business trust, joint state company trust, unincorporated organization,

 

 

 joint venture, a government
authority or other entity of whatever nature.

 

“Prospectus” shall mean the prospectus included in any
Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments to the
Registration Statement of which such Prospectus is a part, and all material
incorporated by reference in such Prospectus.

 

“Registrable Securities” shall mean the Securities, but only so
long as they remain Restricted Securities.

 

“Registration Expenses” shall have the meaning ascribed thereto
in Section 7 hereof.

 

“Registration Statement” means any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective
amendments, all exhibits, and all material incorporated by reference in such
Registration Statement.

 

“Restricted Securities” means the Registrable Securities unless
and until, in the case of any such Securities, (i) they have been effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering them, (ii) they are distributed to the public,
or all of the Registrable Securities are eligible to be sold in any one day,
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (iii) they are otherwise freely transferable without
restriction under the Securities Act.

 

“Securities” shall mean any and all shares of Common Stock now
held by the Stockholders.

 

“Securities Act” shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

 

“Wolfson Group” shall mean the Stockholders identified as being
members of the Wolfson Group on Schedule I hereto and their Permitted
Transferees.  Actions permitted to be
taken by the Wolfson Group hereunder shall be taken by all the members of the
Wolfson Group if approved or consented to by members of the Wolfson Group
holding a

 

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majority of the interests in Nesstech LLC and/or the Company held by
the members of the Wolfson Group.

 

2.             Securities
Subject to this Agreement.  The
Securities entitled to the benefits of this Agreement are the Registrable
Securities.

 

3.             Demand
Registration.

 

(a)           Request
for Registration. Subject to the provisions of Section 3(b) hereof, at
any time after six months following the consummation of an underwritten public
offering under the Securities Act by the Company of its Common Stock, each of
GLY and the Wolfson Group may make a written request to the Company for
registration under and in accordance with the provisions of the Securities Act
of all or part (but not less than 20%) 
of the Registrable Securities owned by such Holder or Holders (a “Demand
Registration”) provided (i) that the value of shares of Common Stock proposed
to be registered (based upon the proposed gross offering price thereof net of
selling expenses) is at least $5,000,000 and (ii) that at least twelve (12)
months shall have elapsed since the last time a Demand Registration has been
requested by such Holder under this Section 3(a) if such a request has
previously been made by such Holder under this Section 3(a). Within five (5) Business days after
receipt of such request, the Company shall give written notice (the “Notice”)
of such request to all other Holders and will include in such registration all
Registrable Securities with respect to which the Company receives written
requests for inclusion therein within twenty (20) business days after it gives
the Notice to the applicable Holder. 
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 requesting Holders, 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 (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Securities to be sold. 
Notwithstanding anything to the contrary contained herein, no request may
be made under this Section 3(a) within 120 days after the effective date
of a Registration Statement filed by the Company covering a firm commitment
underwritten public offering in which the holders of Registerable Securities
shall have been entitled to join pursuant to Section 4 and in which there
shall have been effectively registered all shares of Registerable Securities as
to which registration shall have been requested.

 

(b)           Number
of Registrations. Each of GLY and the Wolfson Group is entitled to two (2)
Demand Registrations regardless of the Person or Persons making demand.  Each Holder agrees that if the

 

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Company determines that there are material developments which the
Company determines require the filing of a post-effective amendment to the
Registration Statement, then each Holder agrees to refrain from selling any
Registrable Securities until the post-effective amendment is declared
effective.  The Company agrees to file
and attempt to have declared effective such post-effective amendment as soon as
possible.  Notwithstanding the
foregoing, (i) if the Board of Directors of the Company determines in its good
faith judgment, after consultation with a firm of nationally recognized
underwriters, that there will be an adverse effect on a then contemplated
public offering of the Company’s equity securities, the Company may defer the
filing of the Registration Statement which is required to effect any
registration and may withdraw any Registration Statement without thereby
incurring any liability to the holders of Registerable Securities and (ii) if
the Company shall at any time furnish to a holder of Registrable Securities who
requests registration of a certificate signed by the President of the Company
or any other officer of the Company stating that the Company has pending or in
process a material transaction, the disclosure of which would, in the good
faith judgment of the Board of Directors of the Company, materially and
adversely affect the Company, the Company may defer the filing of a
Registration Statement for up to 90 days. 
The Company shall not be deemed to have effected a Demand Registration
unless and until such Demand Registration is declared effective (provided that
a registration which is withdrawn by or at the request of the Holders, the
expenses of which are borne by the Holders, shall not be deemed to be a
registration pursuant to this Section 3, and provided further, that a
registration which is withdrawn by the Holders, the expenses of which are borne
by the Company, shall be deemed to be a completed, effective registration for
purposes of this Section 3).

 

(c)           Priority
on Demand Registrations.  If the
managing underwriter or underwriters of a Demand Registration (or in the case
of a Demand Registration not being underwritten, a majority of the Holders)
advise the Company in writing that in its or their opinion the principal amount
and/or number of Securities proposed to be sold in such Demand Registration
exceeds the principal amount and/or number of Securities which can be sold in
such offering without an adverse effect on such offering, the Company will
include in such registration only the number of securities which, in the
opinion of such underwriter or underwriters (or Holders, as the case may be)
can be sold, selected pro rata among the Holders which have requested to be
included in such Demand Registration; provided, that if any Holder has
requested inclusion in such Demand Registration and no more than 30% of the
Registrable Securities which such Holder has requested to be included in such
Demand Registration pursuant to this Section 3 are so included, such
Holder shall be entitled to an additional Demand Registration hereunder (with
all expenses of registration relating to such

 

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additional Demand Registration to be borne by the Company) on the same
terms and conditions as would have applied to such Holder had such earlier
Demand Registration not been made.

 

(d)           Selection
of Underwriters and Counsel. If any Demand Registration is an underwritten
offering with respect to any issue of Registrable Securities, the Holders of a
majority of such Registrable Securities to be included in such Demand
Registration will select the investment banker or bankers and manager or
managers to administer the offering and one counsel to the sellers of such
Registrable Securities in such offering; provided, that such investment
bankers and managers be of nationally recognized standing and reasonably satisfactory
to the Company.  The Holders of the
Registrable Securities to be registered shall pay all underwriting discounts
and commissions of such investment banker or bankers and manager or managers.
The Company shall pay the reasonable fees and expenses of one such counsel to
the sellers of such Registrable Securities incurred in connection with
reviewing and otherwise acting in connection with the registration statement
relating to such underwritten public offering.

 

(e)           Form
S-3 Registration.

 

In case the Company shall receive from either GLY or the Wolfson Group
a written request that the Company effect a registration on Form S-3 and any
related qualification or compliance with respect to all or a part (but not less
than 20%)  of the Registrable Securities
owned by such Holder or Holders, the Company will:

 

(A)          promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders; and

 

(B)           as soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holder’s or Holder’s Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities
of any other Holder or Holders joining in such request as are specified in a
written request given within 15 days after receipt of such written notice from
the Company; provided, however, that the Company shall not be obligated to
effect any such registration, qualification or compliance, pursuant to this
Section 3(e): (i) if Form S-3 is not available for such offering by the
Holders; (ii) if the Holders, together

 

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with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters’ discounts or commissions) of less than $5,000,000; (iii) if the
Company shall furnish to the Holders a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its
shareholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form
S-3 registration statement for a period not greater than 90 days after receipt
of the request of the Holder or Holders under this Section 3(e); (iv) if
the Company has, within the six (6) month period preceding the date of such
request, effected a registration for such Holders pursuant to
Section 3(a), (v) if the Company has already effected a registration on
Form S-3 for such Holders pursuant to this Section 3(e); or (vi) in any
particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting
such registration, qualification or compliance.

 

Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Holders.  Registrations effected
pursuant to this Section 3(e) shall not be counted as demands for
registration or registrations effected pursuant to Section 3(a).

 

4.             Piggyback
Registration Rights.

 

(a)           If
the Company, at any time or from time to time subsequent to the closing date of
the initial public offering by the Company of its Common Stock, proposes to
register any securities under the Securities Act either for its own account or
the account of any selling security holders (other than pursuant to
Section 3 and other than pursuant to a registration statement on Forms S-4
or S-8 or any successor or similar forms), it will give written notice to each
of the Holders of its intention at least twenty (20) days in advance of the
filing of any registration statement with respect thereto. Upon the written
request of any of the Holders given within fifteen (15) days after receipt of
such notice, the Company, subject to Section 4(b) below, will use its best
efforts to cause the Registrable Securities

 

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requested by the Holders to be registered, to be so registered.  The Company shall have the right, in its
sole discretion, to terminate or withdraw any registration initiated by it
under this Section 4 prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration.

 

(b)           Underwritten
Offerings.

 

(i)    In the case of an underwritten
offering by the Company of securities, the Company shall, with respect to
Securities that a Holder then desires to sell, enter into an underwriting
agreement with the same underwriters engaged by the Company with respect to
securities being offered by the Company and use its best efforts to cause such
underwriters to include in any such underwriting all of the Securities that a
Holder then desires to sell; provided, however,  that such underwriting agreement is in
substantially the same form as the underwriting agreement that the Company
enters into in connection with the primary offering it is making.

 

(ii)   If the managing underwriter
with respect to such underwritten offering requests in writing that the number
of securities to be offered by selling security holders be reduced because
in the judgment of the managing underwriter the offering would be materially
and adversely affected, then such securities shall be reduced by such amount as
the managing underwriter may determine in writing so as to not materially and
adversely affect the proposed offering, which reduced number of securities
shall be included in the offering selected, first, from the Holders
participating in such offering, as nearly as possible pro rata, based on the
number of Registrable Securities such Holders have requested to be included
therein, and, next, to the extent available, among any other selling security
holders.

 

(c)           The
Holders of a majority of the Registrable Securities to be included in such
registration will select one counsel to the sellers of such Registrable
Securities in such offering.  The
Company shall pay the reasonable fees and expenses of one such counsel to the
sellers of such Registrable Securities (up to $10,000) incurred in connection
with reviewing and otherwise acting in connection with the registration
statement relating to such offering.

 

5.             Information.
Upon making a request pursuant to Section 3 or 4, the Holder shall specify
the number of shares of Registrable

 

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Securities to be registered on its behalf and the intended method of
disposition thereof; provided, however, that if the Holders of a
majority of the Registrable Securities included in such requests for
registration specify one particular type of underwritten offering, such method
of disposition shall be the type of underwritten offering or a series of such
underwritten offerings used in connection with the disposition of the
Securities pursuant to such Registration Statement as the Holders of a majority
of the Registrable Securities may elect during the time period the Registration
Statement is effective.

 

The Company may require the Holders to furnish to the Company such
information regarding themselves and the distribution of Registrable Securities
as the Company may from time to time reasonably request in writing in order to
comply with the Securities Act.  The
Holders agree to notify the Company as promptly as practicable of any
inaccuracy or change in information they have previously furnished to the
Company.

 

6.             Registration
Procedures. If and whenever the Company is required by the provisions of
Section 3 to effect a registration under the Securities Act, the Company
will, at its expense, as expeditiously as practicable, but in no event later
than 30 days after receipt of a request for registration pursuant to the terms
of Section 3:

 

(a)           In
accordance with the Securities Act and the rules and regulations of the
Commission, prepare and file with the Commission a Registration Statement in
the form of an appropriate registration statement with respect to the Registrable
Securities and use its best efforts to cause such Registration Statement to
become and remain continuously effective until the earlier of (i) all of
the Registrable Securities covered by such Registration Statement have been
sold in accordance with the intended methods of disposition of the seller or
sellers set forth in such Registration Statement and (ii) the end of a
period from the date that such Registration Statement has been declared
effective of one hundred eighty (180) days in the case of a Registration
Statement on Form S-3 or sixty (60) days in all other cases, unless the Company
in its good faith judgment reasonably believes that the continued effectiveness
of such Registration Statement would materially and adversely affect the
financial condition of the Company in view of the disclosures of any pending
litigation, claim, assessment or governmental investigation which may be
required thereby and that the failure to disclose any material information with
respect to the foregoing would cause a violation of the Securities Act; provided
that, if for any portion of such period the Registration Statement is not
effective, then such requirement for maintaining the effectiveness of the
Registration Statement shall be extended by the length of such interruption(s),
and shall prepare and file with the

 

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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 during such period;

 

(b)           Furnish
to each Holder participating in such registration (each of such persons
participating in the registration being referred to herein as a “Participant”
in such registration) such reasonable number of copies of the Registration
Statement and Prospectus and such other documents as such Participant may
reasonably request in order to facilitate the public offering of the
Registrable Securities;

 

(c)           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 as such Participants may reasonably request, provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified or to subject itself to taxation in connection with any
such registration or qualification of such Securities;

 

(d)           Notify
the Participants in such registration, 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;

 

(e)           Notify
the Participants in such registration promptly of any request by the Commission
for the amending or supplementing of such Registration Statement or Prospectus
or for additional information;

 

(f)            Prepare
and file with the Commission, promptly upon the request of any Participant in
such registration, the Registration Statement and any amendments or supplements
to such Registration Statement or Prospectus which, in the reasonable opinion
of counsel for such Participants, is required under the Securities Act or the
rules and regulations thereunder in connection with the distribution of the
Securities by such Participants or to otherwise comply with the requirements of
the Securities Act and such rules and regulations;

 

(g)           Prepare
and promptly file with the Commission and promptly notify the Participants in
such registration 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

 

9

 

required to be delivered under the Securities Act, any event has
occurred as the result of which any such Prospectus or any other Prospectus
then in effect may 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;

 

(h)           Advise
the Participants in such registration, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order by the
Commission 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;

 

(i)            Otherwise
use its best efforts to comply with all applicable rules and regulations of the
Commission, and make generally available to the Company’s security holders
earnings statements satisfying the provisions of Section 11(a) of the
Securities Act, no later than forty-five (45) days after the end of any twelve
(12) month period (or ninety (90) days, if such a period is a fiscal year)
beginning with the first month of the Company’s first fiscal quarter commencing
after the effective date of a Registration Statement;

 

(j)            Not
file any amendment or supplement to such Registration Statement or Prospectus
to which a majority in interest of the Participants in such registration has
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 unless the Company shall
have obtained an opinion of counsel that such amendment is required under the
Securities Act or the rules or regulations adopted thereunder in connection
with the distribution of Securities by the Company or the Participants.

 

7.             Expenses
of Registration. All expenses of the Company incident to the Company’s
performance of or compliance with the provisions of Sections 3, 4, 5 and 6 of
this Agreement shall be borne by the Company including without limitation:

 

(a)           All
registration and filing fees;

 

(b)           Fees
and expenses of compliance with all securities or blue sky laws (including fees
and disbursements of counsel for the Company in connection with blue sky
qualifications of the Registrable Securities; provided, however,
that the Company shall not be required to consent to general service of process
in any such state);

 

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(c)           Printing,
messenger, telephone and delivery expenses; and

 

(d)           Fees
and disbursements of counsel for the Company and its independent auditors.

 

Nothing in this Section 7 shall be deemed to require the Company
to pay or bear any expenses of any Participant’s attorneys or accountants or
any other personal expenses or any underwriting discounts, selling commissions
or similar fees of the Participants if such registration results in an
underwritten public offering of all or any portion of the Registrable
Securities, except as otherwise set forth herein.

 

8.             Indemnification
and Contribution.

 

(a)           Indemnification
by the Company. Whenever, pursuant to Section 3 or 4, a Registration
Statement relating to the Registrable Securities is filed under the Securities
Act, the Company will (except as to matters covered by Section 8(b)
hereof) indemnify and hold harmless each Participant in the registration, each
of their officers, directors and employees, each underwriter of such
Registrable Securities, and each Person, if any, who controls any such Person
(collectively, the “Participant Indemnitees” and, individually, a “Participant
Indemnitee”), against any losses, claims, damages or liabilities, joint or
several, to which such Participant Indemnitees may become subject under the
Securities Act 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 such
Registration Statement, or 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, and will reimburse
each Participant Indemnitee for all legal or other expenses reasonably incurred
by it in connection with investigating or defending against such loss, claim,
damage, liability or action; provided, however, that the Company
will not be liable in any such case if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by any such seller, any such underwriter or any such
controlling person in writing specifically for use in such registration
statement or prospectus.

 

(b)           Indemnification
by Participants.  Each Participant
in such registration will indemnify and hold harmless the Company, each of

 

11

 

its directors, each of its officers who has signed the Registration
Statement and each other person, if any, who controls the Company, within the meaning
of the Securities Act, each underwriter participating in such registration and
each Person who controls any such underwriter, within the meaning of the
Securities Act (collectively, the “Company Indemnitees” and, individually, a
“Company Indemnitee”) and each other Participant Indemnitee against all losses,
claims, damages or liabilities, joint or several, to which any of the Company
Indemnitees or the other Participant Indemnitees may become subject under the
Securities Act 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
such Registration Statement, or 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, but only if, and to
the extent that, such statement or omission was in reliance upon and in
conformity with written information furnished to the Company by such
Participant specifically for use in the preparation thereof.

 

(c)           Indemnification
Procedures. Promptly after receipt by a Participant Indemnitee or a Company
Indemnitee (collectively, “Indemnitees” and, individually, an “Indemnitee”)
under Section 8(a) or 8(b) hereof of notice of the commencement of any
action, such Indemnitee will, if a claim in respect thereof is to be made against
the indemnifying party under such clause, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
which it may have to any Indemnitee otherwise than under such clauses. In case
any such action shall be brought against any Indemnitee, and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled 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 satisfactory to such Indemnitee, and after notice
from the indemnifying party to such Indemnitee of its election to assume the defense
thereof, the indemnifying party shall not be liable to such Indemnitee under
such clause for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof other than reasonable costs
of investigation; provided, however, that the Indemnitee shall
have the right to employ one counsel to represent such Indemnitee if, in the
reasonable judgment of such Indemnitee, it is advisable for such party to be
represented by separate counsel because separate defenses are available, or
because a conflict of interest exists between such indemnified and indemnifying

 

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party in respect of such claim, and in that event the fees and expenses
of such separate counsel shall be paid by the indemnifying party.
Notwithstanding the foregoing, if the Company is an Indemnitee, the Company
shall designate the one counsel, and in all other circumstances, the one
counsel shall be designated by a majority in interest based upon the Registrable
Securities of the Indemnitees. For purposes of this Section 8 the terms
“control,” and “controlling person” have the meanings which they have under the
Securities Act.

 

(d)           Contribution.
If for any reason the foregoing indemnity is unavailable, or is insufficient to
hold harmless an Indemnitee, then the indemnifying party shall contribute to
the amount paid or payable by the Indemnitee as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the Indemnitee on the other from the registration or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, or provides a lesser sum to the Indemnitee than the amount hereinafter
calculated, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and the
Indemnitee on the other but also the relative fault of the indemnifying party
and the Indemnitee as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.

 

9.             “Stand-Off”
Agreement.  Each Holder, if
requested by the Company and the managing underwriter of an offering by the
Company of Registrable Securities pursuant to a Registration Statement, shall
agree not to sell publicly or otherwise transfer or dispose of any Registrable
Securities held by such Holder for at least 180 days following the effective
date of such Registration Statement; provided, that:

 

(a)           such
agreement shall only apply to the Company’s first Registration Statement
covering Common Stock to be sold to the public in an underwritten offering, any
other Registration Statement covering Common Stock to be sold to the public in
an underwritten offering that becomes effective in the two year period after
the effectiveness of such first Registration Statement and any subsequent
underwritten registration in which the Holder is given the opportunity to
participate; and

 

(b)           all
Holders holding not less than the number of shares of Registrable Securities held
by such Holder and all officers and directors of the Company enter into similar
agreements.

 

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10.           Amendment
and Modification. This Agreement may be amended, modified or supplemented
in any respect only by written agreement by the Company, GLY and the Wolfson
Group.

 

11.           Governing
Law. This Agreement and the rights and obligations of the parties hereunder
shall be governed by, and construed and interpreted in accordance with, the
laws of the State of Delaware, without giving effect to the choice of law
principles thereof.

 

12.           Invalidity
of Provision. The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction.

 

13.           Notices.
All notices and other communications hereunder shall be in writing and, unless
otherwise provided herein, shall be deemed duly given if delivered personally
or mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses or at such other address for the party as
shall be specified by like notice:

 

(a)           If
to the Company or any member of the Wolfson Group, to such party at:

 

One State Street Plaza

29th Floor

New York, New York 10004

Attn: Morris Wolfson

 

with a copy to:

 

Olshan Grundman Frome Rosenzweig & Wolosky LLP

505 Park Avenue

New York, New York 10022

Attn:  Steven Wolosky, Esq.

 

14

 

	
   

  	
   (b)

  	
  If to GLY:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

14.           Headings;
Execution in Counterparts. The headings and captions contained herein are
for convenience of reference only and shall not control or affect the meaning
or construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.

 

15.           Entire
Agreement. This Agreement, including any exhibits hereto and the documents
and instruments referred to herein and therein, embodies the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

 

16.           Attorneys’
Fees.  If any legal action or any
arbitration or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default or misrepresentation
in connection with any of the provisions of this Agreement, the successful or
prevailing party or parties shall be entitled to recover such reasonable
attorneys fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it or they may be entitled, as may be
ordered in connection with such proceeding.

 

17.           Successors
and Assigns.  This Agreement shall
be binding upon the parties hereto and their successors and assigns.

 

[Remainder of this page intentionally left
blank.]

 

15

 

[REGISTRATION RIGHTS AGREEMENT SIGNATURE
PAGE]

 

 

IN WITNESS WHEREOF, this Agreement has been signed by each of the
parties hereto as of the date first above written.

 

 

	
   

  	
  NESS TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Morris Wolfson

  
	
   

  	
   

  	
  Name:

  	
  Morris Wolfson

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  G.L.Y. High-Tech Investments Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Hagai Lavi

  
	
   

  	
   

  	
  Name:

  	
  Hagai Lavi

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Morris Wolfson Family Limited

  Partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Arielle Wolfson

  
	
   

  	
   

  	
  Name:

  	
  Arielle Wolfson

  
	
   

  	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/  Aaron Wolfson

  
	
   

  	
   

  	
  AARON WOLFSON

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/  Abraham Wolfson

  
	
   

  	
   

  	
  ABRAHAM WOLFSON

  
					

 

16

 

SCHEDULE I

 

 

Stockholders

 

GLY:

 

G.L.Y. High-Tech Investments Inc.

 

 

The Wolfson Group:

 

Morris Wolfson Family Limited Partnership

Aaron Wolfson

Abraham WolfsonExhibit 10.2

 

 

REGISTRATION RIGHTS AGREEMENT

 

 

dated as of May 13, 1999

 

 

between

 

 

NESS TECHNOLOGIES, INC.

 

 

AND

 

 

VELSTON PTE. LTD.

 

 

REGISTRATION RIGHTS AGREEMENT,
dated as of May 13, 1999, between NESS TECHNOLOGIES, INC., a Delaware
corporation (the “Company”), and VELSTON PTE. LTD., a Singapore
corporation.  The Company has agreed to
provide registration rights with respect to the Registrable Securities (as
hereinafter defined) on the terms set forth in this Agreement.

 

The parties hereto agree as follows:

 

1.             Definitions.

 

As used in this Agreement, the following capitalized terms shall have
the following meanings:

 

“Commission” shall mean the Securities and Exchange Commission.

 

“Common Stock” means the common stock, par value  $.01 per share, of the Company.

 

“Demand Registration” shall have the meaning assigned to such
term in Section 3 hereof.

 

“Permitted Transferee” of Velston shall mean a transferee of
Registrable Securities that is a “Permitted Transferee” of a member of Velston
within the meaning of the Securities Sale Agreement among The Wolfson Group (as
defined therein) and Velston, dated as of the date hereof, provided such
transferee agrees in writing to be bound by the terms and conditions of this
Registration Rights Agreement.

 

“Person” shall mean an individual, partnership, corporation,
business trust, joint state company trust, unincorporated organization, joint
venture, a government authority or other entity of whatever nature.

 

“Prospectus” shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments to the
Registration Statement of which such Prospectus is a part, and all material
incorporated by reference in such Prospectus.

 

“Registrable Securities” shall mean the Securities, but only so
long as they remain Restricted Securities.

 

“Registration Expenses” shall have the meaning ascribed thereto
in Section 7 hereof.

 

“Registration Statement” means any registration statement of the
Company which covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus,

 

 

amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference in such Registration Statement.

 

“Restricted Securities” means, with respect Velston and each
Permitted Transferee, if any,  the
Registrable Securities unless and until, in the case of any such Securities,
(i) they have been effectively registered under the Securities Act and disposed
of in accordance with the Registration Statement covering them, (ii) they are
distributed to the public, or all of the Registrable Securities held Velstonor
each Permitted Transferee, if any, are eligible to be sold in any one day,
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (iii) they are otherwise freely transferable without
restriction under the Securities Act.

 

“Securities” shall mean any and all shares of Common Stock now
held by Velston.

 

“Securities Act” shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

 

“Velston” shall mean Velston Pte. Ltd., a Singapore corporation,
and its Permitted Transferees.

 

2.             Securities
Subject to this Agreement.  The
Securities entitled to the benefits of this Agreement are the Registrable
Securities.

 

3.             Demand
Registration.

 

(a)           Request
for Registration. Subject to the provisions of Section 3(b) hereof, at
any time after six months following the consummation of an underwritten public
offering under the Securities Act by the Company of its Common Stock, holders
representing a majority in interest of the Registrable Securities may make a
written request to the Company for registration under and in accordance with
the provisions of the Securities Act of all or part (but not less than 20%) of
the Registrable Securities owned by such holder or holders (a “Demand
Registration”) provided (i) that the value of shares of Common Stock proposed
to be registered (based upon the proposed gross offering price thereof net of
selling expenses) is at least $3,000,000 and (ii) that at least twelve (12)
months shall have elapsed since the last time a Demand Registration has been
requested by such holder or holders under this Section 3(a) if such a
request has previously been made by such holder or holders under this
Section 3(a). Within five (5)
Business days after receipt of such request, the Company shall give written
notice (the “Notice”) of such request to all other holders of Registrable
Securities and will include in such registration all Registrable Securities
with respect to which the Company receives written requests for inclusion
therein within twenty (20) business days after it gives the Notice to the
applicable holder.  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 requesting holders, 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 (if such method of disposition shall be an underwritten
public offering), such inclusion would adversely affect the marketing of the
Securities to be sold.  Notwithstanding
anything to the contrary contained herein, no request may be

 

2

 

made under this Section 3(a) within 120 days after the effective
date of a Registration Statement filed by the Company covering a firm
commitment underwritten public offering in which the holders of Registerable
Securities shall have been entitled to join pursuant to Section 4 and in
which there shall have been effectively registered all shares of Registerable
Securities as to which registration shall have been requested.

 

(b)           Number
of Registrations. Velston is entitled to two (2) Demand Registrations
regardless of the Person or Persons making demand.  Velston agrees that if the Company determines that there are
material developments which the Company determines require the filing of a
post-effective amendment to the Registration Statement, then Velston agrees to
refrain from selling any Registrable Securities until the post-effective
amendment is declared effective.  The
Company agrees to file and attempt to have declared effective such
post-effective amendment as soon as possible. 
Notwithstanding the foregoing, (i) if the Board of Directors of the
Company determines in its good faith judgment, after consultation with a firm
of nationally recognized underwriters, that there will be an adverse effect on
a then contemplated public offering of the Company’s equity securities, the
Company may defer the filing of the Registration Statement which is required to
effect any registration and may withdraw any Registration Statement without
thereby incurring any liability to the holders of Registerable Securities and
(ii) if the Company shall at any time furnish to a holder of Registrable
Securities who requests registration of a certificate signed by the President
of the Company or any other officer of the Company stating that the Company has
pending or in process a material transaction, the disclosure of which would, in
the good faith judgment of the Board of Directors of the Company, materially
and adversely affect the Company, the Company may defer the filing of a
Registration Statement for up to 90 days. 
The Company shall not be deemed to have effected a Demand Registration
unless and until such Demand Registration is declared effective (provided that
a registration which is withdrawn by or at the request of Velston, the expenses
of which are borne by Velston, shall not be deemed to be a registration
pursuant to this Section 3, and provided further, that a registration
which is withdrawn by Velston, the expenses of which are borne by the Company,
shall be deemed to be a completed, effective registration for purposes of this
Section 3).

 

(c)           Priority
on Demand Registrations. If the managing underwriter or underwriters of a
Demand Registration (or in the case of a Demand Registration not being
underwritten, Velston) advise the Company in writing that in its or their
opinion the principal amount and/or number of Securities proposed to be sold in
such Demand Registration exceeds the principal amount and/or number of
Securities which can be sold in such offering without an adverse effect on such
offering, the Company will include in such registration only the number of
securities which, in the opinion of such underwriter or underwriters (or
Velston, as the case may be) can be sold, selected by Velston; provided, that
if no more than 30% of the Registrable Securities that Velston has requested to
be included in such Demand Registration pursuant to this Section 3 are so
included, Velston shall be entitled to an additional Demand Registration hereunder
(with all expenses of registration relating to such additional Demand
Registration to be borne by the Company) on the same terms and conditions as
would have applied to Velston had such earlier Demand Registration not been
made.

 

(d)           Selection
of Underwriters and Counsel. If any Demand Registration is an underwritten
offering with respect to any issue of Registrable Securities, Velston will
select the investment banker or bankers and manager or managers to administer
the offering and one counsel to the sellers of

 

3

 

such Registrable Securities in such offering; provided, that
such investment bankers and managers be of nationally recognized standing and
reasonably satisfactory to the Company. 
Velston shall pay all underwriting discounts and commissions of such
investment banker or bankers and manager or managers with respect to the
Registrable Securities of Velston sold pursuant to such Demand Registration .
The Company shall pay the reasonable fees and expenses of one such counsel to
the sellers of such Registrable Securities incurred in connection with
reviewing and otherwise acting in connection with the registration statement
relating to such underwritten public offering.

 

(e)           Form
S-3 Registration.

 

In case the Company shall receive from Velston a written request that
the Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part (but not less than 20%)  of the Registrable Securities owned by
Velston, the Company will:

 

(A)          as soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of Velston’s Registrable Securities as are specified in such request;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 3(e):
(i) if Form S-3 is not available for such offering by Velston; (ii) if Velston,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any underwriters’
discounts or commissions) of less than $3,000,000; (iii) if the Company shall
furnish to Velston a certificate signed by the President of the Company stating
that in the good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its shareholders for such
Form S-3 Registration to be effected at such time, in which event the Company
shall have the right to defer the filing of the Form S-3 registration statement
for a period not greater than 90 days after receipt of the request of Velston
under this Section 3(e); (iv) if the Company has, within the six (6) month
period preceding the date of such request, effected a registration for Velston
pursuant to Section 3(a) or this Section 3(e), (v) if the Company has
already effected two registrations on Form S-3 for Velston pursuant to this
Section 3(e); or (iv) in any particular jurisdiction in which the Company
would be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance.

 

Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or
requests of Velston.  Registrations
effected pursuant to this Section 3(e) shall not be counted as demands for
registration or registrations effected pursuant to Section 3(a).

 

4

 

4.             Piggyback
Registration Rights.

 

(a)           If
the Company, at any time or from time to time subsequent to the closing date of
the initial public offering by the Company of its Common Stock, proposes to
register any securities under the Securities Act either for its own account or
the account of any selling security holders (other than pursuant to
Section 3 and other than pursuant to a registration statement on Forms S-4
or S-8 or any successor or similar forms), it will give written notice to Velston
of its intention at least twenty (20) days in advance of the filing of any
registration statement with respect thereto. Upon the written request of
Velston given within fifteen (15) days after receipt of such notice, the
Company, subject to Section 4(b) below, will use its best efforts to cause
the Registrable Securities so requested to be registered, to be so
registered.  The Company shall have the
right, in its sole discretion, to terminate or withdraw any registration initiated
by it under this Section 4 prior to the effectiveness of such registration
whether or not Velston has elected to include securities in such registration.

 

(b)           Underwritten
Offerings.

 

(i)            In the case of an
underwritten offering by the Company of securities, the Company shall, with
respect to Securities that Velston then desires to sell, enter into an
underwriting agreement with the same underwriters engaged by the Company with
respect to securities being offered by the Company and use its best efforts to
cause such underwriters to include in any such underwriting all of the
Securities that Velston then desires to sell; provided, however,  that such underwriting agreement is in
substantially the same form as the underwriting agreement that the Company
enters into in connection with the primary offering it is making.

 

(ii)           If the managing
underwriter with respect to such underwritten offering requests in writing that
the number of securities to be offered by selling security holders be
reduced because in the judgment of the managing underwriter the offering would
be materially and adversely affected, then such securities shall be reduced by
such amount as the managing underwriter may determine in writing so as to not
materially and adversely affect the proposed offering, which reduced number of
securities shall be included in the offering selected, first, from Velston and
the Holders (G.L.Y. High-Tech Investments Inc., Morris Wolfson Family
Partnership, L.P., Aaron Wolfson and Abraham Wolfson, to the extent that they
hold Registrable Securities, in this instance as that term is defined in that
certain Registration Rights Agreement dated as of March 26, 1999, among
the Company and the stockholders listed above) participating in such offering,
as nearly as possible pro rata, based on the number of Registrable Securities
Velston and such Holders have requested to be included therein, and, next, to
the extent available, among any other selling security holders.

 

(c)           The
holders of a majority of the Registrable Securities and any other securities,
if any, to be included in such registration will select one counsel to the
sellers of such Registrable Securities in such offering.  The Company shall pay the reasonable fees
and expenses of one such counsel to the

 

5

 

sellers of such Registrable Securities (up to $10,000) incurred in
connection with reviewing and otherwise acting in connection with the
registration statement relating to such offering.

 

5.             Information.
Upon making a request pursuant to Section 3 or 4, Velston shall specify
the number of shares of Registrable Securities to be registered on its behalf
and the intended method of disposition thereof; provided, however,
that if the sellers of a majority of the Registrable Securities included in
such requests for registration specify one particular type of underwritten
offering, such method of disposition shall be the type of underwritten offering
or a series of such underwritten offerings used in connection with the
disposition of the Securities pursuant to such Registration Statement as the
sellers of a majority of the Registrable Securities may elect during the time
period the Registration Statement is effective.

 

The Company may require Velston to furnish to the Company such
information regarding itself and the distribution of Registrable Securities as
the Company may from time to time reasonably request in writing in order to
comply with the Securities Act.  Velston
agrees to notify the Company as promptly as practicable of any inaccuracy or
change in information it has previously furnished to the Company.

 

6.             Registration
Procedures. If and whenever the Company is required by the provisions of
Section 3 to effect a registration under the Securities Act, the Company
will, at its expense, as expeditiously as practicable, but in no event later
than 30 days after receipt of a request for registration pursuant to the terms
of Section 3:

 

(a)           In
accordance with the Securities Act and the rules and regulations of the
Commission, prepare and file with the Commission a Registration Statement in
the form of an appropriate registration statement with respect to the
Registrable Securities and use its best efforts to cause such Registration
Statement to become and remain continuously effective until the earlier of
(i) all of the Registrable Securities covered by such Registration Statement
have been sold in accordance with the intended methods of disposition of the
seller or sellers set forth in such Registration Statement and (ii) the
end of a period from the date that such Registration Statement has been
declared effective of one hundred eighty (180) days in the case of a
Registration Statement on Form S-3 or sixty (60) days in all other cases,
unless the Company in its good faith judgment reasonably believes that the
continued effectiveness of such Registration Statement would materially and
adversely affect the financial condition of the Company in view of the
disclosures of any pending litigation, claim, assessment or governmental
investigation which may be required thereby and that the failure to disclose
any material information with respect to the foregoing would cause a violation
of the Securities Act; provided that, if for any portion of such period
the Registration Statement is not effective, then such requirement for
maintaining the effectiveness of the Registration Statement shall be extended
by the length of such interruption(s), and shall 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 during such period;

 

6

 

(b)           Furnish
to Velston, if it is participating in such registration (each of such persons
participating in the registration being referred to herein as a “Participant”
in such registration), such reasonable number of copies of the Registration
Statement and Prospectus and such other documents as such Participant may
reasonably request in order to facilitate the public offering of the
Registrable Securities;

 

(c)           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 as such Participants may reasonably request, provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified or to subject itself to taxation in connection with any
such registration or qualification of such Securities;

 

(d)           Notify
the Participants in such registration, 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;

 

(e)           Notify
the Participants in such registration promptly of any request by the Commission
for the amending or supplementing of such Registration Statement or Prospectus
or for additional information;

 

(f)            Prepare
and file with the Commission, promptly upon the request of any Participant in
such registration, the Registration Statement and any amendments or supplements
to such Registration Statement or Prospectus which, in the reasonable opinion
of counsel for such Participants, is required under the Securities Act or the
rules and regulations thereunder in connection with the distribution of the
Securities by such Participants or to otherwise comply with the requirements of
the Securities Act and such rules and regulations;

 

(g)           Prepare
and promptly file with the Commission and promptly notify the Participants in
such registration 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 has
occurred as the result of which any such Prospectus or any other Prospectus
then in effect may 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;

 

(h)           Advise
the Participants in such registration, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order by the
Commission 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;

 

7

 

(i)            Otherwise
use its best efforts to comply with all applicable rules and regulations of the
Commission, and make generally available to the Company’s security holders
earnings statements satisfying the provisions of Section 11(a) of the
Securities Act, no later than forty-five (45) days after the end of any twelve
(12) month period (or ninety (90) days, if such a period is a fiscal year)
beginning with the first month of the Company’s first fiscal quarter commencing
after the effective date of a Registration Statement;

 

(j)            Not
file any amendment or supplement to such Registration Statement or Prospectus
to which a majority in interest of the Participants in such registration has
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 five business days prior to the filing thereof unless the Company shall
have obtained an opinion of counsel that such amendment is required under the
Securities Act or the rules or regulations adopted thereunder in connection
with the distribution of Securities by the Company or the Participants.

 

7.             Expenses
of Registration. All expenses of the Company incident to the Company’s
performance of or compliance with the provisions of Sections 3, 4, 5 and 6 of
this Agreement shall be borne by the Company including without limitation:

 

(a)           All
registration and filing fees;

 

(b)           Fees
and expenses of compliance with all securities or blue sky laws (including fees
and disbursements of counsel for the Company in connection with blue sky
qualifications of the Registrable Securities; provided, however,
that the Company shall not be required to consent to general service of process
in any such state);

 

(c)           Printing,
messenger, telephone and delivery expenses; and

 

(d)           Fees
and disbursements of counsel for the Company and its independent auditors.

 

Nothing in this Section 7 shall be deemed to require the Company
to pay or bear any expenses of any Participant’s attorneys or accountants or
any other personal expenses or any underwriting discounts, selling commissions
or similar fees of the Participants if such registration results in an
underwritten public offering of all or any portion of the Registrable
Securities, except as otherwise set forth herein.

 

8.             Indemnification
and Contribution.

 

(a)           Indemnification
by the Company. Whenever, pursuant to Section 3 or 4, a Registration
Statement relating to the Registrable Securities is filed under the Securities
Act, the Company will (except as to matters covered by Section 8(b)
hereof) indemnify and hold harmless each Participant in the registration, each
of their officers, directors and employees, each underwriter of such
Registrable Securities, and each Person, if any, who controls any such Person
(collectively, the “Participant Indemnitees” and, individually, a “Participant
Indemnitee”), against any losses, claims, damages or liabilities, joint or
several,

 

8

 

to which such Participant Indemnitees may become subject under the
Securities Act 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
such Registration Statement, or 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, and will reimburse
each Participant Indemnitee for all legal or other expenses reasonably incurred
by it in connection with investigating or defending against such loss, claim,
damage, liability or action; provided, however, that the Company
will not be liable in any such case if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by any such seller, any such underwriter
or any such controlling person in writing specifically for use in such registration
statement or prospectus.

 

(b)           Indemnification
by Participants.  Each Participant
in such registration will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the Registration Statement and
each other person, if any, who controls the Company, within the meaning of the
Securities Act, each underwriter participating in such registration and each
Person who controls any such underwriter, within the meaning of the Securities
Act (collectively, the “Company Indemnitees” and, individually, a “Company
Indemnitee”) and each other Participant Indemnitee against all losses, claims,
damages or liabilities, joint or several, to which any of the Company
Indemnitees or the other Participant Indemnitees may become subject under the
Securities Act 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
such Registration Statement, or 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, but only if, and to
the extent that, such statement or omission was in reliance upon and in
conformity with written information furnished to the Company by such
Participant specifically for use in the preparation thereof.

 

(c)           Indemnification
Procedures. Promptly after receipt by a Participant Indemnitee or a Company
Indemnitee (collectively, “Indemnitees” and, individually, an “Indemnitee”)
under Section 8(a) or 8(b) hereof of notice of the commencement of any
action, such Indemnitee will, if a claim in respect thereof is to be made
against the indemnifying party under such clause, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
which it may have to any Indemnitee otherwise than under such clauses. In case
any such action shall be brought against any Indemnitee, and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled 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 satisfactory to such Indemnitee, and after notice
from the indemnifying party to such Indemnitee of its election to assume the
defense thereof, the indemnifying party shall not be liable to such Indemnitee
under such clause for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof other than reasonable costs
of investigation; provided, however, that the Indemnitee shall
have the right to employ one counsel to represent such Indemnitee if, in the
reasonable

 

9

 

judgment of such Indemnitee, it is advisable for such party to be
represented by separate counsel because separate defenses are available, or
because a conflict of interest exists between such indemnified and indemnifying
party in respect of such claim, and in that event the fees and expenses of such
separate counsel shall be paid by the indemnifying party. Notwithstanding the
foregoing, if the Company is an Indemnitee, the Company shall designate the one
counsel, and in all other circumstances, the one counsel shall be designated by
a majority in interest based upon the Registrable Securities of the
Indemnitees. For purposes of this Section 8 the terms “control,” and
“controlling person” have the meanings which they have under the Securities
Act.

 

(d)           Contribution.
If for any reason the foregoing indemnity is unavailable, or is insufficient to
hold harmless an Indemnitee, then the indemnifying party shall contribute to
the amount paid or payable by the Indemnitee as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the Indemnitee on the other from the registration or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, or provides a lesser sum to the Indemnitee than the amount hereinafter
calculated, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and the
Indemnitee on the other but also the relative fault of the indemnifying party
and the Indemnitee as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.

 

9.             “Stand-Off”
Agreement.  Velston, if requested by
the Company and the managing underwriter of an offering by the Company of
Registrable Securities pursuant to a Registration Statement, shall agree not to
sell publicly or otherwise transfer or dispose of any Registrable Securities
held by Velston for at least 180 days following the effective date of such
Registration Statement; provided, that:

 

(a)           such
agreement shall only apply to the Company’s first Registration Statement
covering Common Stock to be sold to the public in an underwritten offering, any
other Registration Statement covering Common Stock to be sold to the public in
an underwritten offering that becomes effective in the two year period after
the effectiveness of such first Registration Statement and any subsequent
underwritten registration in which Velston is given the opportunity to
participate; and

 

(b)           all
holders holding not less than the number of shares of Registrable Securities
held by Velston and all officers and directors of the Company enter into
similar agreements.

 

10.           Amendment
and Modification. This Agreement may be amended, modified or supplemented
in any respect only by written agreement by the Company and Velston.

 

11.           Governing
Law. This Agreement and the rights and obligations of the parties hereunder
shall be governed by, and construed and interpreted in accordance with, the
laws of the State of Delaware, without giving effect to the choice of law
principles thereof.

 

10

 

12.           Invalidity
of Provision. The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction.

 

13.           Notices.
All notices and other communications hereunder shall be in writing and, unless
otherwise provided herein, shall be deemed duly given if delivered personally
or mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses or at such other address for the party as
shall be specified by like notice:

 

(a)           If
to the Company at:

 

One State Street Plaza

29th Floor

New York, New York 10004

Attn: Morris Wolfson

 

with a copy to:

 

Olshan Grundman Frome Rosenzweig & Wolosky LLP

505 Park Avenue

New York, New York 10022

Attn:  Steven Wolosky, Esq.

 

 

(b)  If to Velston:

 

65 Chulia Street

#31-03 OCBC Center

Singapore 049513

 

14.           Headings;
Execution in Counterparts. The headings and captions contained herein are
for convenience of reference only and shall not control or affect the meaning
or construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.

 

15.           Entire
Agreement. This Agreement, including any exhibits hereto and the documents
and instruments referred to herein and therein, embodies the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

 

11

 

16.           Attorneys’
Fees.  If any legal action or any
arbitration or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover such
reasonable attorneys fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be
entitled, as may be ordered in connection with such proceeding.

 

17.           Successors
and Assigns.  This Agreement shall
be binding upon the parties hereto and their successors and assigns.

 

[Remainder of this page intentionally left
blank.]

 

12

 

[REGISTRATION RIGHTS AGREEMENT SIGNATURE
PAGE]

 

 

IN WITNESS WHEREOF, this Agreement has been signed by each of the
parties hereto as of the date first above written.

 

 

	
   

  	
  NESS TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Morris Wolfson

  
	
   

  	
   

  	
  Name:

  	
  Morris Wolfson

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  VELSTON PTE. LTD.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Yoav Schwalb

  
	
   

  	
   

  	
  Name:

  	
  Yoav Schwalb

  
	
   

  	
   

  	
  Title:

  	
  Director

  

 

13

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