As filed with the Securities and Exchange Commission on June 5, 1996.
File No. 333-____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------------
GREENTREE SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 13-2897997
(State or other jurisdiction (I.R.S. Employer Identification No.)
of organization)
2801 Fruitville Road, Suite 180, Sarasota, Florida 34237 (941) 954-2210
(Address and telephone number of registrant's principal executive offices)
--------------------------------
John J. Medico
President and Chief Executive Officer
Greentree Software, Inc.
2801 Fruitville Road, Suite 180
Sarasota, Florida 34237
(941) 954-2210
(Name, address and telephone number of agent for service)
with copies to:
Julio E. Vega, Esq.
Bingham, Dana & Gould LLP
150 Federal Street
Boston, Massachusetts 02110
(617) 951-8000
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price Offering Registration
be Registered Registered Per Share* Price* Fee
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Common Shares
$.04 Par Value(1)(2) 5,365,012 $.70 $3,755,508 $1,295
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(1) Estimated solely for the purpose of determining the registration fee.
Calculated in accordance with Rule 457(c) based on the average of the
high and low prices reported on the OTC Bulletin Board on June 3, 1996.
(2) Includes 581,824 Common Shares being registered for resale by certain
Selling Shareholders of Common Shares issuable upon exercise of
Common Share Purchase Warrants.
<PAGE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
Subject to Completion, Dated June 5, 1996
P R O S P E C T U S
GREENTREE SOFTWARE, INC.
5,365,012 Shares of
Common Shares, $.04 Par Value
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This Prospectus ("Prospectus") of Greentree Software, Inc., a New York
corporation (the "Company"), relates to up to 5,365,012 shares (the "Shares")
of the Company's common shares, $.04 par value per share (the "Common Shares"),
being sold by certain shareholders of the Company (the "Selling Shareholders"),
including certain directors and officers of the Company, for their respective
accounts. See "Selling Shareholders." The Company will not receive any proceeds
from the sale of Shares by the Selling Shareholders. The Common Shares are
traded on the OTC Bulletin Board under the symbol "GTSW." On June 3, 1996, the
last reported sale price of the Common Shares on the OTC Bulletin Board was
$.75 per share.
-----------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-----------
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Underwriting Proceeds to Selling
Price to Public Discounts Shareholders
and Commissions
- --------------------------------------------------------------------------
Per Share (l) (1)(2) (1)(2)
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Total (1) (1)(2) (1)(2)
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(1) The sale or distribution of the Shares may be effected by the Selling
Shareholders through one or more underwriters, brokers, dealers or agents
from time to time in one or more transactions (which may involve crosses or
block transactions) in the over-the-counter market. Any of such
transactions may be effected at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at varying prices
determined at the time of sale or at negotiated or fixed prices, in each
case as determined by agreement between the Selling Shareholder and
underwriters, brokers, dealers or agents, or purchasers. Transactions
effected by selling Shares to or through underwriters, brokers, dealers or
agents, such underwriters, brokers, dealers or agents may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders or commissions from purchasers of Shares for whom they
may act as agent (which discounts, concessions or commissions as to
particular underwriters, brokers, dealers or agents may be in excess of
those customary in the types of transactions involved). The Selling
Shareholders and any brokers, dealers or agents that participate in the
distribution of the Shares may be deemed to be underwriters, and any profit
on the sale of Shares by them and any discounts, concessions or commissions
received by any such underwriters, brokers, dealers or agents may be deemed
to be underwriting discounts and commissions under the Securities Act of
1933, as amended (the "Securities Act").
<PAGE>
Under the securities laws of certain states, the Shares may not be sold
unless the Shares have been registered or qualified for sale in such state
or an exemption from registration or qualification is available and is
complied with.
The Company will pay all of the expenses incident to the registration,
offering and sale of the Shares to the public hereunder other than
commissions, fees and discounts of underwriters, brokers, dealers and
agents. The Company has agreed to indemnify the Selling Shareholders
against certain liabilities, including liabilities under the Securities
Act.
Certain of the underwriters, dealers, brokers or agents may have other
business relationships with the Company and its affiliates in the ordinary
course.
See "Plan of Distribution" and "Selling Shareholders."
(2) The Company has agreed to prepare and file this Prospectus and the related
Registration Statement and supplements and amendments thereto required by
the Securities Act with the Securities and Exchange Commission, to register
and qualify the Shares if required under applicable Blue Sky laws, and to
deliver copies of the Prospectus to the Selling Shareholders. The expenses
incurred in connection with the same, estimated at $57,295, will be
borne by the Company. The Company will not be responsible for any
discounts, concessions, commissions or other compensation due to any broker
or dealer in connection with the sale of any of the Shares offered hereby,
which expenses will be borne by the Selling Shareholder.
The date of this Prospectus is June 5, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and other
information concerning the Company may be inspected and copies may be obtained
(at prescribed rates) at public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and at Northwest Atrium Center, 500
W. Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can also be obtained from the Public Reference Section, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, upon
payment of prescribed rates.
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act with the Commission with
respect to the Common Shares being offered pursuant to this Prospectus. As
permitted by the rules and regulations of the Commission, this Prospectus omits
certain of the information contained in the Registration Statement. For further
information with respect to the Company and the Common Shares being offered
pursuant to this Prospectus, reference is hereby made to such Registration
Statement, including the exhibits filed as part thereof. Statements contained in
this Prospectus concerning the provisions of certain documents filed with, or
incorporated by reference in, the Registration Statement are not necessarily
complete, each such statement being qualified in all respects by such reference.
Copies of all or any part of the Registration Statement, including the documents
incorporated by reference therein or exhibits thereto, may be obtained upon
payment of the prescribed rates at the offices of the Commission set forth
above.
Upon request, the Company will provide without charge to each person to
whom a copy of this Prospectus has been delivered a copy of any information that
was incorporated by reference in the Prospectus (other than exhibits to
documents, unless such exhibits are specifically incorporated by reference into
the information incorporated by reference in the Prospectus). The Company will
also provide upon specific request, without charge to each person to whom a copy
of this Prospectus has been delivered, a copy of all documents filed from time
to time by the Company with the Commission pursuant to the Exchange Act.
Requests for such copies should be directed to Arnold Muhlbach, 2801 Fruitville
Road, Suite 180, Sarasota, Florida 34237 Telephone requests may be directed to
the Secretary at (941) 954-2210.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There is incorporated herein by reference the Annual Report on Form 10-KSB
of the Company for the fiscal year ended May 31, 1995 and the Quarterly Reports
on Form 10-QSB of the Company for the fiscal quarters ended August 31, 1995,
November 30, 1995 and February 29, 1996, and the Current Reports of the Company
filed on Form 8-K dated August 24, 1995, October 27, 1995, December 6, 1995 and
May 29, 1996 filed with the Commission pursuant to Section 13(a) of the Exchange
Act, and the description of the Common Shares contained in the Company's
Registration Statement on Form 8-A filed with the Commission pursuant to Section
12(g) of the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15 (d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Shares shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing such documents. Any statement contained herein, or in a document
all or a portion of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document or portion thereof which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
<PAGE>
RISK FACTORS
In considering whether to purchase any of the Shares offered hereby,
prospective investors should carefully consider the following risk factors,
among others discussed herein:
History of Losses and Accumulated Deficit; Declining Revenues; Uncertainty
of Future Profitability. The Company had a net loss of approximately $2.4
million for the fiscal year ended on May 31, 1995 and had an accumulated deficit
at May 31, 1995 of approximately $11.2 million. The Company had a net loss of
approximately $772,000 for the nine months ended on February 29, 1996 and had an
accumulated deficit of approximately $12 million at February 29, 1996. The
Company has experienced ongoing losses from operations and expects that such
losses will continue for at least some period until product sales may be
generated in sufficient volume to offset expenses. For the fiscal year ended May
31, 1995, the Company had revenues of $558,982. For the nine months ended
February 29, 1996, the Company has had revenues of $102,778 compared with
$261,337 for the same period in 1995. There can be no assurance the Company's
revenues will continue at all or will grow sufficiently to achieve
profitability. The Company does not expect to be profitable at all unless and
until such time as sales of its software products generate sufficient revenue to
fund its operations.
Capital Requirements; Uncertainty of Additional Funding. At May 15, 1996
the Company had a cash balance of approximately $315,000. Predicting the costs
of the ongoing development of the Company's software product and of the
expansion of its sales force and other required personnel, as well as its
working capital and other capital needs, is difficult. There can be no assurance
that revenues, if any, generated by the Company from the sale of its software
product will be adequate to complete the development of its software product and
to expand its sales force. The Company anticipates that it may have to raise
additional capital to fund continued operations. There can be no assurance that
any such required capital would be available on acceptable terms, if at all. If
the Company is unable to raise such additional capital on acceptable terms, it
could have to discontinue operations and liquidate. It is highly likely that
investors would lose all of their investment in the event of any liquidation of
the Company's assets.
GT Purchase PRO Software. The Company has invested heavily in research for,
and development of, its core purchasing and materials management software system
- - GT Purchase PRO. The product was initially made available for delivery to the
market at the end of the fourth quarter of fiscal 1994. The orders received to
date for the earlier GT Purchase PRO product have been significantly lower than
expected by management. Management believes that this was due primarily to a
variety of problems which were partly created by one of the development tools
used to develop the initial product. The Company, through the use of independent
contractors over which the Company has only limited control, has recently
completed the development of a new version of the GT Purchase PRO product ("GT
Purchase PRO 5.0"). The Company believes the software development toolset used
to produce GT Purchase PRO 5.0 has corrected the performance problems associated
with the prior version of the product; however, there can be no assurance that
(i) such performance problems have been completely eliminated; (ii) any further
required development work will be completed on a timely basis; (iii) there will
be satisfactory acceptance of the new product into the marketplace; or (iv)
revenues from this new product will be realized in any material amounts, if at
all, and, if realized, when. GT Purchase PRO 5.0, as with any new software
product, has contained, and in the future may contain, "bugs." There is no
assurance that all significant bugs have been or will be identified and, if
identified, eliminated.
Litigation. On February 12, 1996, the Company was sued by Parera
Information Services, Inc. in the United States District Court for the District
of Massachusetts. Parera and the Company were parties to a software development
agreement. The complaint seeks damages for breach of contract, alleged copyright
infringement, misrepresentation and violation of the Massachusetts Consumer
Protection Act. Additionally, Parera seeks injunctive relief prohibiting the
Company from marketing its GT Purchase PRO Version 5.0 software, declaring
Parera as the owner of the software and freezing the Company's assets. The
Company disputes Parera's claims and plans to vigorously defend this matter.
Additionally, the Company anticipates filing counterclaims against Parera.
<PAGE>
The Company believes that all of the claims alleged by Parera in its
complaint are either without merit or subject to counterclaims that the Company
has against Parera. The Company intends to vigorously defend the lawsuit and
expects to prevail or obtain a favorable settlement. However, there can be no
assurance that the lawsuit will be decided or resolved in the Company's favor.
Although the Company believes the foregoing action will ultimately be settled in
its favor, it is too early to determine with any accuracy what the actual
outcome may be. Should Parera be successful in obtaining judgments in its favor,
including any substantial monetary damages or a temporary or permanent
injunction with regard to the Company's products, the Company could be forced to
discontinue operations and seek liquidation. In addition, the Company has very
limited financial and other resources with which to respond and defend the above
action.
New Management, Ability to Recruit Sales, Service and Implementation
Personnel. The Company's new management have a very limited history in operating
the Company or experience in managing a company with the problems and of the
size and stage of development of the Company. There can be no assurance that the
Company's management will be successful in meeting their planned objectives for
the Company. The ability to achieve anticipated revenues is substantially
dependent on the ability of the Company to attract on a timely basis and retain
skilled personnel, especially key management, sales, service and implementation
personnel. The Company believes that its future success will depend in large
part on its ability to attract and retain highly skilled technical, managerial,
marketing and professional services personnel to ensure the quality of products
and services provided to its customers. Competition for such personnel, in
particular for product development and implementation personnel, is intense, and
the Company competes in the market for such personnel against numerous
companies, including larger, more established companies with significantly
greater financial resources than the Company. There can be no assurance that the
Company will be successful in attracting and retaining skilled personnel. The
Company's inability to attract and retain qualified employees would have a
material adverse effect on the Company's business.
Substantial Competition. The software field is a growing one and, in
addition to the computer manufacturers which also offer software products
performing functions similar to the Company's products, a large number of
publishing companies and software developers are introducing new software
programs and systems into the market. Existing competitive products offered by
companies with greater financial or marketing resources, and additional
competitive products that may be developed in the future, could adversely impact
and limit the Company's revenues. There can be no assurance that competitors do
not have or will not offer or develop products that are superior to the
Company's products or that achieve greater market acceptance. In addition,
suppliers of relational database management systems and companies that develop
management information software applications for large multinational
manufacturers have begun to target the firms targeted by the Company and offer
applications that compete in the Company's markets. As a result, competition
(including price competition) is likely to increase substantially, which may
result in price reductions and loss of market share. The Company may also face
market resistance from potential customers from the large installed base of
legacy systems, who may be reluctant to commit the time and resources necessary
to convert to an open systems-based client/server software product. As the
client/server computing market expands, a large number of companies, many with
significantly greater resources than the Company, may enter the market or
increase their market share by acquiring or entering into alliances with
competitors of the Company. There can be no assurance that the Company will be
able to compete successfully against its competitors or that the competitive
pressures faced by the Company will not adversely affect its financial
performance.
The Company sells in a highly fragmented market consisting of a few large
multinational suppliers and a much larger number of small, regional competitors.
The Company believes that its industry will experience consolidation which may
further increase the competitive pressures facing similar companies. In order to
compete effectively in the broad markets which the Company presently targets,
the Company will need to continue to grow and attain sufficient size to ensure
that it can develop new products, in a timely basis, in response to evolving
technologies and customer demands and sell such products to a variety of
manufacturing industries worldwide. No assurance can be given that the Company
will be able to grow sufficiently to enable it to compete effectively.
The Company believes that its history of financial and product performance
problems has negatively affected its image in the marketplace and that it has
lost potential business from potential clients who expressed concerns about the
Company's current financial status and ability to remain solvent. It is
impossible to predict what effect these issues may have on the Company's future
market image, overall competitiveness and ability to market its products.
<PAGE>
Dependence on One Product. Substantially all of the Company's revenues are
expected to be derived from the sale of its GT Purchase PRO 5.0 and related
support services. Accordingly, any event that adversely affects fees from such
product or fees derived from the sale of such product, such as competition from
other products, significant flaws in the product or incompatibility with third
party hardware or software products, negative publicity or evaluation, or
obsolescence of the hardware platforms or software environments in which the
product runs, could have a material adverse effect on the Company's results of
operations. The Company's future financial performance will depend on the
continued development and introduction of new and enhanced versions of GT
Purchase PRO 5.0 and other products, and on customer acceptance of such new
enhanced products.
Rapid Technological Change and New Products. The market for the Company's
software products is characterized by rapid technological advances, evolving
industry standards, changes in end-user requirements and frequent new product
introductions and enhancements. The introduction of products embodying new
technologies and the emergence of new industry standards could render the
Company's existing products and products currently under development obsolete
and unmarketable. Accordingly, the Company's future success will depend upon its
ability to enhance its current products and develop and introduce new products
that keep pace with technological developments, satisfy varying end-user
requirements and achieve market acceptance. Any failure by the Company to
anticipate or respond adequately to technological developments or end-user
requirements, or any significant delays in product development or introduction,
could severely damage the Company's competitive position and have an adverse
effect on revenues. There can be no assurance that the Company will be
successful in developing and marketing new products or product enhancements on a
timely basis or that the Company will not experience significant delays in the
future which could have a material adverse effect on the Company's results of
operations. In addition, there can be no assurance that new products or product
enhancements developed by the Company will achieve market acceptance. The
Company may need to expand its outside development agreements or recruit an
internal product development staff to meet these challenges. There can be no
assurance that the Company will be successful in hiring and training adequate
product development personnel to meet its needs.
Dependence on Third Party Software and Hardware. GT Purchase PRO 5.0
incorporates and uses software products and computer hardware and equipment
developed by other entities. The relational database management systems used in
the Company's products, and the operating systems on which the Company's
products can function, have been developed or are owned by third-party entities.
There can be no assurance that all of these entities will remain in business,
that such entities will continue to support these product lines, that their
product lines will remain viable or that these products will otherwise continue
to be available to the Company.
Dependence on Third Party Developers. The Company is currently relying on
the expertise and personnel provided by third party software developers for the
development of, and customization and installation work that is required in
connection with, GT Purchase PRO 5.0. There can be no assurance that the third
party developers will continue to provide services to the Company on acceptable
terms or at all. In the event that the Company would be unable in the future to
reach an agreement with the third party developers, the Company may incur
expense and delay in satisfying customer needs associated with recruiting a
suitable replacement group and negotiating an agreement on terms acceptable to
the Company. The failure to maintain a relationship with third party developers
could have a material adverse effect on the Company.
Intellectual Property and Proprietary Rights. The Company intends to rely
on a combination of copyright, trademark and trade secret laws, employee and
third party nondisclosure agreements and other industry standard methods for
protecting ownership of its proprietary software. There can be no assurance,
however, that, in spite of these precautions, an unauthorized third party will
not copy or reverse-engineer certain portions of the Company's products or
obtain and use information that the Company regards as proprietary. In addition,
the laws of some foreign countries do not protect the Company's proprietary
rights to the same extent as do the laws of the United States. There can be no
assurance that the mechanisms used by the Company to protect its software will
be adequate or that the Company's competition will not independently develop
software products that are substantially equivalent or superior to the Company's
software products. An independent software development group, with which the
Company had entered into a software development agreement, has recently filed
suit against the Company which claims, among other things, copyright
infringement and breach of contract. See RISK FACTORS - Litigation.
The Company expects that, as the number of software products in the
industry increases and the functionality of these products further overlaps,
software products will increasingly be subject to claims of infringement on
third party proprietary rights. Any such claim, whether with or without merit,
could result in costly litigation and require the Company to enter into royalty
or licensing arrangements. Such royalty or license arrangements, if required,
may not be available on terms acceptable to the Company or at all.
<PAGE>
NASD Requirements. The Common Shares are traded in the over-the-counter
market and reported in the National Association of Securities Dealers, Inc.'s
("NASD") OTC Bulletin Board or in the "pink sheets" as reported by the National
Quotation Bureau, Inc. However, because the bid price of the Common Shares has
consistently been below $5.00 per share, the Common Shares, when recommended by
a broker-dealer, are subject to the limitations of Rule 15g-9 under the Exchange
Act, which Rule imposes additional sales practices requirements on
broker-dealers which sell the Common Shares (1) to persons other than (a)
existing customers with a previous history of trading through such
broker-dealer, (b) institutional accredited investors (for example, a bank or
savings and loan association) and (c) a director and/or officer of the Company
and/or the beneficial owner of 5% or more of the Common Shares or (2) in
transactions not exempt by the Rule. For transactions under Rule 15g-9, the
broker-dealer must obtain written information from the prospective purchaser as
to his or her financial situation, investment experience and investment
objectives and, based on such information, reasonably determine that
transactions in the security are suitable for that person and that the
prospective investor (or his or her independent adviser) has sufficient
knowledge and experience in financial matters so as to be reasonably expected to
be capable of evaluating the risks of transactions in such security. The
broker-dealer must also receive the purchaser's written agreement to the
transaction prior to the sale. Certain broker-dealers, particularly if they are
market makers in the Common Shares, will have to comply with the disclosure
requirements of Rules 15g-2, 15g-3, 15g-4, 15g-5 and 15g-6 under the Exchange
Act. Consequently, Rule 15g-9 and these other Rules may adversely affect the
ability of broker-dealers to sell the Common Shares and also may adversely
affect the ability of purchasers in this offering to sell their shares in the
secondary market.
Shares Eligible for Future Sale. Assuming that the holders of the Company's
outstanding options and warrants exercise their respective securities, there
would be issued an aggregate of up to approximately 3,230,000 additional Common
Shares. Management of the Company is of the opinion that, if a substantial
number of such Common Shares were offered at one time, such an offering would
likely have an adverse effect on the market price for the Common Shares. In
addition, if the market price were to decline because of such an offering of
shares, management is of the opinion that such development would also adversely
affect the ability of the Company to raise additional capital in the equity
markets at a price and at a time favorable to the Company when and if such
financing was necessary in the future.
Authorized Shares. The Company currently has 15,000,000 authorized Common
Shares. After accounting for the warrants the Company is required to issue,
shares reserved under stock option plans, outstanding warrants and shares
required to be reserved under various warrant antidilution provisions, the
Company believes it will have approximately 1,476,000 authorized but unissued
shares available for raising any additional required capital. Any increase in
the Company's authorized Common Shares would require a shareholder vote at a
shareholder meeting. There can be no assurance that such remaining authorized
Common Shares will be sufficient to allow the Company to raise any additional
required capital or that the Company would have sufficient funds to pay the
expenses of a shareholder meeting and proxy solicitation for the purpose of
increasing the number of authorized shares. Furthermore, there can be no
assurance that any request for shareholder approval of an increase in the number
of authorized shares would be approved.
Dividends. In view of the cash requirements of the Company and the current
and anticipated operating losses, the Company does not intend to pay dividends
on the Common Shares in the foreseeable future.
<PAGE>
THE COMPANY
Greentree Software, Inc. designs, develops, markets and services purchasing
and materials management application specific software. Greentree introduced its
first purchasing software product in 1985, and has recently completed the
development of the base software product and related "core" modules of the
latest version of its GT Purchase PRO product, which is designed to be a
portable and scalable family of modules of client/server purchasing related
applications for use in small and medium-size organizations. The Company has and
intends to continue to design its latest generation software specifically for
the client/server model of computing and believes that its software offers
significant performance and functional advantages over competing purchasing
software products used in enterprise-level client/server environments. The
Company's software products are developed primarily with fourth generation
language rapid application tool sets which are designed specifically to take
advantage of national database management systems and Microsoft Windows(R).
The Company's principal executive offices are located at 2801 Fruitville
Road, Suite 180, Sarasota, Florida 34237 and its telephone number at those
offices is (941) 954-2210.
RECENT DEVELOPMENTS
Cash Balance; Liquidity; Financing
During March through May 1996, the Company sold 871,523 Common Shares at
$0.70 per share to accredited investors in transactions exempt from the
registration requirements of the Securities Act and received gross proceeds of
$610,066.10.
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Shareholders.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Shares as of June 4, 1996 and as adjusted to reflect the
sale of Common Shares offered hereby by each of the Selling Shareholders.
Except as set forth below, none of the Selling Shareholders has had any
position, office or other material relationship within the past three years with
the Company or its affiliates.
Shares Shares to be
Beneficially Beneficially Owned
Owned Prior to Shares After offering
Name of Selling Shareholder Offering (1) Offered (2) Percentage Number
- --------------------------- ------------ ----------- ---------- ------
T.I.S. Acquisition &
Management Group, Inc. 1,413,333 1,413,333 0 -
Larry E. Jeddeloh 83,333 83,333 0 -
George G. Sipp, Jr. 50,000 50,000 0 -
Allen Ginsberg 100,000 100,000 0 -
David W. Stutz 119,047 119,047 0 -
Joseph R. Garipoli 50,000 50,000 0 -
Richard Battaglino 85,000 85,000 0 -
Eric Peterson 333,333 333,333 0 -
Raymond James &
Associates, Inc.
Custodian for
Eric Peterson IRA 35,714 35,714 0 -
Donald O. Collins, Trustee
Donald O. Collins Rev. Trust 83,333 83,333 0 -
Mark W. Cahill 733,333 733,333 0 -
Primerica Life Insurance 666,666 666,666 0 -
Company
William S. Smith 395,912(3) 395,912 0 -
Wm. Smith & Co. 295,912(4) 295,912 0 -
Gilmore & Co., Inc. 295,912(4) 295,912 0 -
John J. Medico(5) 83,335 83,335 0 -
Brad I. Markowitz(6) 16,666 16,666 0 -
Little Wing, L.P. 571,428 571,428 0 -
Raymond James &
Associates, Inc.
Custodian for
Mark W. Cahill IRA 36,667 36,667 0 -
Awad & Associates, L.P. 70,000 70,000 0 -
Raymond Scott 36,000 36,000 0 -
John W. Walker 36,000 36,000 0 -
Dan Patterson 50,000 50,000 0 -
G. Michael Cassidy 10,000 10,000 0 -
J. Robert Gary 10,000 10,000 0 -
(1) The Company believes, based on information provided by the Selling
Shareholders, that each Selling Shareholder has sole voting and
investment power with respect to the shares beneficially owned.
(2) See "Plan of Distribution."
(3) William Smith is President of Wm. Smith & Co. and may be deemed to be
the beneficial owner of 295,912 shares beneficially owned by Wm.
Smith & Co.
(4) Common Shares issuable upon exercise of Common Stock Purchase
Warrants.
(5) John J. Medico is President and Chief Executive Officer of the
Company.
<PAGE>
(6) Brad I. Markowitz is a Director of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
William Smith. William Smith is President of Wm. Smith & Co. and may be
deemed to be the beneficial owner of 395,912 Common Shares (including 295,912
Common Shares issuable upon exercise of Common Share Purchase Warrants). See
"Selling Stockholders." As consideration for acting as placement agent for three
private placements of the Common Shares, the Company paid Wm. Smith Securities,
Inc. fees as follows (in each case representing 8% of the gross proceeds of the
private placement): for a private placement of 1,410,000 Common Shares during
the period from October 27, 1995 through December 5, 1995 for which the Company
received gross proceeds of approximately $564,000, approximately $45,120; for a
private placeemnt of 2,471,665 Common Shares during December 1995 and January
1996 for which the Company received gross proceeds of approximately $741,000,
approximately $59,280; and for a private placement of 871,523 Common Shares from
March 1996 through may 1996 for which the Company received gross proceeds of
approximately $610,066.10, approximately $48,800. As additional consideration
for such private plcement services, Wm. Smith & Securities Inc. received Common
Share Purchase Warrants as follows: on December 5, 1996 the Company issued to
William Smith Securities, Inc. Warrants to purchase 169,000 Common Shares at an
exercise price of $.48 per share; on January 30, 1996 the Company issued Wm.
Smith Securities, Inc. Warrants to purchase 296,600 Common Shares at an exercise
price of $.36 per share; and on May 15, 1996 the Company issued to Wm. Smith
Securities, Inc. Warrants to purchase 104,582 Common Shares at an exercise price
of .84 per share. Each of the Common Share Purchase Warrants contains certain
antidilution protections, expires on the fifth anniversary of the date of
issuance and provides for exercise by net issuance, whereby Common Shares which
would be receivable upon exercise of the Warrant may be used to pay the exercise
price in lieu of the payment of cash.
PLAN OF DISTRIBUTION
The sale or distribution of the Shares may be effected through one or more
underwriters, brokers, dealers or agents from time to time in one or more
transactions (which may involve crosses or block transactions) in the over-
the-counter market. Any of such transactions may be effected at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at varying prices determined at the time of sale or at negotiated or
fixed prices, in each case as determined by effected agreement between the
Selling Shareholder and underwriters, brokers, dealers or agents, or purchasers.
Transactions effected by selling Shares to or through underwriters, brokers,
dealers or agents, such underwriters, brokers, dealers or agents may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders or commissions from purchasers of Shares for whom they may
act as agent (which discounts, concessions or commissions as to particular
underwriters, brokers, dealers or agents may be in excess of those customary in
the types of transactions involved). The Selling Shareholders and any brokers,
dealers or agents that participate in the distribution of the Shares may be
deemed to be underwriters, and any profit on the sale of Shares by them and any
discounts, concessions or commissions received by any such underwriters,
brokers, dealers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act.
Under the securities laws of certain states, the Shares may not be sold
unless the Shares have been registered or qualified for sale in such state or an
exemption for registration or qualification is available and is complied with.
The Company will pay all of the expenses incident to the registration,
offering and sale of the Shares to the public hereunder other than commissions,
fees and discounts of underwriters, brokers, dealers and agents. The Company has
agreed to indemnify the Selling Shareholders and any underwriters against
certain liabilities, including liabilities under the Securities Act.
<PAGE>
EXPERTS
The financial statements of the Company as of May 31, 1995, and for the
year then ended have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. The
report of KPMG Peat Marwick LLP covering the May 31, 1995 financial statements
contains an explanatory paragraph that states that the "financial statements
have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 1 to the financial statements, the Company has incurred
losses from operations and has a working capital deficit and an accumulated
deficit that raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans in regard to these matters are also
described in Note 1 to the financial statements. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty."
The financial statements of the Company as of May 31, 1994, and for the
year then ended have been incorporated by reference herein and in the
registration statement in reliance upon the report of Rogoff & Company, P.C.,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. The
report of Rogoff & Company, P.C. covering the May 31, 1994 financial statements
contains an explanatory paragraph that states that the "financial statements
have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 1 to the financial statements, the Company has suffered
recurring losses from operations that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 1 to the financial statements. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty."
<PAGE>
=================================== ========================================
No person has been authorized to
give any information or to make any
representations in connection with
this offering other than those
contained in this Prospectus and, if
given or made, such other
information and representations must
not be relied upon as having been 5,365,012 Shares
authorized by the Company. Neither
the delivery of this Prospectus nor
any sale made hereunder shall, under GREENTREE SOFTWARE, INC.
any circumstances, create any
implication that there has been no
change in the affairs of the Company Common Shares
since the date hereof or that the
information contained herein is
correct as of any time subsequent to
its date. This Prospectus does not
constitute an offer to sell or a
solicitation of an offer to buy any ----------
securities other than the registered PROSPECTUS
securities to which it relates. This ----------
Prospectus does not constitute an
offer to sell or a solicitation of
an offer to buy such securities in -------------
any circumstances in which such June 5, 1996
offer or solicitation is unlawful.
--------------------
==================================== ========================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation,
are:
SEC Registration Fee.................. $ 1,295
Transfer Agent and Registrar Fees
and Expenses........................ 11,000
Legal Fees and Expenses............... 30,000
Blue Sky Fees and Expenses............ 10,000
Accounting Fees and Expenses.......... 5,000
Miscellaneous......................... --
-------
57,295
Total................................. =======
- -----------------------
* Estimates
Item 15. Indemnification of Directors and Officers.
The By-Laws of the Registrant provide for indemnification of officers and
directors to the fullest extent provided by New York law. Section 722 of
the Business Corporation Law of the State of New York contains provisions
entitling directors and officers of the Registrant to indemnification from
judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees, as the result of an action or proceeding in
which they may be involved by reason of being, or having been, a director
or officer of the Registrant or serving another corporation in such
capacity at the request of the Registrant, provided said directors or
officers acted in good faith.
Item 16. Exhibits.
(3.1) Certificate of Incorporation of the Registrant, incorporated by
reference to Exhibit 3.1. to the Registration Statement of the
Registrant on Form S-18.
(3.2) Amendment to Certificate of Incorporation of the Registrant,
incorporated by reference to Exhibit 3.2 to the Registration
Statement on Form S-18 of the Registrant.
(3.3) Amendment to Certificate of Incorporation of the Registrant,
incorporated by reference to Exhibit 3.3 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended May 31, 1992.
(3.4) Amendment to Certificate of Incorporation of the Registrant,
incorporated by reference to Exhibit 3.4 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended May 31, 1993.
(3.5) Amendment to Certificate of Incorporation of the Registrant,
incorporated by reference to Exhibit 3.5 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended May 31, 1993.
(3.6) By-Laws of the Registrant, incorporated by reference to Exhibit
3.6 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended May 31, 1993.
(4.1) Registration Rights Agreement dated as of December 22, 1995 among
the Registrant and certain of its shareholders
(4.2) Registration Rights Agreement dated as of April 23, 1996 among the
Registrant and certain of its shareholders
(4.3) Form of Warrant.
(5) Opinion of Bingham, Dana & Gould LLP.
<PAGE>
(23.1) Consent of Bingham, Dana & Gould LLP (included in Exhibit 5).
(23.2) Consent of KPMG Peat Marwick LLP.
(23.3) Consent of Rogoff & Company, P.C.
(24) Power of Attorney (included on signature page).
Item 17. Undertakings.
(A) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(B) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
<PAGE>
(C) The undersigned registrant hereby undertakes to remove from
registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination
of the offering.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sarasota and the State of Florida as of June 3, 1996.
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
--------------------------------------
John J. Medico
Chief Executive Officer and President
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints John J. Medico,
his/her true and lawful attorney-in-fact with the authority to execute in the
name of each such person, and to file with the Securities and Exchange
Commission, together with any exhibits thereto and other documents therewith,
any and all amendments (including without limitation post-effective amendments)
to this registration statement necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, which amendments may make such other changes in the
registration statement as the aforesaid attorney-in-fact executing the same
deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed below as of June 3, 1996 by
the following persons on behalf of the Registrant and in the capacities
indicated.
/s/ John J. Medico
- ------------------------------- Chief Executive Officer and President
John J. Medico (principal executive officer)
/s/ Arnold Muhlbach
- ------------------------------- Chief Financial Officer (principal
Arnold Muhlbach financial and accounting officer)
/s/ Jeffrey Pinkerton Vice President of
- ------------------------------- Product Development, Director
Jeffrey Pinkerton
/s/ Brad Markowitz
- ------------------------------- Director
Brad Markowitz
<PAGE>
EXHIBIT INDEX
Exhibit Description
(4.1) Registration Rights Agreement dated as of December 22, 1995
among the Registrant and certain of its shareholders
(4.2) Registration Rights Agreement dated as of April 23, 1996 among
the Registrant and certain of its shareholders
(4.3) Form of Warrant
(5) Opinion of Bingham, Dana & Gould LLP
(23.2) Consent of KPMG Peat Marwick LLP
(23.3) Consent of Rogoff & Company, P.C.
(24) Power of Attorney (included on signature page).
GREENTREE SOFTWARE, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of December 22, 1995, among
Greentree Software, Inc., a New York corporation (the "Company"), and the other
Persons identified on the signature pages hereto.
W I T N E S S E T H:
WHEREAS, the Company is offering to sell to prospective investors, in a
private placement (the "Private Placement"), up to 4,166,667 shares of Common
Stock, $.04 par value per share (the "Common Stock"), upon the terms and
conditions described in the Company's private placement memorandum relating to
the Private Placement (the "Private Placement Memorandum");
WHEREAS, the Company has engaged Wm Smith Securities, Inc., a Colorado
corporation (the "Placement Agent"), to offer and sell on behalf of the Company,
on a best efforts basis, the shares of Common Stock proposed to be sold by the
Company pursuant to the Private Placement;
WHEREAS, as partial consideration for the Placement Agent's services, the
Company has agreed to issue to the Placement Agent a warrant (the "Placement
Agent Warrant") to purchase a number of shares of the Company's Common Stock,
which number will be determined on a formula basis as provided in the Placement
Agent Warrant; and
WHEREAS, in order to induce the Holders to purchase shares of Common Stock
in the Private Placement and in order to induce the Placement Agent to accept
the Placement Agent Warrant as partial consideration for the Placement Agent's
services, the Company has agreed to provide certain registration rights to the
Holders and to the Placement Agent upon the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, 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.
<PAGE>
-2-
"Demand Registration" shall have the meaning assigned to such term in
Section 3 hereof.
"Holder" shall mean a Person who is the owner of Registrable Securities.
"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 Registrable Security, (i) it has been effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering it, or (ii) it is eligible for distribution to
the public pursuant to Rule 144 (or any similar provisions then in force) under
the Securities Act.
"Securities" shall mean the Common Stock issued to the parties to this
Agreement pursuant to the Private Placement or upon exercise of the Placement
Agent Warrant.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
<PAGE>
-3-
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 this Section,
one or more Holders owning in the aggregate in excess of 50% of the issued and
outstanding Registrable Securities may make a written request to the Company for
registration under and in accordance with the provisions of the Securities Act
of up to all of the Registrable Securities owned by such Holder or Holders (a
"Demand Registration"). Within five (5) days after receipt of such request, the
Company will serve 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 five (5) business days after it gives the Notice to the applicable
Holder. Subject to the provisions of Section 3(d), the Company may include in
any registration statement to be filed pursuant to this Section 3 additional
shares of Common Stock for sale for its own account or for the account of any
other person.
(b) Number of Registrations. The Holders are entitled to, in the aggregate,
one (1) Demand Registration regardless of the Person or Persons making demand.
Each Holder 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 each Holder agrees to refrain from
selling any Registrable Securities until the post-effective amendment is
declared effective.
(c) Selection of Underwriters. If a registration pursuant to this Section 3
involves an underwritten offering, the underwriter or underwriters thereof shall
be selected by the Company after consultation with the Holders making demand.
(d) Limitations, Conditions and Qualifications. The obligations of the
Company to cause the Registrable Securities to be registered under the
Securities Act pursuant to this Section 3 are subject to each of the following
limitations, conditions and qualifications:
(1) The Company shall not be obligated to file or keep effective any
Registration Statement pursuant to Section 3(a) hereof at any time if the
Company would be required to include financial statements audited as of any date
other than the end of its fiscal year.
<PAGE>
-4-
(2) The Company, by act of its Board of Directors, shall be entitled
to postpone for up to 30 days from the receipt of request for a Demand
Registration the filing or effectiveness of any Registration Statement otherwise
required to be prepared and filed by it pursuant to Section 3(a) if the Board of
Directors of the Company determines, in its reasonable judgment, that the
Company is in possession of material information that has not been disclosed to
the public and the Board of Directors of the Company reasonably deems it to be
advisable not to disclose such information at such time in a registration
statement. If the Company shall so postpone the filing of a Registration
Statement, the Holders shall have the right to withdraw the request for
registration by giving written notice to the Company within 30 days after
receipt of the notice of postponement and, in the event of such withdrawal, such
request shall not be counted for purposes of the request for registration to
which the Holders are entitled pursuant to Section 3(a) hereof.
(3) If the Company at any time shall register Registrable Securities
under the Securities Act for sale to the public, the Holders of such Registrable
Securities shall, upon the written request of the Company, not publicly sell,
make any short sale of, grant any option for the purchase of, or otherwise
dispose of any Securities (other than any Registrable Securities being
registered under such Demand Registration) without the prior written consent of
the Company, to the extent and for the period (not exceeding 180 days) that all
of the directors and officers of the Corporation (other than directors and
officers holding not more than 25,000 shares of Common Stock (as adjusted for
stock dividends, stock splits, combinations of shares, or similar events) in the
aggregate) are subject to the same restriction.
(4) Priority of Demand Registration. If the Demand Registration
pursuant to this Section 3 involves an underwritten offering and the managing
underwriter shall advise the Company in writing that, in its opinion, the number
of shares of Common Stock requested to be included in such registration exceeds
the number which can be sold in such offering, then the Company will include in
such registration, to the extent of the number of shares of Common Stock which
the Company is so advised can be sold in such offering, (i) first, the number of
Registrable Securities requested to be included in such registration by the
Holders (on a pro rata basis to the number of Registrable Securities held by
such Holder), and (ii) second, the other shares of Common Stock of the Company
proposed to be included in such registration, in accordance with the priorities,
if any, then existing among the Company and the holders of such other
securities.
4. "Piggyback" Registration. Whenever the Company proposes to register any
of its Common Stock under the Securities Act, other than pursuant to the Demand
Registration pursuant to Section 3(a) or a registration statement
<PAGE>
-5-
on Form S-4 or Form S-8 or similar or successor forms, the Company shall, each
such time, give to the Holders written notice of its intent to do so. Upon the
written request of any Holder within twenty (20) days after the giving of any
such notice by the Company, the Company shall use its best efforts to cause to
be included in such registration up to fifty (50%) percent of the Registrable
Securities owned by such selling Holder, to the extent requested to be
registered; provided that (i) such selling Holder agrees to sell its shares of
Common Stock in the same manner and on the same terms and conditions as the
other shares of Common Stock which the Company proposes to register and (ii) if
the registration is to include shares of Common Stock to be sold for the account
of the Company, the proposed managing underwriter does not advise the Company
that, in its opinion, the inclusion of such selling Holders' shares of
Registrable Securities (without any reduction in the number of shares to be sold
for the account of the Company) is likely to affect adversely the success of the
offering or the price the Company would receive for any shares of Common Stock
offered by it pursuant thereto, in which case the Shares proposed to be included
by the selling Holders will be reduced (on a pro rata basis), according to the
total number of shares of Registrable Securities owned by such selling Holders,
or in such other proportions as shall mutually be agreed to by such selling
Holders, to such number which the Company is advised can be sold in such
offering without adversely affecting the success of the offering or the price
the Company would receive for any shares of Common Stock.
5. Information. Upon making a request pursuant to Sections 3 or 4, the
Holders shall specify the number and shares of Common Stock to be registered.
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 when the Company is required by the
provisions of Sections 3 or 4 to effect a registration under the Securities Act,
the Company will, at its expense, as expeditiously as practicable, subject to
the provisions of Section 3(d) hereof:
(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 registration statement appropriate with respect to the
Registrable Securities and use its best efforts to cause such Registration
Statement to become and remain continuously effective until 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
<PAGE>
-6-
sellers set forth in such Registration Statement, but in no event for longer
than five years from the date of the issuance of such Registrable Securities,
and prepare and file with the Commission such amendments to such Registration
Statement and supplements to the Prospectus contained therein as may be
necessary to keep such Registration Statement effective and such Registration
Statement and Prospectus accurate and complete during such period;
(b) Furnish to the Holders participating in such registration such
reasonable number of copies of the Registration Statement and Prospectus and
such other documents as such Holders may reasonably request in order to
facilitate the public offering of the Registrable Securities;
(c) Use its best efforts to register or qualify the Common Stock covered
by such Registration Statement under such state securities or blue sky laws of
such jurisdictions as such Holders 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 Common Stock;
(d) Notify the Holders participating 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 Holders participating 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 Holder participating 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 Holders is required under
the Securities Act or the rules and regulations thereunder in connection with
the distribution of the Common Stock by such Holders 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 Holders participating 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 Common Stock is required to be delivered under the
<PAGE>
-7-
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 Holders participating 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.
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 or
qualify as a foreign corporation 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 Holder's attorneys or accountants or any other personal
expenses or any underwriting discounts, selling commissions or similar fees if
such registration results in an underwritten public offering of all or any
portion of the Registrable Securities.
<PAGE>
-8-
8. Indemnification and Contribution.
(a) Indemnification by the Company. Whenever, pursuant to Sections 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 Holder participating in the
registration, each of their officers, directors and employees, and each person,
if any, who controls any such Person (collectively, the "Holder Indemnitees"
and, individually, a "Holder Indemnitee"), against any losses, claims, damages
or liabilities, joint or several, to which such Holder 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 Holder 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.
(b) Indemnification by Holders. Each Holder participating in any
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 (collectively, the "Company Indemnitees" and, individually, a
"Company Indemnitee") and each other Holder Indemnitee against all losses,
claims, damages or liabilities, joint or several, to which any of the Company
Indemnitees or the other Holder 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 Holder specifically
for use in the preparation thereof, and will reimburse each Company Indemnitee
and each other Holder 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.
<PAGE>
-9-
(c) Indemnification Procedures. Promptly after receipt by a Holder
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
such Indemnitee 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
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
<PAGE>
-10-
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
9. Amendment and Modification. This Agreement may be amended, modified or
supplemented in any respect only by written agreement by the Company and the
Holders of a majority of the issued and outstanding Registrable Securities.
10. 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 Commonwealth of Massachusetts, without giving
effect to the choice of law principles thereof.
11. 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.
12. Notices. All notices and other communications hereunder shall be in
writing and, unless otherwise provided herein, shall be deemed duly given upon
receipt if delivered personally, sent by facsimile transmission, sent by express
courier, 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:
Greentree Software, Inc.
2801 Fruitville Road
Sarasota, FL 34237
Attn: John J. Medico, President
with a copy to:
Bingham, Dana & Gould
150 Federal Street
Boston, MA 02110
Attn: Victor J. Paci, Esq.
(b) If to a Holder, as listed on Schedule A or as such Holder shall
designate to the Company in writing.
<PAGE>
-11-
13. 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. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one such counterpart.
14. 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.
15. 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.
16. Transferability Of Rights. Notwithstanding anything in this Agreement
to the contrary, none of the rights of any Holder under this Agreement shall be
transferred or assigned to any person unless (i) such person becomes the
registered holder, in the books of the Company, of such Holder's Shares, and
(ii) such person agrees to become a party to, and bound by all of the terms and
conditions of, this Agreement.
<PAGE>
-12-
IN WITNESS WHEREOF, this Agreement has been signed by each of the parties
hereto as of this 28 day of December, 1995.
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
-------------------
John J. Medico
President
<PAGE>
-13-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of December 22, 1995, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ Mark W. Cahill
----------------------
Name: Mark W. Cahill
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: 12/28/95
-------------------
<PAGE>
-13-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of December 22, 1995, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ Donald O. Collins
----------------------
Name: Donald O. Collins
---------------------------
Donald O. Collins Rev. Trust
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: 12/28/95
-------------------
<PAGE>
-13-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of December 22, 1995, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
/s/ Eric C. Petersen
Signature: /s/ Ellen C. Petersen
----------------------
Name: Eric C. Petersen
---------------------------
Ellen C. Petersen
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: 12/28/95
-------------------
<PAGE>
-13-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of December 22, 1995, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ IL P.C.
----------------------
Name: Primerica Life Insurance Co.
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: 12/28/95
-------------------
<PAGE>
-13-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of December 22, 1995, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ Richard Battaglino
----------------------
Name: Richard Battaglino
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: 12/28/95
-------------------
<PAGE>
-13-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of December 22, 1995, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ Joseph R. Garipoli
----------------------
Name: Joseph R. Garipoli
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: 12/28/95
-------------------
<PAGE>
-13-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of December 22, 1995, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ Allen Ginsberg
----------------------
Name: Allen Ginsberg
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: 12/28/95
-------------------
<PAGE>
-13-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of December 22, 1995, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ David W. Stutz
----------------------
Name: David W. Stutz
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: 12/28/95
-------------------
GREENTREE SOFTWARE, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of April 23, 1996, among Greentree
Software, Inc., a New York corporation (the "Company"), and the other Persons
identified on the signature pages hereto.
W I T N E S S E T H:
WHEREAS, the Company is offering to sell to prospective investors, in a
private placement (the "Private Placement"), up to 1,666,667 shares of Common
Stock, $.04 par value per share (the "Common Stock"), upon the terms and
conditions described in the Company's private placement memorandum relating to
the Private Placement (the "Private Placement Memorandum");
WHEREAS, the Company has engaged Wm Smith Securities, Inc., a Colorado
corporation (the "Placement Agent"), to offer and sell on behalf of the Company,
on a best efforts basis, the shares of Common Stock proposed to be sold by the
Company pursuant to the Private Placement;
WHEREAS, as partial consideration for the Placement Agent's services, the
Company has agreed to issue to the Placement Agent a warrant (the "Placement
Agent Warrant") to purchase a number of shares of the Company's Common Stock,
which number will be determined on a formula basis as provided in the Placement
Agent Warrant; and
WHEREAS, in order to induce the Holders to purchase shares of Common Stock
in the Private Placement and in order to induce the Placement Agent to accept
the Placement Agent Warrant as partial consideration for the Placement Agent's
services, the Company has agreed to provide certain registration rights to the
Holders and to the Placement Agent upon the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
<PAGE>
-2-
1. Definitions. As used in this Agreement, the following capitalized terms
shall have the following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Mandatory Registration" shall have the meaning assigned to such term in
Section 3 hereof.
"Holder" shall mean a Person who is the owner of Registrable Securities.
"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 Registrable Security, (i) it has been effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering it, or (ii) it is eligible for distribution to
the public pursuant to Rule 144 (or any similar provisions then in force) under
the Securities Act.
<PAGE>
-3-
"Securities" shall mean the Common Stock issued to the parties to this
Agreement pursuant to the Private Placement or upon exercise of the Placement
Agent Warrant.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
2. Securities Subject to this Agreement. The Securities entitled to the
benefits of this Agreement are the Registrable Securities.
3. Mandatory Registration.
(a) Mandatory Registration. Subject to the provisions of this Section, no
later than May 15, 1996, the Company will file with the Commission an
appropriate Registration Statement, registering under and in accordance with the
provisions of the Securities Act of all of the Registrable Securities (a
"Mandatory Registration"). The Company may include in any Registration Statement
to be filed pursuant to this Section 3 additional shares of Common Stock for
sale for its own account or for the account of any other person and specifically
will include the shares of Common Stock sold in the two recent previous private
placements of the Company and the shares underlying the warrants issued to the
Placement Agent. Upon filing the registration statement pursuant to the
Mandatory Registration, the Company will respond, and direct its counsel to
respond, as quickly as possible to any and all further requirements or
conditions required by the Commission in order for such Registration Statement
to be declared effective.
(b) Holdback. Each Holder 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 or supplement to the
Prospectus, then each Holder agrees to refrain from selling any Registrable
Securities until such post-effective amendment is declared effective or such
supplement is filed with the Commission. The Company agrees that it will file,
or cause to be filed, any such post-effective amendment or supplement within 60
days of the occurrence of any such material development(s).
(c) Limitations, Conditions and Qualifications. The obligations of the
Company to cause the Registrable Securities to be registered under the
Securities Act pursuant to this Section 3 are subject to the following
limitation:
The Company, by act of its Board of Directors, shall be entitled to
postpone for up to 30 days the Mandatory Registration filing or effectiveness of
any
<PAGE>
-4-
Registration Statement otherwise required to be prepared and filed by it
pursuant to Section 3(a) if the Board of Directors of the Company determines, in
its reasonable judgment, that the Company is in possession of material
information that has not been disclosed to the public and the Board of Directors
of the Company reasonably deems it to be advisable not to disclose such
information at such time in a registration statement. However, the Company shall
be entitled to only two such postponements.
4. "Piggyback" Registration. Whenever the Company proposes to register any
of its Common Stock under the Securities Act, other than pursuant to the
Mandatory Registration pursuant to Section 3(a) or a registration statement on
Form S-4 or Form S-8 or similar or successor forms, the Company shall, each such
time, give to the Holders written notice of its intent to do so. Upon the
written request of any Holder within twenty (20) days after the giving of any
such notice by the Company, the Company shall use its best efforts to cause to
be included in such registration up to fifty (50%) percent of the Registrable
Securities owned by such selling Holder, to the extent requested to be
registered; provided that (i) such selling Holder agrees to sell its shares of
Common Stock in the same manner and on the same terms and conditions as the
other shares of Common Stock which the Company proposes to register and (ii) if
the registration is to include shares of Common Stock to be sold for the account
of the Company, the proposed managing underwriter does not advise the Company
that, in its opinion, the inclusion of such selling Holders' shares of
Registrable Securities (without any reduction in the number of shares to be sold
for the account of the Company) is likely to affect adversely the success of the
offering or the price the Company would receive for any shares of Common Stock
offered by it pursuant thereto, in which case the Shares proposed to be included
by the selling Holders will be reduced (on a pro rata basis), according to the
total number of shares of Registrable Securities owned by such selling Holders,
or in such other proportions as shall mutually be agreed to by such selling
Holders, to such number which the Company is advised can be sold in such
offering without adversely affecting the success of the offering or the price
the Company would receive for any shares of Common Stock.
5. Information. Upon making a request pursuant to Section 4, the Holders
shall specify the number and shares of Common Stock to be registered. 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.
<PAGE>
-5-
6. Registration Procedures. If and when the Company is required by the
provisions of Sections 3 or 4 to effect a registration under the Securities Act,
the Company will, at its expense, as expeditiously as practicable, subject to
the provisions of Section 3(d) hereof:
(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 registration statement appropriate with respect to the
Registrable Securities and use its best efforts to cause such Registration
Statement to become and remain continuously effective until 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, but in no event for longer than five years
from the date of the issuance of such Registrable Securities, and prepare and
file with the Commission such amendments to such Registration Statement and
supplements to the Prospectus contained therein as may be necessary to keep such
Registration Statement effective and such Registration Statement and Prospectus
accurate and complete during such period;
(b) Furnish to the Holders participating in such registration such
reasonable number of copies of the Registration Statement and Prospectus and
such other documents as such Holders may reasonably request in order to
facilitate the public offering of the Registrable Securities;
(c) Use its best efforts to register or qualify the Common Stock covered
by such Registration Statement under such state securities or blue sky laws of
such jurisdictions as such Holders 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 Common Stock;
(d) Notify the Holders participating 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 Holders participating 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;
<PAGE>
-6-
(f) Prepare and file with the Commission, promptly upon the request of
any Holder participating 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 Holders is required under
the Securities Act or the rules and regulations thereunder in connection with
the distribution of the Common Stock by such Holders 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 Holders participating 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 Common Stock 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 Holders participating 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.
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
<PAGE>
-7-
sky qualifications of the Registrable Securities; provided, however, that the
Company shall not be required to consent to general service of process or
qualify as a foreign corporation 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 Holder's attorneys or accountants or any other personal
expenses or any underwriting discounts, selling commissions or similar fees if
such registration results in an underwritten public offering of all or any
portion of the Registrable Securities.
8. Indemnification and Contribution.
(a) Indemnification by the Company. Whenever, pursuant to Sections 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 Holder participating in the
registration, each of their officers, directors and employees, and each person,
if any, who controls any such Person (collectively, the "Holder Indemnitees"
and, individually, a "Holder Indemnitee"), against any losses, claims, damages
or liabilities, joint or several, to which such Holder 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 Holder 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.
(b) Indemnification by Holders. Each Holder participating in any
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 (collectively, the "Company Indemnitees" and, individually, a
"Company Indemnitee") and each
<PAGE>
-8-
other Holder Indemnitee against all losses, claims, damages or liabilities,
joint or several, to which any of the Company Indemnitees or the other Holder
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 Holder specifically for use in the preparation thereof, and will
reimburse each Company Indemnitee and each other Holder 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.
(c) Indemnification Procedures. Promptly after receipt by a Holder
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
such Indemnitee 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
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
<PAGE>
-9-
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. Amendment and Modification. This Agreement may be amended, modified or
supplemented in any respect only by written agreement by the Company and the
Holders of a majority of the issued and outstanding Registrable Securities.
10. 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 Commonwealth of Massachusetts, without giving
effect to the choice of law principles thereof.
11. 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.
12. Notices. All notices and other communications hereunder shall be in
writing and, unless otherwise provided herein, shall be deemed duly given upon
receipt if delivered personally, sent by facsimile transmission, sent by express
courier, 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:
<PAGE>
-10-
Greentree Software, Inc.
2801 Fruitville Road,
Suite 180
Sarasota, FL 34237
Attn: John J. Medico, President
with a copy to:
Bingham, Dana & Gould
150 Federal Street
Boston, MA 02110
Attn: Victor J. Paci, Esq.
(b) If to a Holder, as listed on Schedule A or as such Holder shall
designate to the Company in writing.
13. 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. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one such counterpart.
14. 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.
15. 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 attorney's 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.
<PAGE>
-11-
16. Transferability Of Rights. Notwithstanding anything in this Agreement
to the contrary, none of the rights of any Holder under this Agreement shall be
transferred or assigned to any person unless (i) such person becomes the
registered holder, in the books of the Company, of such Holder's Shares, and
(ii) such person agrees to become a party to, and bound by all of the terms and
conditions of, this Agreement.
IN WITNESS WHEREOF, this Agreement has been signed by each of the parties hereto
as this 23rd day of April, 1996.
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
-----------------------
John J. Medico
President
<PAGE>
-12-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of April 23, 1996, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ Raymond Scott
----------------------
Name: Raymond Scott
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: April 23, 1996
-------------------
<PAGE>
-12-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of April 23, 1996, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ David W. Stutz
----------------------
Name: David W. Stutz
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: April 23, 1996
-------------------
<PAGE>
-12-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of April 23, 1996, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
LITTLE WING, L.P.
By: Quillcap Corporation, General Partner
By: /s/ Parker Quillen, President
---------------------------------
Parker Quillen, President
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: April 23, 1996
-------------------
<PAGE>
-12-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of April 23, 1996, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature: /s/ John W. Walker
----------------------
Name: John W. Walker
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: April 23, 1996
-------------------
<PAGE>
-12-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of April 23, 1996, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
RAYMOND, JAMES & ASSOCIATES, INC. CUSTODIAN
Signature: /s/ Mark W. Cahill
----------------------
Name: Mark W. Cahill
---------------------------
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: April 23, 1996
-------------------
<PAGE>
-12-
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of April 23, 1996, among Greentree Software, Inc., a New York
corporation (the "Company"), and the Holders parties thereto, as amended and in
effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a party to the Registration Rights Agreement. This
Signature Page shall take effect and shall become a part of the Registration
Rights Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
AWAD & ASSOCIATES, L.P.
By: /s/ Dennison T. Veru, General Partner
-------------------------------------
Dennison T. Veru, General Partner
Accepted:
GREENTREE SOFTWARE, INC.
By: /s/ John J. Medico
----------------------------
Date: April 30, 1996
-------------------
<PAGE>
-13-
SCHEDULE A
----------
HOLDER ADDRESS
- ------ -------
Exhibit 4.3
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAW. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAW.
_____, 1996
GREENTREE SOFTWARE, INC.
STOCK PURCHASE WARRANT
Void after ______, 2001
This Warrant (the "Warrant") entitles ________, or its assignee (the
"Holder"), for value received, to purchase from GREENTREE SOFTWARE, INC., a New
York corporation (the "Company"), at any time during the period from the date of
issuance set forth above (the "Commencement Date") to 5:00 p.m., New York time,
on _____, 2001 (the "Expiration Date"), at which time this Warrant shall expire
and become void, ____ shares of the Company's common shares, $0.04 par value per
share ("Stock"), subject to adjustment as set forth herein (the "Warrant
Shares"). This Warrant shall be exercisable at $___ per share, subject to
adjustment as set forth herein (the "Exercise Price"). This Warrant also is
subject to the following terms and conditions:
1. Exercise of Warrant. Subject to the terms and conditions hereof,
this Warrant may be exercised in whole or in part at any time from and after the
Commencement Date and before the Expiration Date. Exercise shall be by
presentation and surrender to the Company at its principal office of this
Warrant and the subscription form annexed hereto, executed by the Holder,
together with payment to the Company in accordance with Section 2 or 3 hereof in
an amount equal to the product of the Exercise Price multiplied by the number of
Warrant Shares being purchased upon such exercise. If this Warrant is exercised
in part only, the Company shall, as soon as practicable after presentation of
this Warrant upon such exercise, execute and deliver a new Warrant, dated the
date hereof, evidencing the right of the Holder to purchase the balance of the
Warrant Shares purchasable hereunder upon the same terms and conditions herein
set forth. Upon and as of receipt by the Company of such properly completed and
duly executed purchase form accompanied by payment as herein provided, the
Holder shall be deemed to be the Holder of record of the Warrant Shares issuable
upon such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then actually be delivered to the Holder.
<PAGE>
-2-
2. Payment of Exercise Price. The Exercise Price for the Warrant Shares
being purchased may be paid (i) in cash or by check, (ii) by the surrender by
the Holder to the Company of any promissory notes or other obligations issued by
the Company, with all such notes and obligations so surrendered being credited
against the Exercise Price for the Warrant Shares in an amount equal to the
principal amount thereof plus accrued interest to the date of surrender, or
(iii) by any combination of the foregoing.
3. Net Issue Exercise. Notwithstanding any provision herein to the
contrary, in lieu of exercising this Warrant for cash or cancellation of
indebtedness, the Holder may elect to receive, without the payment by the Holder
of any additional consideration, Warrant Shares equal to the value of this
Warrant or any portion hereof by the surrender of this Warrant or such portion
to the Company, with the net issue exercise notice annexed hereto duly executed,
at the principal office of the Company. Thereupon, the Company shall issue to
the Holder such number of fully paid and nonassessable Warrant Shares as is
computed using the following formula:
X = Y(A-B)
------
A
where: X = the number of Warrant Shares to be issued to the
Holder pursuant to this Section 3.
Y = the number of shares of Stock covered by this
Warrant or, if only a portion of the Warrant is being
exercised, the number of shares of Stock for which
the Warrant is then being exercised pursuant to the
net issue exercise election made pursuant to this
Section 3 (at the date of such calculation).
A = the fair market value of one share of Stock (at the
date of such calculation).
B = the Exercise Price in effect under this Warrant at
the time the net issue exercise election is made
pursuant to this Section 3.
For the purposes of this Section 3, the fair market value of one share of Stock
as of a particular date (the "Determination Date") shall be determined by the
Company's Board of Directors in good faith; provided, however, that (i) if, as
of the Determination Date, there has been a public market for the Stock for at
least 11 trading days, the fair market value per share shall be the average of
the closing prices (or bid prices if there are no such closing prices) of the
Stock quoted in the over-the-counter market summary or the closing price quoted
on the Nasdaq National Market or on the primary national securities exchange on
which the Stock is then listed, whichever is applicable, as published in the
Western Edition of the Wall Street Journal (or, if not so reported, as otherwise
reported by the Nasdaq
<PAGE>
-3-
National Market) for the 10 trading days prior to the Determination Date; and
(ii) if the Determination Date is the date on which the Stock is first sold by
the Company in a firm commitment public offering under the Securities Act of
1933, as amended (the "Act"), or if there has been a public market for the Stock
for fewer than 11 trading days, the fair market value shall be the initial
public offering price (before deducting commissions, discounts or expenses).
4. Adjustment of Exercise Price and Number of Warrant Shares. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events as follows:
4.1. Subdivision or Combination of Stock. If at any time or
from time to time after the date of this Warrant (the "Issue Date") the Company
shall subdivide its outstanding shares of Stock, the Exercise Price in effect
immediately prior to such subdivision shall be reduced proportionately and the
number of shares of Stock (calculated to the nearest whole share) shall be
increased proportionately, and conversely, in the event the outstanding shares
of Stock shall be combined into a smaller number of shares, the Exercise Price
in effect immediately prior to such combination shall be increased
proportionately and the number of shares of Stock (calculated to the nearest
whole share) shall be decreased proportionately.
4.2 Adjustment for Stock Dividends. If at any time the Company
shall declare a dividend or make any other distribution upon any class or series
of stock of the Company payable in shares of Stock or securities convertible
into shares of Stock, the Exercise Price and the number of shares to be obtained
upon exercise of this Warrant shall be adjusted proportionately to reflect the
issuance of any shares of Stock or convertible securities, as the case may be,
issuable in payment of such dividend or distribution.
4.3 Reorganization, Reclassification, Consolidation, Merger or
Sale. In the event of any reorganization of the capital stock of the Company, a
consolidation or merger of the Company with another corporation (other than a
merger in which the Company is the surviving corporation), the sale of all or
substantially all of the Company's assets or any transaction involving the
transfer of a majority of the voting power over the capital stock of the Company
effected in a manner such that holders of Stock shall be entitled to receive
stock, securities, or other assets or property, then, as a condition of such
reorganization, reclassification, consolidation, merger, sale or transaction,
lawful and adequate provision shall be made whereby the Holder hereof shall have
the right to purchase and receive (in lieu of the shares of the Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby) such shares of stock, securities or other assets
or property as may be issued or payable with respect to or in exchange for a
number of outstanding shares of such Stock equal to the number of shares of such
Stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby. In any such reorganization, consolidation,
<PAGE>
-4-
merger, sale or transaction, including successive events of such nature,
appropriate provision shall be made with respect to the rights and interests of
the Holder such that the provisions hereof (including, without limitation,
provisions for adjustments of the Exercise Price and of the number of shares
purchasable and receivable upon the exercise of this Warrant) thereafter shall
be applicable, as nearly practicable, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof.
4.4 Issuance of Additional Shares. The Exercise Price in
effect from time to time shall be subject to adjustment upon the issuance of
Stock or Convertible Securities so long as any Warrants are then issued and
outstanding.
(a) Special Definitions. For purposes of this Section
4.4, the following definitions shall apply:
(1) "Option" shall mean contractual rights, options
or warrants to subscribe for, purchase or otherwise acquire either Stock or
Convertible Securities.
(2) "Convertible Securities" shall mean any
evidences of indebtedness, shares (other than Stock and Warrants) or other
securities directly or indirectly convertible into or exchangeable for Stock.
(3) "Additional Shares of Stock" shall mean all
shares of Stock issued (or, pursuant to Section 4.4(c), deemed to be issued) by
the Company after the Issue Date, other than shares of Stock issued or issuable:
(i) pursuant to Options, Warrants or
Convertible Securities outstanding on the Issue Date;
(ii) to directors, officers or employees of, or
consultants to, the Corporation pursuant to a stock grant or option plan or
other employee stock incentive program (collectively, the "Plans") approved by
the Board of Directors, subject to adjustment for all subdivisions and
combinations;
(iii) as a dividend or distribution on the
Warrant or any event for which adjustment is made pursuant to Section 4 hereof;
(iv) by way of dividend or other distribution
on shares excluded from the definition of Additional Shares of Stock by the
foregoing clauses (i), (ii) or (iii) or this clause (iv) or on shares of Stock
so excluded; or
<PAGE>
-5-
(v) pursuant to a merger or acquisition
approved by the Board of Directors.
(b) No Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in respect of the issuance of Additional Shares of
Stock unless the consideration per share for an Additional Share of Stock issued
or deemed to be issued by the Company is less than the Exercise Price in effect
on the date of, and immediately prior to, the issue of such Additional Shares of
Stock.
(c) Issuance of Securities Deemed to be an Issuance of
Additional Shares of Stock.
(1) Options and Convertible Securities. In the event
the Company at any time or from time to time after the Issue Date shall issue
any Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the maximum number of shares (as set
forth in the instrument relating thereto without regard to any provisions
contained therein for a subsequent adjustment of such number) of Stock issuable
upon the exercise of such Options or, in the case of Convertible Securities and
Options therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be Additional Shares of Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the close of
business on such record date, provided that in any such case in which Additional
Shares of Stock are deemed to be issued:
(i) no further adjustment in the Exercise Price
shall be made upon the subsequent issue of Convertible Securities or shares of
Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(ii) if such Options or Convertible Securities
by their terms provide, with the passage of time or otherwise, for any increase
or decrease in the consideration payable to the Company or in the number of
shares of Stock issuable upon the exercise, conversion or exchange thereof, the
applicable Exercise Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities.
(2) Upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the Exercise Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon such expiration, be recomputed
as if:
<PAGE>
-6-
(i) in the case of Convertible Securities or
Options for Stock, the only Additional Shares of Stock issued were the shares of
Stock, if any, actually issued upon the exercise of such Options or conversion
or exchange of such Convertible Securities and the consideration received
therefor was the consideration actually received by the Company for the issue of
all such Options, whether or not exercised, plus the consideration actually
received by the Company upon such exercise, or for the issue of all such
Convertible Securities which were actually converted or exchanged, plus the
additional consideration, if any, actually received by the Company upon such
conversion or exchange, and
(ii) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the
consideration received by the Company for the Additional Shares of Stock
actually deemed to have been then issued was the consideration actually received
by the Company for the issue of all such Options, whether or not exercised, plus
the consideration actually received by the Company upon the issue of the
Convertible Securities with respect to which such Options were actually
exercised.
(3) No readjustment pursuant to clause (2) above
shall have the effect of increasing the Exercise Price to an amount which
exceeds the lower of (x) such Exercise Price on the original adjustment date, or
(y) such Exercise Price that would have resulted from any issuance of Additional
Shares of Stock between the original adjustment date and such readjustment date.
(4) In the case of any Options which expire by their
terms not more than 30 days after the date of issue thereof, no adjustment of
the Exercise Price shall be made until the expiration or exercise of all such
Options; provided, however, that this clause (4) shall not apply to Options that
are issued within 30 days of a transaction described under Section 4.4(c)(1) or
(2) hereof.
(d) Adjustment of Exercise Price Upon Issuance of
Additional Shares of Stock. In the event the Company shall issue Additional
Shares of Stock (including Additional Shares of Stock deemed to be issued
pursuant to Section 4.4(c)) without consideration or for a consideration per
share less than the Exercise Price in effect on the date of and immediately
prior to such issue, then and in such event, such Exercise Price, as applicable,
shall be reduced, concurrently with such issue, to a price (calculated to the
nearest cent) determined by multiplying the Exercise Price by a fraction:
(1) the numerator of which shall be (i) the number of
shares of Stock outstanding immediately prior to the issuance of such Additional
Shares of Stock (calculated on a fully diluted basis assuming the exercise or
conversion of all Options, Warrants or Convertible Securities which are
exercisable or convertible at the time such
<PAGE>
-7-
calculation is being made), plus (ii) the number of shares of Stock which the
net aggregate consideration, if any, received by the Company for the total
number of such Additional Shares of Stock so issued would purchase at the
Exercise Price in effect immediately prior to such issuance, and
(2) the denominator of which shall be (i) the number
of shares of Stock outstanding immediately prior to the issuance of such
Additional Shares of Stock (calculated on a fully diluted basis assuming the
exercise or conversion of all Options, Warrants or Convertible Securities which
are exercisable or convertible at the time such calculation is being made), plus
(ii) the number of such Additional Shares of Stock so issued.
(e) Determination of Consideration. For purposes of this
Section 4.4, the consideration received by the Company for the issue of any
Additional Shares of Stock shall be computed as follows:
(1) Cash and Property. Such consideration shall:
(i) insofar as it consists of cash, be computed
at the aggregate amount of cash received by the Company excluding amounts paid
or payable for accrued interest or accrued dividends;
(ii) insofar as it consists of property other
than cash, be computed at the fair value thereof at the time of such issue, as
determined in good faith by the Board of Directors; and
(iii) in the event Additional Shares of Stock
are issued together with other shares or securities or other assets of the
Company for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (i) and (ii) above,
as determined in good faith by the Board of Directors.
(2) Options and Convertible Securities. The
consideration per share received by the Company for Additional Shares of Stock
deemed to have been issued pursuant to Section 4.4(c)(1), relating to Options
and Convertible Securities, shall be determined by dividing:
(i) the total amount, if any, received or
receivable by the Company as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Company upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, or in the case of
<PAGE>
-8-
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
(ii) the maximum number of shares of Stock (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
4.5 Adjustment of Number of Warrant Shares. Upon each
adjustment in the Exercise Price pursuant to any provisions of this Section 4,
the number of Warrant Shares purchasable hereunder at that Exercise Price shall
be adjusted, to the nearest whole share, to the product obtained by multiplying
such number of shares purchasable immediately prior to such adjustment in the
Exercise Price by a fraction, the numerator of which shall be the Exercise Price
immediately prior to such adjustment and the denominator of which shall be the
Exercise Price immediately thereafter.
4.6 Minimal Adjustments. No adjustment in the Exercise Price
and/or the number of shares of Stock subject to this Warrant shall be made if
such adjustment would result in a change in the number of shares represented by
this Warrant of less than one share (the "Adjustment Threshold Amount"). Any
adjustment not made because the Adjustment Threshold Amount is not satisfied
shall be carried forward and made, together with any subsequent adjustments, at
such time as (a) the aggregate amount of all such adjustments is equal to at
least the Adjustment Threshold Amount or (b) the Warrant is exercised.
4.7 Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Exercise Price pursuant to this Section 4, the
Warrant shall, without any action on the part of the holder thereof, be adjusted
in accordance with this Section 4, and the Company promptly shall compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to the Holder a certificate setting forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based.
4.8 Other Events. If any other event of the type contemplated
by this Section 4 but not expressly provided for by such provisions occurs, the
Board of Directors of the Company will make appropriate adjustment in the
Exercise Price so as to equitably protect the rights of the Holder.
5. Notices of Record Date. Upon (a) any establishment by the Company of
a record date of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or right or option to acquire securities of the Company, or
any other right, or (b) any capital reorganization, reclassification,
recapitalization, merger or consolidation of the Company with or into any other
corporation, any transfer of all or substantially all the assets of the
<PAGE>
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Company, or any voluntary or involuntary dissolution, liquidation or winding up
of the Company, the Company shall mail to the Holder at least 10 days, or such
longer period as may be required by law, prior to the record date specified
therein, a notice specifying (i) the date established as the record date for the
purpose of such dividend, distribution, option or right and a description of
such dividend, distribution, option or right, (ii) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up is expected to become effective and (iii) the date, if
any, fixed as to when the holders of record of Stock (or other securities at
that time receivable upon exercise of the Warrant) shall be entitled to exchange
their shares of Stock (or such other stock or securities) for securities or
other property deliverable upon such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up.
6. No Dilution or Impairment. The Company will not, by amendment of its
articles of incorporation or by-laws or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all action as may be
necessary or appropriate in order to protect the rights of the Holder against
dilution, or other impairment.
7. Fractional Shares. The Company shall not issue any fractional shares
nor scrip representing fractional shares upon exercise of any portion of this
Warrant.
8. Representations, Warranties and Covenants. This Warrant is issued
and delivered by the Company and accepted by each Holder on the basis of the
following representations, warranties and covenants made by the Company:
8.1 Authority. The Company has all necessary authority to
issue, execute and deliver this Warrant and to perform its obligations
hereunder. This Warrant has been duly authorized, issued, executed and delivered
by the Company and is the valid and binding obligation of the Company,
enforceable in accordance with its terms.
8.2 Reservation of Warrant Shares. The Warrant Shares issuable
upon the exercise of this Warrant have been (and any securities issuable or
deliverable upon conversion of such Warrant Shares, upon issuance or delivery,
will be) duly authorized and reserved for issuance by the Company and, when
issued in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable.
8.3 Compliance with Laws. The issuance, execution and delivery
of this Warrant do not, and the issuance of the Warrant Shares upon the exercise
of this Warrant in accordance with the terms hereof (and the issuance of any
securities issuable or deliverable upon conversion of such Warrant Shares) will
not, (i) violate or contravene the Company's articles of incorporation or
by-laws, or any law, statute, regulation, rule, judgment or order applicable to
the Company, (ii) violate, contravene or result in a breach or default under
<PAGE>
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any material contract, agreement or instrument to which the Company is a party
or by which the Company or any of its assets are bound or (iii) require the
consent or approval of or the filing of any notice or registration with any
person or entity.
9. Investment Representations.
9.1 Purchase for Investment. The Holder represents and
warrants that it is acquiring the Warrant, and upon exercise will hold the
Warrant Shares, solely for its account for investment and not with a view to or
for sale or distribution of said Warrant or Warrant Shares or any part thereof.
The Holder also represents that the entire legal and beneficial interests of the
Warrant and Warrant Shares the Holder is acquiring is being acquired for, and
will be held for, its account only.
9.2 Securities Not Registered. The Holder understands that the
Warrant has not been registered under the Act on the basis that no distribution
or public offering of the stock of the Company is to be effected. The Holder
realizes that the basis for the exemption may not be present if, notwithstanding
its representations, it has in mind merely acquiring the securities for a fixed
or determinable period in the future, or for a market rise, or for sale if the
market does not rise. The Holder has no such intention.
9.3 Securities to be Held Indefinitely. The Holder recognizes
that the Warrant and Warrant Shares being acquired by it must be held
indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available. The Holder recognizes that the
Company has no obligation to register the Warrant or the Warrant Shares of the
Company, or to comply with any exemption from such registration.
9.4 Rule 144. The Holder is aware that neither the Warrant nor
Warrant Shares may be sold pursuant to Rule 144 adopted under the Act unless
certain conditions are met and until the Holder has held the Warrant Shares for
at least two years. Among the conditions for use of the Rule is the availability
of current information to the public about the Company. The Holder understands
that the Company has not made such information available and has no present
plans to do so.
9.5 Accredited Investor. The Holder represents and warrants
that it is an "accredited investor" as such term is defined in Rule 501(a) under
the Act.
10. Transfer, Exchange, Assignment or Loss of Warrant.
10.1 Restrictions on Transfer. This Warrant may be
transferred, in whole or in part, subject to the following restrictions. This
Warrant and the Warrant Shares or any other securities ("Other Securities")
received upon exercise of this Warrant shall be subject to restrictions on
transferability until registered under the Act, unless an exemption from
registration is available. Until this Warrant and the Warrant Shares or Other
Securities are so registered, this Warrant and any certificate for Warrant
Shares or
<PAGE>
-11-
Other Securities issued or issuable upon exercise of this Warrant shall contain
a legend on the face thereof, in form and substance satisfactory to counsel for
the Company, stating that this Warrant, the Warrant Shares or Other Securities
may not be sold, transferred or otherwise disposed of unless, in the opinion of
counsel (which counsel and which opinion shall be satisfactory to the Company),
the Warrant, the Warrant Shares or Other Securities may be transferred without
such registration.
10.2 Procedure for Transfer. Any transfer permitted hereunder
shall be made by surrender of this Warrant to the Company at its principal
office or to the Transfer Agent at its offices with a duly executed request to
transfer the Warrant, which shall provide adequate information to effect such
transfer and shall be accompanied by funds sufficient to pay any transfer taxes
applicable. Upon satisfaction of all transfer conditions, the Company or
Transfer Agent shall, without charge, execute and deliver a new Warrant in the
name of the transferee named in such transfer request, and this Warrant promptly
shall be canceled.
10.3 Lost, Stolen or Destroyed Warrant. Upon receipt by the
Company of evidence satisfactory to it of loss, theft, destruction or mutilation
of this Warrant and, in the case of loss, theft or destruction, of reasonably
satisfactory indemnification, or, in the case of mutilation, upon surrender of
this Warrant, the Company will execute and deliver, or instruct the Transfer
Agent to execute and deliver, a new Warrant of like tenor and date, and any such
lost, stolen or destroyed Warrant thereupon shall become void.
10.4 Warrant Binding Upon Assignee or Successor. The terms and
conditions of this Warrant shall be binding upon any permitted assignee and
successor of the Holder. Any such successor or assignee shall be obligated to
and shall immediately execute an instrument which provides that such party is
bound under the terms of this Warrant. Any transfer, assignment or other
disposition without such execution by the proposed transferee, assignee or
successor shall be null and void.
11. Issue Tax. The issuance of certificate for shares of Stock upon the
exercise of this Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than applicable income taxes) in respect
thereof; provided, however, that the Company shall not be required to pay any
tax that may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
12. Amendment. The terms of this Warrant may be amended,
modified or waived only with the written consent of the Holder.
13. Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
as such laws are applied to contracts entered into and wholly to be performed
within the Commonwealth of Massachusetts.
<PAGE>
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IN WITNESS WHEREOF, the Company and Holder have executed this Warrant
as of May 15, 1996.
___________________ GREENTREE SOFTWARE, INC.
By: ___________________ By:________________________
John Medico, President
-----------------
<PAGE>
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SUBSCRIPTION
To: ________________________ Date: _____________________
The undersigned hereby subscribes for __________________ shares of
Stock covered by this Warrant. The certificate(s) for such shares shall be
issued in the name of the undersigned or as otherwise indicated below:
------------------------
Signature
------------------------
Name for Registration
------------------------
Mailing Address
<PAGE>
-14-
NET ISSUE EXERCISE ELECTION NOTICE
To: ________________________ Date: _____________________
The undersigned hereby elects under Section 3 to surrender the right to
purchase _____________ shares of Stock pursuant to this Warrant. The
certificate(s) for the shares issuable upon such net issue exercise election
shall be issued in the name of the undersigned or as otherwise indicated below.
------------------------
Signature
------------------------
Name for Registration
------------------------
Mailing Address
<PAGE>
-15-
ASSIGNMENT
For value received __________________________ hereby sells, assigns
and transfers unto ___________________________________________________________
[Please print or typewrite name and address of Assignee]
the within Warrant, and does hereby irrevocably constitute and appoint
__________________________________________ its attorney to transfer the within
Warrant on the books of the within named Company with full power of
substitution on the premises.
Dated: _________________
--------------------------
In the Presence of:
- ------------------------
June 5, 1996
Greentree Software, Inc.
2801 Fruitville Road, Suite 180
Sarasota, FL 34237
Re: Registration Statement on Form S-3 Under the Securities Act of 1933,
as amended
Ladies and Gentlemen:
We have acted as counsel to Greentree Software, Inc., a New York
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of 4,783,188 shares (the
"Shares") of the common shares, $.04 par value per share (the "Common Shares"),
of the Company, and 581,824 Common Shares (the "Warrant Shares"), issuable upon
the exercise of Common Share Purchase Warrants (the "Warrants"), to be offered
by certain stockholders of the Company pursuant to a Registration Statement on
Form S-3, filed by the Company with the Securities and Exchange Commission (the
"Commission") on June 5, 1996.
As such counsel, we have reviewed (i) the Certificate of Incorporation, as
amended, of the Company, (ii) the By-laws, as amended, of the Company, (iii) the
Warrants, (iv) the corporate proceedings taken by the Company with respect to
the authorization of the Warrants and the issuance of the Shares and the Warrant
Shares upon exercise of the Warrants, all as certified to us by officers of the
Company, and (v) a certificate executed and delivered by certain officers of the
Company (the "Officers' Certificate"). We have made no other documentary review
of any kind whatsoever. In connection with our opinion provided herein, our
investigation revealed that the minute book of the Company containing all
resolutions of the Board of Directors and of the shareholders of the Company
other than those specifically reviewed by us in connection with this opinion is
unavailable to the Company and to us. As a consequence, we have relied upon the
presumption of regularity and continuity to the extent necessary to enable us to
provide our opinion.
With regard to all matters of fact (including factual conclusions and
characterizations and descriptions of purpose, intention or other state of
mind), we have relied entirely upon the Officers' Certificate and have assumed,
without independent inquiry, the accuracy of the Officers' Certificate. We have
assumed without any investigation the genuineness of all signatures, the
conformity to the originals of all documents reviewed by us as copies, the
authenticity and completeness of all original documents reviewed by us in
original or copy form, and the legal competence of each individual executing a
document.
In rendering our opinion below regarding the Shares, we have assumed,
without investigation, that the Company has received the consideration called
for by the resolutions of the Board of Directors of the Company authorizing the
issuance of the Shares. We have also assumed that Common Shares of the Company
are regularly quoted in an over-the-counter market by one or more members of a
national or an affiliated securities association as set forth in ss.630 of the
Business Corporation Law of the State of New York.
We have also assumed that the registration requirements of the Act and all
applicable requirements of state laws regulating the sale of securities will
have been duly satisfied.
This opinion is limited solely to the Business Corporation Law of the State
of New York, as reported in McKinney's Consolidated Laws of New York Annotated
(West Publishing Co. 1986)
Based upon the foregoing, we are of the opinion that the Shares are
validly issued, fully paid and non-assessable and that the Warrant Shares, when
issued upon exercise of the Warrants in accordance with the terms of the
Warrants will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Bingham, Dana & Gould LLP
Bingham, Dana & Gould LLP
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Greentree Software, Inc.
We consent to the use of our report incorporated by reference herein and to the
reference to our firm under the heading "Experts in the Prospectus.
[Signature of KPMG Peat Marwich, LLP]
St. Petersburg, Florida
June 3, 1996
Consent of Independent Public Accountants
To: Greentree Software, Inc.
As independent public accountants, we hereby consent to the use of our
report for the year ended May 31, 1994 included in the prospectus and to the
reference to our firm under the heading "Experts" therein.
[Signature of Rogoff & Company, P.C.]
New York, New York
May 15, 1996
