REGISTRATION RIGHTS AGREEMENT
The parties to this Registration Rights Agreement (the "Agreement"),
effective as of December 31, 1996, are Faroudja, Inc., a Delaware corporation
("FI") and Xxxxxxx Investors, LLC.
WHEREAS, certain investors ("Investors") entered into that certain
Subscription Agreement ("Subscription Agreement") with Faroudja Images, Inc., a
Delaware corporation ("FII") wherein those Investors purchased FII Common Stock
and were granted, among other things, registration rights in the event that FII,
including all successors and assigns of FII by way of merger or otherwise,
completes an initial public offering of its stock prior to March 8, 1999;
WHEREAS, concurrent with the merger of Faroudja Research Enterprises, Inc.,
a California corporation ("FRE") with and into Faroudja Laboratories, Inc., a
California corporation ("FLI"), and the merger of Faroudja Acquisition, Inc., a
California corporation and indirect wholly-owned subsidiary of FLI, with and
into FLI (collectively, the "Mergers"), with FLI surviving the Mergers as a
wholly-owned subsidiary of FI, Faroudja Images, Inc., a Delaware corporation
("FII") liquidated effective December 31, 1996 and the assets of FII, including
options to purchase certain shares of FLI and FRE held by Y&I, were distributed
to Xxxxx X. Xxxxxxxxxx as the Liquidating trustee for FII (the "Liquidating
Trustee") to be distributed at a later date to the FII shareholders;
WHEREAS, Yves Faroudja and Xxxxxxx Faroudja (collectively, "Y&I"), FI, FII,
Xxxxxxx Investors, LLC, Images Partners, LP and the Liquidating Trustee (Xxxxxxx
Investors, LLC, Images Partners, LP and the Liquidating Trustee are
collectively, known herein as the "FI Shareholders") entered into that certain
Amended and Restated Option to Purchase Shares of Common Stock of Faroudja, Inc.
as of December 31, 1996, restating certain rights of FII and Y&I, and confirming
the transfer of assets by FII to the Liquidating Trustee, which assets will be
distributed at a later date to the FII shareholders;
WHEREAS Y&I, FI and the FI Shareholders entered into that certain
Registration and Shareholders Right Agreement of even date, restating certain
registration rights of Y&I that were originally set forth in that certain
Shareholders Agreement entered into on March 8, 1996, by and between FII, FLI,
FRE and Y&I, which agreement was terminated pursuant to that certain Mutual
Termination of Shareholders Agreement, dated December 30, 1996, by and between
FII, FLI, FRE and Y&I; and
WHEREAS, the parties desire to enter into this Agreement to restate and
amend certain registration and other rights granted to Xxxxxxx Investors, LLC,
as successor to the Investors, which rights were originally set forth in the
Subscription Agreement;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. REGISTRATION RIGHTS.
1.1 DEFINITIONS. As used in this Section 1, the following terms
shall have the following meanings:
(a) "register", "registered" and "registrations refer to a
registration effected by preparing and filing a registration statement or
statements or similar documents in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration statement or
document by the SEC;
(b) "Registrable Securities" means (i) the common stock held by
Xxxxxxx Investors, LLC, and (ii) any common stock of FI issued as a dividend or
other distribution with respect to, or in exchange for or in replacement of such
common stock, excluding in all cases, however, any Registrable Securities sold
by Xxxxxxx Investors, LLC in a transaction in which its registration rights
under this Agreement are not assigned;
(c) "SEC" shall mean the Securities and Exchange Commission; and
(d) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
1.2 REGISTRATION.
(a) FI shall use all reasonable efforts to effect an initial
registered public offering of its stock pursuant to a registration statement
filed with the SEC under the Securities Act ("IPO"), and the parties shall
cooperate in structuring any such public offering.
(b) In the event that FI (which, for all purposes of this
section 1 (including, without limitation, section 1.2(c)), includes all
successors and assigns of FI by way of merger or otherwise) completes an IPO
prior to Xxxxx 0, 0000, XX shall prepare and file, not later than 180 days after
the closing date of the IPO, a registration statement under the Securities Act
to permit resales of the Registrable Securities; provided, however that Xxxxxxx
Investors, LLC may inform the Company in writing that it wishes to exclude all
or a portion of its Registrable Securities from such registration. If Xxxxxxx
Investors, LLC elects to exclude its Registrable Securities from
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such registration it will have no further rights to have such Registrable
Securities registered by the Company.
(c) If FI does not complete an IPO prior to Xxxxx 0, 0000, XX
shall prepare and file, upon the request of the holders of a majority of the
common stock of FI, a registration statement under the Securities Act to permit
resales of all the shares of common stock of FI; PROVIDED, HOWEVER, that Xxxxxxx
Investors, LLC may inform FI in writing that it wishes to exclude all or a
portion of its Registrable Securities from such registration.
(d) FI is obligated to effect only one registration pursuant to
this Agreement.
(e) In connection with an IPO, Xxxxxxx Investors, LLC agrees
that, without the prior written consent of FI, Xxxxxxx Investors, LLC shall not
offer, sell, contract to sell or otherwise dispose of any Registrable Securities
for and during the period beginning on the date that an underwriting agreement
is executed with respect to such offering and continuing to and including 180
days after the date of the prospectus included in the registration statement
under the Securities Act for such offering.
1.3 OBLIGATIONS OF FI. When required under this Agreement to effect
the registration of the Registrable Securities, FI shall, as expeditiously as
reasonably possible:
(a) prepare and file with the SEC a registration statement or
similar documents (the "Registration Statement') with respect to all Registrable
Securities, other than any Registrable Securities excluded pursuant to
section 1.2(b), and use its best efforts to keep the Registration Statement
effective at all times until March 8, 1999, which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading;
(b) prepare and file with the SEC such amendments (including
post effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times until
March 8, 1999, and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Registration
Statement;
(c) furnish promptly to Xxxxxxx Investors, LLC such numbers of
copies of a prospectus, including a preliminary prospectus, and all amendments
and supplements thereto, in conformity with the requirements of the Securities
Act, and such
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other documents as Xxxxxxx Investors, LLC may reasonably request in writing in
order to facilitate the disposition of the Registrable Securities;
(d) use its best efforts to register and qualify the securities
covered by the Registration Statement under such securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by Xxxxxxx Investors, LLC,
and to prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements and to take such other actions as may
be necessary to maintain such registration and qualification in effect at all
times until March 8, 1999, and to take all other actions necessary or advisable
to enable the disposition of such securities in such jurisdictions, provided
that FI shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions or to provide any undertaking or make any
change in its charter or bylaws that its Board of Directors determines to be
contrary to the best interests of FI and its stockholders;
(e) enter into and perform its obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing underwriter of
such offering. Xxxxxxx Investors, LLC hereby agrees to enter into and perform
its customary obligations under any such agreement, including, without
limitation, customary indemnification and contribution obligations;
(f) notify Xxxxxxx Investors, LLC at any time when a prospectus
relating to Registrable Securities covered by the Registration Statement is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
FI shall promptly amend or supplement the Registration Statement to correct any
such untrue statement or omission;
(g) notify Xxxxxxx Investors, LLC of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. FI shall make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible time;
(h) permit a single firm of counsel designated as selling
stockholders' counsel by the holders of a majority in interest of the
Registrable Securities and other FI shares included in such registration to
review the Registration Statement and all amendments and supplements thereto a
reasonable period of time prior to their filing, and shall not file any document
in a form to which such counsel reasonably objects;
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(i) at the request of Xxxxxxx Investors, LLC, furnish on the
date that Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement (i) an opinion, dated
such date, of the counsel representing FI for the purposes of such registration,
in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters and (ii) a letter, dated such
date, from the independent certified public accountants of FI, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters;
(j) make available for inspection by Xxxxxxx Investors, LLC, any
underwriters participating in the offering pursuant to the registration and the
counsel, accountants or other agents retained by Xxxxxxx Investors, LLC or any
such underwriter, all pertinent financial and other records, corporate documents
and properties of FI and cause FI's officers, directors and employees to supply
all information reasonably requested by Xxxxxxx Investors, LLC or any such
underwriters in connection with the registration;
(k) if the common stock is then listed on a national securities
exchange, use its best efforts to cause the Registrable Securities to be listed
on such exchange. If the common stock is not then listed on a national
securities exchange, use its best efforts to facilitate the reporting of the
Registrable Securities on NASDAQ;
(l) provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement;
(m) take all actions reasonably necessary to facilitate the
timely preparation and delivery of certificates (not bearing any legend
restricting the sale or transfer of such securities) representing the
Registrable Securities to be sold pursuant to the Registration Statement and to
enable such certificates to be in such denominations and registered in such
names as Xxxxxxx Investors, LLC or any underwriters may reasonably request; and
(n) take all other reasonable actions necessary to expedite and
facilitate the registration of the Registrable Securities pursuant to the
Registration Statement.
1.4 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of FI to take any action pursuant to this Section 1 with respect to
Xxxxxxx Investors, LLC that Xxxxxxx Investors, LLC shall furnish to FI such
information regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be reasonably
required to effect the registration of the Registrable Securities and shall
execute such documents in connection with such registration as FI may reasonably
request.
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1.5 EXPENSES OF REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registration filings or
qualifications pursuant to this Section 1, including, without limitation, all
registration, listing, filing and qualification fees, printers and accounting
fees, the fees and disbursements of counsel for FI and the reasonable fees and
disbursements of the firm of counsel designated in accordance with
Section 1.3(h) shall be borne by FI.
1.6 INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, FI shall indemnify and hold
harmless Xxxxxxx Investors, LLC, the directors, if any, of Xxxxxxx Investors,
LLC, the officers, if any, of Xxxxxxx Investors, LLC who sign the Registration
Statement, each person, if any, who controls Xxxxxxx Investors, LLC, any
underwriter (as defined in the Securities Act) for Xxxxxxx Investors, LLC and
each person, if any, who controls any such underwriter within the meaning of the
Securities Act or the Securities Exchange Act of 1934 (the "1934 Act"), against
any losses, claims, damages, expenses or liabilities (joint or several) to which
any of them may become subject under the Securities Act, the 1934 Act or
otherwise, insofar as such losses, claims, damages, expenses or liabilities (or
actions or proceedings, whether commenced or threatened, in respect thereof
arise out of or are based upon any of the following statements, omissions or
violations (collectively, a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading or (iii) any violation or alleged violation by FI of the
Securities Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the 1934 Act or any state securities law,
and FI shall reimburse Xxxxxxx Investors, LLC and each such underwriter or
controlling person, promptly as such expenses are incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
PROVIDED, HOWEVER, that the indemnity agreement contained in this Section 1.6(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action, if such settlement is effected without the consent of FI,
which consent shall not be unreasonably withheld, conditioned or delayed, nor
shall FI be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation that
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by Xxxxxxx Investors,
LLC, directors and officers of Xxxxxxx Investors, LLC or any such underwriter or
controlling person, as the case may be. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of Xxxxxxx
Investors, LLC or any such underwriter or controlling person or FI and shall
survive the transfer of the Registrable Securities by Xxxxxxx Investors, LLC.
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(b) To the extent permitted by law, Xxxxxxx Investors, LLC shall
indemnify and hold harmless FI, each of its directors, each of its officers who
have signed the Registration Statement, each person, if any, who controls FI
within the meaning of the Securities Act or the 1934 Act, any underwriter and
any other stockholder selling securities pursuant to the Registration Statement
or any of its directors or officers or any person who controls such holder or
underwriter, against any losses, claims, damages or liabilities (jointly or
severally) to which any of them may become subject under the Securities Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by Xxxxxxx Investors, LLC expressly for use in connection with such
registration; and Xxxxxxx Investors, LLC shall reimburse any legal or other
expense reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the indemnity agreement contained in this Section 1.6(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action,
if such settlement is effected without the consent of Xxxxxxx Investors, LLC,
which consent shall not be unreasonably withheld, conditioned or delayed; and
PROVIDED, FURTHER, that Xxxxxxx Investors, LLC shall be liable under this
Section 1.6(b) for only that amount of losses, claims, damages and liabilities
as does not exceed the proceeds to Xxxxxxx Investors, LLC as a result of the
sale of Registrable Securities pursuant to such registration.
(c) Promptly after receipt by an indemnified party under this
Section 1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.6,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent that the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if, in the reasonable opinion
of counsel for the indemnifying party, representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.6 only to the extent
prejudicial to its ability to defend such action, but the omission so to deliver
written notice to the indemnifying party shall not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 1.6.
The indemnification required by this Section 1.6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, promptly as such
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expense, loss, damage or liability is incurred, and upon receipt by the
indemnifying party of such documentation as it may reasonably request.
(d) To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under this Section 1.6 to the extent permitted by law, PROVIDED that (i)
no contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in this
Section 1.6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of such fraudulent misrepresentation and (iii) contribution by
any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities.
1.7 ASSIGNABILITY. This Agreement is not transferable or assignable
by Xxxxxxx Investors, LLC; PROVIDED, THAT, the rights to have FI register
Xxxxxxx Investors, LLC's Registrable Securities pursuant to section 1 of this
Agreement may be assigned by Xxxxxxx Investors, LLC to transferees or assignees
of such securities provided FI is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; PROVIDED, FURTHER, that such assignment shall be effective only
if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Securities Act
and the transferee agrees that the further transfer or assignment of the
securities shall be made only in accordance with all applicable laws.
2. NOTICES. All notices and other communications under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery, (b) facsimile transmission, (c) registered or certified mail,
postage prepaid, return receipt requested or (d) overnight delivery service.
Notices shall be sent to the appropriate party at its, his or her address or
facsimile number given below (or at such other address or facsimile number for
that party as shall be specified by notice given under this section 2):
if to FI, to it at:
Faroudja, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx, President
Fax: (000) 000-0000
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with a copy to:
Buchalter, Nemer, Fields & Younger
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
if to Xxxxxxx Investors, LLC, to it at:
the address of such party set forth on the signature
page of this Agreement
All such notices and communications shall be deemed received upon (a)
actual receipt by the addressee, (b) actual delivery to the appropriate address
or (c) in the case of a facsimile transmission, upon transmission by the sender
and issuance by the transmitting machine of a confirmation slip confirming that
the number of pages constituting the notice have been transmitted without error.
In the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided for above. However, such mailing shall in no way alter the time at
which the facsimile notice is deemed received.
3. GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the law of the State of California applicable to agreements made
and to be performed wholly in California.
4. SEPARABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of this agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
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5. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be considered an original, but all of which together shall
constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
FAROUDJA, INC.,
a Delaware corporation
By:/s/ Xxxxxxx Xxxxx
----------------------------------------------
Xxxxxxx Xxxxx,
President
XXXXXXX INVESTORS, LLC
By:/s/ Xxxx Xxxxx
----------------------------------------------
Address: 00000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
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REGISTRATION RIGHTS AGREEMENT
The parties to this Registration Rights Agreement (the "Agreement"),
effective as of December 31, 1996, are Faroudja, Inc., a Delaware corporation
("FI") and Images Partners, LP.
WHEREAS, certain investors ("Investors") entered into that certain
Subscription Agreement ("Subscription Agreement") with Faroudja Images, Inc., a
Delaware corporation ("FII") wherein those Investors purchased FII Common Stock
and were granted, among other things, registration rights in the event that FII,
including all successors and assigns of FII by way of merger or otherwise,
completes an initial public offering of its stock prior to March 8, 1999;
WHEREAS, concurrent with the merger of Faroudja Research Enterprises, Inc.,
a California corporation ("FRE") with and into Faroudja Laboratories, Inc., a
California corporation ("FLI"), and the merger of Faroudja Acquisition, Inc., a
California corporation and indirect wholly-owned subsidiary of FLI, with and
into FLI (collectively, the "Mergers"), with FLI surviving the Mergers as a
wholly-owned subsidiary of FI, Faroudja Images, Inc., a Delaware corporation
("FII") liquidated effective December 31, 1996 and the assets of FII, including
options to purchase certain shares of FLI and FRE held by Y&I, were distributed
to the Xxxxx X. Xxxxxxxxxx as the Liquidating Trustee for FII (the "Liquidating
Trustee") to be distributed at a later date to the FII shareholders;
WHEREAS, Yves Faroudja and Xxxxxxx Faroudja (collectively, "Y&I"), FI, FII,
Xxxxxxx Investors, LLC, Images Partners, LP and the Liquidating Trustee (Xxxxxxx
Investors, LLC, Images Partners, LP and the Liquidating Trustee are collectively
known herein as the "FI Shareholders") entered into that certain Amended and
Restated Option to Purchase Shares of Common Stock of Faroudja, Inc. as of
December 31, 1996, restating certain rights of FII and Y&I, and confirming the
transfer of assets by FII to the Liquidating Trustee, which assets will be
distributed at a later date to the FII shareholders;
WHEREAS Y&I, FI and the FI Shareholders entered into that certain
Registration and Shareholders Right Agreement of even date, restating certain
registration rights of Y&I that were originally set forth in that certain
Shareholders Agreement entered into on March 8, 1996, by and between FII, FLI,
FRE and Y&I, which agreement was terminated pursuant to that certain Mutual
Termination of Shareholders Agreement, dated December 30, 1996, by and between
FII, FLI, FRE and Y&I; and
WHEREAS, the parties desire to enter into this Agreement to restate and
amend certain registration and other rights granted to Images Partners, LP, as a
successor to the Investors, which rights were originally set forth in the
Subscription Agreement;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. REGISTRATION RIGHTS.
1.1 DEFINITIONS. As used in this Section 1, the following terms
shall have the following meanings:
(a) "register", "registered" and "registrations refer to a
registration effected by preparing and filing a registration statement or
statements or similar documents in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration statement or
document by the SEC;
(b) "Registrable Securities" means (i) the common stock held by
Images Partners, LP, and (ii) any common stock of FI issued as a dividend or
other distribution with respect to, or in exchange for or in replacement of such
common stock, excluding in all cases, however, any Registrable Securities sold
by Images Partners, LP in a transaction in which its registration rights under
this Agreement are not assigned;
(c) "SEC" shall mean the Securities and Exchange Commission; and
(d) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
1.2 REGISTRATION.
(a) FI shall use all reasonable efforts to effect an initial
registered public offering of its stock pursuant to a registration statement
filed with the SEC under the Securities Act ("IPO"), and the parties shall
cooperate in structuring any such public offering.
(b) In the event that FI (which, for all purposes of this
section 1 (including, without limitation, section 1.2(c)), includes all
successors and assigns of FI by way of merger or otherwise) completes an IPO
prior to Xxxxx 0, 0000, XX shall prepare and file, not later than 180 days after
the closing date of the IPO, a registration statement under the Securities Act
to permit resales of the Registrable Securities; provided, however that Images
Partners, LP may inform the Company in writing that it wishes to exclude all or
a portion of its Registrable Securities from such registration. If Images
Partners, LP elects to exclude its Registrable Securities from
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such registration it will have no further rights to have such Registrable
Securities registered by the Company.
(c) If FI does not complete an IPO prior to Xxxxx 0, 0000, XX
shall prepare and file, upon the request of the holders of a majority of the
common stock of FI, a registration statement under the Securities Act to permit
resales of all the shares of common stock of FI; PROVIDED, HOWEVER, that Images
Partners, LP may inform FI in writing that it wishes to exclude all or a portion
of its Registrable Securities from such registration.
(d) FI is obligated to effect only one registration pursuant to
this Agreement.
(e) In connection with an IPO, Images Partners, LP agrees that,
without the prior written consent of FI, Images Partners, LP shall not offer,
sell, contract to sell or otherwise dispose of any Registrable Securities for
and during the period beginning on the date that an underwriting agreement is
executed with respect to such offering and continuing to and including 180 days
after the date of the prospectus included in the registration statement under
the Securities Act for such offering.
1.3 OBLIGATIONS OF FI. When required under this Agreement to effect
the registration of the Registrable Securities, FI shall, as expeditiously as
reasonably possible:
(a) prepare and file with the SEC a registration statement or
similar documents (the "Registration Statement') with respect to all Registrable
Securities, other than any Registrable Securities excluded pursuant to
section 1.2(b), and use its best efforts to keep the Registration Statement
effective at all times until March 8, 1999, which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading;
(b) prepare and file with the SEC such amendments (including
post effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times until
March 8, 1999, and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Registration
Statement;
(c) furnish promptly to Images Partners, LP such numbers of
copies of a prospectus, including a preliminary prospectus, and all amendments
and supplements thereto, in conformity with the requirements of the Securities
Act, and such
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other documents as Images Partners, LP may reasonably request in writing in
order to facilitate the disposition of the Registrable Securities;
(d) use its best efforts to register and qualify the securities
covered by the Registration Statement under such securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by Images Partners, LP, and
to prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements and to take such other actions as may
be necessary to maintain such registration and qualification in effect at all
times until March 8, 1999, and to take all other actions necessary or advisable
to enable the disposition of such securities in such jurisdictions, provided
that FI shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions or to provide any undertaking or make any
change in its charter or bylaws that its Board of Directors determines to be
contrary to the best interests of FI and its stockholders;
(e) enter into and perform its obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing underwriter of
such offering. Images Partners, LP hereby agrees to enter into and perform its
customary obligations under any such agreement, including, without limitation,
customary indemnification and contribution obligations;
(f) notify Images Partners, LP at any time when a prospectus
relating to Registrable Securities covered by the Registration Statement is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
FI shall promptly amend or supplement the Registration Statement to correct any
such untrue statement or omission;
(g) notify Images Partners, LP of the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. FI shall make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible time;
(h) permit a single firm of counsel designated as selling
stockholders' counsel by the holders of a majority in interest of the
Registrable Securities and other FI shares included in such registration to
review the Registration Statement and all amendments and supplements thereto a
reasonable period of time prior to their filing, and shall not file any document
in a form to which such counsel reasonably objects;
4
(i) at the request of Images Partners, LP, furnish on the date
that Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement (i) an opinion, dated
such date, of the counsel representing FI for the purposes of such registration,
in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters and (ii) a letter, dated such
date, from the independent certified public accountants of FI, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters;
(j) make available for inspection by Images Partners, LP, any
underwriters participating in the offering pursuant to the registration and the
counsel, accountants or other agents retained by Images Partners, LP or any such
underwriter, all pertinent financial and other records, corporate documents and
properties of FI and cause FI's officers, directors and employees to supply all
information reasonably requested by Images Partners, LP or any such underwriters
in connection with the registration;
(k) if the common stock is then listed on a national securities
exchange, use its best efforts to cause the Registrable Securities to be listed
on such exchange. If the common stock is not then listed on a national
securities exchange, use its best efforts to facilitate the reporting of the
Registrable Securities on NASDAQ;
(l) provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement;
(m) take all actions reasonably necessary to facilitate the
timely preparation and delivery of certificates (not bearing any legend
restricting the sale or transfer of such securities) representing the
Registrable Securities to be sold pursuant to the Registration Statement and to
enable such certificates to be in such denominations and registered in such
names as Images Partners, LP or any underwriters may reasonably request; and
(n) take all other reasonable actions necessary to expedite and
facilitate the registration of the Registrable Securities pursuant to the
Registration Statement.
1.4 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of FI to take any action pursuant to this Section 1 with respect to
Images Partners, LP that Images Partners, LP shall furnish to FI such
information regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be reasonably
required to effect the registration of the Registrable Securities and shall
execute such documents in connection with such registration as FI may reasonably
request.
5
1.5 EXPENSES OF REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registration filings or
qualifications pursuant to this Section 1, including, without limitation, all
registration, listing, filing and qualification fees, printers and accounting
fees, the fees and disbursements of counsel for FI and the reasonable fees and
disbursements of the firm of counsel designated in accordance with
Section 1.3(h) shall be borne by FI.
1.6 INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, FI shall indemnify and hold
harmless Images Partners, LP, the directors, if any, of Images Partners, LP, the
officers, if any, of Images Partners, LP who sign the Registration Statement,
each person, if any, who controls Images Partners, LP, any underwriter (as
defined in the Securities Act) for Images Partners, LP and each person, if any,
who controls any such underwriter within the meaning of the Securities Act or
the Securities Exchange Act of 1934 (the "1934 Act"), against any losses,
claims, damages, expenses or liabilities (joint or several) to which any of them
may become subject under the Securities Act, the 1934 Act or otherwise, insofar
as such losses, claims, damages, expenses or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof arise out of or
are based upon any of the following statements, omissions or violations
(collectively, a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading or (iii) any violation or alleged violation by FI of the
Securities Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the 1934 Act or any state securities law,
and FI shall reimburse Images Partners, LP and each such underwriter or
controlling person, promptly as such expenses are incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
PROVIDED, HOWEVER, that the indemnity agreement contained in this Section 1.6(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action, if such settlement is effected without the consent of FI,
which consent shall not be unreasonably withheld, conditioned or delayed, nor
shall FI be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation that
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by Images Partners, LP,
directors and officers of Images Partners, LP or any such underwriter or
controlling person, as the case may be. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of Images
Partners, LP or any such underwriter or controlling person or FI and shall
survive the transfer of the Registrable Securities by Images Partners, LP.
6
(b) To the extent permitted by law, Images Partners, LP shall
indemnify and hold harmless FI, each of its directors, each of its officers who
have signed the Registration Statement, each person, if any, who controls FI
within the meaning of the Securities Act or the 1934 Act, any underwriter and
any other stockholder selling securities pursuant to the Registration Statement
or any of its directors or officers or any person who controls such holder or
underwriter, against any losses, claims, damages or liabilities (jointly or
severally) to which any of them may become subject under the Securities Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by Images Partners, LP expressly for use in connection with such
registration; and Images Partners, LP shall reimburse any legal or other expense
reasonably incurred by any of them in connection with investigating or defending
any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 1.6(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action, if such
settlement is effected without the consent of Images Partners, LP, which consent
shall not be unreasonably withheld, conditioned or delayed; and PROVIDED,
FURTHER, that Images Partners, LP shall be liable under this Section 1.6(b) for
only that amount of losses, claims, damages and liabilities as does not exceed
the proceeds to Images Partners, LP as a result of the sale of Registrable
Securities pursuant to such registration.
(c) Promptly after receipt by an indemnified party under this
Section 1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.6,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent that the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if, in the reasonable opinion
of counsel for the indemnifying party, representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.6 only to the extent
prejudicial to its ability to defend such action, but the omission so to deliver
written notice to the indemnifying party shall not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 1.6.
The indemnification required by this Section 1.6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, promptly as such
7
expense, loss, damage or liability is incurred, and upon receipt by the
indemnifying party of such documentation as it may reasonably request.
(d) To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under this Section 1.6 to the extent permitted by law, PROVIDED that (i)
no contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in this
Section 1.6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of such fraudulent misrepresentation and (iii) contribution by
any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities.
1.7 ASSIGNABILITY. This Agreement is not transferable or assignable
by Images Partners, LP; PROVIDED, THAT, the rights to have FI register Images
Partners, LP's Registrable Securities pursuant to section 1 of this Agreement
may be assigned by Images Partners, LP to transferees or assignees of such
securities provided FI is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; PROVIDED, FURTHER, that such assignment shall be effective only
if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Securities Act
and the transferee agrees that the further transfer or assignment of the
securities shall be made only in accordance with all applicable laws.
2. NOTICES. All notices and other communications under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery, (b) facsimile transmission, (c) registered or certified mail,
postage prepaid, return receipt requested or (d) overnight delivery service.
Notices shall be sent to the appropriate party at its, his or her address or
facsimile number given below (or at such other address or facsimile number for
that party as shall be specified by notice given under this section 2):
if to FI, to it at:
Faroudja, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx, President
Fax: (000) 000-0000
8
with a copy to:
Buchalter, Nemer, Fields & Younger
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
if to Images Partners, LP, to it at:
the address of such party set forth on the signature
page of this Agreement
All such notices and communications shall be deemed received upon (a)
actual receipt by the addressee, (b) actual delivery to the appropriate address
or (c) in the case of a facsimile transmission, upon transmission by the sender
and issuance by the transmitting machine of a confirmation slip confirming that
the number of pages constituting the notice have been transmitted without error.
In the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided for above. However, such mailing shall in no way alter the time at
which the facsimile notice is deemed received.
3. GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the law of the State of California applicable to agreements made
and to be performed wholly in California.
4. SEPARABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of this agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
9
5. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be considered an original, but all of which together shall
constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
FAROUDJA, INC.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxx
----------------------------------------------
Xxxxxxx Xxxxx,
President
IMAGES PARTNERS, LP
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: General Partner
Address: 000 Xxxxxxx Xxxxxx,
00xx Floor
Attention: Xxxxx Xxxxxxxxx,
General Partner
Fax: (000) 000-0000
10
REGISTRATION RIGHTS AGREEMENT
The parties to this Registration Rights Agreement (the "Agreement"),
effective as of December 31, 1996, are Faroudja, Inc., a Delaware corporation
("FI") and Xxxxx X. Xxxxxxxxxx as Liquidating Trustee for Faroudja Images, Inc.
("Liquidating Trustee").
WHEREAS, certain investors ("Investors") entered into that certain
Subscription Agreement ("Subscription Agreement") with Faroudja Images, Inc., a
Delaware corporation ("FII") wherein those Investors purchased FII Common Stock
and were granted, among other things, registration rights in the event that FII,
including all successors and assigns of FII by way of merger or otherwise,
completes an initial public offering of its stock prior to March 8, 1999;
WHEREAS, concurrent with the merger of Faroudja Research Enterprises, Inc.,
a California corporation ("FRE") with and into Faroudja Laboratories, Inc., a
California corporation ("FLI"), and the merger of Faroudja Acquisition, Inc., a
California corporation and indirect wholly-owned subsidiary of FLI, with and
into FLI (collectively, the "Mergers"), with FLI surviving the Mergers as a
wholly-owned subsidiary of FI, Faroudja Images, Inc., a Delaware corporation
("FII") liquidated effective December 31, 1996 and the assets of FII, including
options to purchase certain shares of FLI and FRE held by Y&I, were distributed
to the Liquidating Trustee to be distributed at a later date to the FII
shareholders;
WHEREAS, the Liquidating Trustee is holding and may continue to hold shares
of FI common stock;
WHEREAS, Yves Faroudja and Xxxxxxx Faroudja (collectively, "Y&I"), FI, FII,
Xxxxxxx Investors, LLC, Images Partners, LP and the Liquidating Trustee (Xxxxxxx
Investors, LLC, Images Partners, LP and the Liquidating Trustee are collectively
known herein as the "FI Shareholders") entered into that certain Amended and
Restated Option to Purchase Shares of Common Stock of Faroudja, Inc. as of
December 31, 1996, restating certain rights of FII and Y&I, and confirming the
transfer of assets by FII to the Liquidating Trustee, which assets will be
distributed at a later date to the FII shareholders;
WHEREAS Y&I, FI and the FI Shareholders entered into that certain
Registration and Shareholders Right Agreement of even date, restating certain
registration rights of Y&I that were originally set forth in that certain
Shareholders Agreement entered into on March 8, 1996, by and between FII, FLI,
FRE and Y&I, which agreement was terminated pursuant to that certain Mutual
Termination of Shareholders Agreement, dated December 30, 1996, by and between
FII, FLI, FRE and Y&I; and
WHEREAS, the parties desire to enter into this Agreement to restate and
amend certain registration and other rights granted to the Liquidating Trustee,
as successor to the Investors, which rights were originally set forth in the
Subscription Agreement;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. REGISTRATION RIGHTS.
1.1 DEFINITIONS. As used in this Section 1, the following terms
shall have the following meanings:
(a) "register", "registered" and "registrations refer to a
registration effected by preparing and filing a registration statement or
statements or similar documents in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration statement or
document by the SEC;
(b) "Registrable Securities" means (i) the common stock held by
the Liquidating Trustee, and (ii) any common stock of FI issued as a dividend or
other distribution with respect to, or in exchange for or in replacement of such
common stock, excluding in all cases, however, any Registrable Securities sold
by the Liquidating Trustee in a transaction in which its registration rights
under this Agreement are not assigned;
(c) "SEC" shall mean the Securities and Exchange Commission; and
(d) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
1.2 REGISTRATION.
(a) FI shall use all reasonable efforts to effect an initial
registered public offering of its stock pursuant to a registration statement
filed with the SEC under the Securities Act ("IPO"), and the parties shall
cooperate in structuring any such public offering.
(b) In the event that FI (which, for all purposes of this
section 1 (including, without limitation, section 1.2(c)), includes all
successors and assigns of FI by way of merger or otherwise) completes an IPO
prior to Xxxxx 0, 0000, XX shall prepare and file, not later than 180 days after
the closing date of the IPO, a registration statement under the Securities Act
to permit resales of the Registrable Securities; provided, however that the
Liquidating Trustee may inform the Company in writing that it wishes to exclude
all or a portion of its Registrable Securities from such registration. If the
Liquidating Trustee elects
2
to exclude its Registrable Securities from such registration it will have no
further rights to have such Registrable Securities registered by the Company.
(c) If FI does not complete an IPO prior to Xxxxx 0, 0000, XX
shall prepare and file, upon the request of the holders of a majority of the
common stock of FI, a registration statement under the Securities Act to permit
resales of all the shares of common stock of FI; PROVIDED, HOWEVER, that the
Liquidating Trustee may inform FI in writing that it wishes to exclude all or a
portion of its Registrable Securities from such registration.
(d) FI is obligated to effect only one registration pursuant to
this Agreement.
(e) In connection with an IPO, the Liquidating Trustee agrees
that, without the prior written consent of FI, the Liquidating Trustee shall not
offer, sell, contract to sell or otherwise dispose of any Registrable Securities
for and during the period beginning on the date that an underwriting agreement
is executed with respect to such offering and continuing to and including 180
days after the date of the prospectus included in the registration statement
under the Securities Act for such offering.
1.3 OBLIGATIONS OF FI. When required under this Agreement to effect
the registration of the Registrable Securities, FI shall, as expeditiously as
reasonably possible:
(a) prepare and file with the SEC a registration statement or
similar documents (the "Registration Statement') with respect to all Registrable
Securities, other than any Registrable Securities excluded pursuant to
section 1.2(b), and use its best efforts to keep the Registration Statement
effective at all times until March 8, 1999, which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading;
(b) prepare and file with the SEC such amendments (including
post effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times until
March 8, 1999, and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Registration
Statement;
(c) furnish promptly to the Liquidating Trustee such numbers of
copies of a prospectus, including a preliminary prospectus, and all amendments
and supplements thereto, in conformity with the requirements of the Securities
Act, and such
3
other documents as the Liquidating Trustee may reasonably request in writing in
order to facilitate the disposition of the Registrable Securities;
(d) use its best efforts to register and qualify the securities
covered by the Registration Statement under such securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Liquidating Trustee,
and to prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements and to take such other actions as may
be necessary to maintain such registration and qualification in effect at all
times until March 8, 1999, and to take all other actions necessary or advisable
to enable the disposition of such securities in such jurisdictions, provided
that FI shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions or to provide any undertaking or make any
change in its charter or bylaws that its Board of Directors determines to be
contrary to the best interests of FI and its stockholders;
(e) enter into and perform its obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing underwriter of
such offering. The Liquidating Trustee hereby agrees to enter into and perform
its customary obligations under any such agreement, including, without
limitation, customary indemnification and contribution obligations;
(f) notify the Liquidating Trustee at any time when a prospectus
relating to Registrable Securities covered by the Registration Statement is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
FI shall promptly amend or supplement the Registration Statement to correct any
such untrue statement or omission;
(g) notify the Liquidating Trustee of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. FI shall make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible time;
(h) permit a single firm of counsel designated as selling
stockholders' counsel by the holders of a majority in interest of the
Registrable Securities and other FI shares included in such registration to
review the Registration Statement and all amendments and supplements thereto a
reasonable period of time prior to their filing, and shall not file any document
in a form to which such counsel reasonably objects;
4
(i) at the request of the Liquidating Trustee, furnish on the
date that Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement (i) an opinion, dated
such date, of the counsel representing FI for the purposes of such registration,
in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters and (ii) a letter, dated such
date, from the independent certified public accountants of FI, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters;
(j) make available for inspection by the Liquidating Trustee,
any underwriters participating in the offering pursuant to the registration and
the counsel, accountants or other agents retained by the Liquidating Trustee or
any such underwriter, all pertinent financial and other records, corporate
documents and properties of FI and cause FI's officers, directors and employees
to supply all information reasonably requested by the Liquidating Trustee or any
such underwriters in connection with the registration;
(k) if the common stock is then listed on a national securities
exchange, use its best efforts to cause the Registrable Securities to be listed
on such exchange. If the common stock is not then listed on a national
securities exchange, use its best efforts to facilitate the reporting of the
Registrable Securities on NASDAQ;
(l) provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement;
(m) take all actions reasonably necessary to facilitate the
timely preparation and delivery of certificates (not bearing any legend
restricting the sale or transfer of such securities) representing the
Registrable Securities to be sold pursuant to the Registration Statement and to
enable such certificates to be in such denominations and registered in such
names as the Liquidating Trustee or any underwriters may reasonably request; and
(n) take all other reasonable actions necessary to expedite and
facilitate the registration of the Registrable Securities pursuant to the
Registration Statement.
1.4 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of FI to take any action pursuant to this Section 1 with respect to
the Liquidating Trustee that the Liquidating Trustee shall furnish to FI such
information regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be reasonably
required to effect the registration of the Registrable Securities and shall
execute such documents in connection with such registration as FI may reasonably
request.
5
1.5 EXPENSES OF REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registration filings or
qualifications pursuant to this Section 1, including, without limitation, all
registration, listing, filing and qualification fees, printers and accounting
fees, the fees and disbursements of counsel for FI and the reasonable fees and
disbursements of the firm of counsel designated in accordance with
Section 1.3(h) shall be borne by FI.
1.6 INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, FI shall indemnify and hold
harmless the Liquidating Trustee who signs the Registration Statement, any
underwriter (as defined in the Securities Act) for the Liquidating Trustee and
each person, if any, who controls any such underwriter within the meaning of the
Securities Act or the Securities Exchange Act of 1934 (the "1934 Act"), against
any losses, claims, damages, expenses or liabilities (joint or several) to which
any of them may become subject under the Securities Act, the 1934 Act or
otherwise, insofar as such losses, claims, damages, expenses or liabilities (or
actions or proceedings, whether commenced or threatened, in respect thereof
arise out of or are based upon any of the following statements, omissions or
violations (collectively, a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading or (iii) any violation or alleged violation by FI of the
Securities Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the 1934 Act or any state securities law,
and FI shall reimburse the Liquidating Trustee and each such underwriter
promptly as such expenses are incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, action or proceeding; PROVIDED, HOWEVER,
that the indemnity agreement contained in this Section 1.6(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action,
if such settlement is effected without the consent of FI, which consent shall
not be unreasonably withheld, conditioned or delayed, nor shall FI be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by the Liquidating Trustee or any such
underwriter, as the case may be. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Liquidating
Trustee or any such underwriter or FI and shall survive the transfer of the
Registrable Securities by the Liquidating Trustee.
6
(b) To the extent permitted by law, the Liquidating Trustee
shall indemnify and hold harmless FI, each of its directors, each of its
officers who have signed the Registration Statement, each person, if any, who
controls FI within the meaning of the Securities Act or the 1934 Act, any
underwriter and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any person who
controls such holder or underwriter, against any losses, claims, damages or
liabilities (jointly or severally) to which any of them may become subject under
the Securities Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by the Liquidating Trustee expressly for use in
connection with such registration; and the Liquidating Trustee shall reimburse
any legal or other expense reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the indemnity agreement contained in this Section 1.6(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action, if such settlement is effected without the consent of the
Liquidating Trustee, which consent shall not be unreasonably withheld,
conditioned or delayed; and PROVIDED, FURTHER, that the Liquidating Trustee
shall be liable under this Section 1.6(b) for only that amount of losses,
claims, damages and liabilities as does not exceed the proceeds to the
Liquidating Trustee as a result of the sale of Registrable Securities pursuant
to such registration.
(c) Promptly after receipt by an indemnified party under this
Section 1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.6,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent that the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if, in the reasonable opinion
of counsel for the indemnifying party, representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.6 only to the extent
prejudicial to its ability to defend such action, but the omission so to deliver
written notice to the indemnifying party shall not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 1.6.
The indemnification required by this Section 1.6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense,
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promptly as such expense, loss, damage or liability is incurred, and upon
receipt by the indemnifying party of such documentation as it may reasonably
request.
(d) To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under this Section 1.6 to the extent permitted by law, PROVIDED that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in this
Section 1.6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of such fraudulent misrepresentation and (iii) contribution by
any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities.
1.7 ASSIGNABILITY. This Agreement is not transferable or assignable
by the Liquidating Trustee; PROVIDED, THAT, the rights to have FI register the
Liquidating Trustee's Registrable Securities pursuant to section 1 of this
Agreement may be assigned by the Liquidating Trustee to transferees or assignees
of such securities provided FI is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; PROVIDED, FURTHER, that such assignment shall be effective only
if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Securities Act
and the transferee agrees that the further transfer or assignment of the
securities shall be made only in accordance with all applicable laws.
2. NOTICES. All notices and other communications under this Agreement
shall be in writing and may be given by any of the following methods:
(a) personal delivery, (b) facsimile transmission, (c) registered or certified
mail, postage prepaid, return receipt requested or (d) overnight delivery
service. Notices shall be sent to the appropriate party at its, his or her
address or facsimile number given below (or at such other address or facsimile
number for that party as shall be specified by notice given under this
section 2):
if to FI, to it at:
Faroudja, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx, President
Fax: (000) 000-0000
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with a copy to:
Buchalter, Nemer, Fields & Younger
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
if to the Liquidating Trustee, to him at:
the address of such party set forth on the signature
page of this Agreement
All such notices and communications shall be deemed received upon
(a) actual receipt by the addressee, (b) actual delivery to the appropriate
address or (c) in the case of a facsimile transmission, upon transmission by the
sender and issuance by the transmitting machine of a confirmation slip
confirming that the number of pages constituting the notice have been
transmitted without error. In the case of notices sent by facsimile
transmission, the sender shall contemporaneously mail a copy of the notice to
the addressee at the address provided for above. However, such mailing shall in
no way alter the time at which the facsimile notice is deemed received.
3. GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the law of the State of California applicable to agreements made
and to be performed wholly in California.
4. SEPARABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of this agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
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5. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be considered an original, but all of which together shall
constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
FAROUDJA, INC.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxx
----------------------------------------------
Xxxxxxx Xxxxx,
President
s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------------------
Xxxxx X. Xxxxxxxxxx, as Liquidating Trustee for
Faroudja Images, Inc.
Address: 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
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