EXHIBIT 4.2
REGISTRATION RIGHT AGREEMENT - DEVDEPOT, LLC
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), is entered as of August
[], 2004, by and between International Microcomputer Software, Inc., a
California corporation (the "COMPANY"), and DevDepot, LLC, a California limited
liability company (the "SELLER").
WHEREAS, the Company and the Seller are parties to an Asset Purchase Agreement,
dated as of February 13, 2004 and amended as of May 11, 2004 (the "PURCHASE
AMENDMENT"; the Company having entered the Agreement under its prior name of
Aladdin Systems, Inc.), pursuant to which the Company's wholly-owned subsidiary
purchased from the Seller, and the Seller sold to the Purchaser, substantially
all of the assets of the Seller in partial consideration of the issuance of
112,000 shares of the Company's common stock (the "STOCK CONSIDERATION");
WHEREAS, the Company and the Seller are further parties to an Escrow Agreement,
dated as of May 11, 2004 and amended contemporaneously herewith (the "ESCROW
AMENDMENT"), pursuant to which 25,000 shares of the Stock Consideration have
been placed into escrow;
WHEREAS, in partial consideration of the amendment of the Escrow Amendment, the
Company has agreed to provide certain registration rights as to the Stock
Consideration; and
WHEREAS, all capitalized terms shall have the meanings set forth in the Escrow
Agreement, except as may be specifically otherwise provided herein,
NOW, THEREFORE, the parties hereto agree as follows:
DEFINITIONS
As used in this Agreement:
the terms "register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
the term "REGISTRABLE SECURITIES" means (i) such portion of the Stock
Consideration as are held by the Seller and not subject to the Escrow Agreement,
and (ii) any capital stock of the Company issued as a dividend or other
distribution with respect to, or in exchange for or in replacement of, such
shares;
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company in
compliance with Section 0 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company, which shall be paid in any
event by the Company);
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities and all fees and disbursements
of counsel for the Seller.
COMPANY REGISTRATION
INCLUSION IN REGISTRATION. If the Company shall determine to register any of its
equity securities either for its own account or for the account of any other
security holder, other than a registration relating solely to employee benefit
plans, or a registration relating solely to an SEC Rule 145 transaction, or a
registration on any registration form which does not permit secondary sales, the
Company will:
Promptly, and in no event later than 15 days prior to the anticipated filing
date of the registration statement effecting such registration, give to the
Seller a written notice thereof (which shall include a list of the jurisdictions
in which the Company intends to qualify such securities under the applicable
blue sky or other state securities laws); and include in such registration (and
any related qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request made by the Seller within fifteen (15) days after receipt of the
written notice from the Company described in clause (i) above, except as
otherwise provided in Section 0 below. Such written request may specify all or a
part of the Seller's Registrable Securities.
UNDERWRITING. If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Seller in the written notice given pursuant to Section 0. In such
event, the right of the Seller to registration pursuant to this Section 0 shall
be conditioned upon the Seller's participation in such underwriting. The Seller
shall (together with the Company and any other stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected by the Company.
EXPENSES OF REGISTRATION
All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to this Agreement shall be borne by the
Company, and any and all Selling Expenses shall be borne by the Seller.
REGISTRATION PROCEDURES
In the case of each registration effected by the Company pursuant to this
Agreement, the Company will keep the Seller advised in writing as to the
initiation of each registration and as to the completion thereof. At its
expense, the Company will:
keep such registration effective for a period of one hundred twenty (120) days;
PROVIDED, HOWEVER, that (i) such 120-day period shall be extended for a period
of time equal to the period during which the Seller refrains from selling any
securities included in such registration in accordance with the provisions set
forth in Section 8 hereof; and (ii) in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 120-day period shall be extended until all
such Registrable Securities are sold, PROVIDED that Rule 415, or any successor
rule under the Securities Act, permits an offering on a continuous or delayed
basis, and PROVIDED FURTHER that applicable rules under the Securities Act
governing the obligation to file a post-effective amendment permit, in lieu of
filing a post-effective amendment which (y) includes any prospectus required by
Section 10(a) of the Securities Act or (z) reflects facts or events representing
a material or fundamental change in the information set forth in the
registration statement, the incorporation by reference of information required
to be included in (y) and (z) above to be contained in periodic reports filed
pursuant to Section 12 or 15(d) of the Exchange Act in the registration
statement;
prepare and file such amendments and supplements to such registration statement
and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by any such registration statement;
and
furnish such number of prospectuses and other documents incident thereto as the
Seller from time to time may reasonably request.
INDEMNIFICATION
The Company will indemnify the Seller with respect to each registration which
has been effected pursuant to this Agreement, and each underwriter, if any, and
each person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse the Seller for any legal or other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; PROVIDED that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by the Seller or underwriter.
The Seller will, if Registrable Securities held by them are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, each of its directors and officers and each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter, each other
stockholder of the Company participating in such registration, and each of their
respective officers, directors, and partners, and each person controlling such
other stockholder, in each case, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other document
made by the Seller, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
by the Seller therein not misleading, and will reimburse the Company and such
other stockholders, directors, officers, members, partners, persons,
underwriters or control persons for any legal or other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by the Seller.
Each party entitled to indemnification under this Section 0 (the "INDEMNIFIED
PARTY") shall give notice to the party required to provide indemnification (the
"INDEMNIFYING PARTY") promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom; PROVIDED that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting therefrom, shall
be approved by the Indemnified Party (whose approval shall not unreasonably be
withheld) and the Indemnified Party may participate in such defense at such
party's expense (unless the Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between the Indemnifying Party and the
Indemnified Party in such action, in which case the fees and expenses of counsel
shall be at the expense of the Indemnifying Party), and PROVIDED FURTHER that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement unless
the Indemnifying Party is materially prejudiced thereby. No Indemnifying Party,
in the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
If the indemnification provided for in this Section 0 is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect to
any loss, liability, claim, damage or expense referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and of the Indemnified Party on the other in connection with the
statements or omissions which resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations. The relative
fault of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue (or alleged untrue)
statement of a material fact or the omission (or alleged omission) to state a
material fact relates to information supplied by the Indemnifying Party or by
the Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with any underwritten public offering contemplated by this
Agreement are in conflict with the foregoing provisions, the provisions in such
underwriting agreement shall be controlling.
The foregoing indemnity agreement of the Company and the Seller is subject to
the condition that, insofar as they relate to any loss, claim, liability or
damage made in a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the SEC at the time the registration statement
in question becomes effective or the amended prospectus filed with the SEC
pursuant to SEC Rule 424(b) (the "FINAL PROSPECTUS"), such indemnity agreement
shall not inure to the benefit of any underwriter if a copy of the Final
Prospectus was furnished to the underwriter and was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Securities Act.
INFORMATION BY THE SELLER
The Seller shall furnish to the Company such information regarding the Seller
and the distribution proposed by the Seller as the Company may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
"MARKET STAND-OFF" AGREEMENT
The Seller agrees, if requested by the Company and an underwriter of common
stock (or other securities) of the Company, not to sell or otherwise transfer or
dispose of any common stock (or other securities) of the Company held by the
Seller during the 90-day period following the effective date of a registration
statement of the Company filed under the Securities Act. If requested by the
underwriters, the Seller shall execute a separate agreement to the foregoing
effect. The Company may impose stop-transfer instructions with respect to the
shares (or securities) subject to the foregoing restriction until the end of
said period. The provisions of this Section 8 shall be binding upon any
transferee who acquires Registrable Securities, whether or not such transferee
is entitled to the registration rights provided hereunder.
TERMINATION
The registration rights set forth in this Agreement shall not be available to
the Seller if, in the opinion of counsel to the Company, all of the Registrable
Securities then owned by the Seller could be sold in any 90-day period pursuant
to Rule 144 under the Securities Act (without giving effect to the provisions of
Rule 144(k)).
MISCELLANEOUS
GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of California applicable to contracts made and to be
performed entirely within such State without regard to principles of conflicts
of law.
PARAGRAPH AND SECTION HEADINGS. The descriptive headings of the several sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
NOTICES. Every notice or other communication required or contemplated by this
Agreement by either party shall be delivered to the other party at the address
set forth on the signature page below by: (i) personal delivery; (ii) postage
prepaid, return receipt requested, registered or certified mail; (iii)
internationally recognized express courier, such as Federal Express, UPS or DHL;
or (iv) facsimile or email with a confirmation copy sent simultaneously by
postal mail. Notice not given in writing shall be effective only if acknowledged
in writing by a duly authorized representative of the party to whom it was
given. Either party may change its or his address for notice from time to time
by providing written notice in the manner set forth above.
AMENDMENTS. The terms, provisions and conditions of this Agreement may not be
changed, modified or amended in any manner except by an instrument in writing
duly executed by both of the parties hereto.
ASSIGNMENT. Neither this Agreement nor any of the rights, duties, or obligations
of any party hereunder may be assigned or delegated (by operation of law or
otherwise) by either party hereto except with the prior written consent of the
other party hereto.
COUNTERPARTS. For the convenience of the parties, any number of counterparts of
this Agreement may be executed by any one or more parties hereto, and each such
executed counterpart shall be, and shall be deemed to be, an original, but all
of which shall constitute, and shall be deemed to constitute, in the aggregate
but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of the parties hereto has caused this Registration
Rights Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the day and year first above written.
SELLER - DEVDEPOT, LLC COMPANY - INTERNATIONAL MICROCOMPUTER
SOFTWARE, INC.
/S/ XXXX XXXXXXX /S/ XXXXXXX X. XXXX
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Xxxx Xxxxxxx Xxxxxxx X. Xxxx
Title: CEO Title: CFO
000-X Xxxxxxxxx Xxxx 000 Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000 Xxxxxx, XX 00000
Fax: ( ) Fax: (000) 000-0000
