Exhibit 10.47
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Registration Rights Agreement"),
entered into as of November 26, 1996 by and between RIC INVESTMENT FUND LTD.
with offices at _____________________________________________ (the "Purchaser"),
and VIDEOLAN TECHNOLOGIES, INC., a Delaware corporation with offices at 000
Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, X.X.X. (the
"Company").
W I T N E S S E T H:
WHEREAS, pursuant to a Subscription Agreement, dated as of the date
hereof (the "Agreement"), by and between the Company and the Purchaser, the
Company has agreed to sell and the Purchaser has agreed to purchase 150 shares
of the Company's Series 1996A Convertible Preferred Stock (the "Preferred
Stock") convertible into shares of the Company's Common Stock, $.01 par value
(the "Shares");
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Purchaser's agreement to enter into the Agreement, the Company has agreed to
provide the Purchaser with certain registration rights with respect to the
Shares as set forth in this Registration Rights Agreement;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Agreement
and this Registration Rights Agreement, the Company and the Purchaser agree as
follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Registrable Securities" shall mean the Shares issued to Purchaser or
its designee upon conversion of the Preferred Stock or upon any stock split,
stock dividend, recapitalization or similar event with respect to such Shares;
provided, however, that Registrable Securities shall cease to be Registrable
Securities when they may be sold pursuant to Rule 144 under the Securities Act.
Registrable Securities shall not include the Preferred Stock.
The terms "register", "registered" and "registration" shall refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with Purchaser's exercise of its registration rights under
this Agreement, including,
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without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, blue sky fees and expenses,
reasonable fees and disbursements of one counsel to the Holder and the other
securityholders participating in the registration for a review of the
Registration Statement and related documents, 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).
"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 Holder not included with "Registration Expenses".
"Holder" shall include the Purchaser and any permitted transferee of
Preferred Stock, Shares or Registrable Securities which have not been sold to
the public to whom the registration rights conferred by this Agreement have been
transferred in compliance with Section 11 of this Agreement.
"Registration Statement" shall have the meaning set forth in Section
2(a) herein.
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Rule 144" shall mean Rule 144 under the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2. Demand Registration
(a) After the Closing Date the Company shall use its best efforts
to effect such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act) as may be so
requested and as would permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified in such request in
the states specified in such request.
Subject to the previous paragraph, the Company shall file (i) a
registration statement with the Commission pursuant to Rule 415 under the
Securities Act on Form S-3 under the Securities Act (or in the event that the
Company in ineligible to use such form, such other form as the Company is
eligible to use under the Securities Act) covering the Registrable Securities so
requested to be registered ("Registration Statement") ; (ii) such blue sky
filings as shall have been requested by the Holder; and (iii) any required
filings with the National Association of Securities Dealers, Inc. or exchange
where the Shares are traded, as soon as practicable, after receipt of the
request of the Holder. Thereafter the Company shall use its best efforts to have
such Registration Statement and other filings declared effective no later than
90 days from the Closing Date, as that term is defined in the Subscription
Agreement.
(b) (i) Subject to the conditions contained in Section 2(a)
above, if the Company fails to have such Registration Statement declared
effective by the Commission
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within ninety (90) days from the Closing Date as a result of the Company's
failure to use its best efforts to effect such registration, the Holder shall
have, in addition to and without limiting any other rights it may have at law,
in equity or under the Preferred Stock, the Agreement, or this Registration
Rights Agreement (including the right to specific performance), the right to
receive, as liquidated damages, additional shares of common stock of the Company
as provided in subparagraph (ii) of this section.
(ii) If after ninety (90) days from the Closing Date, the
Registration Statement has not been declared effective by the Commission as a
result of the Company's failure to use its best efforts to effect such
registration, then the Company shall issue to the Purchaser an additional amount
of common stock shares (the "Additional Shares") upon conversion of such
Holder's Preferred Stock. For each 30-day period that the Company is late in
having its Registration Statement declared effective by the Commission as a
result of the Company's failure to use its best efforts to effect such
registration, the Company shall issue a number of Additional Shares equal to 2%
(which Additional Shares shall be issued pro rata for any period of less than 30
days) of the original principal amount of Preferred Stock held by Purchaser,
which Additional Shares shall be issued to the Purchaser upon its conversion of
Preferred Stock. The number of Additional Shares shall increase to 4% of the
original principal amount of Preferred Stock if the Registration Statement is
not declared effective after 150 days following the Closing Date as a result of
the Company's failure to use its best efforts to effect such registration per
each 30-day period (which Additional Shares shall be issued pro rata for any
period of less than 30 days), and to 6% of the original principal amount of
Preferred Stock, if the Registration Statement is not declared effective after
210 days after the Closing Date as a result of the Company's failure to use its
best efforts to effect such registration per each additional 30- day period
thereafter (which Additional Shares shall be issued pro rata for any period of
less than 30 days), until the effective date of the Registration Statement.
(iii) The Company acknowledges that its failure to register
the Registrable Securities in accordance with this Registration Rights Agreement
as a result of the Company's failure to use its best efforts to effect such
registration will cause the Holder to suffer damages in an amount that will be
difficult to ascertain. Accordingly, the parties agree that it is appropriate to
include in this Registration Rights Agreement a provision for liquidated
damages. The parties acknowledge and agree that the liquidated damages
provisions set forth in paragraph 2(b)(ii) above represent the parties' good
faith effort to quantify such damages and, as such, agree that the form and
amount of such liquidated damages are reasonable and will not constitute a
penalty. The payment of liquidated damages shall not relieve the Company from
its obligations to register the Registrable Securities pursuant to this
Agreement.
(c) If there is more than one Holder, such Holders shall act with
respect to their rights under this Registration Rights Agreement according to
the vote of a majority-in-interest.
(d) The Company shall make available for inspection by a
representative or representatives of the Holder, and any attorney or accountant
retained by such Holder, all financial and other records customary for such
purposes, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, attorney or accountant in
connection with such Registration Statement. The Holder will agree to keep all
non-public information supplied
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to it confidential until such information is included in a Registration
Statement which has been made publicly available.
(e) The Company shall not be obligated to keep such Registration
Statement continuously effective for a period of more than two years from the
date it is declared effective by the Commission; provided, however, that if so
requested by the holders of a majority-in-interest of the Registrable Securities
the Company shall agree to extend the period for which the Registration
Statement remains effective to the same extent that "suspension periods" are
imposed pursuant to the next paragraph, but only so long as the then unsold
Registrable Securities covered by such Registration are too numerous to be sold
under the volume limitations of Rule 144 in any applicable three month period by
any Holder.
Following the effectiveness of the Registration Statement
pursuant to this Registration Rights Agreement, the Company may, at any time,
suspend the effectiveness of such Registration Statement and sales thereunder
for up to ten (10) days, as appropriate (a "Suspension Period"), by giving
notice to each Holder (or underwriter, if any) selling thereunder, if the
Company shall have determined that the Company may be required to disclose any
material corporate development which disclosure (i) may have a material adverse
effect on the Company, (ii) may have a material adverse affect on the
transaction or matter to be disclosed, or (iii) would be detrimental to the
Company or its stockholders. Notwithstanding the foregoing, no more than two
Suspension Periods (i.e., twenty (20) days) may occur in immediate succession,
and the Company shall use its best efforts to limit the duration and number of
any suspension periods. Holder agrees (and shall require that any underwriter
agree) that, upon receipt of any notice from the Company of any Suspension
Period, Holder shall forthwith discontinue disposition of shares covered by the
Registration Statement or Prospectus until such Holder (i) is advised in writing
by the Company that the use of the applicable Prospectus may be resumed, (ii)
has received copies of a supplemental or omitted Prospectus, if applicable, and
(iii) has received copies of any additional or supplemental filings which are
incorporated or deemed to be incorporated by reference in such Prospectus.
3. Company Registration. If at any time, or from time to time prior to
the registration of the Registrable Securities, the Company shall determine to
register any of its securities, either for its own account or the account of a
security holder or holders exercising their respective demand registration
rights, other than (i) a registration on Form S-8 or (ii) a registration on Form
S-4 relating solely to a transaction pursuant to Rule 145, the Company will
promptly give to each Holder written notice thereof and include in such
registration statement all the Registrable Securities specified in a written
request made within 30 days after mailing of written notice by the Company.
4. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company, and all Selling
Expenses shall be borne by the Holder.
5. Registration on Form S-3. Although the Company shall use its best
efforts to qualify for registration on Form S-3 or any comparable or successor
form or forms, or in the event that the Company is ineligible to use such form,
such form as the Company is eligible to use under the Securities Act, nothing in
the Agreement or this Registration Rights Agreement is intended to require the
Company to pay dividends in order to use Form S-3.
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6. Registration Procedures. In the case of each registration effected
by the Company pursuant to this Agreement, the Company will keep the Holder
advised in writing as to the initiation of each registration and as to the
completion thereof. At its expense, the Company will use its best efforts to:
(a) Keep such Registration Statement effective for the period
ending twenty-four (24) months after the registration has been declared
effective by the Commission or until the Holder has completed the distribution
described in the Registration Statement relating thereto, whichever first
occurs.
(b) Furnish such number of prospectuses and other documents
incident thereto as the Holder from time to time may reasonably request.
7. Indemnification.
(a) Company Indemnity. The Company will indemnify the Holder,
each of its officers, directors and partners, and each person controlling
Holder, within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, 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, (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 state securities law or in either case, 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 Holder, each of its officers, directors and partners, and
each person controlling such Holder, for any legal and any other expenses
reasonably incurred in connection with investigating and 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 Holder and
stated to be specifically for use therein. The indemnity agreement contained in
this Section 7(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 the Company (which consent will not be unreasonably withheld).
(b) Holder Indemnity. The Holder will, if Registrable Securities
held by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors, officers, partners, 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 within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, each
other Holder (if any), and each of their officers, directors and partners, and
each person controlling such other Holder 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, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading, and will
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reimburse the Company and such other Holders and their directors, officers and
partners, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating and 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 Holder and
stated to be specifically for use therein, and provided that the maximum amount
for which the Holder shall be liable under this indemnity shall not exceed the
net proceeds received by the Holder from the sale of the Registrable Securities.
The indemnity agreement contained in this Section 7(b) shall not apply to
amounts paid in settlement of any such claims, losses, damages or liabilities if
such settlement is effected without the consent of Holder (which consent shall
not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under this
Article (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 in 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 be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, 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 Article
except to the extent that the Indemnifying Party is materially and adversely
affected by such failure to provide notice. 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.
8. Contribution. If the indemnification provided for in Section 7 herein is
unavailable to the Indemnified Parties in respect of any losses, claims, damages
or liabilities referred to herein (other than by reason of the exceptions
provided therein), then each such Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (i)
as between the Company and the Holder on the one hand and the underwriters on
the other, in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Holder on the one hand or underwriters, as the
case may be, on the other from the offering of the Registrable Securities, or if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of the Holder or underwriters, as the
case may be, on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations and (ii) as between the Company on the one
hand and the Holder on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of the Holder in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
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The relative benefits received by the Company on the one hand and the
Holder or the underwriters, as the case may be, on the other shall be deemed to
be in the same proportion as the proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
from the initial sale of the Preferred Stock which can be converted into
Registrable Securities by the Company to the Holder pursuant to the Subscription
Agreement which corresponds to this Registration Rights Agreement bear to the
gain realized by such Holder or the total underwriting discounts and commissions
received by the underwriters as set forth in the table on the cover page of the
prospectus, as the case may be. The relative fault of the Company on the one
hand and of the Holder or underwriters, as the case may be, on the other shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, by the Holder or
by the underwriters.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 7 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 7(a) or 7(b) hereof had been
available under the circumstances.
The Company and the Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Holder or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of the Holder, the net proceeds received by the Holder from the sale of
Registrable Securities or (ii) in the case of an underwriter, the total price at
which the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that the Holder or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
9. Survival. The indemnity and contribution agreements contained in
Sections 6 and 7 shall remain operative and in full force and effect regardless
of (i) any termination of the Agreement or any underwriting agreement, (ii) any
investigation made by or on behalf of any Indemnified Party or by or on behalf
of the Company and (iii) the consummation of the sale or successive resales of
the Registrable Securities.
10. Information by Holder. The Holder shall furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder 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.
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11. Transfer or Assignment of Registration Rights. The rights, granted
to Purchaser by the Company under this Registration Rights Agreement, to cause
the Company to register Registrable Securities, may be transferred or assigned
to a transferee or assignee of not less than 50 shares of Preferred Stock,
provided that the Company is given written notice by Holder at the time of or
within a reasonable time after said transfer or assignment, stating the name and
address of said transferee or assignee and identifying the securities with
respect to which such registration rights are being transferred or assigned, and
provided further that the transferee or assignee of such rights is not deemed by
the board of directors of the Company, in its reasonable judgment, to be a
competitor of the Company; and provided further that the transferee or assignee
of such rights agrees to be bound by this Registration Rights Agreement.
Purchaser is one of a group of holders of Registrable Securities
issued or issuable pursuant to a total aggregate amount of up to $7.5 million of
Preferred Stock purchased by Purchaser and others in a transaction designed to
qualify as an offering pursuant to Section 4(2), Section 4(6) and Regulation D.
Any action to be taken under this Registration Rights Agreement or any term of
this Registration Rights Agreement may be amended or waived only with written
action by the Company and the holders of at least a majority-in-interest of the
total of the Registrable Securities. Any action, amendment or waiver effected in
accordance with this paragraph shall be binding upon each of the other holders
of Registrable Securities at the time then outstanding.
12. Miscellaneous.
(a) Entire Agreement. This Registration Rights Agreement
contains the entire understanding and agreement of the parties, and may not be
modified or terminated except by a written agreement signed by both parties.
(b) Notices. Any notice or other communication given or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by registered or certified mail, return
receipt requested, postage prepaid or by air courier, (a) if to Purchaser, at
its address hereinabove set forth, (b) if to the Company, at its address
hereinabove set forth, and (c) if to a holder other than Purchaser, at the
address thereof furnished by like notice to the Company, or (d) to any such
addresses at such other address or addresses as shall be so furnished to the
other parties by like notice.
(c) Gender of Terms. All terms used herein shall be deemed to
include the feminine and the neuter, and the singular and the plural, as the
context requires.
(d) Governing Law; Consent of Jurisdiction. This Registration
Rights Agreement and the validity and performance of the terms hereof shall be
governed by and construed in accordance with the laws of the State of Delaware.
The parties hereto hereby consent to, and waive any objection to the exercise
of, personal jurisdiction in the State of New York with respect to any action or
proceeding arising out of this Registration Rights Agreement.
(e) Titles. The titles used in this Registration Rights
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Registration Rights Agreement.
(f) Prospectus Delivery Requirements. Holder agrees, on Holder's
behalf, and shall require any transferee or assignee pursuant to Section 10
above to agree, to comply
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with all prospectus delivery requirements applicable to resales of the
securities pursuant to the Registration Statement.
(g) Termination. The rights of Holder to require the Company to
request a Registration pursuant to this Registration Rights Agreement shall
terminate on the date which is five (5) years from the date of this Registration
Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first above written.
RIC INVESTMENT FUND LTD.
By: ____________________________________
Title:
VideoLan Technologies, Inc.
a Delaware Corporation
By: ____________________________________
Title:
