Exhibit 4.3 - Registration Rights Agreement - Xxx Xxxxxx
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), is entered as of
September 28, 2004, by and between International Microcomputer Software, Inc., a
California corporation (the "COMPANY"), and Xxx Xxxxxx (the "SELLER").
WHEREAS, pursuant to the terms of a Stock Purchase Agreement, dated as of
September 28, 2004, by and between the Seller and the Company (the "PURCHASE
AGREEMENT"), the Company has agreed, as partial consideration for the
acquisition by the Company from the Seller of 100% of the outstanding shares of
capital stock of Abbisoft House Plans, Inc., to issue to the Seller 500,000
shares of unregistered common stock, no par value per share, of the Company (the
"SHARES"); and
WHEREAS, to induce the Seller to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act (as defined below), or any similar successor statute, and
applicable state securities laws,
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS
As used in this Agreement:
(a) 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;
(b) the term "REGISTRABLE SECURITIES" means (i) the Shares 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, the Shares;
(c) "REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in compliance with Section 2 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);
(d) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
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(e) "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.
2. COMPANY REGISTRATION
2.1 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:
(a) 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
(b) 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
2.2 below. Such written request may specify all or a part of the Seller's
Registrable Securities.
2.2 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 2.1(a). In
such event, the right of the Seller to registration pursuant to this Section 2
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.
3. EXPENSES OF REGISTRATION
3.1 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.
4. 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:
(a) 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
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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;
(b) 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
(c) furnish such number of prospectuses and other documents incident
thereto as the Seller from time to time may reasonably request.
5. INDEMNIFICATION
5.1 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.
5.2 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
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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.
5.3 Each party entitled to indemnification under this Section 5 (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.
5.4 If the indemnification provided for in this Section 5 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.
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5.5 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.
5.6 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.
6. 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.
7. RULE 144 REPORTING
With a view to making available the benefits of certain rules and
regulations of the SEC which may permit the sale of restricted securities to the
public without registration, the Company agrees to:
7.1 make and keep public information available as those terms are
understood and defined in Rule 144 at all times;
7.2 use its best efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act; and
7.3 so long as the Seller owns any Registrable Securities, furnish to the
Seller upon request a written statement by the Company as to its compliance with
the reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed as the Seller may
reasonably request and as is necessary for the Seller to avail itself of any
rule or regulation of the SEC allowing the Seller to sell any such securities
without registration. The Company further covenants that it will take such
further action as the Seller may reasonably request, all to the extent required
from time to time to enable such Seller to sell the Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act.
8. "MARKET STAND-OFF" AGREEMENT
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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.
9. 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)).
10. MISCELLANEOUS
10.1 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.
10.2 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.
10.3 NOTICES. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given (a) when delivered personally to
the recipient, (b) when sent to the recipient by telecopy (receipt
electronically confirmed by sender's telecopy machine) if during normal business
hours of the recipient, otherwise on the next business day, (c) one business day
after the date when sent to the recipient by reputable express courier service
(charges prepaid), or (d) seven business days after the date when mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent to the
Seller and to the Company at the addresses indicated below:
If to the Seller: Xxx Xxxxxx
0000 Xxxxx Xxx., Xxx. 000
Xxxxxxxx, XX, 00000
With a copy to: Xxxxxxx Law Firm, P.C.
(which shall not constitute notice) 0000 Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxx, Esq.
(000) 000-0000 (Fax)
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If to the Company: International Microcomputer Software, Inc.
000 Xxxxxxx Xxx Xxxxx 000
Xxxxxx, XX 00000
Attn: President
Fax: (000) 000-0000
With a copy to: Xxxxxx & Diamond LLP
(which shall not constitute notice) 00 Xxx Xxxxxxxxxx Xx., 0xx Xxx.
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile No. (000) 000-0000
or to such other address as either party hereto may, from time to time,
designate in writing delivered pursuant to the terms of this Section.
10.4 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.
10.5 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.
10.6 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]
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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 - XXX XXXXXX COMPANY - INTERNATIONAL MICROCOMPUTER
SOFTWARE, INC.
/s/ Xxxxxx Xxxxxxx
/s/ Xxx Xxxxxx -------------------------
--------------------- Name: Xxxxxx Xxxxxxx
Signature Title: President
Xxx Xxxxxx
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