Exhibit 10.8
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
as of November 30, 1999 by and between Phoenix Technologies Ltd., a Delaware
corporation ("Phoenix"), and inSilicon Corporation, a Delaware corporation and a
wholly owned subsidiary of Phoenix ("inSilicon").
RECITALS
WHEREAS, Phoenix currently owns ten shares of common stock of
inSilicon, par value $.001 per share (the "Common Stock"), 10,400,000 shares of
Series A Preferred Stock of inSilicon, par value $.001 per share (the "Series A
Preferred Stock") and a warrant to purchase 50,000 shares of Common Stock (the
"Warrant").
WHEREAS, the parties have determined that it is desirable and in the
best interest of inSilicon to issue and sell additional shares of Common Stock
of inSilicon in an initial public offering (the "Initial Public Offering")
registered under the Securities Act of 1933, as amended.
WHEREAS, the parties desire to enter into this Agreement to set forth
their agreement regarding certain registration rights with respect to the Common
Stock, and the Common Stock issuable upon the conversion of the Series A
Preferred Stock and the exercise of the Warrant (and any other securities issued
in respect thereof or in exchange therefor) and securities of inSilicon that are
hereafter acquired by Phoenix.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. As used in this Agreement, the following
terms have the following meanings:
"AFFILIATE" of any specified Persons means, any other Person that,
directly or indirectly controls, is controlled by or is under common control
with such specified Person.
"AGREEMENT" has the meaning set forth in the preamble hereto, as such
agreement may be amended and supplemented from time to time in accordance with
its terms.
"CAPITAL STOCK" means (a) in the case of a corporation, corporate
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership, partnership interests
(whether general or limited) and (d) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"COMMON STOCK" has the meaning set forth in the first recital to this
Agreement.
"COMPANY SECURITIES" has the meaning set forth in Section 2.2(b)(i).
"DISADVANTAGEOUS CONDITION" has the meaning set forth in
Section 2.1(a)(ii).
"HOLDER" means Phoenix, the other Phoenix Entities and any Transferee.
"HOLDER SECURITIES" has the meaning set forth in Section 2.2(b).
"INITIAL PUBLIC OFFERING" has the meaning set forth in the second
recital to this Agreement.
"INITIAL PUBLIC OFFERING DATE" means the date of closing of the
initial sale of Common Stock in the Initial Public Offering.
"INSILICON" has the meaning set forth in the preamble to this
Agreement.
"INSILICON ENTITIES" means inSilicon and its Subsidiaries, and
"inSilicon Entity" shall mean any of inSilicon Entities.
"MARKET PRICE" of any shares of Common Stock (or other Capital Stock)
on any date means (a) the average of the last sale price of such shares on each
of the five (5) trading days immediately preceding such date on the Nasdaq
National Market or, if such shares are not listed or quoted thereon, on the
principal national securities exchange or automated interdealer quotation system
on which such shares are traded or (b) if such sale prices are unavailable or
such shares are not so traded, the value of such shares on such date determined
in accordance with procedures reasonably satisfactory to inSilicon and Phoenix.
"OTHER SECURITIES" has the meaning set forth in Section 2.2.
"PERSON" means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability company, any other entity and any governmental authority (and any
department or agency thereof.)
"PHOENIX" has the meaning set forth in the preamble hereto.
"PHOENIX ENTITIES" means Phoenix and Affiliates of Phoenix (other than
Affiliates that constitute inSilicon Entities), and "Phoenix Entity" shall mean
any of the Phoenix Entities.
"PHOENIX OWNERSHIP REDUCTION" means any decrease at any time in the
Phoenix ownership of inSilicon voting securities to less than fifty percent
(50%) of inSilicon's outstanding voting securities.
"REGISTRABLE SECURITIES" means at any time the (a) shares of Common
Stock owned by the Phoenix Entities on the date hereof or hereafter acquired,
(b) the shares of Common Stock issuable upon conversion of the Series A
Preferred Stock and the exercise of the Warrant and (c) shares of Common Stock
that are issued in respect of shares described in clauses (a) and (b) in any
reclassification, share combination, share subdivision, share dividend, share
exchange, merger, consolidation or similar transaction or event. As to any
particular Registrable
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Securities, such Registrable Securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the sale by the
Holder thereof shall have been declared effective under the Securities Act and
such securities shall have been disposed of in accordance with such
registration statement, (b) such Registrable Securities are sold by a Person in
a transaction in which the rights under the provisions of this Agreement are
not assigned or (c) the Registrable Securities held by the Holder shall
represent one percent of the class of Registrable Securities and otherwise may
be sold pursuant to Rule 144, (d) such Registrable Securities shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by inSilicon and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any state securities or Blue Sky Law then
in effect or (e) they shall have ceased to be outstanding.
"REGISTRATION EXPENSES" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article II, including, without limitation, (a) the fees, disbursements and
expenses of inSilicon's counsel and accountants and the fees and expenses of
counsel selected by the Holders in accordance with this Agreement in connection
with the registration of the securities to be disposed of, such fees and
expenses of such counsel selected by the Holders to be reasonable in the
reasonable discretion of inSilicon; (b) all expenses, including filing fees, in
connection with the preparation, printing and filing of the registration
statement, any preliminary prospectus or final prospectus, any other offering
document and amendments and supplements thereto and the mailing and delivering
of copies thereof to any underwriters and dealers; (c) the cost of printing or
producing any underwriting agreements and blue sky or legal investment memoranda
and any other documents in connection with the offering, sale or delivery of the
securities to be disposed of; (d) all expenses in connection with the
qualification of the securities to be disposed of for offering and sale under
state securities laws, including the fees and disbursements of counsel for the
underwriters or the Holders of securities in connection with such qualification
and in connection with any blue sky and legal investment surveys; (e) the filing
fees incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the securities to be
disposed of; (f) transfer agents' and registrars' fees and expenses and the fees
and expenses of any other agent or trustee appointed in connection with such
offering; (g) all security engraving and security printing expenses; (h) all
fees and expenses payable in connection with the listing of the securities on
any securities exchange or automated interdealer quotation system or the rating
of such securities; (i) any other fees and disbursements of underwriters
customarily paid by the sellers of securities, but excluding underwriting
discounts and commissions and transfer taxes, if any; and (j) other reasonable
out-of-pocket expenses of Holders.
"RULE 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"RULE 415 OFFERING" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated under
the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute.
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"SERIES A PREFERRED STOCK" has the meaning set forth in the first
recital of this Agreement.
"SELLING HOLDER" has the meaning ascribed thereto in Section 2.4(e).
"SUBSIDIARY" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than fifty
percent (50%) of the voting capital stock or other voting ownership interests is
owned or controlled, directly or indirectly, by such Person or by one or more of
the Subsidiaries of such Person or by a combination thereof. "Subsidiary," when
used with respect to Phoenix or inSilicon, shall also include any other entity
affiliated with Phoenix or inSilicon, as the case may be, that Phoenix and
inSilicon may hereafter agree in writing shall be treated as a "Subsidiary" for
the purposes of this Agreement.
"TRANSFEREE" has the meaning ascribed thereto in Section 2.9.
"WARRANT" has the meaning set forth in the first recital of this
Agreement.
Section 1.2. INTERNAL REFERENCES. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement and references
to the parties shall mean the parties to this Agreement.
ARTICLE II
REGISTRATION RIGHTS
Section 2.1. DEMAND REGISTRATION. (a) Upon written notice provided
at any time after the Initial Public Offering Date from any Holder or Holders of
Registrable Securities requesting that inSilicon effect the registration under
the Securities Act of any or all of the Registrable Securities held by such
Holder(s), which notice shall specify the intended method or methods of
disposition of such Registrable Securities, inSilicon shall use its best efforts
to effect the registration under the Securities Act and applicable state
securities laws of such Registrable Securities for disposition in accordance
with the intended method or methods of disposition stated in such request
(including in a Rule 415 Offering, if inSilicon is then eligible to register
such Registrable Securities on Form S-3 (or a successor form) for such
offering); PROVIDED that:
(i) the Holder(s) of Registrable Securities must request a minimum of
$25,000,000 of shares in any request made pursuant to this Section 2.1.
(ii) with respect to any registration statement filed, or to be filed,
pursuant to this Section 2.1, if inSilicon shall furnish to the Holders of
Registrable Securities that have made such request a certified resolution
of the Board of Directors of inSilicon stating that in the Board of
Directors' good faith judgment it would (because of the existence of any
acquisition or any other event or condition of similar significance to
inSilicon) be materially disadvantageous (a "Disadvantageous Condition") to
inSilicon for such a registration statement to be filed and become
effective, and setting forth the general reasons for such judgment,
inSilicon shall be entitled not to file any such registration statement,
until such Disadvantageous Condition no longer exists (notice of which
inSilicon shall promptly deliver to such Holders); PROVIDED, that the
filing of any
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such registration statement may not be delayed for a period in excess of
ninety (90) days due to the occurrence of any particular Disadvantageous
Condition and no more than one (1) resolution regarding Disadvantageous
Conditions may be made by the Board of Directors in any twelve (12) month
period;
(iii) after any Phoenix Ownership Reduction, the Holders may
exercise its rights under this Section 2.1 on not more than four (4)
occasions (it being acknowledged that prior to any Phoenix Ownership
Reduction, there shall be no limit to the number of occasions on which the
Holders may exercise such rights); and
(iv) after any Phoenix Ownership Reduction, the Holders of Registrable
Securities shall not be entitled to more than two (2) registrations
pursuant to this Section 2.1 during any twelve- (12-) month period.
(b) Notwithstanding any other provision of this Agreement to the
contrary, a registration requested by a Holder of Registrable Securities
pursuant to this Section 2.1 shall not be deemed to have been effected (and,
therefore, not requested for purposes of paragraph (a) above), (i) unless it has
become effective, (ii) if after it has become effective such registration is
interfered with by any stop order, injunction or other order or requirement of
the SEC or other governmental agency or court for any reason other than a
misrepresentation or an omission by such Holder and, as a result thereof, the
Registrable Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth in the related
registration statement or (iii) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied or waived other than by reason of some act
or omission by such Holder of Registrable Securities.
(c) In the event that any registration pursuant to this Section 2.1
shall involve, in whole or in part, an underwritten offering, the Holders of a
majority of the Registrable Securities to be registered shall have the right to
designate an underwriter or underwriters reasonably acceptable to inSilicon as
the lead or managing underwriters of such underwritten offering and, in
connection with each registration pursuant to this Section 2.1, such Holders may
select one counsel reasonably acceptable to inSilicon to represent all such
Holders.
(d) inSilicon shall have the right to cause the registration of
additional equity securities for sale for its account in any registration of
Registrable Securities requested by the Holders pursuant to paragraph (a) above;
PROVIDED that without the Holder's consent, in the first registration effected
pursuant to this Agreement (whether under this Section 2.1 or under Section
2.2), inSilicon shall only be entitled to include equity securities equal to up
to forty percent (40%) of the aggregate of the equity securities registered (up
to fifty percent (50%) if the equity securities registered have a maximum
aggregate offering price of $50 million or less) and in all subsequent
registrations effected pursuant to this Agreement (whether under this Section
2.1 or under Section 2.2), inSilicon shall only be entitled to include equity
securities equal to up to fifty percent (50%) of the aggregate equity securities
registered. The Holders of the Registrable Securities to be offered may require
that any such additional equity securities be included in the offering proposed
by such Holders on the same conditions as the Registrable Securities that are
included therein. In the event that a nationally recognized investment banking
or commercial banking firm selected by such Holders reasonably acceptable to
inSilicon (which shall be the
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lead underwriter or a managing underwriter in the case of an underwritten
offering) advises inSilicon and the Holders in writing that the number of
equity securities requested to be included in a registration statement by the
Holders of Registrable Securities and inSilicon exceeds the number which, in
the good faith view of such investment banking firm, can be sold without
adversely affecting the price, timing, distribution or sale of securities in
the offering, the number shall be allocated between inSilicon and the Holders
in accordance with the percentages set forth above in this Section 2.1(d) and
the number allocated to the Holders shall be reallocated among the requesting
Holders on the basis of the number of Registrable Securities each has requested
to be registered.
Section 2.2. PIGGYBACK REGISTRATION. In the event that inSilicon
at any time after the Initial Public Offering Date proposes to register any
of its Common Stock, any other of its equity securities or securities
convertible into or exchangeable for its equity securities (collectively,
including Common Stock, "Other Securities") under the Securities Act, whether
or not for sale for its own account, in a manner that would permit
registration of Registrable Securities for sale for cash to the public under
the Securities Act, it shall at each such time give prompt written notice to
each Holder of Registrable Securities of its intention to do so and of the
rights of such Holder under this Section 2.2. Subject to the terms and
conditions hereof, such notice shall offer each such Holder the opportunity
to include in such registration statement such number of Registrable
Securities as such Holder may request. Upon the written request of any such
Holder made within fifteen (15) days after the receipt of inSilicon's notice
(which request shall specify the number of Registrable Securities intended to
be disposed of and the intended method of disposition thereof), inSilicon
shall use its best efforts to effect, in connection with the registration of
the Other Securities, the registration under the Securities Act of all
Registrable Securities which inSilicon has been so requested to register, to
the extent required to permit the disposition (in accordance with such
intended method of disposition thereof) of the Registrable Securities so
requested to be registered; PROVIDED, that without inSilicon's consent, in
the first registration effected pursuant to this Agreement (whether under
this Section 2.2 or under Section 2.1), the Holders shall be entitled to
include other securities equal to no more than sixty percent (60%) of the
aggregate Other Securities and Registrable Securities registered (no more
than fifty percent (50%) if the Other Securities and Registrable Securities
have a maximum aggregate offering price of $50 million or less) and in all
subsequent registrations effected pursuant to this Agreement (whether under
this Section 2.2 or under Section 2.1), the Holders shall be entitled to
include Other Securities equal to no more than fifty percent (50%) of the
Other Securities and Registrable Securities registered. inSilicon may
require that any such Registrable Securities of the Holders be included in
the offering proposed by inSilicon on the same conditions as the Other
Securities. In the event that the number of Registrable Securities requested
to be included in the registration statement by the Holders of Registrable
Securities in the first registration effected pursuant to this Agreement
(whether under this Section 2.2 or under Section 2.1) exceed the maximum
aggregate number the Holders are entitled to include in the Registration
Statement as provided above the number of Registrable Securities that the
Holders shall be entitled to include shall be reduced to equal no more than
sixty percent (60%) of the aggregate Other Securities and Registrable
Securities registered (no more than fifty percent (50%) if the Other
Securities and Registrable Securities have a maximum aggregate offering price
of $50 million or less and in all subsequent registrations effected pursuant
to this Agreement (whether under this Section 2.2 or under Section 2.1) the
number of Registrable Securities that the Holders shall be entitled to
include shall be reduced to equal no more than fifty percent (50%) of the
aggregate
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Other Securities and Registrable Securities. The number of shares allocated
to the Holders shall be reallocated among the requesting Holders on the basis
of the number of Registrable Securities each has requested to be registered;
PROVIDED further, that:
(a) if, at any time after giving such written notice of its intention
to register any Other Securities and prior to the effective date of the
registration statement filed in connection with such registration, inSilicon
shall determine for any reason not to register the Other Securities, inSilicon
may, at its election, give written notice of such determination to such Holders
and thereupon inSilicon shall be relieved of its obligation to register such
Registrable Securities in connection with the registration of such Other
Securities, without prejudice, however, to the rights of the Holders of
Registrable Securities immediately to request that such registration be effected
as a registration under Section 2.1 to the extent permitted thereunder;
(b) if the registration referred to in the first sentence of this
Section 2.2 is to be an underwritten registration on behalf of inSilicon, and a
nationally recognized investment banking or commercial banking firm selected by
inSilicon advises inSilicon in writing that, after giving effect to any
reduction set forth previously in this Section 2.2 the aggregate number of Other
Securities and Registrable Securities requested to be included in such
Registration Statement by inSilicon and the Holders of Registration Securities
exceeds the number which in the good faith view of such investment banking firm,
can be sold without adversely affecting the price, timing, distribution or sale
of the Other Securities and the Registrable Securities in the offering,
inSilicon shall include in such registration that number of the Other Securities
and the Registrable Securities requested to be included by inSilicon and the
Holders as will cause the number of Other Securities and Registrable Securities
to be sold in such offering which, in the good faith view of such investment
banking or commercial banking firm is equal to the number that can be sold
without adversely affecting such offering; PROVIDED, that without inSilicon's
consent, in the first registration effected pursuant to this Agreement (whether
under this Section 2.2 or under Section 2.1), the Holders shall be entitled to
include other securities equal to no more than sixty percent (60%) of the
aggregate Other Securities and Registrable Securities registered (no more than
fifty percent (50%) if the Other Securities and Registrable Securities have a
maximum aggregate offering price of $50 million or less) and in all subsequent
registrations effected pursuant to this Agreement (whether under this Section
2.2 or under Section 2.1), the Holders shall be entitled to include Other
Securities equal to no more than fifty percent (50%) of the Other Securities and
Registrable Securities registered. The number of Shares allocated to the
Holders shall be reallocated among the requesting Holders on the basis of the
number of Registrable Securities each has requested to be registered;
(c) inSilicon shall not be required to effect any registration of
Registrable Securities under this Section 2.2 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
executive or employee benefit or compensation plans; and
(d) no registration of Registrable Securities effected under this
Section 2.2 shall relieve inSilicon of its obligation to effect a registration
of Registrable Securities pursuant to Section 2.1.
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Section 2.3. EXPENSES. inSilicon and each Holder shall pay its pro
rata share, according to the percentage of shares sold for its account, of any
registration in which it participates. Notwithstanding the foregoing, each
Holder shall only be obligated to pay for underwriting discounts and commissions
attributable to the Registrable Securities sold by such Holder.
Section 2.4. REGISTRATION AND QUALIFICATION. If and whenever
inSilicon is required to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 2.1 or 2.2, inSilicon shall as
promptly as practicable:
(a) prepare, file and use its best efforts to cause to become
effective a registration statement under the Securities Act relating to the
Registrable Securities to be offered;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
Registrable Securities until the earlier of (i) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition set forth in such registration statement and (ii) the
expiration of six months after such registration statement becomes effective;
PROVIDED, that such six (6)-month period shall be extended for such number of
days that equals the number of days elapsing from (x) the date the written
notice contemplated by paragraph (f) below is given by inSilicon to (y) the date
on which inSilicon delivers to the Holders of Registrable Securities the
supplement or amendment contemplated by paragraph (f) below;
(c) furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such registration
statement or prospectus, and such other documents, as the Holders of Registrable
Securities or such underwriter may reasonably request, and upon request a copy
of any and all transmittal letters or other correspondence to or received from,
the SEC or any other governmental agency or self-regulatory body or other body
having jurisdiction (including any domestic or foreign securities exchange)
relating to such offering;
(d) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under the securities or blue
sky laws of such U.S. jurisdictions as the Holders of such Registrable
Securities or any underwriter to such Registrable Securities shall request, and
use its best efforts to obtain all appropriate registrations, permits and
consents in connection therewith, and do any and all other acts and things which
may be necessary or advisable to enable the Holders of Registrable Securities or
any such underwriter to consummate the disposition in such jurisdictions of its
Registrable Securities covered by such registration statement; PROVIDED, that
inSilicon shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any such jurisdiction wherein it is not so
qualified or to consent to general service of process in any such jurisdiction;
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(e) (i) use its best efforts to furnish to each Holder of Registrable
Securities included in such registration (each, a "Selling Holder") and to any
underwriter of such Registrable Securities an opinion of independent counsel for
inSilicon addressed to each Selling Holder and dated the date of the closing
under the underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration statement) and
(ii) use its best efforts to furnish to each Selling Holder a "cold comfort"
letter addressed to each Selling Holder and signed by the independent public
accountants who have audited the financial statements of inSilicon included in
such registration statement, in each such case covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public offerings
of securities and such other matters as the Selling Holders may reasonably
request and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements;
(f) as promptly as practicable, notify the Selling Holders in writing
(i) at any time when a prospectus relating to a registration pursuant to
Sections 2.1 or 2.2 is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and (ii) of any request by the SEC or any
other regulatory body or other body having jurisdiction for any amendment of or
supplement to any registration statement or other document relating to such
offering, and in either such case, at the request of the Selling Holders prepare
and furnish to the Selling Holders a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an 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 under which they are made, not
misleading;
(g) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Securities to be so
included in the registration statement;
(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders to the extent not already provided, as soon as reasonably practicable,
but not later than eighteen (18) months after the effective date of the
registration statement, an earnings statement covering the period of at least
twelve (12) months beginning with the first full month after the effective date
of such registration statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the Securities Act;
(i) use its best efforts to list all such Registrable Securities
covered by such registration on each securities exchange and automated
interdealer quotation system on which a class of common equity securities of
inSilicon is then listed;
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(j) to the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of inSilicon to attend any "road shows"
scheduled in connection with any such registration, with all out-of-pocket costs
and expense incurred by inSilicon or such officers in connection with such
attendance to be paid by inSilicon; and
(k) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected pursuant
to Sections 2.1 or 2.2 unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested by
the Selling Holders or the underwriters.
Section 2.5. CONVERSION OF OTHER SECURITIES, ETC. In the event that
any Holder offers any options, rights, warrants or other securities issued by it
or any other Person that are offered with, convertible into or exercisable or
exchangeable for any Registrable Securities, the Registrable Securities
underlying such options, rights, warrants or other securities shall continue to
be eligible for registration pursuant to Sections 2.1 and 2.2.
Section 2.6. UNDERWRITING; DUE DILIGENCE. (a) If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant
to a registration requested under this Article II, inSilicon shall enter into
an underwriting agreement with such underwriters for such offering, which
agreement will contain such representations and warranties by inSilicon and
such other terms and provisions as are customarily contained in underwriting
agreements of inSilicon to the extent relevant and as are customarily contained
in underwriting agreements generally with respect to secondary distributions to
the extent relevant, including, without limitation, indemnification and
contribution provisions substantially to the effect and to the extent provided
in Section 2.7, and agreements as to the provision of opinions of counsel and
accountants' letters to the effect and to the extent provided in Section
2.4(e). The Selling Holders on whose behalf the Registrable Securities are to
be distributed by such underwriters shall be parties to any such underwriting
agreement and the representations and warranties by, and the other agreements
on the part of, inSilicon to and for the benefit of such underwriters, shall
also be made to and for the benefit of such Selling Holders. Such underwriting
agreement shall also contain such representations and warranties by such
Selling Holders and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
when relevant, including, without limitation, indemnification and contribution
provisions substantially to the effect and to the extent provided in Section
2.7.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article II, inSilicon shall give the Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books and
records and such opportunities to discuss the business of inSilicon with its
officers and the independent public accountants who have certified the financial
statements of inSilicon as shall be necessary, in the opinion of such Holders
and such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
Section 2.7. INDEMNIFICATION AND CONTRIBUTION. (a) In the case of
each offering of Registrable Securities made pursuant to this Article II,
inSilicon agrees to indemnify and hold harmless, to the extent permitted by law,
each Selling Holder, each underwriter of Registrable
10
Securities so offered and each Person, if any, who controls any of the
foregoing Persons within the meaning of the Securities Act and the officers,
directors, affiliates, employees and agents of each of the foregoing, against
any and all losses, liabilities, costs (including reasonable attorneys' fees
and disbursements), claims and damages, joint or several, to which they or any
of them may become subject, under the Securities Act or otherwise, including
any amount paid in settlement of any litigation commenced or threatened,
insofar as such losses, liabilities, costs, claims and damages (or actions or
proceedings in respect thereof, whether or not such indemnified Person is a
party thereto) arise out of or are based upon any untrue statement by inSilicon
or alleged untrue statement by inSilicon of a material fact contained in the
registration statement (or in any preliminary or final prospectus included
therein) or in any offering memorandum or other offering document relating to
the offering and sale of such Registrable Securities prepared by inSilicon or
at its direction, or any amendment thereof or supplement thereto, or in any
document incorporated by reference therein, or any omission by inSilicon or
alleged omission by inSilicon to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
PROVIDED, however that inSilicon shall not be liable to any Person in any such
case to the extent that any such loss, liability, cost, claim or damage arises
out of or relates to any untrue statement or alleged untrue statement, or any
omission, if such statement or omission shall have been made in reliance upon
and in conformity with information relating to a Selling Holder, another holder
of securities included in such registration statement or underwriter furnished
in writing to inSilicon by or on behalf of such Selling Holder, other holder or
underwriter specifically for use in the registration statement (or in any
preliminary or final prospectus included therein), offering memorandum or other
offering document, or any amendment thereof or supplement thereto. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of any Selling Holder, any other holder or any underwriter
and shall survive the transfer of such securities. The foregoing indemnity
agreement is in addition to any liability that inSilicon may otherwise have to
each Selling Holder, other holder or underwriter of the Registrable Securities
or any controlling person of the foregoing and the officers, directors,
affiliates, employees and agents of each of the foregoing; PROVIDED, further,
that, in the case of an offering with respect to which a Selling Holder has
designated the lead or managing underwriters (or a Selling Holder is offering
Registrable Securities directly, without an underwriter), this indemnity does
not apply to any loss, liability, cost, claim or damage arising out of or
relating to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus or offering memorandum if a copy
of a final prospectus or offering memorandum was not sent or given by or on
behalf of any underwriter (or such Selling Holder or other Holder, as the case
may be) to such Person asserting such loss, liability, cost, claim or damage at
or prior to the written confirmation of the sale of the Registrable Securities
as required by the Securities Act and such untrue statement or omission had
been corrected in such final prospectus or offering memorandum.
(b) In the case of each offering made pursuant to this Agreement,
each Selling Holder, by exercising its registration rights hereunder, agrees to
indemnify and hold harmless inSilicon, each underwriter of Registrable
Securities so offered, each other Selling Holder or other holder with securities
included in such offering and in the case of an underwriter, such Selling Holder
or other holder, and each Person, if any, who controls any of the foregoing
within the meaning of the Securities Act and the officers, directors,
affiliates, employees and agents of each of the foregoing, against any and all
losses, liabilities, costs (including reasonable attorneys'
11
fees and disbursements), claims and damages to which they or any of them may
become subject, under the Securities Act or otherwise, including any amount
paid in settlement of any litigation commenced or threatened, insofar as such
losses, liabilities, costs, claims and damages (or actions or proceedings in
respect thereof, whether or not such indemnified Person is a party thereto)
arise out of or are based upon any untrue statement or alleged untrue statement
by such Selling Holder of a material fact contained in the registration
statement (or in any preliminary or final prospectus included therein) or in
any offering memorandum or other offering document relating to the offering and
sale of such Registrable Securities prepared by inSilicon or at its direction,
or any amendment thereof or supplement thereto, or any omission or alleged
omission by such Selling Holder of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that such untrue statement of a material fact is
contained in, or such material fact is omitted from information relating to
such Selling Holder furnished to inSilicon in writing by or on behalf of such
Selling Holder specifically for use in such registration statement (or in any
preliminary or final prospectus included therein), offering memorandum or other
offering document, or any amendment thereof or supplement thereto. The
foregoing indemnity is in addition to any liability which such Selling Holder
may otherwise have to inSilicon, or controlling persons and the officers,
directors, affiliates, employees, and agents of each of the foregoing;
PROVIDED, however, that, in the case of an offering made pursuant to this
Agreement with respect to which inSilicon has designated the lead or managing
underwriters (or inSilicon is offering securities directly, without an
underwriter), this indemnity does not apply to any loss, liability, cost,
claim, or damage arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission in any preliminary prospectus
or offering memorandum if a copy of a final prospectus or offering memorandum
was not sent or given by or on behalf of any underwriter (or inSilicon, as the
case may be) to such Person asserting such loss, liability, cost, claim or
damage at or prior to the written confirmation of the sale of the Registrable
Securities as required by the Securities Act and such untrue statement or
omission had been corrected in such final prospectus or offering memorandum.
(c) Each party indemnified under paragraph (a) or (b) above shall,
promptly after receipt of notice of a claim or action against such indemnified
party in respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the claim or action; PROVIDED, that the
failure to notify the indemnifying party shall not relieve it from any
liability that it may have to an indemnified party under this Section 2.7
(except that the failure to notify an indemnifying party promptly of the
commencement of any such action to the extent prejudicial to the indemnifying
party's ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party to the extent the indemnifying party is
prejudiced under this Section 2.7, but the omission so to notify the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.7). If any such claim or
action shall be brought against an indemnified party, and it shall have
notified the indemnifying party thereof, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified party and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate therein, and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume the
defense thereof with counsel satisfactory to the indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party). After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 2.7 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation. If the indemnifying party does not assume
the defense
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of such claim or action, it is understood that the indemnifying party shall
not, in connection with any one such claim or action or separate but
substantially similar or related claims or actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
one separate firm of local attorneys in each such jurisdiction) at any time for
all such indemnified parties. Any indemnifying party against whom indemnity
may be sought under this Section 2.7 shall not be liable to indemnify an
indemnified party if such indemnified party settles such claim or action
without the consent of the indemnifying party, which consent shall not be
unreasonably withheld.
(d) If the indemnification provided for in this Section 2.7 shall
for any reason be unavailable (other than in accordance with its terms) to an
indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, cost, claim or
damage in such proportion as shall be appropriate to reflect (i) the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other hand or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law or if the indemnified party failed to give
the notice required under paragraph (c) above, the relative benefits and the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other with respect to the statements or omissions which resulted
in such loss, liability, cost, claim or damage as well as any other relevant
equitable considerations. The relative benefits received by the indemnifying
party and the indemnified party shall be deemed to be in the same respective
proportion as the net proceeds (before deducting expenses) of the offering
received by such party (or, in the case of an underwriter, such underwriter's
discounts and commissions) bear to the aggregate offering price of the
Registrable Securities or Other Securities. The relative fault shall be
determined by reference to 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 indemnifying party on the one hand or the
indemnified party on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, but not by reference to any indemnified party's stock
ownership in inSilicon. The amount paid or payable by an indemnified party as
a result of the loss, cost, claim, damage or liability, or action in respect
thereof, referred to above in this paragraph (d) shall be deemed to include,
for purposes of this paragraph (d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediate preceding paragraph.
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.
13
(e) Indemnification and contribution similar to that specified in the
preceding paragraphs of this Section 2.7 (with appropriate modifications) shall
be given by inSilicon, the Selling Holders and underwriters with respect to any
required registration or other qualification of securities under any state law
or regulation or governmental authority.
(f) In no event shall Phoenix be liable pursuant to this Section 2.7
for any amounts in excess of the net proceeds received by Phoenix pursuant to
its sales of securities in the offering in connection with which its liability
hereunder arises.
(g) The obligations of the parties under this Section 2.7 shall be in
addition to any liability which any party may otherwise have to any other party.
Section 2.8. RULE 144 AND FORM S-3. Commencing ninety (90) days
after the Initial Public Offering Date, inSilicon shall use its best efforts to
ensure that the conditions to the availability of Rule 144 set forth in
paragraph (c) thereof shall be satisfied. Upon the request of any Holder of
Registrable Securities, inSilicon will deliver to such Holder a written
statement as to whether it has complied with such requirements. inSilicon
further agrees to use its reasonable efforts to cause all conditions to the
availability of Form S-3 (or any successor form) under the Securities Act of the
filing of registration statements under this Agreement to be met as soon as
practicable after the Closing Date.
Section 2.9. TRANSFER OF REGISTRATION RIGHTS. Any Holder may
transfer all or any portion of its rights under Article II to any transferee of
a number of Registrable Securities owned by such Holder exceeding two percent
(2%) of the outstanding class or series of such securities immediately after the
time of transfer (each transferee that receives such minimum number of
Registrable Securities, a "Transferee"); PROVIDED, that Phoenix may transfer
without restrictions to any Phoenix entity; and PROVIDED, FURTHER, each
Transferee of Registrable Securities to which Registrable Securities are
transferred, sold or assigned directly by a Phoenix Entity, shall be entitled to
request the registration of Registrable Securities pursuant to Section 2.1 only
to the extent Phoenix specifically assigns such rights to the Transferee and
shall otherwise only be entitled to request the registration of Registrable
Securities pursuant to Section 2.2. Any transfer of registration rights
pursuant to this Section 2.9 shall be effective upon receipt by inSilicon of
(i) written notice from such Holder stating the name and address of any
Transferee and identifying the number of Registrable Securities with respect to
which the rights under this Agreement are being transferred and the nature of
the rights so transferred and (ii) a written agreement from such Transferee to
be bound by the terms of this Article II, Article III and Sections 4.3, 4.5,
4.7, 4.8, 4.9, and 4.12 of this Agreement. The Holders may exercise their
rights hereunder in such priority as they shall agree upon among themselves.
Section 2.10. HOLDBACK AGREEMENT. If any registration pursuant to
this Article II shall be in connection with an underwritten public offering of
Registrable Securities, each Selling Holder agrees not to effect any public sale
or distribution, including any sale under Rule 144, of any equity security of
inSilicon or any security convertible into or exchangeable or exercisable for
any equity security of inSilicon, in the case of Registrable Securities
(otherwise than through the registered public offering then being made), within
seven (7) days prior to or ninety (90) days (or such lesser period as the lead
or managing underwriters may permit) after the effective date of the
registration statement (or the commencement of the offering to the
14
public of such Registrable Securities in the case of Rule 415 offerings).
inSilicon hereby also so agrees and agrees to cause each other holder of equity
securities or securities convertible into or exchangeable or exercisable for
such securities purchased from inSilicon otherwise than in a public offering to
so agree; PROVIDED that, subject to Section 2.6(a) hereof, inSilicon shall not
be so restricted from effecting any public sale or distribution of any security
in connection with any merger, acquisition, exchange offer, subscription offer,
dividend reinvestment plan or stock option or other executive or employee
benefit or compensation plan.
ARTICLE III
MISCELLANEOUS
Section 3.1. LIMITATION OF LIABILITY. Neither Phoenix nor inSilicon
shall be liable to the other for any special, indirect, incidental or
consequential damages of the other arising in connection with this Agreement.
Section 3.2. TERM. This Agreement shall remain in effect until all
Registrable Securities held by Holders have been transferred by them to Persons
other than Transferees; PROVIDED, that the provisions of Section 2.7 shall
survive any such expiration.
Section 3.3. NOTICES. All notices and communications under this
Agreement shall be in writing and any communication or delivery hereunder shall
be deemed to have been duly given when received addressed as follows:
If to Phoenix, to:
000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
If to inSilicon, to:
000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Any party may, by written notice so delivered to the other party,
change the address to which delivery of any notice shall thereafter be made.
Section 3.4. AMENDMENT AND WAIVER. This Agreement may not be
altered or amended, nor may rights hereunder be waived, except by an instrument
in writing executed by inSilicon and Holders of a majority of the Registrable
Securities. No waiver of any terms, provision or condition of or failure to
exercise or delay in exercising any rights or remedies under this Agreement, in
any one or more instances shall be deemed to be, or construed as, a further or
continuing waiver of any such term, provision, condition, right or remedy or as
a waiver of any other term, provision or condition of this Agreement.
Notwithstanding the foregoing, this Agreement may not be altered or amended, nor
may rights hereunder be waived by inSilicon after the Initial Public Offering
Date without the affirmative vote or written consent of a majority of the
directors of inSilicon who are not Affiliates of Phoenix.
15
Section 3.5. COUNTERPARTS. This Agreement may be executed in
counterparts each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same Agreement.
Section 3.6. GOVERNING LAW. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of California, without
regard to the conflicts of law rules of such state.
Section 3.7. ENTIRE AGREEMENT. This Agreement including the
schedules and the other agreements referenced specifically in this Agreement
constitute the entire understanding of the parties with respect to the subject
matter of this Agreement, superseding all negotiations, prior discussions and
prior agreements and understandings relating to such subject matter.
Section 3.8. LEGAL ENFORCEABILITY. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Without
prejudice to any rights or remedies otherwise available to any party hereto,
each party hereto acknowledges that damages would be an inadequate remedy for
any breach of the provisions of this Agreement and agrees that the obligations
of the parties hereunder shall be specifically enforceable.
Section 3.9. TITLES AND HEADINGS. Titles and headings to Sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
Section 3.10. CONFLICTING AGREEMENTS. In the event of conflict
between this Agreement and the Contribution Agreement between Phoenix and
inSilicon of even date herewith, the provisions of this Agreement shall prevail.
Section 3.11. DISPUTES. All disputes arising out of, related to or
resulting from this Agreement, including the interpretation hereof shall be
resolved in accordance with the procedures set forth in the Initial Public
Offering Agreement between Phoenix and inSilicon of even date herewith.
Section 3.12. FURTHER ASSURANCES. Phoenix and inSilicon shall
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such instruments and take such other action as may be necessary or
advisable to carry out their obligations under this Agreement and under any
exhibit, document or other instrument delivered pursuant hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
PHOENIX TECHNOLOGIES LTD.
By: /s/ Xxxxx X. Xxxxx
-----------------------
Name: Xxxxx X. Xxxxx
Title: V.P., General Counsel & Secretary
INSILICON CORPORATION
By: /s/ Xxxxx X. Power
-----------------------
Name: Xxxxx X. Power
Title:
17
