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EXHIBIT 4.2
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INVESTOR RIGHTS AGREEMENT
This INVESTOR RIGHTS AGREEMENT (the "AGREEMENT") is made and entered into
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as of March 4, 1998 by and among DISCREET LOGIC INC., a company incorporated
under the laws of Quebec ("the "COMPANY"), and Intel Corporation, a Delaware
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corporation ("INVESTOR").
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RECITALS
A. The Company and Investor have entered into a Common Shares Purchase
Agreement dated as of the date hereof (the "PURCHASE AGREEMENT") pursuant to
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which Investor has agreed to purchase 645,000 shares of the Company's Common
Shares, without par value ("COMMON SHARES").
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B. The execution and delivery of this Agreement by the parties hereto is a
condition precedent to the obligations of the parties under the Purchase
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties hereto agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms have the meanings
indicted below:
1933 ACT. The Securities Act of 1933, as amended and the rules and
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regulations promulgated thereunder, as in effect from time to time.
1934 ACT. The Securities Exchange Act of 1934, as amended, and the
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rules and regulations promulgated thereunder, as in effect from time to time.
BUSINESS DAY. Each weekday that is not a day on which banking
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institutions in California are authorized or obligated by law or executive order
to close.
BLACK-OUT PERIOD. The period beginning on July 1, 1998 and ending 48
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hours after the Company's public announcement of its quarterly results for the
quarter and year ended June 30, 1998.
COMMISSION. The United States Securities and Exchange Commission.
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HOLDER. Any person owning Registrable Securities who is a party to
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this Agreement, and any transferee thereof in accordance with this Agreement.
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PROSPECTUS. The prospectus included in any Registration Statement, as
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amended or supplemented by any prospectus supplement (including, without
limitation, any prospectus supplement with respect to the terms of the offering
of any portion of the Registrable Securities covered by such Registration
Statement), and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
REGISTER, REGISTRATION AND REGISTERED. A registration effected by
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preparing and filing a registration statement or similar document with the
Commission in compliance with the 1933 Act, and the declaration or ordering of
effectiveness of such registration statement or document.
REGISTRABLE SECURITIES. The Common Shares issued to Investor pursuant
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to the Purchase Agreement and any securities that may be issued by the Company
or any successor to the Company from time to time with respect to, in exchange
for, or in replacement of such shares of Common Shares, including, without
limitation, securities issued as a stock dividend on or pursuant to a stock
split of such shares of Common Shares; provided, however, that those shares as
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to which the following apply shall cease to be Registrable Securities when: (a)
a Registration Statement with respect to the sale of such Registrable Securities
shall have become effective under the 1933 Act and such Registrable Securities
shall have been disposed of under such Registration Statement; (b) such
Registrable Securities shall have become transferable, or have become eligible
and remain eligible for transfer (whether or not so transferred), in accordance
with Rule 144(k), or any successor rule or provision, under the 1933 Act; (c)
such Registrable Securities shall have been transferred in a transaction in
which the Holder's rights and obligations under this Agreement were not assigned
in accordance with this Agreement; (d) such Registrable Securities shall have
ceased to be outstanding; or (e) such Registrable Securities shall have been
sold pursuant to Rule 144.
REGISTRATION EXPENSES. All expenses incident to the Company's
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performance of or compliance with Sections 2 and 3 hereof; including, without
limitation, all registration and filing fees (including filing fees with respect
to the Commission and to the National Association of Securities Dealers, Inc.
and listing fees of the Nasdaq National Market), all fees and expenses of
complying with state securities or "blue sky" laws (including fees and
disbursements of underwriters' counsel in connection with any "blue sky"
memorandum or survey, but excluding any fees and expenses for foreign
qualification in such jurisdictions), all printing expenses, all registrars' and
transfer agents' fees and all fees and disbursements of the Company's counsel
and independent public accountants; provided, however that Registration Expenses
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shall not include the fees and expenses of more than one counsel to the holders
of Registrable Securities, or underwriters' discounts and commissions, or
brokerage fees, associated with the sale of the Registrable Securities.
REGISTRATION STATEMENT. A registration statement prepared and filed
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with the Commission in compliance with the 1933 Act.
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SELLER. Any person, including any Holder, selling any Registrable
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Securities in an offering of any Registrable Securities of the Company pursuant
to this Agreement.
SELLING EXPENSES. All applicable discounts and commissions, brokerage
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fees, transfer taxes and any fees and disbursements of more than one counsel or
any accountants or other advisors for the Sellers of the Registrable Securities
being registered.
2. "PIGGY-BACK" REGISTRATION RIGHTS
If at any time the Company shall determine to register pursuant to an
underwritten public offering under the 1933 Act any of its Common Shares for its
own account, or the account of other stockholders of the Company desiring to
sell "restricted securities" of the Company (as defined in Rule 144 of the 0000
Xxx) pursuant to an underwritten public offering, it shall send to the Holder
written notice of such determination and, if within 15 calendar days after
receipt of such notice, Holder shall so request in writing, the Company shall
include in such registration statement all or any part of the Registrable
Securities the Holder requests to be registered. This right shall not apply to a
registration of Common Shares on Form S-8 or Form S-4 (or their then
equivalents) relating to Common Shares to be issued by the Company in connection
with any acquisition of any entity or business, or shares of Common Shares
issuable in connection with any stock option, stock purchase plan or other
employee benefit plan.
If, in connection with any offering involving an underwriting of Common
Shares to be issued for the account of the Company or selling securityholders,
the managing underwriter shall impose a limitation on the number of Common
Shares which may be included in any such registration statement because, in its
judgment, such limitation is necessary to effect an orderly public distribution
of the Common Shares and to maintain a stable market for the securities of the
Company, then the Company shall be obligated to include in such registration
statement only such limited portion of the stock with respect to which the
Holder has requested inclusion hereunder, on a pro rata basis based on the
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number of Common Shares owned by the Holder and all other selling
securityholders; provided, however, that such number of shares requested to be
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included in the registration statement pursuant hereto may be reduced to 25% of
such requested amount prior to any reduction in the number of shares included
therein by the Company.
3. SHELF REGISTRATION
3.1 Undertaking to Register
Within ninety (90) days following the Closing (as that term is defined
in the Purchase Agreement), upon written request of Investor, the Company will
use its commercially reasonable best efforts to prepare, file and have declared
effective a registration statement under the Securities Act to register all of
the Registrable Securities for resale in the public market in brokerage
transactions or transactions with market makers, in block trades, and in
privately negotiated transactions.
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3.2 SELLING PROCEDURES; SUSPENSION
(a) Except in the event that paragraph (b) below applies, the Company
shall (i) if deemed necessary by the Company, prepare and file from time to time
with the Commission a post-effective amendment to the Registration Statement or
a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that such Registration Statement will not contain 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 not misleading, and so that, as
thereafter delivered to purchasers of the Registrable Securities being sold
thereunder, such Prospectus will not contain 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
were made, not misleading; (ii) provide the Holders of the Registrable
Securities copies of any documents filed pursuant to Section 3.2(a)(i); and
(iii) inform each Holder that the Company has complied with its obligations in
Section 3.2(a)(i) (or that, if the Company has filed a post-effective amendment
to the Registration Statement which has not yet been declared effective, the
Company will notify each such Holder to that effect, it will use its best
efforts to secure the effectiveness of such post-effective amendment and will
immediately notify each such Holder pursuant to Section 3.2(a)(i) hereof when
the amendment has become effective).
(b) In the event (i) of any request by the Commission or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement for amendments or supplements to a Registration
Statement or related Prospectus or for additional information; (ii) of the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose; (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) of any event or circumstance which necessitates the making of any
changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (v) that, in the
reasonable, good faith judgment of the Company's management or Board of
Directors, (A) the offering of securities pursuant thereto would materially and
adversely affect (i) a pending or scheduled public offering or private placement
of the Company's securities, (ii) a pending or proposed acquisition, merger,
consolidation, reorganization, restructuring or similar transaction of or by the
Company or other material corporate activity or
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transaction, (iii) bona fide negotiations, discussions or proposals with respect
to any of the foregoing, or (iv) the position or strategy of the Company in
connection with any pending or threatened litigation, claim, assessment or
government investigation, and (B) in the event sales of Registrable Securities
were made under the Registration Statement and disclosure of all material
information with respect to the applicable circumstance(s) described in
subsection (A) had not been made, such circumstance(s) could reasonably be
expected to cause a violation of the 1933 Act or the 1934 Act (each a
"SUSPENSION EVENT"); then, subject to paragraph (d) below, the Company shall
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deliver a notice in writing to the Holders (the "SUSPENSION NOTICE") to the
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effect of the foregoing and, upon receipt of such Suspension Notice, each such
Holder will refrain from selling any Registrable Securities pursuant to the
Registration Statement (a "SUSPENSION") until such Holder's receipt of copies of
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the supplemented or amended Prospectus provided for in Section 3.2(a)(i) hereof,
or until it is advised in writing by the Company that the Prospectus may be
used, and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.
(c) In the event of any Suspension Event, or any delay in effecting
the Registration under Section 3.2 above, the Company will use its commercially
reasonable efforts to ensure that the use of the Prospectus so suspended or
delayed may be commenced or resumed, as the case may be, and that the Suspension
will terminate and the Holder's ability to sell pursuant to the Prospectus so
suspended will commence or resume, as the case may be, as soon as practicable
and, in the case of a pending development, filing or event referred to in
Section 3.2(b)(iv) or (v) hereof, as soon, in the judgment of the Company's
management or Board of Directors (in accordance with the provisions of Section
3.2), as disclosure of such pending development, filing or event or the
resumption of sales pursuant to the Registration Statement would not have a
material adverse effect on the Company's ability to consummate or materially
prejudice the Company's interest with respect to the transaction, if any,
contemplated by such development, filing or event. Notwithstanding any other
provision of this Agreement, the Company shall have the right to cause a maximum
of two (2) Suspensions pursuant to Section 3.2(b)(iv) and (v), neither of which
may be within 60 days of the other, as provided above (including for this
purpose a delay in effecting the Registration pursuant to Section 3.2 above)
during any 12-month period after the initial effective date of the Registration
Statement, and the total number of days for which all Suspensions (including for
this purpose a delay in effecting the Registration Statement pursuant to Section
3.2 above) during any 12-month period shall not exceed 90 days in the aggregate.
(d) The Company will use its commercially reasonable best efforts to
maintain the effectiveness of any registration statement pursuant to which any
of the Registrable Securities are being offered for (i) up to 180 days (or such
shorter period of time as the underwriters need to complete the distribution of
the registered offering in any Company-primary or secondary offering), in the
case of a registration pursuant to Section 2, or (ii) in the case of a "shelf"
Registration Statement pursuant to Section 3 until the date on which each Holder
may sell all Registrable Securities then held by such Holder without restriction
by the volume limitations of Rule 144(e). The Company from
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time to time will amend or supplement such Registration Statement and the
Prospectus contained therein to the extent necessary to comply with the 1933 Act
and any applicable state securities statue or regulation. The 180-day time
period referenced in clause (i) above during which the Company is obligated to
keep the registration statement effective shall be extended for a number of days
equal to the number of days during which the Company has effected a Suspension.
The Company shall use commercially reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the securities for sale in any jurisdiction, at
the earliest practicable moment.
(e) Notwithstanding the foregoing, during the Black-Out Period the
Holder shall not offer or sell any Registrable Securities, or engage in any
other transaction involving or relating to the Registrable Securities, until the
Black-Out Period has expired.
3.3 UNDERWRITING AGREEMENT
If in connection with any proposed distribution by the Holder under
the "piggy back" registration referred to in Section 2, the Company in its
discretion shall determine that it is in the best interests of the Company to
effect distribution by means of an underwriting, the Company shall promptly
notify the Holder of such determination. In such event, in addition to the
limitations set forth in Section 2, the right of Holder to participate in such
distribution shall be conditioned upon such Holder's participation in the
underwriting arrangements required by this Section 3.3, including without
limitation, the requirement that the Holder enter into an underwriting agreement
and a lock-up agreement (for a period determined by the managing underwriter not
to exceed the period agreed to by all directors and officers of the Company),
each in customary form with the managing underwriter selected for the
underwriting by the Company.
4. EXPENSES
The Company will pay all Registration Expenses in connection with the
registration of Registrable Securities effected by the Company pursuant to
Section 2 or 3. Holders of Registrable Securities registered pursuant to this
Agreement shall pay all Selling Expenses with each such Holder bearing a pro
rata portion of the Selling Expenses based upon the number of Registrable
Securities registered by each such Holder.
5. EXPIRATION OF REGISTRATION RIGHTS
The obligations of the Company under Section 2 of this Agreement to
register the Registrable Securities shall expire and terminate at the earlier of
(a) three (3) years following the Closing or (b) such time as the Holder shall
be entitled or eligible to sell, within any ninety (90) day period, all such
securities without restriction and without a need for the filing of a
registration statement under the Securities Act, including without
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limitation, for any resales of restricted securities made pursuant to Rule
144(k) as promulgated by the Securities and Exchange Commission. The
determination as to whether the Holder is entitled or eligible to sell all
Registrable Securities without the need for registration under the Securities
Act shall be based on a written opinion of counsel that registration of the
Registrable Securities is not required under the Securities Act, sufficient to
permit the transfer agent to transfer such securities upon a sale by the Holder.
The obligations of the Company under Section 3 of this Agreement shall expire at
the time specified in Section 3.2(d)(ii).
6. REGISTRATION PROCEDURES
In connection with the registration of Registrable Securities under this
Agreement, and subject to the other provisions of this Agreement, the Company
shall:
(a) use its commercially reasonable best efforts to cause the
Registration Statement filed in accordance with Section 2 or Section 3 to become
effective as soon as practicable after the date of filing thereof;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective for the shorter of (i) the duration of its registration obligations,
or (ii) until there are no Registrable Securities outstanding, and to comply
with the provisions of the 1933 Act with respect to the disposition of the
Registrable Securities;
(c) furnish to each Seller of such Registrable Securities such number
of copies of the Prospectus included in such Registration Statement as such
Seller may reasonably request in order to facilitate the sale or disposition of
such Registrable Securities;
(d) use its commercially reasonable best efforts to register or
qualify all securities covered by such Registration Statement under such other
securities or "blue sky" laws of such jurisdictions as each Seller shall
reasonably request, and do any and all other acts and things that may be
necessary to enable such Seller to consummate the disposition in such
jurisdictions of its Registrable Securities covered by such Registration
Statement, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, or to subject itself to taxation in respect of
doing business in any such jurisdiction, or to consent to general service of
process in any such jurisdiction;
(e) notify each Seller of Registrable Securities covered by such
Registration Statement, at any time when a Prospectus relating thereto is
required to be delivered under the 1933 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 not misleading in light of the circumstances
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then existing or if it is necessary to amend or supplement such Prospectus to
comply with the law, and at the request of any such Seller, prepare and furnish
to such Seller 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 or securities, such Prospectus, as
amended or supplemented, will comply with the law;
(f) use its best efforts to qualify such securities for inclusion in
the Nasdaq National Market, and provide a transfer agent and registrar for such
Registrable Securities not later than the effective date of such Registration
Statement; and
(g) issue to any person (who is not an affiliate of the Company) to
which any Holder of Registrable Securities may sell such Registrable Securities
in connection with such registration certificates evidencing such Registrable
Securities without any legend restricting the transferability of the Registrable
Securities (unless otherwise required by law).
7. 1934 ACT REGISTRATION
The Company shall timely file with the Commission such information as the
Commission may prescribe under Section 13 or 15(d) of the 1934 Act and shall use
its best efforts to take all action and make all filings of information
referenced in Rule 144(c) as may be required as a condition to the availability
of Rule 144 under the 1933 Act (or any successor exemptive rule hereinafter in
effect) with respect to such Common Shares. The Company shall furnish to any
holder of Registrable Securities forthwith upon five (5) days written request
(i) a written statement by the Company as to its compliance with the reporting
requirements of Rule 144(c), (ii) a copy of the most recent annual or quarterly
report of the Company as filed with the Commission, and (iii) such other
publicly-filed reports and documents as a holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing a holder to
sell any such Registrable Securities without registration.
8. INVESTOR INFORMATION
It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Agreement that all Holders of Registrable Securities
shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such Registrable Securities as shall be reasonably required to effect the
registration of their Registrable Securities and to execute such documents in
connection with such registration as the Company may reasonably request.
9. INDEMNIFICATION AND CONTRIBUTION
In the event any Registrable Securities are included in a Registration
Statement under Sections 2 and 3:
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(a) The Company will indemnify and hold harmless each Seller, the
officers, directors, partners, agents and employees of each Seller, any
underwriter (as defined in the 0000 Xxx) for such Seller and each person, if
any, who controls such Seller or underwriter within the meaning of the 1933 Act
or the 1934 Act, against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the 1933 Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively, a
"VIOLATION"): (i) any untrue statement or alleged untrue statement of a material
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fact contained in such Registration Statement, including any preliminary
Prospectus or final Prospectus contained therein or any amendments or
supplements thereto; (ii) the omission or alleged omission to state in such
Registration Statement a 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; or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any state securities law
or any rule or regulation promulgated under the 1933 Act, the 1934 Act or any
state securities law applicable to the Company in connection with such
Registration Statement; and the Company will reimburse each such Seller,
officer, director, partner, agent, employee, underwriter or controlling person
for any reasonable legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
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in this Section 9(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 shall not be unreasonably withheld or
delayed), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation (i) which occurs in reliance upon and in conformity with
written information finished expressly for use in connection with such
registration by any such Seller, underwriter or controlling person or (ii) which
is based upon any information in a Prospectus that has been amended or
supplemented if such Seller had been notified of such amendment or supplement
and the use of such amendment or supplement by the Seller would have avoided the
Violation.
(b) Each Seller will indemnify and hold harmless the Company, each of
its officers, directors, partners, agents or employees, each person, if any, who
controls the Company within the meaning of the 1933 Act, any underwriter and any
other Seller or any of its directors, officers, partners, agents or employees or
any person who controls such Seller, against any losses, claims, damages or
liabilities joint or several) to which the Company or any such director,
officer, partner, agent, employee, controlling person or underwriter, or other
such Seller or director, officer, partner, agent, employee or controlling person
may become subject, under the 1933 Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information finished by such Seller expressly for
use in connection with such registration; and each such Seller will reimburse
any reasonable legal or other expenses reasonably
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incurred by the Company or any such director, officer, partner, agent, employee,
controlling person or underwriter, other Seller, officer, director, partner,
agent, employee or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. Notwithstanding
anything contained in this Agreement to the contrary, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Seller, which consent shall not be unreasonably
withheld or delayed; provided, further, that the aggregate liability of each
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Seller in connection with any sale of Registrable Securities pursuant to a
Registration Statement in which a Violation occurred shall be limited to the net
proceeds from such sale.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel selected by the
indemnifying party and reasonably acceptable to the indemnified party; provided,
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however, that an indemnified party shall have the right to retain its own
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counsel, with the reasonable fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing or conflicting interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if and to the extent prejudicial to its ability
to defend such action, shall relieve such indemnifying party of liability to the
indemnified party under this Section 9 to the extent of such prejudice, but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 9.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section 9, for any reason other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be entitled
to contribution to liabilities and expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying parties and the indemnified
parties, except to the extent that contribution is not permitted under Section
11(f) of the 1933 Act. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things, the
parties' relative knowledge and access to information concerning the matter with
respect to which the claim was asserted, the opportunity to correct and prevent
any statement or omission and any other equitable considerations appropriate
under the circumstances, including, without limitation, whether any untrue
statement 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, on the one hand, or by the
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Holder of Registrable Securities, on the other hand. The Company and Investors
of the Registrable Securities covered by such Registration Statement agree that
it would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation. No seller of Registrable Securities covered
by such Registration Statement or person controlling such Seller shall be
obligated to make any contribution hereunder which in the aggregate exceeds the
net proceeds of the securities sold by such seller, less the aggregate amount of
any damages which such seller and its controlling persons have otherwise been
required to pay in respect of the same claim or any substantially similar claim.
The obligations of such Investors to contribute are several in proportion to
their respective ownership of the Registrable Securities covered by such
Registration Statement and not joint. Notwithstanding the foregoing, in no event
shall any contribution by a Holder under this Section 9(d) exceed the net
proceeds from the offering received by such Holder.
10. TRANSFERABILITY
Each Holder agrees that he will not make any disposition of all or any
portion of the Registrable Securities (a) except in a registered public offering
pursuant to the rights granted in this Agreement; or (b) until (i) such Holder
shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition and (ii) if reasonably requested by the
Company, such Holder shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to counsel for the Company, that such
disposition will not require registration of such Registrable Securities or such
transaction under the 1933 Act or applicable state securities laws.
11. COVENANTS
11.1 Board Observership
During the period from the date hereof until the earlier of the date
that is six months after the completion of the final milestone set forth in the
Strategic Development Agreement, dated as of the date hereof between Investor
and the Company (the "DEVELOPMENT AGREEMENT"), or immediately upon termination
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of the Development Agreement, and for so long as Investor holds at least 483,750
Common Shares of the Purchased Shares (as adjusted for stock splits, stock
dividends and similar transactions), Investor shall be entitled to appoint a
non-voting observer to the Company's Board of Directors who is acceptable to the
Company; and such observer shall be entitled to attend all meetings of the
Company's Board of Directors and committees thereof (other than the audit,
nomination, governance, and compensation committees) and shall receive notice of
all meetings and all materials furnished to members of the Company's Board of
Directors in their capacities as such at the same time and in the same manner as
such notice and materials are provided to the Board of Directors, unless the
Board of Directors or management of the Company shall reasonably determine that
delivery of such notice and/or materials to Investor may be detrimental to the
Company. Upon the request of the Board of Directors of the Company, the
observer will excuse himself from any portion of
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the Board or committee meetings if the Board of Directors shall reasonably
determine that the observer's presence may violate the attorney-client privilege
or may create a conflict of interest or if the Chairman of the Board of the
Company shall reasonably determine that the observer's presence is detrimental
to the Company. The materials furnished to Investor and the discussions and
presentations in connection with or at such meetings shall be considered
confidential information and Investor shall not disclose such materials and
discussions to any third party under the terms of the Confidentiality and
Nondisclosure Agreement No. 98073, dated September 25, 1997, between the Company
and Investor.
The Investor acknowledges that the use or disclosure of any information
which is material and non-public ("Inside Information"), or trading in the
securities of the Company on the basis of such Inside Information, may result in
civil and criminal penalties and enforcement proceedings commenced by the
Securities and Exchange Commission and others in the event it engages in
transactions involving the capital stock of the Company. Because of receipt of
the confidential information provided to the Investor and its Nominee, the
Investor and its Nominee may be deemed to have Inside Information regarding the
Company.
The Company acknowledges that an observer designated by Investor will
likely have, from time to time, information that may be of interest to the
Company ("INFORMATION") regarding a wide variety of matters including, by way of
-----------
example only, (a) Investor's technologies, plans and services, and plans and
strategies relating thereto, (b) current and future investments Investor has
made, may make, may consider or may become aware of with respect to other
companies and other technologies, products and services, including, without
limitation, technologies, products and services that may be competitive with the
Company's, and (c) developments with respect to the technologies, products and
services, and plans and strategies relating thereto, of other companies,
including, without limitation, companies that may be competitive with the
Company. The Company recognizes that a portion of such Information may be of
interest to the Company. Such Information may or may not be known by the
Observer. The Company, as a material part of the consideration for this
Agreement, agrees that Investor and its Observer shall have no duty to disclose
any Information to the Company or permit the Company to participate in any
projects or investments based on any Information, or to otherwise take advantage
of any opportunity that may be of interest to the Company if it were aware of
such Information, and hereby waives, to the extent permitted by law, any claim
based on the corporate opportunity doctrine or otherwise that could limit
Investor's ability to pursue opportunities based on such Information or that
would require Investor or Observer to disclose any such Information to the
Company or offer any opportunity relating thereto to the Company.
11.2 DISCLOSURE
(a) Except to the extent required by law or judicial order or except
as provided herein, neither party shall disclose this Agreement, the Purchase
Agreement or
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any of the terms hereof or thereof without the other's prior written approval,
which approval will not be delayed or unreasonably withheld. Either party may
disclose this Agreement to the extent required by law or judicial order,
provided that if such disclosure is pursuant to judicial order or proceedings,
the disclosing party will notify the other party promptly before such disclosure
and will cooperate with the other party to seek confidential treatment with
respect to the disclosure if requested by the other party and provided further
that if such disclosure is required pursuant to the rules and regulations of any
federal, state or local organization, the parties will cooperate to seek
confidential treatment of this Agreement to the maximum extent possible under
law.
(b) Prior to the execution of this Agreement, the parties will agree
on the content of a joint press release announcing the existence of this
Agreement, which press release will be issued as mutually agreed by the parties.
(c) Neither party will be required to disclose to the other any
confidential information of any third party without having first obtained such
third party's prior written consent.
12. MISCELLANEOUS
12.1 Amendments and Waivers
Any provision of this Agreement may be amended and the observance
thereof may only be waived (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company
and the Holders of a majority of the Registrable Securities then outstanding.
Any amendment or waiver effected in accordance with this Section 12.1 shall be
binding upon each Holder of Registrable Securities at the time outstanding, each
future Holder of Registrable Securities, and the Company.
12.2 NOTICES
Any notice required or permitted under this Agreement will be given in
writing, shall be effective when received, and shall in any event be deemed
received and effectively given upon personal delivery to the party to be
notified or one (1) business day after deposit with a nationally recognized
courier service such as FedEx for next business day delivery, or one (1)
business day after sent by facsimile with copy deposited with a nationally
recognized courier service such as FedEx for next business day delivery,
addressed to the party to be notified at the address indicated for such party on
the signature page hereof or at such other address as the Shareholder or the
Company may designate by giving at least ten (10) days advance written notice
pursuant to this Section 12.2
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12.3 GOVERNING LAW
This Agreement shall for all purposes be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to
conflicts-of-laws principles. The parties hereto agree to submit to the non-
exclusive jurisdiction of the federal and state courts of the County of Santa
Xxxxx in the State of California with respect to the breach or interpretation of
this Agreement or the enforcement of any and all rights, duties, liabilities,
obligations, powers and other relations between parties arising under this
Agreement.
12.4 SEVERABILITY
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excised from this
Agreement, and the remainder of this Agreement shall be interpreted as if such
provision were so excised and shall be enforceable in accordance with its
remaining terms.
12.5 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original and all of which together shall constitute one and the
same instrument.
12.6 ASSIGNMENT
The rights set forth in this Agreement are not transferable except to
a person controlling, controlled by, or under common control with Holder who
receives at least 35% of such shares. All transferees shall agree in writing to
be bound by all of the provisions of this Agreement. A Holder shall promptly
advise the Company in writing of the identity and address of any person to whom
it transferred its registration rights hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
DISCREET LOGIC INC. INTEL CORPORATION
By: /s/ Xxxxxxxx Xxxxxxxxx By: /s/ Xxxxxx Xxxxxxx
----------------------------- ---------------------------------
Name: Xxxxxxxx Xxxxxxxxx Name: Xxxxxx Xxxxxxx
--------------------------- -------------------------------
Title: Sr. Vice President and Title: Vice President and Treasurer
Chief Financial Officer, ------------------------------
Treasurer and Secretary
--------------------------
Address: 00 Xxxx Xxxxxx Address: 0000 Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxx Mail Stop SC4-210
Canada H3D 2L7 Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel Attention: Treasurer and General
Counsel
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
WITH A COPY TO:
Xxxx X. Xxxxxxx, Esq. Address: 0000 Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP Mail Stop SC4-210
000 Xxxx Xxxxxx; Xxxx Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxxxxxxx 00000
Xxxxxx, XX 00000 Attention: Treasurer and General
Counsel
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
