EXHIBIT 2.2
SONIC SOLUTIONS
FINDER'S FEE AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this 27th
day of February, 2001, by and among Sonic Solutions, a California corporation
(the "Company"), Digitek Consulting Inc. ( "Digitek") and Xx. Xxxxx Nasiopoulos,
an individual and sole shareholder of Digitek ("Xx. Xxxxxxxxxxx").
THE PARTIES AGREE AS FOLLOWS:
1. Finder's Fee. In consideration for the efforts and work of Digitek in
introducing the parties (the "Service") to the transaction involving the
acquisition by the Company of the DVD business as contemplated by that certain
Asset Purchase Agreement dated as of the date hereof between the Company and
Daikin Industries Ltd., the Company hereby agrees to issue to Digitek, 100,000
shares of the Company's Common Stock (the "Shares") at an issue price of $1.50
per share (the "Issue Price"). The aggregate Issue Price for the Shares have
been fully satisfied by the provision of the Service by Digitek to the Company.
At the same time, issuance of the Shares is in full satisfaction of the
Company's obligations to Digitek in connection with the Service. The Company
shall forthwith cause to be delivered to Digitek a certificate representing the
Shares and a Registration Rights Agreement in the form attached in Schedule A,
duly executed by the Company.
2. Restrictions on Resale of Shares.
2.1 Legends. Digitek understands and acknowledges that the Shares are
not registered under the Securities Act of 1933, as amended (the "Act"), and
that under the Act and other applicable laws Digitek may be required to hold
such Shares for an indefinite period of time. Each stock certificate
representing Shares shall bear the following legends:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SECURITIES MAY
NOT BE TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN
EFFECT AS TO SUCH TRANSFER OR, IN THE OPINION OF COUNSEL FOR THE
COMPANY, REGISTRATION UNDER THE ACT IS UNNECESSARY IN ORDER FOR SUCH
TRANSFER TO COMPLY WITH THE ACT OR UNLESS SOLD PURSUANT TO RULE 144 OF
THE ACT. THESE SECURITIES AND THE RIGHTS OF THE HOLDER OF THESE
SECURITIES ARE SUBJECT TO AN AGREEMENT
BETWEEN THE COMPANY AND THE HOLDER DATED FEBRUARY 27, 2001"
3. Representations and Acknowledgments of Digitek and Xx. Xxxxxxxxxxx.
Digitek and Xx. Xxxxxxxxxxx, jointly and severally, hereby represent, warrant,
acknowledge and agree that:
3.1 Organization and Authority. Digitek is a corporation duly
organized, validly existing and in good standing under the laws of British
Columbia, Canada. This Agreement and the Registration Rights Agreement entered
into on the date hereof between the Company and Digitek and the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate and shareholder action on behalf of Digitek. Xx. Xxxxx Nasiopoulos is
the sole shareholder of Digitek.
3.2 Investment. The Shares are being acquired for investment for
Digitek's own account, not as a nominee or agent, and not with a view to the
sale or distribution of any part thereof, and Digitek has no present intention
of selling, granting any participation in, or otherwise distributing any of the
Shares. By executing this Agreement, Digitek and Xx. Xxxxxxxxxxx further
represent that neither of them have any contract, undertaking, agreement, or
arrangement with any person to sell, transfer, or grant participation to such
person or to any third person, with respect to any of the Shares.
3.3 Unregistered Securities. Digitek must bear the economic risk of
investment for an indefinite period of time because the Shares have not been
registered under the Act and therefore cannot and will not be sold unless they
are subsequently registered under the Act or an exemption from such registration
is available, if applicable. Digitek will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the securities
purchased hereunder except in compliance with the Act, applicable blue sky laws,
and the rules and regulations promulgated thereunder.
3.4 Experience. Digitek represents that: (i) it has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of the prospective investment in the Shares; (ii) it has
received all the information requested from the Company and considers necessary
or appropriate for deciding whether to obtain the Shares; (iii) it has had the
opportunity to discuss the Company's business, management, and financial affairs
with the Company's management, (iv) it has the ability to bear the economic
risks of his prospective investment; and (v) it is able, without materially
impairing its financial condition, to hold the Shares for an indefinite period
of time and to suffer a complete loss on the prospective investment.
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4. Representations and Acknowledgments of the Company. The Company hereby
represents, warrants, acknowledges and agrees that:
4.1 Organization and Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California.
4.2 Validity of Shares. The Shares, when issued, sold and delivered in
accordance with the terms and for the consideration expressed in this Agreement,
will be duly and validly authorized and issued and fully paid and non-
assessable, provided, however, that such Shares shall be subject to restrictions
on transfer under state and/or federal securities laws.
5. Tax Advice. Digitek and Xx. Xxxxxxxxxxx acknowledge that they have not
relied and will not rely upon the Company with respect to any tax consequences
related to the ownership, purchase, or disposition of the Shares. Digitek and
Xx. Xxxxxxxxxxx assume full responsibility for all such consequences and for the
preparation and filing of all tax returns and elections which may or must be
filed in connection with such Shares.
6. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given on the
date of service if served personally or five (5) days after mailing if mailed by
first class United States mail, certified or registered with return receipt
requested, postage prepaid, and addressed as follows:
To the Company at: Sonic Solutions
000 Xxxxxxx Xxx
Xxxxxx, XX 00000
Attn: Chief Financial Officer
To Digitek or Xx. Xxxxxxxxxxx at:
Digitek Consulting Inc.
000-0000 Xxx Xxxxxx
Xxxxxxxxx, XX, X0X 0X0
Attn: Xxxxx Xxxxxxxxxxx
7. Binding Effect. This Agreement shall be binding upon the heirs, legal
representatives and successors of the Company, Digitek and Xx. Xxxxxxxxxxx;
provided, however, that Digitek may not assign any rights or obligations under
this Agreement. The Company's rights under this Agreement shall be freely
assignable.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into
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and to be performed entirely within the State of California by residents of the
State of California.
9. Entire Agreement. This Agreement constitutes the entire agreement of
the parties pertaining to the Shares and supersedes all prior and
contemporaneous agreements, representations, and understandings of the parties
related to the Shares.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement as of
the date first above written.
The Company: SONIC SOLUTIONS
By: /s/ A. Xxxx Xxxxxxxx
-------------------------
A. Xxxx Xxxxxxxx
Digitek: DIGITEK CONSULTING INC.
By: /s/ Xxxxx Xxxxxxxxxxx
-------------------------
Xxxxx Xxxxxxxxxxx
Its: President
-------------------------
Xx. Xxxxx Nasiopoulos,
an individual:
/s/ Xx. Xxxxx Nasiopoulos
-------------------------
Xx. Xxxxx Nasiopoulos
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Schedule A
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of February
27, 2001, is made and entered into between Sonic Solutions, a California
corporation (the "Company"), and Digitek Consulting Inc, a British Columbia,
Canada corporation (the "Investor").
WHEREAS, the Company, the Investor and Xx. Xxxxx Nasiopoulos, the sole
shareholder of the Investor, have entered into that certain Finder's Fee
Agreement, dated as of the date hereof (the "Finder's Fee Agreement"), pursuant
to which the Company has issued and the Investor has purchased 100,000 shares of
the Company's Common Stock (the "Registrable Securities");
WHEREAS, pursuant to the terms of, and in consideration for, the Investor's
agreement to enter into the Finder's Fee Agreement, the Company has agreed to
provide the Investor with certain registration rights with respect to the
Registrable Securities;
NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein and in the Finder's Fee
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
REGISTRATION RIGHTS
Section 1.1 REGISTRATION STATEMENT.
(a) Filing of Registration Statement. Subject to the terms and
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conditions of this Agreement, the Company shall file with the SEC a registration
statement on Form S-3 or such other form acceptable to the SEC under the
Securities Act of 1933, as amended (the "Securities Act") for the registration
of the Registrable Securities for resale by the Investor to the public (the
"Registration Statement") within fifteen (15) days following the date that the
Company's independent auditors receive from Daikin Industries, Ltd. ("Daikin")
all financial information related to the DVD business of Daikin acquired by the
Company pursuant to the Asset Purchase Agreement of even date herewith between
the Company and Daikin which are acceptable to such auditors (the "Filing
Deadline").
(b) Effectiveness of the Registration Statement. The Company shall
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use its reasonable efforts to have the Registration Statement declared effective
by the SEC as soon as practicable and to ensure that the Registration Statement
remains in effect throughout the term of this Agreement as set forth in Section
4.2, subject to the terms and conditions of this Agreement.
(c) Deferral and Suspension. If the Company shall furnish to the
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Investor notice signed by the Chairman and Chief Executive Officer of the
Company stating that the Board of Directors of the Company has, by duly
authorized resolution, determined in good faith that it would be seriously
detrimental to the Company and its shareholders for the Registration Statement
to be filed (or remain in effect) and it is therefore essential to defer the
filing of such
Registration Statement (or temporarily suspend the effectiveness of such
Registration Statement or use of the related prospectus) (a "Blackout Notice"),
the Company shall have the right to defer such filing (or suspend such
effectiveness) immediately for a period of not more than thirty (30) days beyond
such the date by which such Registration Statement was otherwise required to be
filed (or required to remain in effect). The Investor acknowledges that it would
be seriously detrimental to the Company and its shareholders for such
Registration Statement to be filed (or remain in effect) and therefore essential
to defer such filing (or suspend such effectiveness) and agrees to suspend any
disposition of the Registrable Securities pursuant to any such Registration
Statement immediately for a period of not more than thirty (30) days upon
receipt of such notice. The Company may not utilize any of its rights under this
Section 1.1(c) to defer the filing of a Registration Statement (or suspend its
effectiveness) more than once in any eighteen (18) month period.
ARTICLE II
REGISTRATION PROCEDURES
Section 2.1. FILINGS; INFORMATION. The Company will effect the
registration and sale of such Registrable Securities in accordance with the
intended methods of disposition thereof. Without limiting the foregoing, the
Company in each such case will do the following as expeditiously as possible,
but in no event later than the deadline, if any, prescribed therefor in this
Agreement:
(a) The Company shall (i) prepare and file with the SEC a Registration
Statement on Form S-3 (if use of such form is then available to the Company
pursuant to the rules of the SEC and, if not, on such other form promulgated by
the SEC for which the Company then qualifies and which counsel for the Company
shall deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
provisions of this Agreement and in accordance with the intended method of
distribution of such Registrable Securities); (ii) use reasonable efforts to
cause such filed Registration Statement to become and remain effective (pursuant
to Rule 415 under the Act or otherwise); (iii) as expeditiously as possible,
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 for the time periods
prescribed by Section 1.1(b); (iv) comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by the Investor set forth in such Registration Statement;
(v) act in good faith and use reasonable efforts to take all actions that (A)
will facilitate the Registration Statement to be filed and declared effective as
expeditiously as possible or (B) are reasonably necessary to implement the
intentions of the parties set forth in this Agreement.
(b) The Company shall file all necessary amendments to the
Registration Statement in order to effectuate the purpose of this Agreement.
(c) If so requested by the managing underwriters, if any, or the
holders of a majority in aggregate principal amount of the Registrable
Securities being sold in connection
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with the filing of a Registration Statement under the Securities Act for the
offering on a continuous or delayed basis in the future of all of the
Registrable Securities (a "Shelf Registration"), the Company shall (i) promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and such holders agree should
be included therein, and (ii) make all required filings of such prospectus
supplement or post-effective amendment as soon as practicable after the Company
has received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment; provided, however, that the Company
shall not be required to take any action pursuant to this Section 2.1(c)(ii)
that would, in the opinion of counsel for the Company, violate applicable law.
(d) In connection with the filing of a Shelf Registration, and in
connection with any underwritten public offering of the Registrable Securities,
the Company shall enter into such agreements and take all such other reasonable
actions in connection therewith (including those reasonably requested by the
managing underwriters, if any, or the holders of a majority in aggregate
principal amount of the Registrable Securities being sold) in order to expedite
or facilitate the disposition of such Registrable Securities, and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration, (i) make such
representations and warranties to the holders of such Registrable Securities and
the underwriters, if any, with respect to the business of the Company (including
with respect to businesses or Stocks acquired or to be acquired by the Company),
and the Registration Statement, prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm such representations and warranties if and
when requested; (ii) if an underwriting agreement is entered into, the same
shall contain indemnification provision and procedures no less favorable to the
selling holders of such Registrable Securities and the underwriters, if any,
than those set forth herein (or such other provisions and procedures acceptable
to the holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement and the managing underwriters,
if any); and (iii) deliver such documents and certificates as may be reasonably
requested by the holders of a majority in aggregate principal amount of the
Registrable Securities being sold, their counsel and the managing underwriters,
if any, to evidence the continued validity of their representations and
warranties made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company. The Company shall also use its reasonable efforts
to furnish, on the date that the Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through underwriters,
(i) an opinion, dated as of such date, of the counsel representing the Company
for the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and (ii) a letter, dated as of such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering addressed to the underwriters.
(e) No less than five (5) Trading Days prior to filing the
Registration Statement or prospectus, or any amendment or supplement thereto
(excluding amendments deemed to result
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from the filing of documents incorporated by reference therein), the Company
shall deliver to the Investor and one firm of counsel representing the Investor,
in accordance with the notice provisions of Section 4.8, copies of such
Registration Statement as proposed to be filed, together with exhibits thereto,
which documents will be subject to review by such parties, and thereafter
deliver to the Investor and its counsel, in accordance with the notice
provisions of Section 4.8, such number of copies of such Registration Statement,
each amendment and supplement thereto (in each case including all exhibits
thereto), the prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents or information as the Investor
or counsel may reasonably request in order to facilitate the disposition of the
Registrable Securities.
(f) The Company shall deliver, in accordance with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by
such Registration Statement such number of conformed copies of such Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in such Registration Statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 promulgated under the Securities Act relating to such
seller's Registrable Securities, and such other documents, as such seller may
reasonably request to facilitate the disposition of its Registrable Securities.
(g) After the filing of the Registration Statement, the Company shall
promptly notify the Investor of any stop order issued or threatened by the SEC
in connection therewith and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.
(h) The Company shall use its reasonable efforts to (i) register or
qualify such Registrable Securities under such other securities or blue sky laws
of such jurisdictions in the United States as the Investor may reasonably (in
light of its intended plan of distribution) request, and (ii) cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be reasonably necessary or advisable to enable the
Investor to consummate the disposition of the Registrable Securities; provided
that the Company will not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (h), subject itself to taxation in any such jurisdiction, or consent
or subject itself to general service of process in any such jurisdiction.
(i) The Company shall immediately notify the Investor upon the
occurrence of any of the following events in respect of a Registration Statement
or related prospectus in respect of an offering of Registrable Securities: (i)
receipt of any request for additional information by the SEC or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement for additional information, amendments or supplements
to the Registration Statement or related prospectus; (ii) the issuance by the
SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt of any notification
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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) the
happening of any event that makes any statement made in the Registration
Statement or related prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
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; and (v) the Company's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate; and the Company
will promptly make available to the Investor any such supplement or amendment to
the related prospectus.
(j) The Company shall enter into customary agreements and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities (whereupon the Investor may, at its
option, require that any or all of the representations, warranties and covenants
of the Company also be made to and for the benefit of the Investor).
(k) The Company shall appoint a transfer agent and registrar for all
such Registrable Securities covered by such Registration Statement not later
than the effective date of such Registration Statement.
(l) The Company may require the Investor to promptly furnish in
writing to the Company such information as may be legally required in connection
with such registration including, without limitation, all such information as
may be requested by the SEC or the National Association of Securities Dealers.
The Investor agrees to provide such information requested in connection with
such registration within ten (10) business days after receiving such written
request and the Company shall not be responsible for any delays in obtaining or
maintaining the effectiveness of the Registration Statement caused by the
Investor's failure to timely provide such information.
Section 2.2. REGISTRATION EXPENSES. In connection with each Registration
Statement, the Company shall pay all registration expenses incurred in
connection with the registration thereunder (the "Registration Expenses"),
including, without limitation: (i) all registration, filing, securities exchange
listing and fees required by the National Association of Securities Dealers,
(ii) all registration, filing, qualification and other fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) all word processing, duplicating, printing,
messenger and delivery expenses, (iv) the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees and expenses
incurred in connection with the listing of the Registrable Securities, (vi)
reasonable fees and disbursements of counsel for the Company and customary fees
and expenses for independent certified public accountants retained
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by the Company, (vii) the fees and expenses of any special experts retained by
the Company in connection with such registration, (viii) premiums and other
costs of policies of insurance obtained at the discretion of the Company against
liabilities arising out of any public offering of the Registrable Securities
being registered, and (ix) any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding underwriting
fees, discounts, transfer taxes or commissions, if any, attributable to the sale
of Registrable Securities, which shall be payable by each holder of Registrable
Securities pro rata on the basis of the number of Registrable Securities of each
such holder that are included in a registration under this Agreement.
ARTICLE III
INDEMNIFICATION AND CONTRIBUTION
Section 3.1. INDEMNIFICATION BY THE COMPANY. To the extent permitted by
law, the Company agrees to indemnify and hold harmless the Investor, its
partners, affiliates, officers, directors, employees and duly authorized agents,
and each Person or entity, if any, who controls the Investor within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, together
with the partners, Affiliates, officers, directors, employees and duly
authorized agents of such controlling Person or entity (collectively, the
"Controlling Persons"), from and against any loss, claim, damage, liability,
costs and expenses (including, without limitation, reasonable attorneys' fees
and disbursements and costs and expenses of investigating and defending any such
claim) (collectively, "Damages"), joint or several, and any action or proceeding
in respect thereof to which the Investor, its partners, affiliates, officers,
directors, employees and duly authorized agents, and any such Controlling Person
may become subject under the Securities Act or otherwise as incurred and,
insofar as such Damages (or actions or proceedings in respect thereof) arise out
of, or are based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or prospectus relating to
the Registrable Securities or any preliminary prospectus, (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
the same are based upon information furnished in writing to the Company by the
Investor expressly for use therein, or (iii) any violation or alleged violation
by the Company of the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities
law in connection with the offering covered by such registration statement and
shall reimburse the Investor, its partners, affiliates, officers, directors,
employees and duly authorized agents, and each such Controlling Person for any
legal and other expenses reasonably incurred by the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, or any
such Controlling Person, as incurred, in investigating or defending or preparing
to defend against any such Damages or actions or proceedings; provided, however,
that the Company shall not be liable to the Investor to the extent that any such
Damages arise out of or are based upon an untrue statement or omission made in
any preliminary prospectus if (i) the Investor failed to send or deliver a copy
of the final prospectus delivered by the Company to the Investor with or prior
to the delivery of written confirmation of the sale by the Investor to the
Person asserting the claim from which such Damages arise, and (ii) the final
prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, and provided
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further, that the indemnity agreement contained in this Section 3.1 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.
Section 3.2. INDEMNIFICATION BY THE INVESTOR. To the extent permitted by
law, the Investor agrees to indemnify and hold harmless the Company, its
partners, affiliates, officers, directors, employees and duly authorized agents,
and each Controlling Person, from and against any Damages, joint or several, and
any action or proceeding in respect thereof to which the Company, its partners,
affiliates, officers, directors, employees and duly authorized agents, and any
such Controlling Person may become subject under the Securities Act or otherwise
as incurred and, insofar as such Damages (or actions or proceedings in respect
thereof) arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
prospectus relating to the Registrable Securities or any preliminary prospectus,
or arises out of, or are based upon, any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse the Company, its
partners, affiliates, officers, directors, employees and duly authorized agents,
and each such Controlling Person for any legal and other expenses reasonably
incurred by the Company, its partners, affiliates, officers, directors,
employees and duly authorized agents, or any such Controlling Person, as
incurred, in investigating or defending or preparing to defend against any such
Damages or actions or proceedings; provided, however, that the indemnity
agreement contained in this Section 3.2 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 Investor, which consent shall
not be unreasonably withheld; and provided further, that in no event shall any
indemnity under this Section 3.2 exceed the net proceeds from the offering
received by the Investor.
Section 3.3. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after
receipt by any person or entity in respect of which indemnity may be sought
pursuant to Section 3.1 or 3.2 (an "Indemnified Party") of notice of any claim
or the commencement of any action, the Indemnified Party shall, if a claim in
respect thereof is to be made against the person or entity against whom such
indemnity may be sought (the "Indemnifying Party"), notify the Indemnifying
Party in writing of the claim or the commencement of such action; in the event
an Indemnified Party shall fail to give such notice as provided in this Section
3.3 and the Indemnifying Party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, the indemnification provided for in Section
3.1 or 3.2 shall be reduced to the extent of any actual prejudice resulting from
such failure to so notify the Indemnifying Party; provided, that the failure to
notify the Indemnifying Party shall not relieve the Indemnifying Party from any
liability that it may have to an Indemnified Party otherwise than under Section
3.1 or 3.2. If any such claim or action shall be brought against an Indemnified
Party, and it shall notify the Indemnifying Party thereof, 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 reasonably satisfactory to the Indemnified
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 for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the
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defense thereof other than reasonable costs of investigation; provided that the
Indemnified Party shall have the right to employ separate counsel to represent
the Indemnified Party and its Controlling Persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such counsel shall be for the account of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable judgment of
the Company and such Indemnified Party, representation of both parties by the
same counsel would be inappropriate due to actual or potential conflicts of
interest between them, it being understood, however, 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 (together with
appropriate local counsel) at any time for all Indemnified Parties, or for fees
and expenses that are not reasonable. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
claim or pending or threatened proceeding in respect of which the Indemnified
Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such claim or proceeding. Whether or not the defense of any claim or action
is assumed by the Indemnifying Party, such Indemnifying Party will not be
subject to any liability for any settlement made without its consent, which
consent will not be unreasonably withheld.
Section 3.4. OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding paragraphs of this Article III (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any governmental
authority other than the Securities Act. The provisions of this Article III
shall be in addition to any other rights to indemnification, contribution or
other remedies which an Indemnified Party may have pursuant to law, equity,
contract or otherwise.
Section 3.5. CONTRIBUTION. If the indemnification provided for in this
Article III is unavailable to the Indemnified Parties in respect of any Damages
referred to herein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages as between the Company on the one
hand and the Investor on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of the Investor in connection with
such statements or omissions, as well as other equitable considerations. The
relative fault of the Company on the one hand and of the Investor on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Investor
agree that it would not be just and equitable if contribution pursuant to this
Section 3.5 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the Damages referred to in the immediately
preceding paragraph shall be deemed to
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include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 3.5, the Investor shall in no event be required to contribute any amount
in excess of the amount by which the total price at which the Registrable
Securities of the Investor were sold to the public (less underwriting discounts
and commissions) exceeds the amount of any damages which the Investor has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE IV
MISCELLANEOUS
Section 4.1. NO OUTSTANDING REGISTRATION RIGHTS. The Company represents
and warrants to the Investor that there is not in effect on the date hereof any
agreement by the Company pursuant to which any holders of securities of the
Company have a right to cause the Company to register or qualify such securities
under the Securities Act or any securities or blue sky laws of any jurisdiction
that would conflict or be inconsistent with any provision of this Agreement,
except to the extent such agreements are disclosed in documents filed with the
SEC by the Company under the Exchange Act and except in connection with the
shares of stock issued pursuant to the Asset Purchase Agreement between the
Company and Daikin entered into on the date hereof.
Section 4.2. TERM. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate at such time as all Registrable
Securities (i) have been disposed of pursuant to the Registration Statement,
(ii) have been sold under circumstances under which all of the applicable
conditions of Rule 144 (or any similar provision then in force) under the
Securities Act ("Rule 144") are met, (iii) have been otherwise transferred to
holders who may trade such shares without restriction under the Securities Act,
and the Company has delivered a new certificate or other evidence of ownership
for such securities not bearing a restrictive legend, or (iv) may be sold
without any time, volume or manner limitations pursuant to Rule 144(k) (or any
similar provision then in effect) under the Securities Act in the opinion of
counsel to the Company, which counsel shall be reasonably acceptable to the
Investor; provided, however, that such registration rights shall not terminate
sooner than two years following the date hereof. Notwithstanding the foregoing,
paragraph (c) of Section 1.1, Article III, Section 4.8, and Section 4.9 shall
survive the termination of this Agreement.
Section 4.3. RULE 144. The Company covenants that it will file all
reports required to be filed by it under the Act and the Exchange Act and that
it will take such further action as holders of Registrable Securities may
reasonably request, all to the extent required from time to time to enable the
Investor to sell Registrable Securities without registration under the Act
within the limitation of the exemptions provided by (a) Rule 144, as such Rule
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. If at any time the Company is not required to file
such reports, it will, upon the request of any holder of Registrable Securities,
make publicly available other information so long as necessary to permit
9
sales pursuant to Rule 144. Upon the request of the Investor, the Company will
deliver to the Investor a written statement as to whether it has complied with
such requirements.
Section 4.4. CERTIFICATE. The Company will, at its expense, forthwith
upon the request of any holder of Registrable Securities, deliver to such holder
a certificate, signed by the Company's principal financial officer, stating (a)
the Company's name, address and telephone number (including area code), (b) the
Company's Internal Revenue Service identification number, (c) the Company's
Commission file number, (d) the number of shares of each class of Stock
outstanding as shown by the most recent report or statement published by the
Company, and (e) whether the Company has filed the reports required to be filed
under the Exchange Act for a period of at least ninety (90) days prior to the
date of such certificate and in addition has filed the most recent annual report
required to be filed thereunder.
Section 4.5. AMENDMENT AND MODIFICATION. Any provision of this Agreement
may be waived, provided that such waiver is set forth in a writing executed by
both parties to this Agreement. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable Securities. Notwithstanding the foregoing,
the waiver of any provision hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and does not directly or
indirectly affect the rights of other holders of Registrable Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such holders; provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. No course of dealing between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or discharge any part of this Agreement or any rights or obligations of
any person under or by reason of this Agreement.
Section 4.6. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The Investor may
assign its rights under this Agreement to any subsequent holder the Registrable
Securities, provided that the Company shall have the right to require any holder
of Registrable Securities to execute a counterpart of this Agreement as a
condition to such holder's claim to any rights hereunder; provided further that
such holder is an "accredited investor" as defined in Rule 501 of Regulation D
of the Securities Act. This Agreement, together with the Finder's Fee
Agreement, sets forth the entire agreement and understanding between the parties
as to the subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
Section 4.7. SEPARABILITY. If any provision of this Agreement is held to
be invalid, illegal or incapable of being enforced by any law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal
10
or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.
Section 4.8. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given on the date of service if served personally, by recognized expedited
delivery service, or by facsimile (with confirmation copies of any facsimile
notice to be provided by at least one other method of delivery permitted
hereunder), or five (5) days after the date of mailing if mailed, by first class
mail, registered or certified, postage prepaid. Notices shall be addressed as
follows:
To Investor at: Digitek Consulting Inc.
000-0000 Xxx Xxxxxx
Xxxxxxxxx, XX, X0X 0X0
Att: Xx. Xxxxx Nasiopoulos
with a copy (which shall not constitute notice) to:
XxXxxxxx Xxxxxxxx
X.X Xxx 00000
Xxxxxxx Xxxxxx, Xxxxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
Xxxxxx X0X 0X0
Attn: Xxx XxXxxxxxxx
Xxxxxx Godward LLP
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx
To the Company at: Sonic Solutions
000 Xxxxxxx Xxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxx White & XxXxxxxxx LLP
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxx
or to such other address as a party has designated by notice in writing to
the other party in the manner provided by this Section.
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Section 4.9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed in the State of California by
California residents. The parties hereby waive trial by jury in connection with
any action or suit under this Agreement or otherwise arising from the
relationship between the parties hereto.
Section 4.10. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement,
nor shall they affect their meaning, construction or effect.
Section 4.11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.
Section 4.12. FURTHER ASSURANCES. Each party shall cooperate and take
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
Section 4.13. REMEDIES. In the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement and
granted by law. The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the remedy at law,
including monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be executed by the undersigned, thereunto duly authorized, as of
the date first set forth above.
SONIC SOLUTIONS
By:
---------------------------------------
A. Xxxx Xxxxxxxx
Senior Vice President
DIGITEK CONSULTING INC.
------------------------------------------
By: Xxxxx Xxxxxxxxxxx
Its:
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