EXHIBIT 2.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
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into as of July 15, 1997 by and among Discreet Logic Inc., a corporation
organized under the laws of the province of Quebec ("Buyer"), and the former
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shareholders (individually, a "Seller," and collectively, the "Sellers") of
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D-Vision Systems, Inc., an Illinois corporation (the "Company").
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W I T N E S S E T H:
WHEREAS, Buyer, the Company and the Sellers are parties to a certain Stock
Purchase Agreement dated as of July 15, 1997 (the "Purchase Agreement") pursuant
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to which Buyer will acquire all outstanding shares of stock of the Company in
exchange for cash and Buyer Common Shares; and
WHEREAS, the execution of this Agreement by the parties hereto is a
condition precedent to the obligations of the parties to consummate the
transactions contemplated by the Purchase Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth below, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
have the meaning ascribed to them:
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
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that is not a day on which banking institutions in Montreal or New York City are
closed.
"Buyer Common Shares" means the shares of common stock, no par value per
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share, of Buyer issued to Sellers pursuant to the Purchase Agreement.
"Commission" means the U.S. Securities and Exchange Commission, or any
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other U.S. federal agency at the time administering the Securities Act.
"Effective Date" means the date a Registration Statement becomes effective.
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"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended,
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or any other similar U.S. federal statute, and the rules and regulations of the
Commission thereunder, as may be in effect from time to time.
"Prospectus" means the prospectus included in any Registration Statement,
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as 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
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Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means the Buyer Common Shares issued to and
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received by the Sellers in respect of shares of the Company's common stock and
the Company's preferred stock at the Closing (as defined in the Purchase
Agreement) pursuant to the Purchase Agreement and held continuously from the
Closing Date by such Sellers and any securities that may be issued by Buyer or
any successor to Buyer from time to time with respect to, in exchange for, or in
replacement of such Buyer Common Shares, including, without limitation,
securities issued as a stock dividend on or pursuant to a stock split or similar
recapitalization of such shares; provided, however, that those shares as to
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which the following apply shall cease to be Registrable Securities if: (a) a
Registration Statement with respect to the sale of such Registrable Securities
shall have become effective under the Securities Act and such Registrable
Securities shall have been disposed of under such Registration Statement; (b)
such Registrable Securities shall have become transferable, and have been so
transferred, in accordance with the resale provisions of Rule 144 or any
successor rule or provision, under the Securities Act; (c) such Registrable
Securities shall have been transferred in a transaction in which the Seller's
rights and obligations under this Agreement were not assignable in accordance
with this Agreement; (d) such Registrable Securities shall have ceased to be
outstanding; or (e) the Registrable Securities have previously been sold in
accordance with the terms of this Agreement.
"Securities Act" means the U.S. Securities Act of 1933, as amended, or any
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similar U.S. federal statue, and the rules and regulations of the Commission
thereunder, as may be in effect from time to time.
"Shelf Registration" means a registration effected pursuant to a shelf
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registration statement of Buyer, on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the Commission, all
amendments and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein. A
registration statement relating to a Shelf Registration shall be referred to
herein as the "Registration Statement." The Registration Statement shall be
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effected on [Form S-3] or any successor form prescribed by the Commission.
2. SHELF REGISTRATION.
(a) Subject to the limitations set forth in Sections 4, 5 and 7 hereof,
Sellers constituting at least 25% of the total Registrable Securities then
outstanding (the "Initiating Holders") shall have the right to request that
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Buyer use its reasonable efforts to promptly effect qualification and
registration of the Registrable Securities under the Securities Act on a
Form S-3 Registration Statement (the "Registration"). Such request shall specify
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the name and address (including telephone and facsimile numbers) of each Seller
requesting registration and the number of shares for which each such Seller is
requesting registration (the "Registration Notice") and shall be sent by the
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Initiating Holders to Buyer and to each Seller who is not an Initiating
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Holder (the "Non-Initiating Holders"). Following receipt of the Registration
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Notice, Buyer shall use reasonable efforts to register the number of shares of
Registrable Securities specified in the Registration Notice and in all notices
received by Buyer from the Non-Initiating Holders within 15 Business Days after
delivery of such notice by the Initiating Holders to Buyer.
(b) Buyer shall use its reasonable efforts to proceed with and complete
the filing of a Registration Statement in respect of the Registrable Securities
as expeditiously as possible and in doing so shall carry out the following
actions:
(i) prepare the Registration Statement and use its reasonable
efforts to obtain the approval of its Board of Directors to carry out the
necessary actions to file the Registration Statement and register the
Registrable Securities in compliance therewith;
(ii) file the Registration Statement with the Commission and use its
reasonable efforts to cause the Registration Statement to become effective
as soon as practicable following the receipt of a request by the Initiating
Holders, and to keep such Registration Statement continuously effective
until the earlier of (A) midnight on the ninetieth (90th) day following the
Effective Date of the Registration, or at such later time as may be
established pursuant to Sections 4(b), 5(b) or 7(b) or (B) the date on
which no Registrable Securities for which the Registration has been
initiated remain unsold ("each a Distribution Period");
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(iii) prepare and file as expeditiously a possible with the
Commission such amendments and supplements to the Registration Statement,
and the Prospectus, as may be necessary to keep the Registration Statement
effective during a Distribution Period;
(iv) furnish to each Seller such number of copies of the
Registration Statement and the Prospectus (including each preliminary
prospectus) and any amendments or supplements thereto as such Seller may
reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities;
(v) use its reasonable efforts to register or qualify the
Registrable Securities under the state securities or "blue sky" laws of
such jurisdictions as each Seller shall reasonably request and to maintain
such qualification throughout the Distribution Period, except that Buyer
shall not be required for the purpose of such qualification to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or, except as to matters relating to the offer
and sale of the Registrable Securities, consent to general service of
process in any such jurisdiction;
(vi) use its reasonable efforts to list the Registrable Securities
on the Nasdaq National Market or with any U.S. securities exchange on which
the common shares of Buyer are then listed;
(vii) immediately notify each Seller (A) of the Effective Date and
the date when any post-effective amendment to the Registration Statement
becomes effective, (B) of
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any stop order or notification from the Commission or any other
jurisdiction as to the suspension of the effectiveness of the Registration
Statement, and (C) of the happening of any event of which Buyer has
knowledge that would result in the Prospectus contained in the Registration
Statement, as then in effect, including an untrue statement of a material
fact or omitting to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;
(viii) timely file with the Commission all documents required to be
filed by Buyer pursuant to subsections 13(a), 13(c), 15(d), and Section 14
of the Exchange Act, and otherwise maintain its qualification to file a
Registration Statement; and
(ix) if the Registrable Securities are to be sold by way of an
underwritten offering (on either a "firm commitment" or "best efforts"
basis), take all reasonable actions as are necessary or advisable to
expedite and facilitate the disposition of the Registrable Securities in
the manner contemplated by the Registration Statement, to the same extent
as if the Registrable Securities then being offered were for the account of
Buyer, including, without limitation, (A) entering into such customary
agreements (including underwriting agreements in customary form) as the
underwriters may reasonably request, and (B) using its best efforts to
furnish: (1) an opinion of counsel representing Buyer for the purposes of
such registration, dated the date the Registrable Securities are delivered
to the underwriters for sale and addressed to the underwriters and the
Sellers, (x) stating that the Registration Statement has become effective
under the Securities Act, and that to the best knowledge of such counsel,
no stop order suspending its effectiveness has been issued and no
proceeding for that purpose has been instituted or is pending or
contemplated under the Securities Act, (y) stating that the Registration
Statement and each amendment or supplement thereto, comply as to form in
all material respects with the requirements of the Securities Act (except
that such counsel need not express any opinion as to financial statements
contained therein) and (z) to such other effects as reasonably may be
requested by counsel for the underwriters or by the Sellers or their
counsel, (2) letters dated the date of execution of the underwriting
agreement and the date of delivery of the Registrable Securities (if so
requested by the underwriters or the Sellers) and addressed to the
underwriters and the Sellers, from the chartered accountants retained by
Buyer stating that they are independent public accountants within the
meaning of the Securities Act that, in the opinion of those accountants,
the financial statements of Buyer included in the Registration Statement,
and any amendment or supplement thereto, comply as to form in all material
respects with the applicable accounting requirements of the Securities Act,
and covering such other financial matters (including information as to the
period ending no more than five (5) business days prior to the date of the
letter) with respect to the registration as the underwriters reasonably may
request, and (3) for inspection by the Sellers, any underwriter
participating in any distribution pursuant to the Registration Statement,
and any attorney, accountant or other agent retained by any underwriter,
all pertinent financial and other records, pertinent corporate documents
and properties of Buyer, and causing Buyer' officers, directors and
employees to supply all information reasonably requested by any
underwriter, attorney, and accountant or agent in connection with the
Registration Statement, on the condition
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that each of the foregoing have entered into confidentiality agreements
with Buyer in respect of the information contained in such records or
documents.
(c) Buyer shall not be required to effect more than one (1) registration
pursuant to the provisions of this Section 2. Buyer and the Sellers shall use
their reasonable best efforts to coordinate sales of Registrable Securities
pursuant to a Registration Statement in a manner to ensure stability in the
trading price of the Buyer Common Shares. In addition, Buyer may affect
qualification and registration of the Registrable Securities pursuant to this
Section 2 pursuant to an existing shelf registration statement or pursuant to an
underwritten offering in accordance with the provisions of Section 5 hereof.
3. SHAREHOLDER OBLIGATIONS. In connection with the filing of the
Registration Statement, each Seller will furnish to Buyer as expeditiously as
possible, such documents or information with respect to itself and the proposed
sale or distribution of the Registrable Securities, as is reasonably necessary
in order to assure compliance of U.S. federal and applicable state securities
laws, and as a condition to any proposed sale or distribution of the Registrable
Securities deliver to Buyer in writing representation and warranties, including
but not limited to, representations and warranties that, in connection with any
proposed sale or distribution of Registrable Securities, Seller has complied
with all requirements under the Securities Act, including applicable prospectus
delivery requirements, and that such shares of Registrable Securities have been
sold or distributed in accordance with the method of sale set forth in the
Registration Statement. Each Seller shall comply, throughout the Distribution
Period, with all United States and state securities laws in the offer and sale
of the Registrable Securities.
4. DELAYS IN REGISTRATION.
(a) The obligations of Buyer with respect to the Registration Statement
(as set out in Section 2 hereof) and the rights of the Sellers to distribute the
Registrable Securities pursuant to this Agreement and any Registration
Statement, may be suspended by Buyer on the occurrence of any of the following
events:
(i) Buyer has made an initial determination to conduct a primary,
secondary or combined primary and secondary public offering pursuant to
which Sellers shall have the right to include therein Registrable
Securities in accordance with Section 4(e) hereof;
(ii) Buyer is about to make a normal course disclosure containing
information of a material nature;
(iii) Buyer is engaged in any activity at any time that, in the good
faith determination of its management or Board of Directors, would have a
material effect on Buyer and would be adversely affected by the continued
compliance with this Agreement or the continued distribution of the
Registrable Securities by the Sellers (each a "Material Activity").
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(b) In the event of a suspension pursuant to paragraph (a) of this Section
4, Buyer shall use its best efforts to minimize the length of such suspension:
(i) under paragraph 4(a)(i), from the date of such determination
until the earlier of (a) the decision by Buyer not to pursue the public
offering or (b) for a period of one hundred and eighty (180) days, more or
less, from the effective date of the registration statement relating to
such public offering, provided that during such suspension Buyer will
proceed with reasonable efforts to file the appropriate documentation in
respect of, and otherwise complete, such public offering as expeditiously
as practicable;
(ii) under paragraph 4(a)(ii), for a period of five (5) Business
Days, more or less; and
(iii) under paragraph 4(a)(iii), in the case of each Material
Activity, for a period of ninety (90) days, more or less, and in any event
to end not later than the termination of the Material Activity giving rise
to the suspension.
(c) Buyer shall promptly give the Sellers' notice of both the beginning
and end of any suspension under subsection 4(a).
(d) The Distribution Period shall be extended by the length of any
suspensions under paragraph 4(b)(i) and (iii).
(e) If Buyer at any time proposes to conduct a public offering pursuant to
Section 4(a)(i) hereof (except with respect to registration statements on Forms
X-0, X-0 or another form not available for registering the Registrable
Securities for sale to the public), each such time it will give written notice
to all Sellers of outstanding Registrable Securities of its intention to do so.
Upon the written request of any such Seller, received by Buyer within 15
Business Days after the giving of any such notice by Buyer, to register any of
its Registrable Securities, Buyer will use reasonable efforts to cause the
Registrable Securities as to which registration shall have been so requested to
be included in the securities to be covered by the registration statement
proposed to be filed by Buyer. If Buyer is advised in writing in good faith by
any managing underwriter of the Common Shares being offered in such public
offering that the number of Common Shares proposed to be offered is greater than
the amount which can be offered without adversely affecting the offering, Buyer
may, at its sole discretion, reduce the number of Registrable Securities
included in the offering. Notwithstanding the foregoing provisions, the Company
may withdraw any registration statement referred to in this Section 4(e) without
thereby incurring any liability to the holders of Registrable Securities.
5. PUBLIC OFFERINGS.
(a) If, in connection with any proposed distribution by the Sellers under
Section 2 hereof, Buyer in its sole discretion shall determine that it is in the
best interests of Buyer to effect distribution by means of an underwritten
offering, Buyer shall promptly notify the Sellers of such
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determination. In such event, the right of any Seller to participate in such
distribution shall be subject to the following conditions:
(i) the Seller shall enter into, and perform its obligations under,
an underwriting agreement in customary form with the managing underwriter
selected for the underwriting by Buyer;
(ii) during the course of such public offering, the Seller shall
cooperate with Buyer and take such actions as are customarily required by
underwriters in such circumstances;
(iii) during the period that any registration statement in respect of
such public offering is effective, the Seller shall make no other
distribution of Registrable Securities; and
(iv) if requested in writing by the underwriters for the public
offering of securities of Buyer, each holder of Registrable Securities
shall agree not to sell publicly any or any other Common Shares of Buyer
(other than Registrable Securities or other Common Shares of Buyer being
registered in such offering), without the consent of such underwriters, for
a period of not more than 180 days following the effective date of the
registration statement relating to such offering.
(b) If Buyer is advised in writing in good faith by any managing
underwriter of the Common Shares being offered in such public offering that the
number of Common Shares proposed to be offered is greater than the amount which
can be offered without adversely affecting the offering, Buyer may, at its sole
discretion, reduce the number of Registrable Securities included in the
offering. If Buyer is advised to decline to include all or part of the
Registrable Securities in such public offering, the Distribution Period shall be
extended by the aggregate of the suspension initiated pursuant to Section
4(b)(i) hereof in respect of such public offering and the period that the
registration statement in respect of such public offering is effective.
6. EXPENSES.
(a) Buyer will pay all Registration Expenses in connection with the
registration of Registrable Securities effected by Buyer pursuant to Section 2
hereof (including, without limitation a public offering made pursuant to the
provisions of Section 5 hereof). Holders of Registrable Securities registered
pursuant to this Agreement shall pay all Selling Expenses associated with such
registration, with each Seller bearing a pro rata portion of the Selling
Expenses based upon the number of Registrable Securities registered by each
Seller.
(b) The term "Registration Expenses" means all expenses incurred by Buyer
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in complying with Section 2 hereof (including, without limitation a public
offering made pursuant to the provisions of Section 5 hereof), including,
without limitation, all registration and filing fees, printing expenses, fees in
connection with the listing of the Registrable Securities with any
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securities exchange, fees and disbursements of counsel to Buyer and independent
public accountants for Buyer, reasonable fees and expenses (including counsel
fees) incurred in connection with complying with state securities or "blue sky"
laws, fees of the National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars; provided, however, that
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Registration Expenses shall not include the fees and expenses of counsel for the
Sellers. The term "Selling Expenses" means all underwriting discounts and
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selling commissions and stock transfer fees and taxes applicable to the sale of
the Registrable Securities. Neither of the foregoing definitions shall include
any charges or amounts for routine internal costs incurred by either party
carrying out the transfers contemplated in this Agreement.
7. SALE OF REGISTRABLE SECURITIES DURING THE DISTRIBUTION PERIOD.
(a) The parties confirm their intention that the sale or distribution of
the Registrable Securities will be carried out in a orderly and cooperative
manner. To that end, the Sellers will periodically advise Buyer of the nature
and progress of their efforts to sell or distribute the Registrable Securities
including, without limitation, the provision to Buyer of a written monthly
report setting out the above matters, as well as disclosing the identify of any
actual or prospective purchasers of Registrable Securities (if known), the
number of Registrable Securities sold or distributed or subject to negotiation
and the consideration paid or due. In addition, as a condition to any proposed
sale or distribution of Registrable Securities, Seller shall deliver to Buyer in
writing representations and warranties, including but not limited to,
representations and warranties that, in connection with any proposed sale or
distribution of Registrable Securities, Seller has complied with all
requirements under the Securities Act, including applicable prospectus delivery
requirements, and that such Registrable Securities have been sold or distributed
in accordance with the method of sale set forth in the Registration Statement.
(b) In the interest of selling the Registrable Securities in an orderly
fashion, each Seller will observe the following constraints regarding any
disposition of the Registrable Securities during the Distribution Period (any of
which dispositions are referred to collectively, hereinafter as "sales," or "a
sale"):
(i) Each Seller agrees to give written notice to the Buyer and Xxxxx,
Xxxxxxx & Xxxxxxxxx, LLP at least three (3) Business Days prior to any
intended sale or distribution of Registrable Securities under the
Registration Statement referred to in Section 2 hereof, which notice shall
specify the date on which such Seller intends to begin such sale or
distribution. As soon as practicable after the date such notice is
received by Buyer, and in any event within three (3) Business Days after
such date, Buyer shall comply with either paragraph (A) or (B) below.
(A) Except in the event that paragraph (B) below applies, Buyer
shall (i) if deemed necessary by Buyer, prepare and file 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
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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 Sellers who gave such notice copies of any documents
filed pursuant to Section 7(b)(i)(A)(i); and (iii) inform each such
holder that Buyer has complied with its obligations under Section
7(b)(i)(A)(i) (or that, if Buyer has filed a post-effective amendment
to the Registration Statement which has not yet been declared
effective, Buyer will notify each such Seller to that effect, will use
its reasonable efforts to secure the effectiveness of such post-
effective amendment and will immediately notify each such Seller
pursuant to Section 7(b)(i)(A)(i) hereof when the amendment has become
effective).
(B) In the event of (i) 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 the Registration Statement or related Prospectus or for
additional information; (ii) the issuance by the Commission or any
other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or the
written threat or initiation of any proceedings for that purpose;
(iii) the receipt by Buyer 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) 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; (v) that, in
accordance with Section 4(a)(i) hereof, Buyer has made an initial
determination to conduct a public offering; (vi) that, in accordance
with Section 4(a)(ii) hereof, Buyer is in possession of material
information that it deems advisable not to disclose in a Registration
Statement or (vii) that, in the good faith judgment of Buyer's Board
of Directors, in accordance with the provision of Section 4(a)(iii)
hereof, it is advisable to suspend use of the Prospectus for a period
of time; then, subject to and in accordance with Section 4 hereof,
Buyer shall deliver written notice to the Sellers to the effect of the
foregoing and, upon receipt of such notice, each such Seller's
Distribution Period will not commence until such Seller receives
copies of the supplemented or
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amended Prospectus provided for in Section 7(b)(i)(A)(i) hereof, or
until it is advised in writing by Buyer, pursuant to Section 4(c)
hereof, 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 any of the events or circumstances listed in
the foregoing paragraph (B) occur or exist after a Distribution Period
has commenced, subject to Section 4 hereof, Buyer shall have the same
right to suspend such Distribution Period by delivery of written
notice as Buyer would have had if the Distribution Period had not yet
commenced, and any such suspension of a Distribution Period shall be
deemed included within the meaning of the term "suspension" for all
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purposes under this Agreement.
(ii) Each Seller who following the consummation of the transactions
contemplated by the Purchase Agreement will be an employee of Buyer will
sell Registrable Securities only in accordance with the terms of Buyer's
policy on xxxxxxx xxxxxxx.
(iii) The Sellers will advise any broker or dealer acting on its
behalf in respect of the sale of the Registrable Securities, and any
prospective purchasers of the Registrable Securities, of the constraints
set out in this Section 7.
8. INDEMNIFICATION.
(a) Buyer, will indemnify and hold harmless each Seller, the officer,
directors, partners, agents and employees of each Seller and each person, if
any, who controls such Seller within the meaning of the Securities Act, against
all losses, claims, damages or liabilities, joint or several (collectively
"Claims"), to which they may become subject under the Securities Act, the
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Exchange Act or other federal or state law (excepting Claims related to or
arising from a breach by such Seller of its obligations under Sections 4(a),
5(a)(iii), or 7(b)), in so far as the Claims (or actions in respect thereof)
arise out of or are based on (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment or supplement thereto, or the omission or alleged omission to state in
those documents a material fact required to be stated therein, or necessary to
make the statements therein, not misleading or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or the
omission or alleged omission to state in those documents a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (collectively, a "Violation"), and
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reimburse each such Seller, officer, director, partner, agent, employee or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any Claims; provided, however,
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that the indemnity agreement contained in this Section 8(a) shall not apply to
amounts paid in settlement of any such Claims, if such settlement is effected
without the consent of Buyer, which consent shall not be unreasonably withheld
or delayed. This indemnity shall not apply to any Claims that arise out of, or
are based upon an untrue statement or alleged untrue statement or omission or
alleged
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omission made in reliance upon and in conformity with information provided by
any such Seller in writing specifically for the purposes of filing or
maintaining the effectiveness of the Registration Statement.
(b) Each Seller will indemnify and hold harmless Buyer, each of its
officers, directors, partners, agents or employees, each person, if any, who
controls Buyer within the meaning of the Securities 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 Claims to which Buyer 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 Securities Act, the Exchange
Act or other federal or state law, insofar as such Claims 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 furnished by such Seller expressly for use in connection with such
registration; and each such Seller will reimburse any reasonable legal or other
expenses reasonably incurred by Buyer 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 Claims. Notwithstanding anything contained
in this Agreement to the contrary, the indemnity agreement contained in this
Section 8(b) shall not apply to amounts paid in settlement of any such Claims if
such settlement is effected without the consent of the Seller, which consent
shall not be unreasonably withheld, conditioned or delayed; provided further,
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that the aggregate liability of each 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) As soon as it becomes aware of the commencement of an action
respecting a Claim, the indemnified party shall promptly notify the indemnifying
party, although failure to notify shall not relieve the indemnifying party from
any liability to indemnify the indemnified party. Following receipt of that
notice, the indemnifying party may participate in and, to the extent it wishes
and upon giving notice to the indemnified party, assume and undertake the
defense of the action using counsel satisfactory to it. In that event, the
indemnifying party will not be liable to the indemnified party for any legal
expenses subsequently incurred by the indemnified party in connection with the
defense of the action, other than reasonable costs of investigation and of
liaison with the indemnifying party's counsel. If the defendants in any action
include both the indemnified party and the indemnifying party, and if the
indemnified party reasonably concludes that there may be reasonable defenses
available to it that are different from or additional to those available to the
indemnifying party or if the interests of the indemnified party reasonably may
be deemed to be conflicting with the interests of the Indemnifying party, the
indemnified party shall have the right to select separate counsel and to assume
those legal defenses and otherwise to participate in the defense of the action,
with the expenses and fees of separate counsel and other expenses related to
that participation to be reimbursed by the indemnifying party as incurred.
(d) If the indemnification provided for above is held by a court of
competent jurisdiction to be unavailable, then the indemnifying party, in lieu
of such indemnification, shall
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contribute to the amount paid or payable by the indemnified party in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand the indemnified party on the other hand in connection with
the statements or omissions that resulted in the Claims, as well as other
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the alleged untrue statement of a
material fact or omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The provisions of this Section 8 shall survive the expiration or
termination of this Agreement and shall expire at the end of any applicable
limitation period.
9. EXPIRATION OF REGISTRATION RIGHTS.
The obligations of Buyer under Section 2 of this Agreement to register the
Registrable Securities shall expire and terminate upon the earlier of (i) the
last day of the Distribution Period; (ii) at such time when the Sellers have
sold the last of the Registrable Securities; or (iii) at such time as the
Sellers shall be entitled or eligible to sell all such securities in the United
States or to a U.S. Person without restriction and without a need for the filing
of a registration statement under the Securities Act. The determination as to
whether the Sellers are 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 Seller.
10. RESTRICTIONS ON TRANSFERS OF COMMON SHARES.
(a) The Sellers agree and understand that the issuance of the Registrable
Securities has not been, and, except as contemplated in this Agreement, the sale
or other disposition thereof by the Sellers will not be, registered under the
Securities Act or the securities laws of any state and that such shares may be
sold or disposed of only in one or more transactions registered under the
Securities Act and, where applicable, such state laws or as to which an
exemption from the registration requirements of the Securities Act and, where
applicable, such state laws is available. The Sellers acknowledge that, except
as expressly set forth in this Agreement, the Sellers have no right to require
Buyer to cause the registration of any Registrable Securities. The Sellers
understand and agree that each certificate representing any Registrable
Securities (each, a "Certificate") shall be subject to stop transfer
-----------
instructions and shall bear the following legend:
"THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN
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EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
STATE LAWS."
Buyer hereby agrees that it will, upon the request of the Sellers,
eliminate any stop transfer instructions and any restrictive legend on any
certificates representing the Registrable Securities if (i) in the opinion of
counsel, including in-house counsel with demonstrated expertise in matters
relating to federal securities laws, which counsel and opinion (in form, scope
and substance) shall be reasonably satisfactory to Buyer, the Sellers are
entitled to sell or dispose of the Registrable Securities represented by such
Certificate without registration or (ii) such shares are being disposed of by
the Sellers under a Registration Statement pursuant to Section 2 herein and in
compliance with the Securities Act and applicable state and securities laws.
(b) Each Seller covenants and agrees that, for a period beginning on the
date of the Purchase Agreement and ending on the date which is forty-eight hours
following the public announcement by Buyer of its 1996 fiscal year-end results,
the Seller shall not sell, offer to sell or otherwise dispose of any Buyer
Common Shares issued to and received by the Sellers pursuant to the Purchase
Agreement to any Person.
For the purposes of the foregoing, "Person" means any individual,
------
partnership, limited partnership, joint venture, syndicate, sole proprietorship,
company or corporation with or without share capital, unincorporated
association, trust, trustee, executor, administrator or other legal personal
representative, regulatory body or agency, government or governmental agency,
authority or entity however designated or constituted.
11. BINDING ON SUCCESSORS. This Agreement is binding upon and shall enure
to the benefit of the respective successors and assigns of the parties, whether
so expressed or not.
12. NO ASSIGNMENT. No Seller may assign this Agreement or any of the
rights or obligations hereunder without the express written consent of the
Buyer; provided, however, that this Agreement and the rights and obligations of
the Sellers may be assigned with the prior written consent of Buyer, which shall
not be unreasonably withheld, (i) if the Seller is an individual, to an
immediate family member, (ii) if the Seller is a limited partnership, to its
limited partners, (iii) if the Seller is a corporation, to its stockholders, and
(iv) if the Seller is a limited liability company, to its members, and on
condition that such transferee pursuant to clauses (i), (ii), (iii) or (iv)
agrees in writing to be bound by the terms of this Agreement.
13. NOTICE. All notices, requests, consents or other communications
required pursuant to this Agreement shall be in writing and shall be delivered
personally, mailed by certified or registered mail (return receipt requested),
or sent by facsimile addressed as follows:
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if to Buyer:
Discreet Logic Inc.
00 xxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
Fax: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
if to any Seller, at the address set forth on Schedule A hereto.
----------
or, to such other address as may be given pursuant to this Section 13.
14. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts (irrespective of
its choice of law principles).
15. AMENDMENT. This Agreement may not be amended without the written
consent of Buyer and a majority of the Registrable Securities then outstanding.
The failure of a party to enforce any right set forth in this Agreement, or
granted at law or in equity, shall in no way be construed to be a waiver of such
right, or affect the validity of this Agreement or any part thereof, or the
right thereafter to enforce each and every provision of this Agreement.
16. UNENFORCEABLE PROVISION. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable, such provision shall be severed from
this Agreement and shall not in any manner affect or render illegal, invalid or
unenforceable any other provision of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
DISCREET LOGIC INC.
By /s/ Xxxxxxxx Xxxxxxxxx
----------------------------
Title: Senior V.P. & C.F.O.
D-VISIONS SYSTEMS, INC.
By /s/ Xxxx Xxxxxx
----------------------------
Title:
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SELLERS
-------
Xxxxxxx X. Xxxx, Trustee for Xxxxxxx X. Xxxx
Revocable Living Trust under dated 2/12/91
By: /s/ Xxxxxxx X. Xxxx
------------------------
Its: Trustee
-----------------------
/s/ Xxxxxxx X. Xxxx
----------------------------
Xxxxxxx X. Xxxx
/s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx
*
----------------------------
Xxxx X. Xxxxx
/s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx
/s/ Xxxxx X. Xxxx
----------------------------
Xxxxx X. Xxxx
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Geocapital III, L.P.
By: *
--------------------------
Its:
-------------------------
Platinum Venture Partners I, L.P.
By: *
--------------------------
Its:
-------------------------
*
-----------------------------
Xxxxxx X. Xxxxxx
*
-----------------------------
Xxxxxx X. Steel
Presidents Forum/D-Vision L.L.C.
By: *
--------------------------
Its:
-------------------------
*
-----------------------------
Xxxxxxx X. Steel
Sunbeam Ventures Ltd.
By: *
--------------------------
Its:
-------------------------
*
-----------------------------
Xxxxxxx Xxxxx
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*
-----------------------------
Xxxxxxx Xxxx
*
-----------------------------
Xxxx Xxxxxx
*
-----------------------------
Xxxxxxx Xxxxxx
/s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx
Attorney-in-Fact
