EXHIBIT 10.2
CORPORATE AGREEMENT
THIS CORPORATE AGREEMENT ("Agreement") is entered into as of July 6, 1998
by and between SILICON GRAPHICS, INC., a Delaware corporation ("Silicon
Graphics"), and MIPS TECHNOLOGIES, INC., a Delaware corporation (the "Company").
RECITALS
WHEREAS, Silicon Graphics directly owns 36,000,000 shares of Common Stock,
par value $0.001 per share ("Common Stock"), of the Company, and the Company is
a member of Silicon Graphics' "affiliated group" of corporations (the "SGI
Group") for federal income tax purposes;
WHEREAS, the parties are contemplating the possibility that Silicon
Graphics will sell shares of Common Stock in an initial public offering (the
"Initial Public Offering") registered under the Securities Act of 1933, as
amended; and
WHEREAS, the parties desire to enter into this Agreement to set forth their
agreement regarding (i) Silicon Graphics' rights to purchase additional shares
of Capital Stock of the Company to permit Silicon Graphics to own at least the
Minimum Ownership Percentage of Capital Stock in the Company, (ii) certain
registration rights with respect to the Common Stock (and any other securities
issued in respect thereof or in exchange therefor) and (iii) certain
representations, warranties, covenants and agreements applicable so long as the
Company is a subsidiary of Silicon Graphics.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Silicon Graphics and the Company,
for themselves, their successors, and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. As used in this Agreement, the following terms
will have the following meanings, applicable both to the singular and the plural
forms of the terms described:
"Affiliate" means, with respect to a given Person, any Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to vote a majority of
the securities having voting power for the election of directors (or other
Persons acting in similar capacities) of such Person or otherwise to direct or
cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agreement" has the meaning ascribed thereto in the preamble hereto, as
such agreement may be amended and supplemented from time to time in accordance
with its terms.
"Applicable Stock" means at any time the (i) shares of Common Stock owned
by the SGI Entities that were owned on the date hereof, plus (ii) shares of
Common Stock purchased by the SGI Entities pursuant to Article II of this
Agreement, plus (iii) shares of Common Stock that were issued to SGI Entities in
respect of shares described in either clause (i) or clause (ii) in any
reclassification, share combination, share subdivision, share dividend, share
exchange, merger, consolidation or similar transaction or event.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Company Securities" has the meaning ascribed thereto in Section 3.2(b).
"Disadvantageous Condition" has the meaning ascribed thereto in Section
3.1(a).
"MIPS Entities" means the Company and its Subsidiaries, and "MIPS Entity"
shall mean any of the MIPS Entities.
"Holder" means Silicon Graphics, the other SGI Entities and any Transferee.
"Holder Securities" has the meaning ascribed thereto in Section 3.2(b).
"Initial Public Offering" has the meaning ascribed thereto in the recitals
to this Agreement.
"Initial Public Offering Date" means the date of completion of the initial
sale of Common Stock in the Initial Public Offering.
"Issuance Event" has the meaning ascribed thereto in Section 2.2.
"Issuance Event Date" has the meaning ascribed thereto in Section 2.2.
"Market Price" of any shares of Common Stock (or other Capital Stock) on
any date means (i) the average of the last sale price of such shares on each of
the five trading days immediately preceding such date on the Nasdaq National
Market or, if such shares are not listed or quoted thereon, on the principal
national securities exchange or automated interdealer
quotation system on which such shares are traded or (ii) if such sale prices
are unavailable or such shares are not so traded, the value of such shares on
such date determined in accordance with agreed-upon procedures reasonably
satisfactory to the Company and Silicon Graphics.
"Minimum Ownership Percentage" means the ownership of such number of (i)
shares of Capital Stock of the Company to the extent, and only to the extent,
necessary for Silicon Graphics to maintain all of the following: (a) control of
the Company (within the meaning of Section 368(a)(2)(H) and (c) of the Internal
Revenue Code of 1986, as amended (the "Code")), (b) the status of the Company as
a member of the affiliated group of corporations (within the meaning of Section
1504 of the Code) of which Silicon Graphics is the common parent, provided such
status has theretofore been maintained or (c) its then-existing percentage of
the total voting power and value of the Company, whichever percentage is
highest, and (ii) shares of non-voting capital stock to the extent, and only to
the extent, necessary to own 80% of each outstanding class of such stock.
"Option" has the meaning ascribed thereto in Section 2.1(a).
"Option Notice" has the meaning ascribed thereto in Section 2.2.
"Other Holders" has the meaning ascribed thereto in Section 3.2(c).
"Other Securities" has the meaning ascribed thereto in Section 3.2.
"Ownership Percentage" means, at any time, the fraction, expressed as a
percentage and rounded to the next highest thousandth of a percent, whose
numerator is the aggregate Value of the Applicable Stock and whose denominator
is the aggregate Value of outstanding shares of Common Stock of the Company;
PROVIDED, HOWEVER, that any shares of Common Stock issued by the Company in
violation of its obligations under Article II of this Agreement shall not be
deemed outstanding for the purpose of determining the Ownership Percentage. For
purposes of this definition, "Value" means, with respect to any share of stock,
the value of such share determined by Silicon Graphics under principles
applicable for purposes of Section 1504 of the Internal Revenue Code of 1986, as
amended.
"Person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization, government (and
any department or agency thereof) or other entity.
"Registrable Securities" means shares of Common Stock and any stock or
other securities into which or for which such Common Stock may hereafter be
changed, converted or exchanged and any other shares or securities issued to the
Holders (or such shares or other securities into which or for which such shares
are so changed, converted or exchanged) upon any reclassification, share
combination, share subdivision, share dividend, share exchange, merger,
consolidation or similar transaction or event or pursuant to the Option. As to
any particular Registrable Securities, such Registrable Securities shall cease
to be Registrable Securities when (i)
a registration statement with respect to the sale by the Holder thereof shall
have been declared effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement,
(ii) such Registrable Securities are sold by a person in a transaction in
which the rights under the provisions of this Agreement are not assigned or
(iii) such Registrable Securities may be sold pursuant to Rule 144(k) (or any
similar provision then in force) under the Securities Act without
registration under the Securities Act. (iv) such Registrable Securities shall
have been otherwise transferred, new certificates for them not bearing a
legend restricting further transfer shall have been delivered by the Company
and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any state securities or
blue sky law then in effect or (v) they shall have ceased to be outstanding.
"Registration Expenses" means any and all expenses incident to performance
of or compliance with any registration of securities pursuant to Article III,
including, without limitation, (i) the fees, disbursements and expenses of the
Company's counsel and accountants and the fees and expenses of counsel selected
by the Holders in accordance with this Agreement in connection with the
registration of the securities to be disposed of, such fees and expenses of such
counsel selected by the Holders to be reasonable in the reasonable discretion of
the Company; (ii) all expenses, including filing fees, in connection with the
preparation, printing and filing of the registration statement, any preliminary
prospectus or final prospectus, any other offering document and amendments and
supplements thereto and the mailing and delivering of copies thereof to any
underwriters and dealers; (iii) the cost of printing or producing any
underwriting agreements and blue sky or legal investment memoranda and any other
documents in connection with the offering, sale or delivery of the securities to
be disposed of; (iv) all expenses in connection with the qualification of the
securities to be disposed of for offering and sale under state securities laws,
including the fees and disbursements of counsel for the underwriters or the
Holders of securities in connection with such qualification and in connection
with any blue sky and legal investment surveys; (v) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the securities to be disposed of; (vi) transfer
agents' and registrars' fees and expenses and the fees and expenses of any other
agent or trustee appointed in connection with such offering; (vii) all security
engraving and security printing expenses; (viii) all fees and expenses payable
in connection with the listing of the securities on any securities exchange or
automated interdealer quotation system or the rating of such securities, (ix)
any other fees and disbursements of underwriters customarily paid by the sellers
of securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, and (x) other reasonable out-of-pocket expenses of Holders other
than legal fees and expenses referred to in clause (i) above.
"Rule 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated under
the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
"Selling Holder" has the meaning ascribed thereto in Section 3.4(e).
"SGI Entities" means Silicon Graphics and Subsidiaries of Silicon Graphics
(other than Subsidiaries that constitute MIPS Entities), and "SGI Entity" shall
mean any of the SGI Entities.
"SGI Group" has the meaning ascribed thereto in the recitals to this
Agreement.
"SGI Ownership Reduction" means any decrease at any time in the Ownership
Percentage to less than 50%.
"SGI Transferee" has the meaning ascribed thereto in Section 3.9.
"Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting capital stock or other voting ownership interests is owned or
controlled, directly or indirectly, by such Person or by one or more of the
Subsidiaries of such Person or by a combination thereof. "Subsidiary," when
used with respect to Silicon Graphics or the Company, shall also include any
other entity affiliated with Silicon Graphics or the Company, as the case may
be, that Silicon Graphics and the Company may hereafter agree in writing shall
be treated as a "Subsidiary" for the purposes of this Agreement.
"Transferee" has the meaning ascribed thereto in Section 3.9.
Section 1.2. INTERNAL REFERENCES. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement and references to the
parties shall mean the parties to this Agreement.
ARTICLE II
OPTIONS
Section 2.1. OPTIONS. (a) The Company hereby grants to Silicon Graphics,
on the terms and conditions set forth herein, a continuing right (the "Option")
to purchase from the Company such number of shares of the Capital Stock as is
necessary to allow the SGI Entities to maintain the Minimum Ownership Percentage
in the Capital Stock of the Company. The Option shall be assignable, in whole
or in part and from time to time, by Silicon Graphics to any SGI Entity. The
exercise price for the shares of Capital Stock purchased pursuant to the Option
shall be the Market Price of the Capital Stock as of the date of first delivery
of notice of exercise of the Option by Silicon Graphics (or its permitted
assignee hereunder) to the Company.
(b) The provisions of Section 2.1(a) hereof notwithstanding, the Option
granted pursuant to Section 2.1 shall not apply and shall not be exercisable in
connection with the issuance by the
Company of any shares of Common Stock pursuant to any stock option or other
executive or employee benefit or compensation plan maintained by the Company,
so long as, from and after the date hereof and prior to the issuance of such
shares, the Company has repurchased from shareholders and not subsequently
reissued a number of shares equal or greater to the number of shares to be
issued in any such issuance.
Section 2.2. NOTICE. At least 20 business days prior to the issuance of
any shares of Capital Stock (other than in connection with the Initial Public
Offering, including the full exercise of all underwriters' over-allotment
options granted in connection therewith and other than issuances of Common Stock
to any SGI Entity) or the first date on which any event could occur that, in the
absence of a full or partial exercise of the Option, would result in a reduction
in Silicon Graphics' level of ownership in the Company to below the Minimum
Ownership Percentage, the Company will notify Silicon Graphics in writing (an
"Option Notice") of any plans it has to issue such shares or the date on which
such event could first occur. Each Option Notice must specify the date on which
the Company intends to issue such additional shares or on which such event could
first occur (such issuance or event being referred to herein as an "Issuance
Event" and the date of such issuance or event as an "Issuance Event Date"), the
number of shares the Company intends to issue or may issue and the other terms
and conditions of such Issuance Event.
Section 2.3. OPTION EXERCISE AND PAYMENT. The Option may be exercised by
Silicon Graphics (or any SGI Entity to which all or any part of the Option has
been assigned) for a number of shares equal to or less than the number of shares
that are necessary for the SGI Entities to maintain, in the aggregate, the
Minimum Ownership Percentage. Each Option may be exercised at any time by the
delivery to the Company of a written notice (the "Exercise Notice") to such
effect specifying (i) the number of shares of Capital Stock to be purchased by
Silicon Graphics, or any of the SGI Entities and (ii) a calculation of the
exercise price for such shares. Upon any such exercise of the Option, the
Company will deliver to Silicon Graphics (or any SGI Entity designated by
Silicon Graphics), against payment therefor, certificates (issued in the name of
Silicon Graphics or its permitted assignee hereunder or as directed by Silicon
Graphics) representing the shares of Capital Stock being purchased upon such
exercise. If after the receipt of an Option Notice and prior to the
corresponding Issuance Event Date, Silicon Graphics delivers to the Company an
Exercise Notice, the Company shall deliver the certificates for the shares of
Capital Stock being purchased prior to the applicable Issuance Event Date.
Payment for such shares shall be made by wire transfer or intrabank transfer of
immediately-available funds to such account as shall be specified by the
Company, for the full purchase price for such shares.
Section 2.4. EFFECT OF FAILURE TO EXERCISE. Except as provided in Section
2.6, any failure by Silicon Graphics to exercise the Option in full shall not
affect Silicon Graphics' right to exercise the Option at any time in the future.
Section 2.5. INITIAL PUBLIC OFFERING. Notwithstanding the foregoing,
Silicon Graphics shall not be entitled to exercise the Option in connection
with the Initial Public Offering of the Common Stock if, upon the completion
of the Initial Public Offering, including the full exercise of all
underwriters' over-allotment options granted in connection therewith, Silicon
Graphics owns at
least the Minimum Ownership Percentage (other than (i)(c) of the definition
of the Minimum Ownership Percentage).
Section 2.6. TERMINATION OF OPTIONS. The Option shall terminate upon the
occurrence of any Issuance Event that, after considering Silicon Graphics'
response thereto and to any other Issuance Events, results in a SGI Ownership
Reduction, other than any Issuance Event in violation of this Agreement. Each
Option, or any portion thereof assigned to any SGI Entity other than Silicon
Graphics, also shall terminate in the event that the Person to whom such Option,
or such portion thereof has been transferred, ceases to be a SGI Entity for any
reason whatsoever.
ARTICLE III
REGISTRATION RIGHTS
Section 3.1. DEMAND REGISTRATION - REGISTRABLE SECURITIES. (a) Upon
written notice provided at any time after the Initial Public Offering Date from
any Holder of Registrable Securities requesting that the Company effect the
registration under the Securities Act of any or all of the Registrable
Securities held by such Holder, which notice shall specify the intended method
or methods of disposition of such Registrable Securities, the Company shall use
its best efforts to effect the registration under the Securities Act and
applicable state securities laws of such Registrable Securities for disposition
in accordance with the intended method or methods of disposition stated in such
request (including in a Rule 415 Offering, if the Company is then eligible to
register such Registrable Securities on Form S-3 (or a successor form) for such
offering); PROVIDED that:
(i) with respect to any registration statement filed, or to be filed,
pursuant to this Section 3.1, if the Company shall furnish to the Holders
of Registrable Securities that have made such request a certified
resolution of the Board of Directors of the Company (adopted by the
affirmative vote of a majority of the directors not designated by the SGI
Entities that are also directors or officers of any SGI Entity) stating
that in the Board of Directors' good faith judgment it would (because of
the existence of, or in anticipation of, any acquisition or financing
activity, or the unavailability for reasons beyond the Company's reasonable
control of any required financial statements, or any other event or
condition of similar significance to the Company) be significantly
disadvantageous (a "Disadvantageous Condition") to the Company for such a
registration statement to be maintained effective, or to be filed and
become effective, and setting forth the general reasons for such judgment,
the Company shall be entitled to cause such registration statement to be
withdrawn and the effectiveness of such registration statement terminated,
or, in the event no registration statement has yet been filed, shall be
entitled not to file any such registration statement, until such
Disadvantageous Condition no longer exists (notice of which the Company
shall promptly deliver to such Holders). Upon receipt of any such notice
of a Disadvantageous Condition, such Holders shall forthwith discontinue
use of the prospectus contained in such registration statement and, if so
directed by the Company, each such Holder will deliver to the Company all
copies, other than permanent
file copies then in such Holder's possession, of the prospectus then
covering such Registrable Securities current at the time of receipt of
such notice; PROVIDED, that the filing of any such registration statement
may not be delayed for a period in excess of 90 days due to the occurrence
of any particular Disadvantageous Condition and no more than three
resolutions regarding Disadvantageous Conditions may be made by the Board
of Directors in any two-year period;
(ii) after any SGI Ownership Reduction, the Holders of Registrable
Securities may collectively exercise their rights under this Section 3.1
(through notice delivered by Holders owning in the aggregate a majority in
economic interest of the Registrable Securities then held by Holders) on
not more than four occasions (it being acknowledged that prior to any SGI
Ownership Reduction, there shall be no limit to the number of occasions on
which such Holders (other than any SGI Transferees and their Affiliates
(other than SGI Entities)) may exercise such rights);
(iii) Except as otherwise provided herein, the Holders of
Registrable Securities shall not have the right to exercise registration
rights pursuant to this Section 3.1 within the 180-day period following the
registration and sale of Registrable Securities effected pursuant to a
prior exercise of the registration rights provided in this Section 3.1; and
(iv) the Holders of Registrable Securities shall not have the right
to exercise registration rights pursuant to this Section 3.1 within the
180-day period following the effective date of the Registration Statement
in connection with the Initial Public Offering.
(b) Notwithstanding any other provision of this Agreement to the contrary,
a registration requested by a Holder of Registrable Securities pursuant to this
Section 3.1 shall not be deemed to have been effected (and, therefore, not
requested for purposes of paragraph (a) above), (i) unless it has become
effective, (ii) if after it has become effective such registration is interfered
with by any stop order, injunction or other order or requirement of the SEC or
other governmental agency or court for any reason other than a misrepresentation
or an omission by such Holder and, as a result thereof, the Registrable
Securities requested to be registered cannot be completely distributed in
accordance with the plan of distribution set forth in the related registration
statement or (iii) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied or waived other than by reason of some act or
omission by such Holder of Registrable Securities.
(c) In the event that any registration pursuant to this Section 3.1 shall
involve, in whole or in part, an underwritten offering, the Holders of a
majority of the Registrable Securities to be registered shall have the right to
designate an underwriter or underwriters reasonably acceptable to the Company as
the lead or managing underwriters of such underwritten offering and, in
connection with each registration pursuant to this Section 3.1, such Holders may
select one counsel reasonably acceptable to the Company to represent all such
Holders.
(d) The Company shall have the right to cause the registration of
additional equity securities for sale for its account, the account of any MIPS
Entity or any existing or former directors, officers or employees of the MIPS
Entities in any registration of Registrable Securities requested by the Holders
pursuant to paragraph (a) above; PROVIDED, HOWEVER, that if the registration and
sale of such additional equity securities would require Silicon Graphics or any
SGI Entity to exercise the Option to maintain the then-current Ownership
Percentage or ownership of 80% of each class of outstanding Nonvoting Stock,
then the number of such additional equity securities shall be reduced so that
exercise of the Option would not be necessary for Silicon Graphics or any SGI
Entity to maintain such ownership levels and, PROVIDED, FURTHER, that if such
Holders are advised in writing (with a copy to the Company) by a nationally
recognized investment banking or commercial banking firm selected by such
Holders reasonably acceptable to the Company (which shall be the lead
underwriter or a managing underwriter in the case of an underwritten offering)
that, in such firm's good faith view, all or a part of such additional equity
securities cannot be sold and the inclusion of such additional equity securities
in such registration would be likely to have an adverse effect on the price,
timing or distribution of the offering and sale of the Registrable Securities
then contemplated by any Holder, the registration of such additional equity
securities or part thereof shall not be permitted. The Holders of the
Registrable Securities to be offered may require that any such additional equity
securities be included in the offering proposed by such Holders on the same
conditions as the Registrable Securities that are included therein. In the event
that the number of Registrable Securities requested to be included in a
registration statement by the Holders thereof exceeds the number which, in the
good faith view of such investment banking firm, can be sold without adversely
affecting the price, timing, distribution or sale of securities in the offering,
the number shall be allocated pro rata among the requesting Holders on the basis
of the relative number of Registrable Securities then held by each such Holder
(provided that any number in excess of a Holder's request may be reallocated
among the remaining requesting Holders in a like manner).
Section 3.2. PIGGYBACK REGISTRATION. In the event that the Company at any
time after the Initial Public Offering Date proposes to register any of its
Common Stock, any other of its equity securities or securities convertible into
or exchangeable for its equity securities (collectively, including Common Stock,
"Other Securities") under the Securities Act, whether or not for sale for its
own account, in a manner that would permit registration of Registerable
Securities for sale for cash to the public under the Securities Act, it shall at
each such time give prompt written notice to each Holder of Registrable
Securities of its intention to do so and of the rights of such Holder under this
Section 3.2. Subject to the terms and conditions hereof, such notice shall offer
each such Holder the opportunity to include in such registration statement such
number of Registrable Securities as such Holder may request. Upon the written
request of any such Holder made within 15 days after the receipt of the
Company's notice (which request shall specify the number of Registrable
Securities intended to be disposed of and the intended method of disposition
thereof), the Company shall use its best efforts to effect, in connection with
the registration of the Other Securities, the registration under the Securities
Act of all Registrable Securities which the Company has been so requested to
register, to the extent required to permit the disposition (in accordance with
such intended method of disposition thereof) of the Registrable Securities so
requested to be registered; PROVIDED, that:
(a) if, at any time after giving such written notice of its intention to
register any Other Securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register the Other Securities, the Company
may, at its election, give written notice of such determination to such Holders
and thereupon the Company shall be relieved of its obligation to register such
Registrable Securities in connection with the registration of such Other
Securities, without prejudice, however, to the rights of the Holders of
Registrable Securities immediately to request that such registration be effected
as a registration under Section 3.1 to the extent permitted thereunder;
(b) if the registration referred to in the first sentence of this Section
3.2 is to be an underwritten registration on behalf of the Company, and a
nationally recognized investment banking or commercial banking firm selected by
the Company advises the Company in writing that, in such firm's good faith view,
all or a part of such Registrable Securities cannot be sold and the inclusion of
all or a part of such Registrable Securities in such registration would be
likely to have an adverse effect upon the price, timing or distribution of the
offering and sale of the Other Securities then contemplated, the Company shall
include in such registration:
(i) first, all Other Securities the Company proposes to sell for its
own account ("Company Securities"),
(ii) second, up to the full number of Registrable Securities held by
Holders constituting SGI Entities that are requested to be included in such
registration (Registrable Securities that are so held being sometimes
referred to herein as "Holder Securities") in excess of the number of
Company Securities to be sold in such offering which, in the good faith
view of such investment banking or commercial banking firm, can be sold
without adversely affecting such offering (and (x) if such number is less
than the full number of such Holder Securities, such number shall be
allocated by Silicon Graphics among such SGI Entities and (y) in the event
that such investment banking or commercial banking firm advises that less
than all of such Holder Securities may be included in such offering, such
SGI Entities may withdraw their request for registration of their
Registrable Securities under this Section 3.2 and 90 days subsequent to the
effective date of the registration statement for the registration of such
Other Securities request that such registration be effected as a
registration under Section 3.1 to the extent permitted thereunder,
(iii) third, up to the full number of Registrable Securities held by
Holders (other than SGI Entities) of Registrable Securities that are
requested to be included in such registration in excess of the number of
Company Securities and Holder Securities to be sold in such offering which,
in the good faith view of such investment banking or commercial banking
firm, can be so sold without so adversely affecting such offering (and (x)
if such number is less than the full number of such Registrable Securities,
such number shall be allocated pro rata among such Holders on the basis of
the number of Registrable Securities requested to be included therein by
each such Holder and (y) in the event that such investment banking firm
advises that less than all of such Registrable Securities may be included
in such offering, such Holders may withdraw their request for registration
of
their Registrable Securities under this Section 3.2 and 90 days
subsequent to the effective date of the registration statement for the
registration of such Other Securities request that such registration be
effected as a registration under Section 3.1 to the extent permitted
thereunder) and
(iv) fourth, up to the full number of the Other Securities (other than
Company Securities), if any, in excess of the number of Company Securities
and Registrable Securities to be sold in such offering which, in the good
faith view of such investment banking firm, can be so sold without so
adversely affecting such offering (and, if such number is less than the
full number of such Other Securities, such number shall be allocated pro
rata among the holders of such Other Securities (other than Company
Securities) on the basis of the number of securities requested to be
included therein by each such Holder);
(c) if the registration referred to in the first sentence of this Section
3.2 is to be an underwritten secondary registration on behalf of holders of
Other Securities (the "Other Holders"), and the lead underwriter or managing
underwriter advises the Company in writing that in their good faith view, all or
a part of such additional securities cannot be sold and the inclusion of such
additional securities in such registration would be likely to have an adverse
effect on the price, timing or distribution of the offering and sale of the
Other Securities then contemplated, the Company shall include in such
registration the number of securities (including Registrable Securities) that
such underwriters advise can be so sold without adversely affecting such
offering, allocated pro rata among the Other Holders and the Holders of
Registrable Securities on the basis of the number of securities (including
Registrable Securities) requested to be included therein by each Other Holder
and each Holder of Registrable Securities; PROVIDED, that if such registration
statement is to be filed at any time after a SGI Ownership Reduction, if such
Other Holders have requested that such registration statement be filed pursuant
to demand registration rights granted to them by the Company, the Company shall
include in such registration (i) first, Other Securities sought to be included
therein by the Other Holders pursuant to the exercise of such demand
registration rights, (ii) second, the number of Holder Securities sought to be
included in such registration in excess of the number of Other Securities sought
to be included in such registration by the Other Holders which in the good faith
view of such investment banking or commercial banking firm, can be so sold
without so adversely affecting such offering (and (x) if such number is less
than the full number of such Holder Securities, such number shall be allocated
by Silicon Graphics among such SGI Entities and (y) in the event that such
investment banking or commercial banking firm advises that less than all of such
Holder Securities may be included in such offering, such SGI Entities may
withdraw their request for registration of their Registrable Securities under
this Section 3.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities request
that such registration be effected as a registration under Section 3.1 to the
extent permitted thereunder) and (iii) third, the number of Registrable
Securities sought to be included in such registration by Holders (other than SGI
Entities) of Registrable Securities in excess of the number of Other Securities
and the number of Holder Securities sought to be included in such registration
which, in the good faith view of such investment banking or commercial banking
firm, can be so sold without so adversely affecting
such offering (and (x) if such number is less than the full number of such
Registrable Securities, such number shall be allocated pro rata among such
Holders on the basis of the number of Registrable Securities requested to be
included therein by each such Holder and (y) in the event that such
investment banking or commercial banking firm advises that less than all of
such Registrable Securities may be included in such offering, such Holders
may withdraw their request for registration of their Registrable Securities
under this Section 3.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities request
that such registration be effected as a registration under Section 3.1 to the
extent permitted thereunder);
(d) The Company shall not be required to effect any registration of
Registrable Securities under this Section 3.2 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
executive or employee benefit or compensation plans; and
(e) no registration of Registrable Securities effected under this Section
3.2 shall relieve the Company of its obligation to effect a registration of
Registrable Securities pursuant to Section 3.1.
Section 3.3. EXPENSES. Except as provided herein and except for
underwriting discounts and commissions attributable to the Registrable
Securities sold by the Holders, the Company shall pay all Registration Expenses
with respect to a particular offering (or proposed offering). Notwithstanding
the foregoing, each Holder and the Company shall be responsible for its own
internal administrative and similar costs, which shall not constitute
Registration Expenses.
Section 3.4. REGISTRATION AND QUALIFICATION. If and whenever the Company
is required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 3.1 or 3.2, the Company shall as promptly
as practicable:
(a) prepare, file and use its reasonable best efforts to cause to become
effective a registration statement under the Securities Act relating to the
Registrable Securities to be offered;
(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities until the earlier of (A) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition set forth in such registration statement and (B) the
expiration of six months after such registration statement becomes effective;
PROVIDED, that such six-month period shall be extended for such number of days
that equals the number of days elapsing from (x) the date the written notice
contemplated by paragraph (f) below is given by the Company to (y) the date on
which the Company delivers to the Holders of Registrable Securities the
supplement or amendment contemplated by paragraph (f) below;
(c) furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such registration
statement or prospectus, and such other documents, as the Holders of Registrable
Securities or such underwriter may reasonably request, and upon request a copy
of any and all transmittal letters or other correspondence to or received from,
the SEC or any other governmental agency or self-regulatory body or other body
having jurisdiction (including any domestic or foreign securities exchange)
relating to such offering;
(d) use its reasonable best efforts to register or qualify all Registrable
Securities covered by such registration statement under the securities or blue
sky laws of such U.S. jurisdictions as the Holders of such Registrable
Securities or any underwriter to such Registrable Securities shall request, and
use its reasonable best efforts to obtain all appropriate registrations, permits
and consents in connection therewith, and do any and all other acts and things
which may be necessary or advisable to enable the Holders of Registrable
Securities or any such underwriter to consummate the disposition in such
jurisdictions of its Registrable Securities covered by such registration
statement; PROVIDED, that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any such
jurisdiction wherein it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) (i) use its best efforts to furnish to each Holder of Registrable
Securities included in such registration (each, a "Selling Holder") and to any
underwriter of such Registrable Securities an opinion of independent counsel for
the Company addressed to each Selling Holder and dated the date of the closing
under the underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration statement) and (ii)
use its best efforts to furnish to each Selling Holder a "cold comfort" letter
addressed to each Selling Holder and signed by the independent public
accountants who have audited the financial statements of the Company included in
such registration statement, in each such case covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public offerings
of securities and such other matters as the Selling Holders may reasonably
request and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements;
(f) as promptly as practicable, notify the Selling Holders in writing (i)
at any time when a prospectus relating to a registration pursuant to Sections
3.1 or 3.2 is required to be delivered under the Securities Act of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (ii) of any request by the SEC or any other regulatory
body or other body having jurisdiction
for any amendment of or supplement to any registration statement or other
document relating to such offering, and in either such case, at the request
of the Selling Holders prepare and furnish to the Selling Holders a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading;
(g) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Securities to be so
included in the registration statement;
(h) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders to the
extent not already provided, as soon as reasonably practicable, but not later
than eighteen (18) months after the effective date of the registration
statement, an earnings statement covering the period of at least twelve (12)
months beginning with the first full month after the effective date of such
registration statement, which earnings statements shall satisfy the provisions
of Section 11(a) of the Securities Act;
(i) use its best efforts to list all such Registrable Securities covered
by such registration on each securities exchange and automated inter-dealer
quotation system on which a class of common equity securities of the Company is
then listed;
(j) to the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of the Company to attend any "road
shows" scheduled in connection with any such registration, with all
out-of-pocket costs and expense incurred by the Company or such officers in
connection with such attendance to be paid by the Company; and
(k) furnish for delivery in connection with the closing of any offering of
Registrable Securities pursuant to a registration effected pursuant to Sections
3.1 or 3.2 unlegended certificates representing ownership of the Registrable
Securities being sold in such denominations as shall be requested by the Selling
Holders or the underwriters.
Section 3.5. CONVERSION OF OTHER SECURITIES, ETC. In the event that any
Holder offers any options, rights, warrants or other securities issued by it or
any other Person that are offered with, convertible into or exercisable or
exchangeable for any Registrable Securities, the Registrable Securities
underlying such options, rights, warrants or other securities shall continue to
be eligible for registration pursuant to Sections 3.1 and 3.2.
Section 3.6. UNDERWRITING; DUE DILIGENCE. (a) If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant to
a registration requested under this Article III, the Company shall enter into an
underwriting agreement with such underwriters for such offering, which agreement
will contain such representations and warranties by the Company
and such other terms and provisions as are customarily contained in
underwriting agreements of the Company to the extent relevant and as are
customarily contained in underwriting agreements generally with respect to
secondary distributions to the extent relevant, including, without
limitation, indemnification and contribution provisions substantially to the
effect and to the extent provided in Section 3.7, and agreements as to the
provision of opinions of counsel and accountants' letters to the effect and
to the extent provided in Section 3.4(e). The Selling Holders on whose behalf
the Registrable Securities are to be distributed by such underwriters shall
be parties to any such underwriting agreement and the representations and
warranties by, and the other agreements on the part of, the Company to and
for the benefit of such underwriters, shall also be made to and for the
benefit of such Selling Holders. Such underwriting agreement shall also
contain such representations and warranties by such Selling Holders and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, when relevant, including,
without limitation, indemnification and contribution provisions substantially
to the effect and to the extent provided in Section 3.7.
(b) In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act pursuant
to this Article III, the Company shall give the Holders of such Registrable
Securities and the underwriters, if any, and their respective counsel and
accountants, such reasonable and customary access to its books and records and
such opportunities to discuss the business of the Company with its officers and
the independent public accountants who have certified the financial statements
of the Company as shall be necessary, in the opinion of such Holders and such
underwriters or their respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
Section 3.7. INDEMNIFICATION AND CONTRIBUTION. (a) In the case of each
offering of Registrable Securities made pursuant to this Article III, the
Company agrees to indemnify and hold harmless, to the extent permitted by law,
each Selling Holder, each underwriter of Registrable Securities so offered and
each Person, if any, who controls any of the foregoing Persons within the
meaning of the Securities Act and the officers, directors, affiliates, employees
and agents of each of the foregoing, against any and all losses, liabilities,
costs (including reasonable attorney's fees and disbursements), claims and
damages, joint or several, to which they or any of them may become subject,
under the Securities Act or otherwise, including any amount paid in settlement
of any litigation commenced or threatened, insofar as such losses, liabilities,
costs, claims and damages (or actions or proceedings in respect thereof, whether
or not such indemnified Person is a party thereto) arise out of or are based
upon any untrue statement by the Company or alleged untrue statement by the
Company of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or in any offering memorandum
or other offering document relating to the offering and sale of such Registrable
Securities prepared by the Company or at its direction, or any amendment thereof
or supplement thereto, or in any document incorporated by reference therein, or
any omission by the Company or alleged omission by the Company to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however that the Company shall not
be liable to any Person in any such case to the extent that any such loss,
liability, cost, claim or damage arises out of or relates to any untrue
statement or alleged untrue
statement, or any omission, if such statement or omission shall have been
made in reliance upon and in conformity with information relating to a
Selling Holder, another holder of securities included in such registration
statement or underwriter furnished in writing to the Company by or on behalf
of such Selling Holder, other holder or underwriter specifically for use in
the registration statement (or in any preliminary or final prospectus
included therein), offering memorandum or other offering document, or any
amendment thereof or supplement thereto. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Selling Holder, any other holder or any underwriter and shall survive the
transfer of such securities. The foregoing indemnity agreement is in addition
to any liability that the Company may otherwise have to each Selling Holder,
other holder or underwriter of the Registrable Securities or any controlling
person of the foregoing and the officers, directors, affiliates, employees
and agents of each of the foregoing; PROVIDED, FURTHER, that, in the case of
an offering with respect to which a Selling Holder has designated the lead or
managing underwriters (or a Selling Holder is offering Registrable Securities
directly, without an underwriter), this indemnity does not apply to any loss,
liability, cost, claim or damage arising out of or relating to any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary prospectus or offering memorandum if a copy of a final prospectus
or offering memorandum was not sent or given by or on behalf of any
underwriter (or such Selling Holder or other holder, as the case may be) to
such Person asserting such loss, liability, cost, claim or damage at or prior
to the written confirmation of the sale of the Registrable Securities as
required by the Securities Act and such untrue statement or omission had been
corrected in such final prospectus or offering memorandum.
(b) In the case of each offering made pursuant to this Agreement, each
Selling Holder, by exercising its registration rights hereunder, agrees to
indemnify and hold harmless, and to cause each underwriter of Registrable
Securities included in such offering (in the same manner and to the same extent
as set forth in Section 3.7(a)) to agree to indemnify and hold harmless, the
Company, each other underwriter who participates in such offering, each other
Selling Holder or other holder with securities included in such offering and in
the case of an underwriter, such Selling Holder or other holder, and each
Person, if any, who controls any of the foregoing within the meaning of the
Securities Act and the officers, directors, affiliates, employees and agents of
each of the foregoing, against any and all losses, liabilities, costs (including
reasonable attorney's fees and disbursements), claims and damages to which they
or any of them may become subject, under the Securities Act or otherwise,
including any amount paid in settlement of any litigation commenced or
threatened, insofar as such losses, liabilities, costs, claims and damages (or
actions or proceedings in respect thereof, whether or not such indemnified
Person is a party thereto) arise out of or are based upon any untrue statement
or alleged untrue statement by such Selling Holder or underwriter, as the case
may be, of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or in any offering memorandum
or other offering document relating to the offering and sale of such Registrable
Securities prepared by the Company or at its direction, or any amendment thereof
or supplement thereto, or any omission by such Selling Holder or underwriter, as
the case may be, or alleged omission by such Selling Holder or underwriter, as
the case may be, of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that such untrue statement of a material fact is contained in, or such
material fact is omitted from
information relating to such Selling Holder or underwriter, as the case may
be, furnished to the Company in writing by or on behalf of such Selling
Holder or underwriter, as the case may be, specifically for use in such
registration statement (or in any preliminary or final prospectus included
therein), offering memorandum or other offering document, or any amendment
thereof or supplement thereto. The foregoing indemnity is in addition to any
liability which such Selling Holder or underwriter, as the case may be, may
otherwise have to the Company, or controlling persons and the officers,
directors, affiliates, employees, and agents of each of the foregoing;
PROVIDED, HOWEVER, that, in the case of an offering made pursuant to this
Agreement with respect to which the Company has designated the lead or
managing underwriters (or the Company is offering securities directly,
without an underwriter), this indemnity does not apply to any loss,
liability, cost, claim, or damage arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary prospectus or offering memorandum if a copy of a final prospectus
or offering memorandum was not sent or given by or on behalf of any
underwriter (or the Company, as the case may be) to such Person asserting
such loss, liability, cost, claim or damage at or prior to the written
confirmation of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been corrected in
such final prospectus or offering memorandum.
(c) Each party indemnified under paragraph (a) or (b) above shall,
promptly after receipt of notice of a claim or action against such indemnified
party in respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the claim or action; PROVIDED, that the failure
to notify the indemnifying party shall not relieve it from any liability that it
may have to an indemnified party under this Section 3.7 (except that the failure
to notify an indemnifying party promptly of the commencement of any such action
to the extent prejudicial to the indemnifying party's ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party to the extent the indemnifying party is prejudiced under this
Section 3.7, but the omission so to notify the indemnifying party well not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 3.7). If any such claim or action shall be brought
against an indemnified party, and it shall have notified the indemnifying party
thereof, unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified party and indemnifying parties may exist in
respect of such claim, the indemnifying party shall be entitled to participate
therein, and, to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense thereof with counsel
satisfactory to the indemnified party (who shall not, except with the consent of
the indemnified party, be counsel to the indemnifying party). After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 3.7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation. If the indemnifying party
does not assume the defense of such claim or action, it is understood that the
indemnifying party shall not, in connection with any one such claim or action or
separate but substantially similar or related claims or actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to one separate firm of local attorneys in each such jurisdiction) at
any time for all such indemnified parties. Any indemnifying party against whom
indemnity may be sought under this Section 3.7 shall not be liable to indemnify
an indemnified party if such indemnified party settles such claim or action
without the consent of the indemnifying party, which consent shall not be
unreasonably withheld.
(d) If the indemnification provided for in this Section 3.7 shall for any
reason be unavailable (other than in accordance with its terms) to an
indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, cost, claim or damage in
such proportion as shall be appropriate to reflect (i) the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other hand or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the indemnified party failed to give the
notice required under paragraph (c) above, the relative benefits and the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other with respect to the statements or omissions which resulted in
such loss, liability, cost, claim or damage as well as any other relevant
equitable considerations. The relative benefits received by the indemnifying
party and the indemnified party shall be deemed to be in the same respective
proportion as the net proceeds (before deducting expenses) of the offering
received by such party (or, in the case of an underwriter, such underwriter's
discounts and commissions) bear to the aggregate offering price of the
Registrable Securities or Other Securities. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the indemnifying party on the one hand or the
indemnified party on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, but not by reference to any indemnified party's stock
ownership in the Company. The amount paid or payable by an indemnified party as
a result of the loss, cost, claim, damage or liability, or action in respect
thereof, referred to above in this paragraph (d) shall be deemed to include, for
purposes of this paragraph (d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediate preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) Indemnification and contribution similar to that specified in the
preceding paragraphs of this Section 3.7 (with appropriate modifications) shall
be given by the Company, the Selling Holders and underwriters with respect to
any required registration or other qualification of securities under any state
law or regulation or governmental authority.
(f) In no event shall Silicon Graphics be liable pursuant to this Section
3.7 for any amounts in excess of the net proceeds received by Silicon Graphics
pursuant to its sales of securities in the offering in connection with which its
liability hereunder arises.
(g) The obligations of the parties under this Section 3.7 shall be in
addition to any liability which any party may otherwise have to any other party.
Section 3.8. RULE 144 AND FORM S-3. Commencing 90 days after the Initial
Public Offering Date, the Company shall use its best efforts to ensure that the
conditions to the availability of Rule 144 set forth in paragraph (c) thereof
shall be satisfied. Upon the request of any Holder of Registrable Securities,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements. The Company further agrees to use its
reasonable efforts to cause all conditions to the availability of Form S-3 (or
any successor form) under the Securities Act of the filing of registration
statements under this Agreement to be met as soon as practicable after the
Initial Public Offering Date. Notwithstanding anything contained in this Section
3.8, the Company may deregister under Section 12 of the Securities Exchange Act
of 1934, as amended, if it then is permitted to do so pursuant to said Act and
the rules and regulations thereunder.
Section 3.9. TRANSFER OF REGISTRATION RIGHTS. Any Holder may transfer all
or any portion of its rights under Article III to any transferee of a number of
Registrable Securities owned by such Holder exceeding five percent (5%) of the
outstanding class or series of such securities at the time of transfer (each
transferee that receives such minimum number of Registrable Securities, a
"Transferee"); PROVIDED, that each Transferee of Registrable Securities (other
than SGI Entities) to which Registrable Securities are transferred, sold or
assigned directly by a SGI Entity (such Transferee, a "SGI Transferee"),
together with any Affiliate of such SGI Transferee (and any subsequent direct or
indirect Transferees of Registrable Securities from such SGI Transferee and any
Affiliates thereof) shall be entitled to request the registration of Registrable
Securities pursuant to this Section 3.9 only once prior to a SGI Ownership
Reduction and thereafter shall only be entitled to request the registration of
Registrable Securities pursuant to Section 3.1(a)(ii) and, provided, further,
that no Transferee shall be entitled to request registration pursuant to this
Section 3.9 for an amount of Registrable Securities equal to less than
$1,000,000. Any transfer of registration rights pursuant to this Section 3.9
shall be effective upon receipt by the Company of (i) written notice from such
Holder stating the name and address of any Transferee and identifying the number
of Registrable Securities with respect to which the rights under this Agreement
are being transferred and the nature of the rights so transferred and (ii) a
written agreement from such Transferee to be bound by the terms of this Article
III and Sections 5.3, 5.4, 5.9, 5.10, and 5.12 of this Agreement. The Holders
may exercise their rights hereunder in such priority as they shall agree upon
among themselves.
Section 3.10. HOLDBACK AGREEMENT. If any registration pursuant to this
Article III shall be in connection with an underwritten public offering of
Registrable Securities, each Selling Holder agrees not to effect any public sale
or distribution, including any sale under Rule 144, of any equity security of
the Company or any security convertible into or exchangeable or exercisable for
any equity security of the Company, in the case of Registrable Securities
(otherwise than through the registered public offering then being made), within
7 days prior to or 90 days (or such lesser period as the lead or managing
underwriters may permit) after the effective date of the registration statement
(or the commencement of the offering to the public of such Registrable
Securities in the case of Rule 415 offerings). The Company hereby also so
agrees and agrees to cause each other holder of equity securities or securities
convertible into or exchangeable or exercisable for such securities purchased
from the Company otherwise than in a public offering to so agree; PROVIDED that,
subject to Section 3.6(a) hereof, the Company shall not be so restricted from
effecting any public sale or distribution of any security in connection with any
merger, acquisition, exchange offer, subscription offer, dividend reinvestment
plan or stock option or other executive or employee benefit or compensation
plan.
Section 3.11. REGISTRATION OF PREFERRED STOCK. The Company agrees that it
shall from time to time enter into one or more agreements with Silicon Graphics
and/or any Transferee, if any, in form and substance reasonably satisfactory to
the parties thereto, granting to Silicon Graphics or the Transferee, as the case
may be, registration rights for the registration of any shares of preferred
stock of the Company that may hereafter be owned, directly or indirectly, by
Silicon Graphics or the Transferee, as the case may be, substantially upon the
same terms and conditions as those contained in Article III for the benefit of
Silicon Graphics.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
Section 4.1. NO VIOLATIONS. (a) For so long as the Ownership Percentage
is equal to or greater than 50%, Silicon Graphics covenants and agrees that it
will not take any action or enter into any commitment or agreement which may
reasonably be anticipated to result, with or without notice and with or without
lapse of time or otherwise, in a contravention or event of default by any SGI
Entity of (i) any provision of applicable law or regulation, including but not
limited to provisions pertaining to the Internal Revenue Code of 1986, as
amended, or the Employee Retirement Income Security Act of 1974, as amended,
(ii) any provision of Silicon Graphics' certificate of incorporation or bylaws,
(iii) any credit agreement or other material instrument binding upon Silicon
Graphics, or (iv) any judgment, order or decree of any governmental body, agency
or court having jurisdiction over Silicon Graphics or any of their respective
assets.
(b) The Company and Silicon Graphics agree to provide to the other any
information and documentation requested by the other for the purpose of
evaluating and ensuring compliance with Section 4.1(a) hereof.
(c) Notwithstanding the foregoing Sections 4.1(a) and 4.1(b), nothing in
this Agreement is intended to limit or restrict in any way Silicon Graphics'
rights as a shareholder of the Company.
Section 4.2. CONFIDENTIALITY. Except as required by law, regulation or
legal or judicial process, Silicon Graphics agrees that neither it nor any SGI
Entity nor any of their respective directors, officers or employees will without
the prior written consent of the Company disclose to any
Person any material, non-public information concerning the business or
affairs of the Company acquired from any director, officer or employee of the
Company (including any director, officer or employee of the Company who is
also a director, officer or employee of Silicon Graphics).
ARTICLE V
MISCELLANEOUS
Section 5.1. LIMITATION OF LIABILITY. Neither Silicon Graphics nor the
Company shall be liable to the other for any special, indirect, incidental or
consequential damages of the other arising in connection with this Agreement.
Section 5.2. SUBSIDIARIES. Silicon Graphics agrees and acknowledges that
Silicon Graphics shall be responsible for the performance by each SGI Entity of
the obligations hereunder applicable to such SGI Entity.
Section 5.3. AMENDMENTS. This Agreement may not be amended or terminated
orally, but only by a writing duly executed by or on behalf of the parties
hereto. Any such amendment shall be validly and sufficiently authorized for
purposes of this Agreement if it is signed on behalf of Silicon Graphics and the
Company by any of their respective presidents or vice presidents.
Section 5.4. TERM. This Agreement shall remain in effect until all
Registrable Securities held by Holders have been transferred by them to Persons
other than Transferees; PROVIDED that the provisions of Section 3.7 shall
survive any such expiration.
Section 5.5. SEVERABILITY. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement or such provision
of the application of such provision to such party or circumstances, other than
those to which it is so determined to be invalid, illegal or unenforceable,
shall remain in full force and effect to the fullest extent permitted by law and
shall not be affected thereby, unless such a construction would be unreasonable.
Section 5.6. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered (a) in person, (b) by registered or certified
mail, postage prepaid, return receipt requested or (c) by facsimile or other
generally accepted means of electronic transmission (provided that a copy of any
notice delivered pursuant to this clause (c) shall also be sent pursuant to
clause (b)), addressed as follows:
(a) If to the Company, to:
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy No.:
(b) If to Silicon Graphics, to:
Silicon Graphics, Inc.
0000 Xxxxx Xxxxxxxxx Xxxx.
Xxxxxxxx Xxxx, XX 00000
Attention: Director, Corporate Legal Services
Telecopy No.: (000) 000-0000
or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.
Section 5.7. FURTHER ASSURANCES. Silicon Graphics and the Company shall
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such instruments and take such other action as may be necessary or
advisable to carry out their obligations under this Agreement and under any
exhibit, document or other instrument delivered pursuant hereto.
Section 5.8. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original instrument, but all
of which together shall constitute but one and the same agreement.
Section 5.9. GOVERNING LAW. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and governed by, the
laws of the State of California.
Section 5.10. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
Section 5.11. SUCCESSORS. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns. Nothing contained in this Agreement, express or implied, is intended
to confer upon any other person or entity any benefits, rights or remedies.
Section 5.12. SPECIFIC PERFORMANCE. The parties hereto acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, it is agreed that they
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States or
any state thereof, in addition to any other remedy to which they may be entitled
at law or equity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
SILICON GRAPHICS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President-
Corporate Operations
MIPS TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Executive Officer and President
