Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of June
25, 1997 is made and entered into between SIGMA DESIGNS, INC., a California
corporation (the "Company"), and RIC Equity Limited and Banque Edouard Constant
(the "Investors").
WHEREAS, the Company and the Investors have entered into that certain
Private Securities Subscription Agreement, dated as of the date hereof (the
"Subscription Agreement"), pursuant to which the Company will issue to the
Investors shares of its Series A Preferred Stock (the "Preferred Stock")
convertible as described in the Subscription Agreement to Common Stock of the
Company, no par value (the "Common Stock");
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investors' agreement to enter into the Subscription Agreement, the Company
has issued to each Investor a warrant (the "Warrant") dated June 25, 1997,
exercisable from time to time within three (3) years from the six (6) month
anniversary of the date of the closing of the purchase of the Warrants for the
purchase of an aggregate of 64,285 shares of Common Stock at a price specified
in such Warrant;
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investors' agreement to enter into the Subscription Agreement, the Company
has agreed to provide the Investors with certain registration rights with
respect to the Conversion Shares (as defined below);
NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein and in the Subscription
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. Capitalized terms defined in the Subscription
Agreement or the Warrant shall have the same meanings herein as are ascribed to
them therein. In addition, the following terms shall have the meanings ascribed
below:
"Act" means the Securities Act of 1933, as amended.
"Material Event" means the happening of any event during the period
that the registration statement described in Section 2 hereof is required to be
effective as a result of which, in the reasonable judgment of the Company, such
registration statement or the related prospectus contains or may contain any
untrue statement of a material fact or omits or may omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
"Registrable Securities" means all of the Common Stock and any other
securities issued or issuable upon conversion of the Preferred Stock or upon
exercise of the Warrants as provided therein (together, the "Conversion
Shares"); provided, however, that any such conversion shares which have been
resold to the public under the Act shall cease to be Registrable Securities upon
such resale.
"Registration Statement" See Section 2.1(a).
"Rule 144" means Rule 144 promulgated under the Act.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. FORM S-3 REGISTRATION STATEMENT.
(a) Filing of Form S-3 Registration Statement. Subject to the
terms and conditions of this Agreement, the Company shall file with the
Securities and Exchange Commission (the "SEC") no later than forty-five (45)
days following the date of this Agreement a registration statement on Form S-3
under the Act (the "Registration Statement") for the registration of the resale
by the Investors of Common Stock to be issued upon conversion of the Preferred
Stock and upon exercise of the Warrant (or, if such form is unavailable for such
registration, on such other form as is available for such registration, which
Registration Statement shall state that, in accordance with Rule 416 promulgated
under the Act, such Registration Statement also covers such indeterminate number
of additional shares of Common Stock).
(b) Effectiveness of Registration Statements. The Company will
use its reasonable best efforts to have the Registration Statement declared
effective by the SEC by no later than one hundred twenty (120) days following
the date of this Agreement and to have the Registration Statement remain in
effect until the termination of this Agreement as provided in Section 5.1.
(c) Penalties for Failure to Obtain or Maintain Effectiveness
of Registration Statement. In the event the Company fails to obtain the
effectiveness of a Registration Statement within the time period set forth in
Section 2.1(b), the discount used to determine the Conversion Price (as defined
in the Certificate of Determination of Preferences of Series A Preferred Stock
of Sigma Designs, Inc.) of the Preferred Stock shall be adjusted one percent
(1%) higher for the first month after such one hundred twenty (120) day period
(or any portion thereof) the Registration Statement is not effective and for
each month thereafter (or any portion thereof) that the Registration Statement
is not effective, the discount shall be increased two percent (2%). In addition,
in the event the Company fails to maintain the effectiveness of a Registration
Statement (or the use of the underlying prospectus) throughout the period set
forth in Section 2.1(b), other than temporary suspensions due to a Material
Event not exceeding sixty (60) days in any one twelve (12) month period, the
Company shall pay to the Investors on a pro rata basis at the end of any
calendar month in which such a suspension has occurred, in cash liquidated
damages in an amount equal to $250 per day. Such liquidated damages amount shall
not be payable with respect to deferrals of filing of a Registration Statement
or suspensions of the effectiveness of a Registration Statement (or use of the
underlying prospectus) in accordance with Section 2.1(d), although any such
deferrals or suspensions shall be counted towards the sixty (60) days allowed by
the preceding sentence.
(d) Material Event. The Investors agree that, upon receipt of
any notice from the Company of the happening of a Material Event, the Investors
will forthwith discontinue disposition of the Registrable Securities pursuant to
any Registration Statement described in Section 2 until the Investors' receipt
of copies of supplemented or amended prospectuses prepared by the Company (which
the Company will use its commercially reasonable efforts to prepare and file
promptly), and, if so directed by the Company, the Investors will deliver to the
Company all copies in their possession, other than permanent file copies then in
the Investors' possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice. In no event shall the
Company delay causing to be effective a supplement or post-effective amendment
to any Registration Statement pursuant to Section 2 or the related prospectus,
for more than sixty (60) days during any twelve (12) month period.
-2-
ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.1. FILINGS; INFORMATION. Whenever the Company is required to
effect or cause the registration of Registrable Securities pursuant to Section
2.1, the Company will use reasonable best efforts to effect the registration of
such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and in connection with any such
request:
(a) The Company will as expeditiously as possible but in no
event later than the time period prescribed by Section 2.1(a), prepare and file
with the SEC a registration statement on Form S-3 (if use of such form is then
available to the Company pursuant to the rules of the SEC and, if not, on such
other form promulgated by the SEC for which the Company then qualifies and which
counsel for the Company shall deem appropriate and which form shall be available
for the sale of the Registrable Securities to be registered thereunder in
accordance with the provisions of this Agreement and in accordance with the
intended method of disposition of such Registrable Securities), and use
reasonable best efforts to cause such filed Registration Statement to become and
remain effective (pursuant to Rule 415 under the Act or otherwise), and the
Company will as expeditiously as possible prepare and file with the SEC such
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective for the time periods prescribed by Section 2.1(b) and comply
with the provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during such period in accordance with the
intended methods of disposition by the Investors set forth in such Registration
Statement. Such Registration Statement shall cover the resale of the Registrable
Securities only. No other securities shall be registered under such Registration
Statement.
(b) The Company will, prior to filing a Registration Statement
or prospectus or any amendment or supplement thereto (excluding amendments
deemed to result from the filing of documents incorporated by reference
therein), furnish to the Investors and one firm of counsel representing the
Investors, copies of such Registration Statement as proposed to be filed,
together with exhibits thereto, which documents will be subject to review and
approval by such parties, and thereafter furnish to the Investors and their
counsel for their review and comment such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in such Registration Statement
(including each preliminary prospectus) and such other documents or information
as the Investors or counsel may reasonably request in order to facilitate the
disposition of the Registrable Securities.
(c) After the filing of the Registration Statement, the
Company will promptly notify the Investors of any stop order issued or
threatened by the SEC in connection therewith and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered.
(d) The Company will use reasonable best efforts to (i)
register or qualify such Registrable Securities under such other securities or
blue sky laws of such jurisdictions in the United States as the Investors may
reasonably (in light of its intended plan of distribution) request, and (ii)
cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities in the United States as may be
necessary by virtue of the business and operations of the Company and do any and
all other acts and things that may be reasonably necessary or advisable to
enable the Investors to consummate the disposition of the Registrable
Securities; provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (d), (B) subject itself to taxation
in any such jurisdiction or (C) consent or subject itself to general service of
process in any such jurisdiction.
-3-
(e) The Company will promptly notify the Investors upon the
occurrence of any of the following events in respect of a Registration Statement
or related prospectus in respect of an offering of Registrable Securities: (i)
the declaration of the effectiveness of a Registration Statement; (ii) receipt
of any request for additional information by the SEC or any other federal or
state governmental authority during the period of effectiveness of the
Registration Statement for amendments or supplements to the Registration
Statement or related prospectus; (iii) the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose; (iv) receipt 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; (v) the happening of any event
which makes any statement made in the Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in the Registration Statement, related prospectus or documents so that,
the Registration Statement and the related prospectus will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances in which they were made; and (vi) the
Company's reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate; and the Company will promptly make
available to the Investors any such supplement or amendment to the related
prospectus.
(f) The Company will enter into customary agreements and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities (the Investors may, at their
option, require that any or all of the representations, warranties and covenants
of the Company also be made to and for the benefit of the Investors). The
Investors understand that no sales of Shares may be underwritten and the Company
is under no obligation to enter into an underwriting agreement.
(g) The Company will otherwise comply with all applicable
rules and regulations of the SEC, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act of 1934, as amended
(the "Exchange Act"), and will make available to its security holders, as soon
as reasonably practicable, an earning statement covering a period of twelve (12)
months, beginning within three (3) months after the effective date of the
Registration Statement, which earning statement shall satisfy the provisions of
Section 11(a) of the Act.
(h) The Company will use commercially reasonable efforts to
secure designation of all such Registrable Securities covered by such
Registration Statement as a Nasdaq "national market system security" within the
meaning of Rule 11Aa2-1 of the SEC.
(i) The Company will appoint a transfer agent and registrar
for all such Registrable Securities covered by such Registration Statement not
later than the effective date of such Registration Statement.
The Company may require the Investors to promptly furnish
in writing to the Company such information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required in connection with such
registration including, without limitation, all such information as may be
requested by the SEC or the National Association of Securities Dealers, Inc.
(the "NASD"). The Investors agree to provide such information as shall be
reasonably requested in connection with such registration within ten (10)
business days after receiving such written request and the Company shall not be
responsible for any delays in obtaining or maintaining the effectiveness of the
Registration Statement caused by the Investors' failure to timely provide such
information. The Investors agree that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3.1(e)
hereof, the Investors will forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until the Investors' receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3.1(e) hereof, and, if so directed by
the Company,
-4-
the Investors will deliver to the Company all copies, other than permanent file
copies then in the Investors' possession, of the most recent prospectus covering
such Registrable Securities at the time of receipt of such notice. In the event
the Company shall give such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective (including the
period referred to in Section 3.1(a) hereof) by the number of days during the
period from and including the date of the giving of notice pursuant to Section
3.1(e) hereof to the date when the Company shall make available to the Investors
a prospectus supplemented or amended to conform with the requirements of Section
3.1(e) hereof.
SECTION 3.2. REGISTRATION EXPENSES. In connection with each
Registration Statement, the Company shall pay the following registration
expenses incurred in connection with the registration thereunder (the
"Registration Expenses"): (i) all registration and filing fees, (ii) fees and
expenses of compliance with securities or blue sky laws, (iii) printing
expenses, (iv) the Company's internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), (v) the fees and expenses incurred in connection with the
listing of the Registrable Securities, (vi) subject to the limitations set forth
in the Subscription Agreement, reasonable fees and disbursements of counsel for
the Company and the Investors and customary fees and expenses for independent
certified public accountants retained by the Company (including the expenses of
any comfort letters or costs associated with the delivery by independent
certified public accountants of a comfort letter or comfort letters requested
pursuant to Section 3.1(h) hereof), and (vii) the fees and expenses of any
special experts retained by the Company in connection with such registration.
The Company shall have no obligation to pay any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities, or the cost of
any special audit required by the Investors, such costs to be borne by the
Investors.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Investor, its partners, Affiliates, officers,
directors, employees and duly authorized agents, and each Person or entity, if
any, who controls such Investor within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, together with the partners, Affiliates,
officers, directors, employees and duly authorized agents of such controlling
Person or entity (collectively, the "Controlling Persons"), from and against any
loss, claim, damage, liability, reasonable attorneys' fees, costs or expenses
and costs and expenses of investigating and defending any such claim
(collectively, "Damages"), joint or several, and any action in respect thereof
to which each Investor, its partners, Affiliates, officers, directors, employees
and duly authorized agents, and any such Controlling Person may become subject
under the Act or otherwise, insofar as such Damages (or proceedings in respect
thereof) arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
prospectus, supplement or amendment relating to the Registrable Securities or
any preliminary prospectus, or arises out of, or are based upon, any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
the same are based upon information furnished in writing to the Company by each
Investor expressly for use therein, and shall reimburse each Investor, its
partners, Affiliates, officers, directors, employees and duly authorized agents,
and each such Controlling Person for any legal and other expenses reasonably
incurred by such Investor, its partners, Affiliates, officers, directors,
employees and duly authorized agents, or any such Controlling Person in
investigating or defending or preparing to defend against any such Damages or
proceedings; provided, however, that the Company shall not be liable to such
Investor to the extent that (i) such Investor failed to send or deliver a copy
of the final prospectus with or prior to the delivery of written confirmation of
the sale by such Investor to the Person asserting the claim from which such
Damages arise, and (ii) the final prospectus would have corrected such untrue
statement or alleged untrue statement or such omission or alleged omission upon
which the claim is asserted and from which the Damages arise.
-5-
SECTION 4.2. INDEMNIFICATION BY THE INVESTORS. Each Investor agrees to
indemnify and hold harmless the Company, its partners, Affiliates, officers,
directors, employees and duly authorized agents and each Person or entity, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, together with the partners, Affiliates,
officers, directors, employees and duly authorized agents of such controlling
Person, to the same extent as the foregoing indemnity from the Company to the
Investor, but only with reference to information related to the Investor or its
plan of distribution, furnished in writing by the Investor or on the Investor's
behalf expressly for use in any Registration Statement or prospectus relating to
the Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus. In case any action or proceeding shall be brought
against the Company or its partners, Affiliates, officers, directors, employees
or duly authorized agents or any such controlling Person or its partners,
Affiliates, officers, directors, employees or duly authorized agents, in respect
of which indemnity may be sought against the Investor, the Investor shall have
the rights and duties given to the Company, and the Company or its partners,
Affiliates, officers, directors, employees or duly authorized agents, or such
controlling Person, or its partners, Affiliates, officers, directors, employees
or duly authorized agents, shall have the comparable rights and duties given to
the Investor by Section 4.1. The Company shall be entitled to receive
indemnities on customary terms from Underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above, with respect to information
so furnished in writing by such persons specifically for inclusion in any
prospectus or Registration Statement.
SECTION 4.3. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after
receipt by any person or entity in respect of which indemnity may be sought
pursuant to Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim
or the commencement of any action, the Indemnified Party shall, if a claim in
respect thereof is to be made against the person or entity from whom such
indemnity may be sought (an "Indemnifying Party"), promptly notify the
Indemnifying Party in writing of the claim or the commencement of such action.
In the event an Indemnified Party shall fail to give such notice as provided in
this Section 4.3 and the Indemnifying Party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, the indemnification
provided for in Section 4.1 or 4.2 shall be reduced to the extent of any actual
prejudice resulting from such failure to so notify the Indemnifying Party;
provided, that the failure to notify the Indemnifying Party shall not relieve
the Indemnifying Party from any liability which it may have to an Indemnified
Party other than that liability arising under Section 4.1 or 4.2. If any such
claim or action shall be brought against an Indemnified Party, and it shall
notify the Indemnifying Party thereof, the Indemnifying Party shall be entitled
to participate therein, and, to the extent that it wishes, jointly with any
other similarly notified Indemnifying Party, to assume the defense thereof.
After notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such claim or action, the Indemnifying Party
shall not be liable to the Indemnified Party for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation; provided that the
Indemnified Party shall have the right to employ separate counsel to represent
the Indemnified Party and its controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such counsel shall be for the account of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable judgment of
the Company and such Indemnified Party, representation of both parties by the
same counsel would be inappropriate due to actual or potential conflicts of
interest between them, it being understood, however, that the Indemnifying Party
shall not, in connection with any one such claim or action or separate but
substantially similar or related claims or actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all Indemnified Parties, or for fees
and expenses that are not reasonable. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
claim or pending or threatened proceeding in respect of which the Indemnified
Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such
-6-
Indemnified Party from all liability arising out of such claim or proceeding.
Whether or not the defense of any claim or action is assumed by the Indemnifying
Party, such Indemnifying Party will not be subject to any liability for any
settlement made without its consent.
SECTION 4.4. CONTRIBUTION. If the indemnification provided for in this
Article IV is unavailable to the Indemnified Parties in respect of any Damages
referred to herein, then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages as between the Company on the one
hand and the Investors on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of the Investors in connection
with such statements or omissions, as well as other equitable considerations.
The relative fault of the Company on the one hand and of the Investors on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and each Investor agrees that it would not be just and
equitable if contribution pursuant to this Section 4.4 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 immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
Damages referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 4.4, contribution by any seller of Registrable Securities shall be
limited to the gross amount of proceeds received by such seller from the sale of
such Registrable Securities. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. TERM. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate on the earlier of (i) the
second anniversary of the date of this Agreement, or (ii) as to any Buyer, the
date as of which such Buyer may sell all of the Registrable Securities that it
holds in reliance upon Rule 144 promulgated under the Securities Act (or
successor thereto), provided, however, that the provisions of Article IV hereof
shall survive any termination of this Agreement.
SECTION 5.2. RULE 144. The Company covenants that it will file all
reports required to be filed by it under the Act and the Exchange Act in a
timely manner and that it will take such further action as holders of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable the Investors to sell Registrable Securities without
registration under the Act within the limitation of the exemptions provided by
(a) Rule 144, as such Rule may be amended from time to time, or (b) any similar
rule or regulation hereafter adopted by the SEC. If at any time the Company is
not required to file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144. Upon the request of the
Investors, the Company will deliver to the Investors a written statement as to
whether it has complied with such requirements.
SECTION 5.3. AMENDMENT AND MODIFICATION. Any provision of this
Agreement may be waived, provided that such waiver is set forth in a writing
executed by the party against whom the enforcement of such waiver is sought. The
provisions of this Agreement, including the provisions of this sentence, may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not
-7-
be given, unless the Company has obtained the written consent of the holders of
a majority of the then outstanding Registrable Securities. Notwithstanding the
foregoing, the waiver of any provision hereof with respect to a matter that
relates exclusively to the rights of holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and does not
directly or indirectly affect the rights of other holders of Registrable
Securities may be given by holders of at least a majority of the Registrable
Securities being sold by such holders; provided that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence. No course of dealing
between or among any Person having any interest in this Agreement will be deemed
effective to modify, amend or discharge any part of this Agreement or any rights
or obligations of any person under or by reason of this Agreement.
SECTION 5.4. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement
and all of the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. The Investors
may assign their rights under this Agreement to any subsequent holder of
Preferred Stock, Warrants or Conversion Shares, provided that the Company shall
have the right to require any holder of Registrable Securities to execute a
counterpart of this Agreement as a condition to such holder's claim to any
rights hereunder. This Agreement, together with the Subscription Agreement and
the Warrants sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among them.
SECTION 5.5. SEPARABILITY. In the event that any provision of this
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless that provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
SECTION 5.6. NOTICES. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder or
which are given with respect to this Agreement shall be in writing and shall be
personally served or deposited in the mail, registered or certified, return
receipt requested, postage prepaid, or delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery, telegram, telex
or facsimile, addressed as set forth below, or to such other address as such
party shall have specified most recently by written notice: (i) if to the
Company, to: Sigma Designs, Inc., 00000 Xxxxxxx Xxxxxxx, Xxxxxxx, XX 00000;
Attention: Xx. Xxxxx X. Xxxx, Facsimile No.: (000) 000-0000, with copies (which
shall not constitute notice) to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx
Xxxx, Xxxx Xxxx, XX 00000 Attention: Tor Xxxxxx, Esq., Facsimile No.: (415)
493-6811; and (ii) if to the Investors, to either (a) RIC Equity Limited, c/o
Rana Investment Company, P.O. Box 60148, Xxxxxx 00000, Xxxxx Xxxxxx, Phone No.:
(0000) 000-0000, Fax: (0000) 000-0000 or (b) Banque Edouard Constant, c/o KERNCO
Trust SA, 2, rue Jargonnant P.O. Box 6432 CH 1211 Xxxxxx 0, Xxxxxxxxxxx,
Attention: Xxxxxx Advoni Phone No.: (011)(000) 000-00000, Fax: (011) (412)
000-00000. Notice shall be deemed given on the date of service or transmission
if personally served or transmitted by telegram, telex or facsimile. Notice
otherwise sent as provided herein shall be deemed given on the third business
day following the date mailed or on the second business day following delivery
of such notice by a reputable air courier service.
SECTION 5.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING
EFFECT TO PROVISIONS GOVERNING CONFLICTS OF LAWS THEREOF.
SECTION 5.8. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement,
nor shall they affect their meaning, construction or effect.
-8-
SECTION 5.9. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.
SECTION 5.10. FURTHER ASSURANCES. Each party shall cooperate and take
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
SECTION 5.11. ARBITRATION; REMEDIES. Any dispute that arises between
the parties to this Agreement shall first be submitted for resolution to
arbitration under the rules of the American Arbitration Association of Santa
Xxxxx County, California. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived.
-9-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.
SIGMA DESIGNS, INC.
By:
----------------------------------------
Xxxxx X. Xxxx
Chairman and Chief Executive Officer
INVESTOR
By:
----------------------------------------
Name:
Title:
INVESTOR
By:
----------------------------------------
Name:
Title:
-10-
