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EXHIBIT F
FORM OF INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (the "AGREEMENT") is made and entered into
as of ______ __, 199_ by and among Number Nine Visual Technology Corporation, a
Delaware corporation (the "COMPANY"), and Silicon Graphics, Inc., a Delaware
corporation ("INVESTOR").
RECITALS
WHEREAS, the Company and Investor entered into a Securities Purchase
Agreement dated as of May 7, 1998 (the "PURCHASE AGREEMENT") pursuant to which
the Investor agreed to loan the Company an aggregate of Nine Million Dollars
($9,000,000) and the Company agreed to issue secured subordinated convertible
promissory notes (collectively the "NOTES") which Notes are convertible into
shares of Series A Convertible Preferred Stock, $.01 par value per share (the
"PREFERRED STOCK") and the Company issued to Investor a warrant exercisable for
such number of shares of Preferred Stock and pursuant to such terms and
conditions as set forth in the warrant (the "WARRANT") (such shares issuable
upon conversion of the Notes and exercise of the Warrant are collectively
referred to herein as the "PREFERRED SHARES"); and
WHEREAS, as a condition precedent to the conversion of the Notes and
exercise of the Warrant on such conditions and terms as set forth in the Notes,
the Warrant and the Purchase Agreement, the parties are obligated to execute and
deliver this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS
For the purposes of this Agreement, the following terms have the meanings
indicated below:
1933 ACT. The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, as in effect from time to time.
1934 ACT. The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
BUSINESS DAY. Each weekday that is not a day on which banking
institutions in the Commonwealth of Massachusetts are authorized or obligated by
law or executive order to close.
COMMISSION. The United States Securities and Exchange Commission.
COMMON STOCK. The Common Stock, $.01 par value per share, of the
Company as constituted as of the date of this Agreement.
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CONVERSION SHARES. The shares of Common Stock issued or issuable
upon conversion of the Preferred Shares, and any securities that may be issued
by the Company or any successor to the Company from time to time with respect
to, in exchange for, or in replacement of such shares of Common Stock Shares,
including, without limitation, the securities issued as a stock dividend on or
pursuant to a stock split of such shares of Common Stock.
HOLDER. Any person owning Registrable Securities who is a party to
this Agreement, and any transferee thereof in accordance with this Agreement.
PROSPECTUS. The prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement (including, without
limitation, any prospectus supplement with respect to the terms of the offering
of any portion of the Registrable Securities covered by such Registration
Statement), and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
REGISTER, REGISTRATION AND REGISTERED. A registration effected by
preparing and filing a registration statement or similar document with the
Commission in compliance with the 1933 Act, and the declaration or ordering of
effectiveness of such registration statement or document.
REGISTRABLE SECURITIES. The Conversion Shares and any other shares
of Common Stock held by the Holder; provided, however, that those shares as to
which the following apply shall cease to be Registrable Securities when: (a) a
Registration Statement with respect to the sale of such Registrable Securities
shall have become effective under the 1933 Act and such Registrable Securities
shall have been disposed of under such Registration Statement; (b) such
Registrable Securities shall have become transferable, or have become eligible
and remain eligible for transfer (whether or not so transferred), in accordance
with Rule 144(k), or any successor rule or provision, under the 1933 Act; (c)
such Registrable Securities shall have been transferred in a transaction in
which the Holder's rights and obligations under this Agreement were not assigned
in accordance with this Agreement; (d) such Registrable Securities shall have
ceased to be outstanding; or (e) such Registrable Securities shall have been
sold pursuant to Rule 144.
REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with Sections 2 and 3 hereof; including, without
limitation, all registration and filing fees (including filing fees with respect
to the Commission and to the National Association of Securities Dealers, Inc.
and listing fees of The Nasdaq National Market), all fees and expenses of
complying with state securities or "blue sky" laws (including reasonable fees
and disbursements of underwriters' counsel in connection with any "blue sky"
memorandum or survey, but excluding any fees and expenses for foreign
qualification in such jurisdictions), all printing expenses, all registrars' and
transfer agents' fees and all fees and disbursements of the Company's counsel
and independent public accountants; provided, however that Registration Expenses
shall not include the fees and expenses of more than one counsel to the holders
of
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Registrable Securities, or underwriters' discounts and commissions, or brokerage
fees, associated with the sale of the Registrable Securities.
REGISTRATION STATEMENT. A registration statement prepared and filed
with the Commission in compliance with the 1933 Act.
SELLER. Any person, including any Holder, selling any Registrable
Securities in an offering of any Registrable Securities of the Company pursuant
to this Agreement.
SELLING EXPENSES. All applicable discounts and commissions,
brokerage fees, transfer taxes and any fees and disbursements of more than one
counsel or any accountants or other advisors for the Sellers of the Registrable
Securities being registered.
Any other terms used herein and not otherwise defined shall have the
meaning assigned to such term in the Purchase Agreement.
2. "PIGGY-BACK" REGISTRATION RIGHTS
If at any time the Company shall determine to register pursuant to an
underwritten public offering under the 1933 Act any of its shares of Common
Stock for its own account, or the account of other stockholders of the Company
desiring to sell "restricted securities" of the Company (as defined in Rule 144
of the 0000 Xxx) pursuant to an underwritten public offering, it shall send to
the Holder written notice of such determination and, if within 15 calendar days
after receipt of such notice, Holder shall so request in writing, the Company
shall include in such Registration Statement all or any part of the Registrable
Securities the Holder requests to be registered. This right shall not apply to a
registration of shares of Common Stock on Form S-8 or Form S-4 (or their then
equivalents) relating to shares of Common Stock to be issued by the Company in
connection with any acquisition of any entity or business, or shares of Common
Stock issuable in connection with any stock option, stock purchase plan or other
employee benefit plan of the Company as such plans are in effect as of the date
hereof.
If, in connection with any offering involving an underwriting of shares of
Common Stock to be issued for the account of selling securityholders, the
managing underwriter shall impose a limitation on the number of shares of Common
Stock which may be included in any such registration statement because, in its
judgment, such limitation is necessary to effect an orderly public distribution
of the shares of Common Stock and to maintain a stable market for the securities
of the Company, then the Company shall be obligated to include in such
registration statement only such limited portion of the Registrable Securities
with respect to which the Holder has requested inclusion hereunder, on a pro
rata basis based on the number of shares of Registrable Securities owned by the
Holder and the shares of Common Stock owned by all other selling
securityholders; provided, however, that the Holder of Registrable Securities
shall have priority over other securityholders of the Company (other than
securityholders that do not hold Registrable Securities who have initiated a
registration to which this Section 2 applies and any securities held by the
Company) to include any Registrable Securities held by such Holder in any
registration statement referred to in this Section 2.
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3. SHELF REGISTRATION
3.1 UNDERTAKING TO REGISTER
Within ninety (90) days following the Closing (as that term is
defined in the Purchase Agreement), upon written request of Investor, the
Company will use its commercially reasonable best efforts to prepare, file and
have declared effective a Registration Statement to register all of the
Registrable Securities for resale in the public market in brokerage transactions
or transactions with market makers, in block trades, and in privately negotiated
transactions.
3.2 SELLING PROCEDURES; SUSPENSION
(a) Except in the event that paragraph (b) below applies, the
Company shall (i) if deemed necessary by the Company, prepare and file from time
to time with the Commission a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or amendment
to any document incorporated therein by reference or file any other required
document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (ii) provide the Holders of the
Registrable Securities copies of any documents filed pursuant to Section
3.2(a)(i); and (iii) inform each Holder that the Company has complied with its
obligations in Section 3.2(a)(i) (or that, if the Company has filed a
post-effective amendment to the Registration Statement which has not yet been
declared effective, the Company will notify each such Holder to that effect, it
will use its best efforts to secure the effectiveness of such post-effective
amendment and will immediately notify each such Holder pursuant to Section
3.2(a)(i) hereof when the amendment has become effective).
(b) In the event (i) of any request by the Commission or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement for amendments or supplements to a Registration
Statement or related Prospectus or for additional information; (ii) of the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose; (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) of any event or circumstance which necessitates the making of any
changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements
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therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; or (v) that, in the reasonable, good faith judgment of the Company's
management or Board of Directors, (A) the offering of securities pursuant
thereto would materially and adversely affect (i) a pending or scheduled public
offering or private placement of the Company's securities, (ii) a pending or
proposed acquisition, merger, consolidation, reorganization, restructuring or
similar transaction of or by the Company or other material corporate activity or
transaction, (iii) bona fide negotiations, discussions or proposals with respect
to any of the foregoing, or (iv) the position or strategy of the Company in
connection with any pending or threatened litigation, claim, assessment or
government investigation, and (B) in the event sales of Registrable Securities
were made under the Registration Statement and disclosure of all material
information with respect to the applicable circumstance(s) described in
subsection (A) had not been made, such circumstance(s) could reasonably be
expected to cause a violation of the 1933 Act or the 1934 Act (each a
"SUSPENSION EVENT"); then, subject to paragraph (d) below, the Company shall
deliver a notice in writing to the Holders (the "SUSPENSION NOTICE") to the
effect of the foregoing and, upon receipt of such Suspension Notice, each such
Holder will refrain from selling any Registrable Securities pursuant to the
Registration Statement (a "SUSPENSION") until such Holder's receipt of copies of
the supplemented or amended Prospectus provided for in Section 3.2(a)(i) hereof,
or until it is advised in writing by the Company that the Prospectus may be
used, and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.
(c) In the event of any Suspension Event, or any delay in effecting
the Registration under Section 3.2 above, the Company will use its commercially
reasonable efforts to ensure that the use of the Prospectus so suspended or
delayed may be commenced or resumed, as the case may be, and that the Suspension
will terminate and the Holder's ability to sell pursuant to the Prospectus so
suspended will commence or resume, as the case may be, as soon as practicable
and, in the case of a pending development, filing or event referred to in
Section 3.2(b)(iv) or (v) hereof, as soon, in the judgment of the Company's
management or Board of Directors (in accordance with the provisions of Section
3.2), as disclosure of such pending development, filing or event or the
resumption of sales pursuant to the Registration Statement would not have a
material adverse effect on the Company's ability to consummate or materially
prejudice the Company's interest with respect to the transaction, if any,
contemplated by such development, filing or event. Notwithstanding any other
provision of this Agreement, the Company shall have the right to cause a maximum
of two (2) Suspensions pursuant to Section 3.2(b)(iv) and (v), neither of which
may be within 60 days of the other, as provided above (including for this
purpose a delay in effecting the Registration pursuant to Section 3.2 above)
during any 12-month period after the initial effective date of the Registration
Statement, and the total number of days for which all Suspensions (including for
this purpose a delay in effecting the Registration Statement pursuant to Section
3.2 above) during any 12-month period shall not exceed 90 days in the aggregate.
(d) The Company will use its commercially reasonable efforts to
maintain the effectiveness of any registration statement pursuant to which any
of the Registrable Securities are being offered for (i) up to 180 days (or such
shorter period of time as the underwriters need to complete the distribution of
the registered offering in any Company-primary or secondary
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offering), in the case of a registration pursuant to Section 2, or (ii) in the
case of a "shelf" Registration Statement pursuant to Section 3 until the date on
which each Holder may sell all Registrable Securities then held by such Holder
without restriction by the volume limitations of Rule 144(e). The Company from
time to time will amend or supplement such Registration Statement and the
Prospectus contained therein to the extent necessary to comply with the 1933 Act
and any applicable state securities statue or regulation. The 180-day time
period referenced in clause (i) above during which the Company is obligated to
keep the registration statement effective shall be extended for a number of days
equal to the number of days during which the Company has effected a Suspension.
The Company shall use commercially reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the securities for sale in any jurisdiction, at
the earliest practicable moment.
3.3 UNDERWRITING AGREEMENT
If in connection with any proposed distribution by the Holder under
the "piggy back" registration referred to in Section 2, the Company in its
discretion shall determine that it is in the best interests of the Company to
effect distribution by means of an underwriting, the Company shall promptly
notify the Holder of such determination. In such event, in addition to the
limitations set forth in Section 2, the right of Holder to participate in such
distribution shall be conditioned upon such Holder's participation in the
underwriting arrangements required by this Section 3.3, including without
limitation, the requirement that the Holder enter into an underwriting agreement
and a lock-up agreement (for a period determined by the managing underwriter not
to exceed the period agreed to by all directors and officers of the Company),
each in customary form with the managing underwriter selected for the
underwriting by the Company.
4. EXPENSES
The Company will pay all Registration Expenses in connection with the
registration of Registrable Securities effected by the Company pursuant to
Section 2 or 3. Holders of Registrable Securities registered pursuant to this
Agreement shall pay all Selling Expenses with each such Holder bearing a pro
rata portion of the Selling Expenses based upon the number of Registrable
Securities registered by each such Holder.
5. EXPIRATION OF REGISTRATION RIGHTS
The obligations of the Company under Section 2 of this Agreement to
register the Registrable Securities shall expire and terminate at the earlier of
(a) two (2) years following the Closing or (b) such time as the Holder shall be
entitled or eligible to sell, within any ninety (90) day period, all such
securities without restriction and without a need for the filing of a
registration statement under the 1933 Act, including without limitation, for any
resales of restricted securities made pursuant to Rule 144(k) as promulgated by
the Commission. The determination as to whether the Holder is entitled or
eligible to sell all Registrable Securities without the need for registration
under the 1933 Act shall be based on a written opinion of counsel that
registration of the Registrable Securities is not required under the 1933 Act,
sufficient to permit the transfer agent to transfer such securities upon a sale
by the Holder. The
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obligations of the Company under Section 3 of this Agreement shall expire at the
time specified in Section 3.2(d)(ii).
6. REGISTRATION PROCEDURES
In connection with the registration of Registrable Securities under this
Agreement, and subject to the other provisions of this Agreement, the Company
shall:
(a) use its commercially reasonable efforts to cause the
Registration Statement filed in accordance with Section 2 or Section 3 to become
effective as soon as practicable after the date of filing thereof;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective for the shorter of (i) the duration of its registration obligations,
or (ii) until there are no Registrable Securities outstanding, and to comply
with the provisions of the 1933 Act with respect to the disposition of the
Registrable Securities;
(c) furnish to each Seller of such Registrable Securities such
number of copies of the Prospectus included in such Registration Statement as
such Seller may reasonably request in order to facilitate the sale or
disposition of such Registrable Securities;
(d) use its commercially reasonable efforts to register or qualify
all securities covered by such Registration Statement under such other
securities or "blue sky" laws of such jurisdictions as each Seller shall
reasonably request, and do any and all other acts and things that may be
necessary to enable such Seller to consummate the disposition in such
jurisdictions of its Registrable Securities covered by such Registration
Statement, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, or to subject itself to taxation in respect of
doing business in any such jurisdiction, or to consent to general service of
process in any such jurisdiction;
(e) notify each Seller of Registrable Securities covered by such
Registration Statement, at any time when a Prospectus relating thereto is
required to be delivered under the 1933 Act, of the happening of any event as a
result of which the Prospectus included in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing or if it is
necessary to amend or supplement such Prospectus to comply with the law, and at
the request of any such Seller, prepare and furnish to such Seller a reasonable
number of copies of a supplement to or an amendment of such Prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities or securities, such Prospectus, as amended or supplemented, will
comply with the law;
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(f) use its best efforts to qualify such securities for inclusion in
the Nasdaq National Market, and provide a transfer agent and registrar for such
Registrable Securities not later than the effective date of such Registration
Statement; and
(g) issue to any person (who is not an affiliate of the Company) to
which any Holder of Registrable Securities may sell such Registrable Securities
in connection with such registration certificates evidencing such Registrable
Securities without any legend restricting the transferability of the Registrable
Securities (unless otherwise required by law).
7. 1934 ACT REGISTRATION
The Company shall timely file with the Commission such information as the
Commission may prescribe under Section 13 or 15(d) of the 1934 Act and shall use
its best efforts to take all action and make all filings of information
referenced in Rule 144(c) as may be required as a condition to the availability
of Rule 144 under the 1933 Act (or any successor exemptive rule hereinafter in
effect) with respect to the shares of Common Stock. The Company shall furnish to
any holder of Registrable Securities forthwith upon five (5) days written
request (i) a written statement by the Company as to its compliance with the
reporting requirements of Rule 144(c), (ii) a copy of the most recent annual or
quarterly report of the Company as filed with the Commission, and (iii) such
other publicly-filed reports and documents as a holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing a holder to
sell any such Registrable Securities without registration.
8. INVESTOR INFORMATION
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement that all Holders of Registrable
Securities shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them and the intended method of disposition
of such Registrable Securities as shall be reasonably required to effect the
registration of their Registrable Securities and to execute such documents in
connection with such registration as the Company may reasonably request.
9. INDEMNIFICATION AND CONTRIBUTION
In the event any Registrable Securities are included in a Registration
Statement under Sections 2 and 3:
(a) The Company will indemnify and hold harmless each Seller, the
officers, directors, partners, agents and employees of each Seller, any
underwriter (as defined in the 0000 Xxx) for such Seller and each person, if
any, who controls such Seller or underwriter within the meaning of the 1933 Act
or the 1934 Act, against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the 1933 Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively, a
"VIOLATION"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such Registration Statement, including any preliminary
Prospectus or final
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Prospectus contained therein or any amendments or supplements thereto; (ii) the
omission or alleged omission to state in such Registration Statement a material
fact required to be stated therein, or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; or
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any state securities law or any rule or regulation promulgated under
the 1933 Act, the 1934 Act or any state securities law applicable to the Company
in connection with such Registration Statement; and the Company will reimburse
each such Seller, officer, director, partner, agent, employee, underwriter or
controlling person for any reasonable legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld or delayed), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation (i) which occurs in reliance
upon and in conformity with written information furnished expressly for use in
connection with such registration by any such Seller, underwriter or controlling
person or (ii) which is based upon any information in a Prospectus that has been
amended or supplemented if such Seller had been notified of such amendment or
supplement and the use of such amendment or supplement by the Seller would have
avoided the Violation.
(b) Each Seller will indemnify and hold harmless the Company, each
of its officers, directors, partners, agents or employees, each person, if any,
who controls the Company within the meaning of the 1933 Act, any underwriter and
any other Seller or any of its directors, officers, partners, agents or
employees or any person who controls such Seller, against any losses, claims,
damages or liabilities joint or several) to which the Company or any such
director, officer, partner, agent, employee, controlling person or underwriter,
or other such Seller or director, officer, partner, agent, employee or
controlling person may become subject, under the 1933 Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Seller expressly for use in connection with such registration; and each such
Seller will reimburse any reasonable legal or other expenses reasonably incurred
by the Company or any such director, officer, partner, agent, employee,
controlling person or underwriter, other Seller, officer, director, partner,
agent, employee or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. Notwithstanding
anything contained in this Agreement to the contrary, the indemnity agreement
contained in this Section 9(b) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Seller, which consent shall not be unreasonably
withheld or delayed; provided, further, that the aggregate liability of each
Seller in connection with any sale of Registrable Securities pursuant to a
Registration Statement in which a Violation occurred shall be limited to the net
proceeds from such sale.
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(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel selected by the
indemnifying party and reasonably acceptable to the indemnified party; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the reasonable fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
conflicting interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if and to the extent prejudicial to its ability to defend such
action, shall relieve such indemnifying party of liability to the indemnified
party under this Section 9 to the extent of such prejudice, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 9.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section 9, for any reason other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be entitled
to contribution to liabilities and expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying parties and the indemnified
parties, except to the extent that contribution is not permitted under Section
11(f) of the 1933 Act. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things, the
parties' relative knowledge and access to information concerning the matter with
respect to which the claim was asserted, the opportunity to correct and prevent
any statement or omission and any other equitable considerations appropriate
under the circumstances, including, without limitation, whether any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or by the Holder of Registrable Securities, on the
other hand. The Company and Investors of the Registrable Securities covered by
such Registration Statement agree that it would not be equitable if the amount
of such contribution were determined by pro rata or per capita allocation. No
seller of Registrable Securities covered by such Registration Statement or
person controlling such Seller shall be obligated to make any contribution
hereunder which in the aggregate exceeds the net proceeds of the securities sold
by such seller, less the aggregate amount of any damages which such seller and
its controlling persons have otherwise been required to pay in respect of the
same claim or any substantially similar claim. The obligations of such Investors
to contribute are several in proportion to their respective ownership of the
Registrable Securities covered by such Registration Statement and not joint.
Notwithstanding the foregoing, in no event shall any contribution by a Holder
under this Section 9(d) exceed the net proceeds from the offering received by
such Holder.
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10. TRANSFERABILITY
Each Holder agrees that it will not make any disposition of all or any
portion of the Registrable Securities (a) except in a registered public offering
pursuant to the rights granted in this Agreement; or (b) until (i) such Holder
shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition and (ii) if reasonably requested by the
Company, such Holder shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to counsel for the Company, that such
disposition will not require registration of such Registrable Securities or such
transaction under the 1933 Act or applicable state securities laws.
11. COVENANTS
The Company covenants and agrees with the Investor that, provided that the
Investor continues to hold Preferred Shares, based upon the then applicable
conversion price, equal to at least five percent (5%) of the then issued and
outstanding shares of the Company's Common Stock:
11.1 DIRECTORS.
(a) Election of Investor Representative. In accordance with the
terms of the Preferred Stock set forth in a Certificate of Designation filed
with the Secretary of State of the State of Delaware (the "CERTIFICATE OF
DESIGNATION"), at each annual meeting of the stockholders of the Company, or at
each special meeting of the stockholders of the Company involving the election
of directors of the Company, and at any other time at which stockholders of the
Company will have the right to or will vote for or consent in writing regarding
the election of directors of the Company, then and in each event, the Board of
Directors of the Company shall use it best efforts, subject to the exercise of
its fiduciary duties, to nominate an individual designated by the Investor for
election as a director of the Company (the "INVESTOR REPRESENTATIVE").
(b) Vacancies and Removal of Investor Representative. The vacancy or
resignation of any Investor Representative elected to the Board of Directors of
the Company shall be governed by the terms of the Certificate of Designation.
(c) Meetings; Indemnification. The Company shall at all times cause
its By-laws to provide that, (a) unless otherwise required by the laws of the
State of Delaware, any two directors shall have the right to call a meeting of
the Board of Directors and (b) the number of directors fixed in accordance
therewith shall in no event conflict with any of the terms or provisions of the
Preferred Stock as set forth in the Certificate of Incorporation, as amended.
The Company shall at all times maintain provisions in its By-laws and/or
Certificate of Incorporation indemnifying all directors against liability and
absolving all directors from liability to the Company and its stockholders to
the maximum extent permitted under the laws of the State of Delaware.
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11.2 DISCLOSURE
(a) Prior to the execution of this Agreement, the parties will agree
on the content of a joint press release announcing the existence of this
Agreement, which press release will be issued as mutually agreed by the parties.
(b) Neither party will be required to disclose to the other any
confidential information of any third party without having first obtained such
third party's prior written consent.
11.3 RESERVE FOR PREFERRED SHARES AND CONVERSION SHARES. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Preferred Stock and Common Stock for the purpose of effecting
the conversion of the Notes and exercise of the Warrant and the conversion of
the Preferred Shares and Conversion Shares, respectively, and otherwise
complying with the terms of this Agreement, such number of its duly authorized
shares of Preferred Stock and Common Stock as shall be sufficient to effect the
conversion of the Notes and the exercise of the Warrant and the conversion of
the Preferred Shares and Conversion Shares, respectively, from time to time
outstanding or otherwise to comply with the terms of this Agreement. If at any
time the number of authorized but unissued shares of Preferred Stock and Common
Stock shall not be sufficient to effect the conversion of the Notes and the
exercise of the Warrant and the conversion of the Preferred Shares and
Conversion Shares, as the case might be, or otherwise to comply with the terms
of this Agreement, the Company will forthwith take such corporate action as may
be necessary to increase its authorized but unissued shares of Preferred Stock
and Common Stock to such number of shares as shall be sufficient for such
purposes. The Company will obtain any authorization, consent, approval or other
action by or make any filing with any court or administrative body that may be
required under applicable United States federal and state securities laws in
connection with the issuance of shares of Preferred Stock and Common Stock upon
conversion of the Notes and exercise of the Warrant and upon conversion of the
Preferred Shares and Conversion Shares, respectively.
11.4 RESTRICTIVE AGREEMENTS PROHIBITED. Neither the Company nor any
of its subsidiaries shall become a party to any agreement which by its terms
restricts the Company's performance of this Agreement.
11.5 TRANSACTIONS WITH AFFILIATES. Except for transactions set
forth in the SEC Documents, contemplated by this Agreement or as otherwise
approved by the Board of Directors, neither the Company nor any of its
subsidiaries shall enter into any transaction with any director, officer,
employee or holder of more than 5% of the outstanding capital stock of any class
or series of capital stock of the Company or any of its subsidiaries, member of
the family of any such person, or any corporation, partnership, trust or other
entity in which any such person, or member of the family of any such person, is
a director, officer, trustee, partner or holder of more than 5% of the
outstanding capital stock thereof, except for transactions on customary terms
related to such person's employment.
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11.6 EMPLOYEE NONDISCLOSURE AND DEVELOPMENTS AGREEMENTS. The
Company shall use its best efforts to obtain, and shall cause its subsidiaries
to use their best efforts to obtain, an Employee Nondisclosure and Developments
Agreement in a form approved by the Board of Directors from all officers, key
employees and other employees hired subsequent to the Closing Date who will have
access to confidential information of the Company or any of its subsidiaries,
upon their employment by the Company or any of its subsidiaries.
11.7 INTELLECTUAL PROPERTY COVENANT. For the term of 18 months from
the date of this Agreement, the Company covenants that it will, where the
Company, in the exercise of reasonable judgment deems it appropriate, use
reasonable business efforts to seek copyright and patent registration, and other
appropriate intellectual property protection, for Intellectual Property of the
Company.
11.8 PURCHASE AGREEMENT COVENANTS. The Company shall comply with
all obligations set forth in Sections 11.1, 11.4, 11.5, 11.6, 11.7 and 11.11 of
the Purchase Agreement.
12. MISCELLANEOUS
12.1 AMENDMENTS AND WAIVERS
Any provision of this Agreement may be amended and the observance
thereof may only be waived (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company
and the Holders of a majority of the Registrable Securities then outstanding.
Any amendment or waiver effected in accordance with this Section 12.1 shall be
binding upon each Holder of Registrable Securities at the time outstanding, each
future Holder of Registrable Securities, and the Company.
12.2 NOTICES
Any notice required or permitted under this Agreement will be given
in writing, shall be effective when received, and shall in any event be deemed
received and effectively given upon personal delivery to the party to be
notified or one (1) business day after deposit with a nationally recognized
courier service such as Federal Express for next business day delivery, or one
(1) business day after sent by facsimile with copy deposited with a nationally
recognized courier service such as Federal Express for next business day
delivery, addressed to the party to be notified at the address indicated for
such party on the signature page hereof or at such other address as the
Shareholder or the Company may designate by giving at least ten (10) days
advance written notice pursuant to this Section 12.2.
12.3 GOVERNING LAW
This Agreement shall for all purposes be governed by and construed
in accordance with the internal laws of the State of Delaware without regard to
conflicts-of-laws
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principles. The parties hereto agree to submit to the non-exclusive jurisdiction
of the federal and state courts of the Commonwealth of Massachusetts with
respect to the breach or interpretation of this Agreement or the enforcement of
any and all rights, duties, liabilities, obligations, powers and other relations
between parties arising under this Agreement.
12.4 SEVERABILITY
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excised from this
Agreement, and the remainder of this Agreement shall be interpreted as if such
provision were so excised and shall be enforceable in accordance with its
remaining terms.
12.5 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall
be deemed to be an original and all of which together shall constitute one and
the same instrument.
12.6 ASSIGNMENT
The rights set forth in this Agreement are not transferable except
to a person controlling, controlled by, or under common control with Holder who
receives at least 20% of the Registrable Securities. All transferees shall agree
in writing to be bound by all of the provisions of this Agreement. A Holder
shall promptly advise the Company in writing of the identity and address of any
person to whom it transferred its registration rights hereunder.
12.7 ACCESS TO INVESTOR INFORMATION.
The Company acknowledges that the Investor Representative (as
defined in Section 11.1) will likely have, from time to time, information that
may be of interest to the Company ("INFORMATION") regarding a wide variety of
matters including, by way of example only, (a) Investor's technologies, plans
and services, and plans and strategies relating thereto, (b) current and future
investments Investor has made, may make, may consider or may become aware of
with respect to other companies and other technologies, products and services,
including, without limitation, technologies, products and services that may be
competitive with the Company's, and (c) developments with respect to the
technologies, products and services, and plans and strategies relating thereto,
of other companies, including, without limitation, companies that may be
competitive with the Company. The Company recognizes that a portion of such
Information may be of interest to the Company. Such Information may or may not
be known by the Investor Representative. The Company, as a material part of the
consideration for this Agreement, agrees that the Investor and its Investor
Representative shall have no duty to disclose any Information to the Company or
permit the Company to participate in any projects or investments based on any
Information, or to otherwise take advantage of any opportunity that may be of
interest to the Company if it were aware of such Information, and hereby waives,
to the extent permitted by law, any claim based on the corporate opportunity
doctrine or otherwise that could limit the Investor's ability to pursue
opportunities based on such Information or that
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would require the Investor or the Investor Representative to disclose any such
Information to the Company or offer any opportunity relating thereto to the
Company.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
NUMBER NINE VISUAL TECHNOLOGY SILICON GRAPHICS, INC.
CORPORATION
By:
By:
Name:
Name:
Title:
Title:
Address: 00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 Address: 0000 X. Xxxxxxxxx Xxxx.
Attention: Chief Executive Officer Xxxxxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Director of Corporate Legal
Services
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000 Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
WITH COPIES TO:
Xxxxxxx X. Xxxxx, Xx., Esq.
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx; Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No. (000) 000-0000
Xxxx X. Xxxxxxx, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No. (000) 000-0000
