EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
Between
PINNACLE SYSTEMS, INC.
and
MIRO COMPUTER PRODUCTS AG
Dated as of August 29, 1997
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made effective
as of August 31, 1997, between PINNACLE SYSTEMS, INC., a California corporation
(the "Company"), and MIRO COMPUTER PRODUCTS AG, a corporation organized under
the laws of Germany ("Miro").
RECITALS
A. Pursuant to the terms of the Asset Purchase Agreement dated as of
August 29, 1997 (the "Purchase Agreement"), by and among the Company, Pinnacle
Systems GmbH, Pinnacle Systems C.V., Pinnacle Systems, Ltd. and Miro, Miro shall
acquire from the Company Two Hundred Three Thousand Five Hundred Sixty-Five
(203,565) fully paid and nonassessable shares of the Company's Common Stock, no
par value (the "Pinnacle Shares").
B. The Purchase Agreement provides for the execution and delivery of
this Agreement at the closing of the transactions contemplated thereby.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and conditions herein and in the Purchase Agreement, the parties
hereto hereby agree as follows:
SECTION 1
REGISTRATION RIGHTS
1.1 Shelf Registration.
(a) Initial Payment Shares. As promptly as practicable and in
any event within 14 days after the issuance of the shares of Pinnacle Common
Stock in connection with the Closing under the Purchase Agreement and pursuant
to Section 2.5(a)(i) of the Purchase Agreement, the Company shall file a
registration statement on Form S-3 under the Securities Act covering such
Pinnacle Shares.
(b) Earnout Payment Shares. As promptly as practicable and in
any event within 14 days after the issuance of shares of Pinnacle Common Stock
in connection with the Earnout Payment (as such term is defined in the Purchase
Agreement) and pursuant to Section 2.5(a)(ii) of the Purchase Agreement, the
Company shall file a registration statement on Form S-3 under the Securities Act
covering such Pinnacle shares.
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(c) Obligations of the Company. In connection with any
registration of Registrable Securities pursuant to this Section 1.1, the Company
shall:
(i) Use its commercially reasonable efforts to cause
such registration statement to become effective and to remain effective
until the earlier of (A) the second anniversary of the date of issuance
of the Pinnacle Shares, (B) the sale of all of such shares of
Registrable Securities so registered or (C) such time as all of the
Registrable Securities can be sold by Holders within a three-month
period without compliance with the registration requirements of the
Securities Act pursuant to Rule 144 thereunder.
(ii) Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus (the
"Prospectus") used in connection therewith as may be necessary to make
and to keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the sale or other
disposition of all securities proposed to be registered in such
registration statement.
(iii) Furnish to the participating Holders or the
underwriters such number of copies of any Prospectus (including any
preliminary Prospectus and any amended or supplemented Prospectus), in
conformity with the requirements of the Securities Act, as the Holders
may reasonably request in order to effect the offering and sale of the
shares of Registrable Securities to be offered and sold, but only while
the Company shall be required under the provisions hereof to cause the
registration statement to remain current.
(iv) Use its best efforts to register or qualify the
shares of Registrable Securities covered by such registration statement
under the securities or Blue Sky laws of such states as the
participating Holders shall reasonably request, maintain any such
registration or qualification current until the earlier of (A) the
second anniversary of the date of this Agreement, (B) the sale of all
the shares of Registrable Securities so registered or (C) such time as
all of the Registrable Securities can be sold by Holders within a
three-month period without compliance with the registration
requirements of the Securities Act pursuant to Rule 144 thereunder;
provided, however, that the Company shall not be required to take any
action that would subject it to the general jurisdiction of the courts
of any jurisdiction in which it is not so subject or to qualify as a
foreign corporation in any jurisdiction where the Company is not so
qualified.
(v) Take all such other action either necessary or
desirable to permit the shares of Registrable Securities held by Miro
(or its permitted assignees) to be registered and disposed of in
accordance with the method of disposition described herein.
(vi) Enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the managing
underwriter of such offering. Each participating Holder participating
in such underwriting shall also enter into and perform its obligations
under any such agreement.
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(vii) Cause all Registrable Securities registered
pursuant to this Section 1.1 to be listed on The Nasdaq National Market
or such other exchange as the Company's Common Stock is then listed or
quoted.
(d) Notwithstanding anything else in this Section 1.1, if, at
any time during which a Prospectus is required to be delivered in connection
with the sale of Registrable Securities, the Board of Directors of Pinnacle
determines in good faith that a development has occurred or a condition exists
as a result of which the registration statement or the Prospectus contains or
incorporates by reference a material misstatement or omission, the correction of
which would require the premature disclosure of confidential information that
would, in the good faith determination of the Board of Directors, materially and
adversely affect Pinnacle, Pinnacle will immediately notify the Holders thereof
by telephone and in writing. Upon receipt of such notification, Holders will
immediately suspend all offers and sales of any Registrable Securities pursuant
to the registration statement for a period not to exceed 30 days. Pinnacle may
not exercise this delay right more than once in any twelve (12) month period.
1.2 Company Registration.
(a) If, at any time or from time to time within seven (7)
years after the effective date of the first registration statement for a public
offering of securities of the Company, the Company shall determine to register
any of its securities, whether for its own account in connection with an
offering of its securities to the general public for cash on a form which would
permit the registration of Registrable Securities, other than (i) a registration
relating solely to employee benefit plans on Form S-1 or S-8 or similar forms
which may be promulgated in the future, or (ii) a registration on Form S-4 or
similar form which may be promulgated in the future relating solely to a SEC
Rule 145 transaction, the Company will promptly give to the Holders written
notice thereof and include in such registration (and any related qualification
under Blue Sky laws or other compliance), and in any underwriting involved
therein, all of the Registrable Securities specified in a written request or
requests, made within thirty (30) business days after mailing or personal
delivery of such written notice from the Company by any Holders, except as set
forth in Section 7.4(b). Such written request may specify all or a part of the
Holder's Registrable Securities.
(b) If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
1.2(a). In such event the right of any Holder to registration pursuant to this
Section 1.2 shall be conditioned upon such Holder's participating in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company)
enter into an underwriting agreement in the form negotiated by the Company with
the underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 1.2, if the underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the underwriter may limit the number of Registrable
Securities to be included in such registration and underwriting to not less than
thirty percent (30%) of the securities sought to be included therein (based on
aggregate market values). The Company shall so
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advise all Holders whose securities would otherwise be registered and
underwritten pursuant hereto, and the number of Registrable Securities that may
be included in the registration and underwriting shall be allocated among all
Holders in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities entitled to inclusion in such registration held by such
Holders at the time of filing the registration statement. If any Holder
disapproves of the terms of any such underwriting, such holder may elect to
withdraw therefrom by written notice to the Company and the underwriter.
(c) In the case of each registration effected by the Company
pursuant to Section 1.2, the Company will keep each Holder participating therein
advised in writing as to the initiation of each registration and as to the
completion thereof. At its expense the Company will:
(i) Keep such registration effective for a period of
one hundred twenty (120) days or until the Holders have completed the
distribution described in the registration statement relating thereto, whichever
first occurs; and
(ii) Furnish such number of prospectuses and other
documents incident thereto as a Holder participating in such registration from
time to time may reasonably request.
1.3 Expenses.
(a) All expenses, other than discounts and commissions,
incurred in connection with any registration pursuant to Section 1.1 and Section
1.2 shall be borne by the Company. The costs and expenses of any such
registration shall include, without limitation, the reasonable fees and expenses
of the Company's counsel and its accountants, the reasonable fees and expenses
of one counsel for the Holders and all other costs and expenses of the Company
incident to the preparation, printing and filing under the Securities Act of the
registration statement and all amendments and supplements thereto and the cost
of furnishing copies of each preliminary prospectus, each final prospectus and
each amendment or supplement thereto to underwriters, dealers and other
purchasers of the securities so registered, the costs and expenses incurred in
connection with the qualification of such securities so registered under the
"blue sky" laws of various jurisdictions, the fees and expenses of the Company's
transfer agent and all other costs and expenses of complying with the provisions
of this Section 1 with respect to such registration (collectively, "Registration
Expenses").
(b) Excluding the Registration Expenses, the participating
Holders shall pay all other expenses incurred on their behalf with respect to
any registration pursuant to Section 1.1 or 1.2, including any counsel for the
participating Holders (other than counsel as provided in Section 1.3(a)) and all
underwriting discounts and selling commissions with respect to the Registrable
Securities sold by them pursuant to such registration statement.
1.4 Indemnification.
(a) To the extent permitted by law, the Company will indemnify
each Holder (excluding Holders who are then directors or officers of the
Company), each of their respective officers and
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directors, and each person controlling such person, with respect to which
registration, qualification or compliance has been effected pursuant to this
Section 1, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or (ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state securities laws or
rule or regulation promulgated thereunder applicable to the Company and relating
to action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each such person,
each of its officers and directors, and each person controlling such person,
each such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage or liability arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Company by an instrument duly executed by such person or underwriter and stated
to be specifically for use therein.
(b) To the extent permitted by law, each Holder will, if
Registrable Securities held by or issuable to such person are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, its legal counsel, each of its directors and
officers who sign such registration statement, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act and each other
such Holder, each of its officers and directors and each person controlling such
Holder, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or (ii) any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company, such Holders, such directors, officers, persons or
underwriters for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder and
stated to be specifically for use therein.
(c) Each party entitled to indemnification under this Section
1.4 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, if such
counsel is other than counsel named herein, shall be approved
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by the Indemnified Party (whose approval shall not unreasonably be withheld),
and the Indemnified Party may participate in such defense at such party's
expense, and provided further that the failure of any Indemnified Party to give
notice as provided herein shall, if such failure is prejudicial to the
Indemnifying Party's ability to defend such action, relieve the Indemnifying
Party of its obligations under this Section 1, but not of any obligation arising
apart from this Section 1. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. If any such Indemnified Party shall have reasonably
concluded that there may be one or more legal defenses available to such
Indemnified Party which are different from or additional to those available to
the Indemnifying Party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided in
this Section 1.5, the Indemnifying Party shall not have the right to assume the
defense of such action on behalf of such Indemnified Party and such Indemnifying
Party shall reimburse such Indemnified Party and any person controlling such
Indemnified Party for that portion of the fees and expenses of any counsel
retained by the Indemnified Party which are reasonably related to the matters
covered by the indemnity agreement provided in this Section 1.4.
1.5 Information by Holder. The Holders whose securities are included in
any registration effected pursuant to this Section 1 shall furnish in writing to
the Company such information regarding such persons and the distribution
proposed by such persons as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Section 1. The Company's obligations under this Section 1
are conditioned upon compliance by such persons with the provisions of this
Section 1.5.
1.6 Sale without Registration. The holder of each certificate
representing securities of the Company required to bear the legend in
substantially the form set forth in Section 6.14 of the Purchase Agreement (or
any similar legend) by acceptance thereof agrees to comply in all respects with
the provisions of this Section 1.6. Prior to any proposed transfer of any
Registrable Securities which shall not be registered under the Securities Act,
the holder thereof shall give written notice to the Company of such holder's
intention to effect such transfer, accompanied by: (a) such information as is
reasonably necessary in order to establish that such transfer may be made
without registration under the Securities Act; and (b) except for transfers
proposed to be made in accordance with SEC Rule 144 (as in effect at the date
hereof and as amended from time to time thereafter) or to any constituent
partner of any Miro, at the expense of the Holder or transferee, an unqualified
written opinion of legal counsel, satisfactory in form and substance to the
Company, to the effect that such transfer may be made without registration under
the Securities Act; provided that nothing contained in this Section 1.6 shall
relieve the Company from complying with any request for registration,
qualification or compliance made pursuant to the other provisions of this
Section 1.
1.7 Transfer of Registration Rights. The rights to cause the Company to
register securities granted by the Company under Sections 1.1 and 1.2 may be
assigned by any Miro to the transferee or assignee of not less than 20% of
Registrable Securities (as adjusted for stock splits and the like) and
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provided that the Company is given written notice of any such transfer within
thirty (30) days of the date of said transfer, stating the name and address of
said transferee or assignee and identifying the securities with respect to which
such registration rights are being assigned and provided further that the
transferee or assignee of such rights is not deemed by the Board of Directors of
the Company, in its reasonable judgment, to be a competitor of the Company and
provided further that the transferee or assignee of such rights assumes in
writing in a form reasonably acceptable to the Company the obligations of Miro
under this Agreement.
1.8 Termination of Registration Rights. The registration rights granted
pursuant to this Section 1 shall terminate as to any Holder at such time as all
Registrable Securities beneficially owned by such Holder can be sold within a
given three-month period without compliance with the registration requirements
of the Securities Act pursuant to Rule 144 and a written opinion to that effect
of legal counsel for the Company delivered to such Holder which shall be
reasonably satisfactory in form and substance to legal counsel for such Holder.
Notwithstanding the foregoing, such registration rights shall terminate seven
(7) years after the effective date of the first registration statement for a
public offering of securities of the Company.
1.9 Sale of Registrable Securities. The sale of Registrable Securities
of any Holder shall be effected through the offices of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇.
SECTION 2
MISCELLANEOUS
2.1 Certain Definitions. As used in this Agreement:
(a) The term "beneficially owned" refers to the meaning of
such terms as provided in Rule 13d-3 promulgated under the Exchange Act.
References to ownership of Voting Stock hereunder mean beneficial ownership.
(b) The term "Exchange Act" means the Securities Exchange Act
of 1934, as amended, or any similar federal statute and the rules and
regulations of the SEC thereunder, all as the same shall be in effect from time
to time.
(c) The term "person" shall mean any person, individual,
corporation, partnership, trust or other nongovernmental entity or any
governmental agency, court, authority or other body (whether foreign, federal,
state, local or otherwise).
(d) The term "Holder" means Miro and any transferee of
Registrable Securities pursuant to Section 1.8 of this Agreement, provided that
any such person shall cease to be a Holder at such time as the registration
rights to which such person is entitled hereunder terminate pursuant to Section
1.10.
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(e) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or ordering
by the SEC of the effectiveness of such registration statement.
(f) The term "Registrable Securities" means (i) the Pinnacle
Shares and (ii) any Common Stock of the Company issued by the Company to Miro in
respect of the Pinnacle Shares upon any stock split, stock dividend,
recapitalization, or similar event; provided, that if, upon any stock dividend,
recapitalization or similar event, the Company issues securities which are not
immediately convertible into Common Stock, the term "Registrable Securities"
shall also include such securities.
(g) The term "Securities Act" means the Securities Act of
1933, as amended, or any similar federal statute and the rules and regulations
of the SEC thereunder, all as the same shall be in effect at the time.
(h) The term "SEC" means the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
2.2 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California as applied to contracts entered
into solely between residents of, and to be performed entirely within, such
state.
2.3 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement may not be assigned by a party without
the prior written consent of the other party. This Agreement is not intended and
shall not be construed to create any rights or remedies in any parties other
than Miro and the Company and no person shall assert any rights as third party
beneficiary hereunder.
2.4 Entire Agreement; Amendment. This Agreement contains the
entire understanding and agreement between the parties with regard to the
subject matter hereof and thereof and supersedes all prior agreements and
understandings among the parties relating to the subject matter hereof. Neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
2.5 Notices and Dates. All notices or other communications
required or permitted under this Agreement shall be made in the manner provided
in Section 10.1 of the Purchase Agreement. In the event that any date provided
for in this Agreement falls on a Saturday, Sunday or legal holiday, such date
shall be deemed extended to the next business day.
2.6 Language Interpretation. In the interpretation of this
Agreement, unless the context otherwise requires, (i) words importing the
singular shall be deemed to import the plural and vice versa, (ii) words
denoting gender shall include all genders, (iii) references to persons shall
include corporations or other entities and vice versa, and (iv) references to
parties, sections, schedules, paragraphs and
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exhibits shall mean the parties, sections, schedules, paragraphs and exhibits of
and to this Agreement, unless otherwise indicated by the context.
2.7 Table of Contents; Titles; Headings. The Table of Contents,
titles and headings to Sections herein are inserted for convenience of reference
only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
2.8 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been signed
by each party and delivered to the other party.
2.9 Severability. If any provision of this Agreement or portion
thereof is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date aforesaid.
"COMPANY" PINNACLE SYSTEMS, INC.,
a California corporation
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Vice President, Finance and Administration and CFO
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"MIRO" MIRO COMPUTER PRODUCTS AG
a corporation organized under the laws
of Germany
By: /S/ ▇. ▇▇▇▇▇
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Name: ▇. ▇▇▇▇▇
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Title: CFO
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