REGISTRATION AGREEMENT
Dated as of April 30, 1998
among
SPECTRUM SIGNAL PROCESSING INC.
and
ALEX COMPUTER SYSTEMS, INC.
REGISTRATION AGREEMENT
This Registration Agreement (this "Agreement") is made
and entered into as of April 30, 1998, among Spectrum Signal Processing
Inc., a corporation incorporated pursuant to the Laws of the Province of
British Columbia ("Spectrum") and Alex Computer Systems, Inc., a Delaware
corporation (the "Shareholder").
This Agreement is made pursuant to the Asset Purchase
Agreement, dated as of April __, 1998, by and among Spectrum, Alex
Informatics Inc. and the Shareholder (the "Acquisition Agreement"), which
provides for the issuance by Spectrum to the Shareholder of certain
common shares of Spectrum ("Common Shares"), and certain warrants to
purchase Common Shares. In order to induce the Shareholder to enter into
the Acquisition Agreement, Spectrum has agreed to provide the
registration rights set forth in this Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to those terms in the Acquisition
Agreement. As used in this Agreement, the following capitalized terms
shall have the following meanings:
Advice: As defined in Section 3(c) hereof.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
NASD: National Association of Securities Dealers, Inc.
Prospectus: The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement and by
all other amendments thereto (including post-effective amendments) and
all material incorporated by reference in such prospectus.
Registrable Securities: Registrable Securities means,
collectively, (i) the Common Shares issued pursuant to Clause 15.1(a) of
the Acquisition Agreement (the "Issued Securities") and (ii) the Common
Shares issuable upon exercise of the warrants issued pursuant to Clause
15.1(b) of the Acquisition Agreement (such Registrable Securities to be
adjusted for any stock dividend, subdivision, split, combination or
exchange in respect of such shares).
Registration Expenses: As defined in Section 4 hereof.
Registration Statement: Any registration statement of
Spectrum which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement
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(including post-effective amendments), and all exhibits to and all
material incorporated by reference in such registration statement.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended.
Shelf Registration: As defined in Section 2(a) hereof.
Stop Order: As defined in Section 3(a)(iii) hereof.
SECTION 2. SHELF REGISTRATION.
(a) As promptly as practicable after the Closing Date
(but in any event on or before the 60th day after the Closing Date (the
"Target Date"), Spectrum shall file with the SEC (or submit to the SEC
for review on a confidential basis) a "shelf" registration with respect
to all Registrable Securities on any appropriate form pursuant to Rule
415 (or similar rule that may be adopted by the SEC) under the Securities
Act (the "Shelf Registration") and shall use its reasonable good faith
efforts to have such Shelf Registration declared effective by the SEC as
promptly as practicable thereafter. In the event Spectrum does not file
or otherwise submit to the SEC for review the Shelf Registration on or
prior to the Target Date, Spectrum shall pay to the Shareholder the sum
of Cdn$100,000, provided that the payment of such sum shall not relieve
Spectrum of its other obligations under this Agreement, which shall
remain in effect.
(b) Spectrum shall use its reasonable good faith
efforts to keep the Shelf Registration continuously effective until the
earliest to occur of (i) all of the Registrable Securities having been
sold under the Shelf Registration, (ii) such time as all of the
Registrable Securities are freely tradable pursuant to Rule 144 under the
Securities Act or similar provision, (iii) the date on which another
exemption exists that permits the public sale of any and all of the
Registrable Securities under the Securities Act and (iv) twelve months
from the Closing Date.
SECTION 3. REGISTRATION PROCEDURES.
(a) In connection with the Shelf Registration,
Spectrum will:
(i) prepare and file with the SEC a
Registration Statement on any appropriate form under the Securities Act,
which form shall be available for the sale of the Registrable Securities,
and use its reasonable good faith efforts to cause any such Registration
Statement to become effective; provided, that before filing any
Registration Statement or any Prospectus or any amendments or supplements
thereto, Spectrum will promptly furnish to the Shareholder copies of all
such documents proposed to be filed.
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(ii) prepare and file with the SEC such
amendments and post-effective amendments to any such Registration
Statement as may be necessary to keep such Registration Statement
effective for the period set forth in Section 2(b) hereof; cause the
Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 under the Securities
Act; and comply in all material respects with the provisions of the
Securities Act with respect to the disposition of all securities covered
by any such Registration Statement during the applicable period.
(iii) notify the Shareholder promptly
(1) when the Prospectus or any Prospectus supplement or post-effective
amendment relating to the Registrable Securities has been filed, and,
with respect to any Registration Statement or any post-effective
amendment relating to such Registrable Securities, when the same has
become effective, (2) of any request by the SEC for amendments or
supplements to such Registration Statement or the Prospectus relating to
such Registrable Securities or for additional information, (3) of the
issuance by the SEC of any order suspending the effectiveness of such
Registration Statement (the "Stop Order") or the initiation of any
proceedings for that purpose, (4) of the receipt by Spectrum of a
notification with respect to the suspension of the qualification of such
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (5) of the existence
of any fact which makes untrue any statement of a material fact made in
such Registration Statement, the Prospectus relating to such Registrable
Securities or any document incorporated therein by reference or which
requires the making of any changes in such Registration Statement, the
Prospectus relating to such Registrable Securities or any document
incorporated therein by reference in order to make the statements therein
not misleading.
(iv) make every reasonable effort to obtain
the withdrawal of any Stop Order at the earliest possible moment.
(v) furnish to the Shareholder, without
charge, at least one conformed copy of the Registration Statement
registering such Registrable Securities and any post-effective amendment
thereto, including financial statements and schedules, all documents
incorporated therein by reference.
(vi) deliver to the Shareholder, without
charge, as many copies of the Prospectus relating to the registration of
such Registrable Securities (including each preliminary prospectus) and
any amendment or supplement thereto as the Shareholder may reasonably
request. Spectrum consents to the use of such Prospectus or any amendment
or supplement thereto by the Shareholder in connection with the offering
and sale of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto.
(vii) prior to any public offering of
Registrable Securities, register, or qualify or cooperate with the
Shareholder in connection with the registration or qualification of, such
Registrable Securities for offer and sale under the securities or
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"blue sky" laws of such jurisdictions as any Shareholder may reasonably
request in writing and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of such
Registrable Securities covered by a Registration Statement; provided,
that Spectrum will not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any action
which would subject it to general service of process or to taxation as a
foreign corporation doing business in any such jurisdiction where it is
not then so subject.
(viii) cooperate with the Shareholder to
facilitate the timely preparation and delivery of certificates
representing such Registrable Securities to be sold and not bearing any
restrictive legends.
(ix) if any fact contemplated by clause
(iii)(5) of this Section 3(a) shall exist, prepare a supplement or
post-effective amendment as required by law to the applicable
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, the Prospectus will not contain an 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.
(x) cause all Registrable Securities
covered by a Registration Statement to be listed on the Nasdaq National
Market.
(b) Spectrum may require the Shareholder to furnish to
Spectrum such information regarding the Shareholder and the distribution
of such securities as Spectrum may from time to time reasonably request
in writing. The Shareholder agrees to furnish promptly to Spectrum all
information required to be disclosed in order to make the information
previously furnished to Spectrum by the Shareholder not materially
misleading.
(c) The Shareholder agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from Spectrum of
the existence of any fact of the kind described in Section 3(a)(iii)(5)
hereof, the Shareholder will forthwith discontinue disposition of
Registrable Securities until the Shareholder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 3(a)(ix)
hereof, or until he is advised in writing (the "Advice") by Spectrum or
Spectrum's counsel that the use of the Prospectus may be resumed.
SECTION 4. REGISTRATION EXPENSES.
The following expenses incident to Spectrum's
performance of or compliance with this Agreement will be borne by
Spectrum: (i) all registration and filing fees and expenses; (ii) fees
and expenses of compliance with federal securities or state or other
jurisdiction's "blue sky" laws; (iii) expenses of printing (including,
without limitation, prospectuses); (iv) fees and disbursements of counsel
for Spectrum; (v) fees
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and disbursements of all independent certified public accountants of
Spectrum; and (vi) fees and expenses of listing the Registrable
Securities on any securities exchange or market in accordance with
Section 3(a)(x) hereof. Notwithstanding the foregoing, the Shareholder
shall reimburse Spectrum for expenses incurred under clauses (iv) and (v)
of the immediately preceding sentence in excess of US$15,000 in the
aggregate as a condition precedent to the effectiveness of any
Registration Statement.
All such expenses set forth in clauses (i) - (vi) above
are herein called "Registration Expenses."
SECTION 5. INDEMNIFICATION.
(a) With respect to the Registration Statement,
Spectrum agrees to indemnify and hold harmless, to the full extent
permitted by law, the Shareholder and each Person who controls the
Shareholder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) against all losses, claims, damages,
liabilities and expenses (including, without limitation, all reasonable
legal expenses or disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise and the costs, expenses
and disbursements of investigating, preparing or defending any such
action, suit, proceeding or investigation, whether or not in connection
with litigation in which an indemnified party is a party and whether or
not involving a third party, and, subject to Section 5(c), all amounts
paid in settlement of a claim or litigation) (collectively, the "Losses")
as and when incurred, arising out of, based upon or in connection with
any untrue or alleged untrue statement of a material fact contained in
any Registration Statement, Prospectus or preliminary Prospectus or in
any application or other document or communication (in this Section 5
collectively called an "application") executed by or on behalf of
Spectrum or based upon written information furnished by or on behalf of
Spectrum filed in any jurisdiction in order to qualify the Registrable
Securities under the "blue sky" or securities laws thereof or filed with
the SEC, or arising out of, based upon or in connection with 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 such Losses are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information (a) relating to the Shareholder, furnished in writing to
Spectrum by or on behalf of the Shareholder for use therein or (b) made
in any preliminary prospectus if a copy of the Prospectus (as amended or
supplemented) was not sent or given by or on behalf of the Shareholder to
the Person asserting any such Loss (if required by law so to have been
delivered) at or prior to the written confirmation of the sale of the
Registrable Securities as required by the Securities Act, and the
Prospectus (as so amended or supplemented) would have corrected such
untrue statement or omission, provided, however, that Spectrum shall have
timely furnished copies of such Prospectus (as so amended or
supplemented) to the Shareholder in compliance with the provisions
hereof.
(b) In connection with the Registration Statement, the
Shareholder will furnish to Spectrum in writing such information as
Spectrum reasonably requests for
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use in connection with any Registration Statement, Prospectus or
preliminary Prospectus and agrees, severally and not jointly, to
indemnify and hold harmless, to the full extent permitted by law,
Spectrum, its directors and officers who sign the Registration Statement
and each Person who controls Spectrum (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) against any
losses, claims, damages, liabilities and reasonable expenses resulting
from any untrue or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact required to be stated in
the Registration Statement or Prospectus or preliminary Prospectus or
necessary to make the statements therein not misleading, to the extent
that the same resulted from or are contained in any information relating
to the Shareholder furnished in writing by the Shareholder to Spectrum
specifically for use in such Registration Statement, Prospectus or
preliminary Prospectus. In no event shall the liability of any selling
Shareholder hereunder be greater in amount than the dollar amount of the
proceeds received by the Shareholder upon the sale (whether prior to or
subsequent to the incurrence of any such liability) of the Registrable
Securities giving rise to such indemnification obligation.
(c) Any Person entitled to indemnification hereunder
will (i) give prompt notice to the indemnifying party of any claim with
respect to which it seeks indemnification; provided, that the failure to
deliver such notice shall not relieve the indemnifying party of its
indemnification obligations hereunder, unless the indemnifying party is
prejudiced by the failure to deliver such notice and (ii) permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party (including, to the
extent any settlement involves the payment of money, the right to settle
any such claim or proceeding); provided, however, that any Person
entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such Person
unless (a) the indemnifying party has agreed to pay such fees or
expenses, or (b) the indemnifying party shall have failed to assume the
defense of such claim and employ counsel reasonably satisfactory to such
Person or (c) in the judgment of any such Person, based upon advice of
independent counsel, there may be one or more legal defenses available to
it which are different from or additional to those available to the
indemnifying person, or a conflict of interest or potential conflict of
interest exists between such Person and the indemnifying party in respect
of such claims (in which case, if the Person notifies the indemnifying
party in writing that such Person elects to employ separate counsel at
the expense of the indemnifying party, the indemnifying party shall not
have the right to assume the defense of such claim on behalf of such
Person). The indemnifying party will not be subject to any liability for
any settlement made without its consent (but such consent will not be
unreasonably withheld or delayed). No indemnifying party will be required
to consent to entry of any judgment or entry 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 of such claim or litigation. An indemnifying party
will not, in connection with substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be obligated to pay the fees and expenses of more
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than one counsel for all parties indemnified by such indemnifying party
with respect to such claim (in addition to all local counsel which are
necessary in the opinion of counsel for such indemnified party in order
to adequately represent such Person), unless there may be one or more
legal defenses available to it which are different from or additional to
those available to the indemnifying person, in which event the
indemnifying party shall be obligated to pay the fees and expenses of,
such additional counsel or counsels.
(d) If a claim for indemnification provided for in the
preceding clauses (a) and (b) is made but it is found in a final judgment
by a court of competent jurisdiction (not subject to further appeal) that
such indemnification may not be enforced in such case, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by the indemnified party as a
result of such Loss in such proportion as is appropriate to reflect the
relative fault of the indemnified party and the indemnifying party and
the relative benefits to be received by each such party, as well as any
other relevant equitable considerations; provided, that no Shareholder
shall be required to contribute in an amount greater than the dollar
amount of the proceeds received by the Shareholder with respect to the
sale of the Registrable Securities giving rise to the indemnification
obligation under this Section 5. The relative fault of Spectrum on the
one hand and the Shareholder on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by Spectrum on the one hand or by the
Shareholder on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by an indemnified
party 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. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. No party shall be liable for contribution under this
clause (d) except to the extent and under such circumstances as such
party would have been liable to indemnify under this Section 5 if such
indemnification were available or sufficient.
(e) The indemnity and contribution agreements contained
in this Section 5 are in addition to any liability that the indemnifying
Persons may otherwise have to the indemnified Persons referred to above.
SECTION 6. HOLDBACK AGREEMENT
The Shareholder agrees to give notice to Spectrum of
any sale of Issued Securities pursuant to an effective Registration
Statement on the date of the said sale specifying the date of sale and
the amount of Issued Securities sold pursuant thereto. The Shareholder
acknowledges and agrees (i) not to sell more than 179,636 Issued
Securities between the earlier of June 1, 1998 and the date on which the
Registration
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Statement is declared effective and August 31, 1998, (ii) not to sell
more than 179,636 Issued Securities between September 1, 1998 and
November 30, 1998, (iii) not to sell more than 179,636 Issued Securities
between December 1, 1998 and February 28, 1999, and (iv) not to sell more
than 179,636 Issued Securities between March 1, 1999 and May 31, 1999.
The Shareholder shall obtain Spectrum's prior written consent for any
sale other than as permitted herein.
SECTION 7. MISCELLANEOUS.
7.1 AMENDMENTS AND WAIVERS.
The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless Spectrum has obtained the
written consent of the holders of a majority of the outstanding
Registrable Securities.
7.2 NOTICES.
All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt requested,
telecopier, or air courier guaranteeing overnight delivery):
(1) if to the Shareholder, initially at the address set
forth in the Acquisition Agreement, and thereafter at
such other address, notice of which is given in
accordance with the provisions of this Section 7.2.
(2) if to Spectrum, initially at its address set forth
in the Acquisition Agreement and thereafter at such
other address, notice of which is given in accordance
with the provisions of this Section 7.2, with a copy to
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally
delivered; five business days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
7.3 SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties,
including, without limitation and without the need for an express
assignment, subsequent holders of Registrable Securities.
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7.4 COUNTERPARTS.
This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
7.5 HEADINGS.
The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
7.6 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW RULES THEREOF.
7.7 SEVERABILITY.
In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
7.8 ENTIRE AGREEMENT.
This Agreement together with the Acquisition Agreement
(including the exhibits and schedules thereto) is intended by the parties
as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights
granted by Spectrum with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
SPECTRUM SIGNAL PROCESSING INC.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President & CEO
ALEX COMPUTER SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name:
Title:
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