Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of February 2, 1999 by and between DSP GROUP, INC., a Delaware
corporation (the "Company"), and MAGNUM TECHNOLOGY LIMITED, a British Virgin
Islands corporation or any transferee, acquiror or assignee who agrees to become
bound by the provisions of this Agreement in accordance with Section 6 hereof
(the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Purchaser has agreed to purchase 2,300,000 shares of
common stock, $.025 par value, of the Company (the "Common Stock") pursuant to
that certain Stock Purchase Agreement, dated of even date herewith, by and
between the Company and the Purchaser (the "Stock Purchase Agreement"), and as a
condition of entering into the Stock Purchase Agreement has required the Company
to grant to the Purchaser the rights contained herein.
NOW, THEREFORE, in consideration of the foregoing recital and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized terms shall have
the following respective meanings:
EXCHANGE ACT. The term "Exchange Act" shall mean the United States
Securities Exchange Act of 1934, as amended.
PERSON. The term "Person" shall mean an individual, partnership,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
REGISTRABLE SECURITIES. The term "Registrable Securities" shall mean
all the Common Stock purchased by and issued to the Purchaser pursuant to the
Stock Purchase Agreement; EXCLUDING in all cases, however, any of such
securities (i) sold by a Person in a transaction in which rights under this
Agreement are not assigned in accordance with this Agreement, or (ii) (A) sold
in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions, and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale or (B) the registration rights
associated with such securities have been terminated pursuant to Section 5 of
this Agreement.
REGISTRATION. 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
of effectiveness of such registration statement.
REGISTRATION STATEMENT. The term "Registration Statement" shall mean a
Registration Statement on Form S-3, or other applicable form, filed by the
Company with the SEC under the Securities Act providing for the offer and sale
of Registrable Securities.
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SEC. The term "SEC" shall mean the United States Securities and
Exchange Commission.
SECURITIES ACT. The term "Securities Act" shall mean the United States
Securities Act of 1933, as amended.
2. REGISTRATION RIGHTS.
2.1. REGISTRATION OF THE REGISTRABLE SECURITIES.
Pursuant to Section 3.3 of the Stock Purchase Agreement, the Company
shall cause to be filed the Registration Statement under the Securities Act to
provide for the resale of the Registrable Securities purchased by and issued to
the Purchaser. The Company shall use its best efforts to cause the Registration
Statement to be declared effective by the SEC prior to six (6) months from the
date hereof. In the event that the Purchaser is not permitted to resell the
Registrable Securities pursuant to the Registration Statement (due to the
Company's non-compliance with its obligations under the Exchange Act or for any
other similar reason), the Company shall use its best efforts to cause a
Registration Statement on such other appropriate form to be effective within
such six (6) month period which will permit the Purchaser to resell the
Registrable Securities pursuant to such Registration Statement.
2.2. UNDERWRITING.
If the Registration Statement is for an underwritten offering for
Common Stock of the Company, the right of the Purchaser to include all or a
portion of the Registrable Securities in a registration pursuant to this Section
2 shall be conditioned upon the Purchaser's participation in such underwriting
and the inclusion of the Registrable Securities in the underwriting to the
extent provided herein. If the Purchaser proposes to distribute the Registrable
Securities through such underwriting, it shall enter into an underwriting
agreement in customary form with the managing underwriter or underwriter(s)
selected for such underwriting. Notwithstanding any other provision of this
Agreement, if the managing underwriter determines in good faith that marketing
factors require a limitation of the number of shares to be underwritten, then
the Company and the Purchaser shall determine the number of shares each Party
shall include in such underwriting. If the Purchaser disapproves of the terms of
any such underwriting, the Purchaser may elect to withdraw therefrom by written
notice to the Company and the underwriter, delivered at least ten (10) business
days prior to the effective date of the Registration Statement. Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration.
2.3. EXPENSES.
All expenses incurred in connection with the registration pursuant to
this Section 2 (excluding underwriters' or brokers' fees, discounts and
commissions), including, without limitation, all federal and blue sky
registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company and fees and disbursements of counsel
for the Purchaser shall be borne by the Company.
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3. REGISTRATION PROCEDURES.
3.1. OBLIGATIONS OF THE COMPANY.
In effectuating the registration of the Registrable Securities pursuant
to Section 2 of this Agreement, the Company shall:
(a) Prepare and file with the SEC the Registration Statement, respond
as promptly as possible to any comments received from the SEC, and use its best
efforts to cause the Registration Statement to become effective pursuant to
Section 2 of this Agreement and, upon the request of the Purchaser, keep the
Registration Statement effective for up to two (2) years.
(b) Prepare and file with the SEC such amendments and supplements to
the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
Registration Statement.
(c) Furnish to the Purchaser such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by them that
are included in such registration.
(d) Use diligent best efforts to register and qualify the securities
covered by the Registration Statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the Purchaser,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) At any time when a prospectus relating thereto is required to be
delivered under the Securities Act, notify the Purchaser as promptly as
practicable after becoming aware of the happening of any event as a result of
which the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
(f) Provide a transfer agent and registrant for the Registrable
Securities registered pursuant to such Registration Statement not later than the
effective date of such registration.
3.2. OBLIGATIONS OF THE PURCHASER.
(a) FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 2 that (i) the
Purchaser, prior to the resale of the Registrable Securities, furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as shall be
reasonably required to timely effect the registration of their Registrable
Securities and
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(ii) the Purchaser cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement hereunder.
(b) DISCONTINUE SALES. If an event requires the filing of a post
effective amendment or supplement to the Registration Statement, the Purchaser
shall promptly discontinue any sales of Registrable Securities upon receipt of
notice of the occurrence of such event. At the end of the period during which
the Company is obligated to keep the Registration Statement current and
effective as described in Section 3.1(a), if the Purchaser is still holding
shares of Registrable Securities included in the registration, the Purchaser
shall discontinue sales of shares pursuant to such Registration Statement upon
receipt of notice from the Company of its intention to remove from registration
the shares of Registrable Securities covered by such Registration Statement that
remain unsold, and the Purchaser shall notify the Company of the number of such
shares registered that remain unsold immediately upon receipt of such notice
from the Company.
(c) OBJECTION. The Company shall not file the Registration Statement or
any amendments or supplements thereto to which the Purchaser shall reasonably
object.
4. INDEMNIFICATION.
In the event any Registrable Securities are included in the
Registration Statement:
4.1. BY THE COMPANY.
To the fullest extent permitted by law, the Company will indemnify and
hold harmless the Purchaser and any underwriter (as defined in the Securities
Act) for the Purchaser and each person, if any, who controls or is deemed to
control the Purchaser or underwriter within the meaning of the Securities Act or
the Exchange Act ("Controlling Person"), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange 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"):
(a) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements thereto;
(b) the omission or alleged omission to state in the Registration
Statement a material fact required to be stated therein, or necessary to make
the statements therein not misleading; or
(c) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any federal or state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any federal
or state securities law in connection with the offering covered by the
Registration Statement;
and the Company will reimburse the Purchaser, underwriter or Controlling Person
for any legal or other expenses reasonably incurred by them, as incurred, in
connection with investigating or
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defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the indemnity agreement contained in this section 4.1 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), 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 which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by the Purchaser or partner, officer, director,
underwriter or Controlling Person of the Purchaser.
4.2. BY THE PURCHASER.
To the extent permitted by law, the Purchaser will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, each person, if any, who controls or is
deemed to control the Company within the meaning of the Securities Act or the
Exchange Act and the underwriter, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer or controlling person of the Company or the underwriter may become
subject under the Securities Act, the Exchange 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 the Purchaser expressly
for use in connection with such registration; and the Purchaser will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person of the Company or the underwriter, in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the indemnity agreement contained
in this section 4.2 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 Purchaser, which consent shall not be unreasonably withheld;
and PROVIDED FURTHER that the total amounts payable in indemnity by the
Purchaser under this section 4.2 in respect of any Violation shall not exceed
the net proceeds received by the Purchaser in the registered offering out of
which such Violation arises.
4.3. NOTICE.
Promptly after receipt by an indemnified party under this Section 4 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 4, 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 mutually satisfactory to the parties; PROVIDED,
HOWEVER that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses of one such counsel 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 conflict of 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 prejudicial to its ability to
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defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 4 resulting from the failure of such
notice to have been timely delivered, 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 4.
4.4. DEFECT ELIMINATED IN FINAL PROSPECTUS.
The foregoing indemnity agreements of the Company and the Purchaser are
subject to the condition that, insofar as they relate to any Violation made in a
preliminary prospectus but eliminated or remedied in the amended prospectus on
file with the SEC at the time the Registration Statement becomes effective or
the amended prospectus filed with the SEC pursuant to Rule 424(b) under the
Securities Act (the "Final Prospectus"), such indemnity agreement shall not
inure to the benefit of any person if a copy of the Final Prospectus was
furnished to the indemnified party and was not furnished to the person asserting
the loss, liability, claim or damage at or prior to the time such action is
required by the Securities Act.
4.5. CONTRIBUTION.
In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) the Purchaser
exercising rights under this Agreement, or any controlling person of the
Purchaser, makes a claim for indemnification pursuant to this Section 4 but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 4 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of the Purchaser or any such controlling person of the Purchaser in
circumstances for which indemnification is provided under this Section 4; then,
and in each such case, the Company and the Purchaser will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that the Purchaser is
responsible for the portion represented by the percentage that the price of the
Registrable Securities offered by and sold under the Registration Statement
bears to the price of all other securities offered by and sold under the
Registration Statement, if any, and the Company and other sellers, if any, are
responsible for the remaining portion; PROVIDED, HOWEVER that, in any such case,
(A) the Purchaser will not be required to contribute any amount in excess of the
price of the Registrable Securities offered and sold by the Purchaser pursuant
to the Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section II (f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
4.6. SURVIVAL.
The obligations of the Company and the Purchaser under this Section 4
shall survive the completion of any offering of the Registrable Securities in a
registration statement, and otherwise.
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5. TERMINATION OF THE COMPANY'S OBLIGATIONS.
The Company shall have no obligations pursuant to Sections 3 and 4 with
respect to any of the Registrable Securities which the Purchaser decides not to
include in the Registration Statement.
6. ASSIGNMENT AND AMENDMENT.
6.1. ASSIGNMENT.
Notwithstanding anything herein to the contrary:
(a) REGISTRATION RIGHTS. The registration rights of the Purchaser under
Section 2 hereof may be assigned to a party who acquires Registrable Securities
from the Purchaser (or a Purchaser's permitted assigns) (an "Acquiror/Assignee")
only if (i) the Purchaser agrees in writing with the Acquiror/Assignee to assign
such rights, and the Company consents to such assignment and is given written
notice by the assigning party at the time of such assignment stating the name
and address of the Acquiror/Assignee and identifying the securities of the
Company as to which the rights in question are being assigned; and (ii) the
Acquiror/Assignee agrees in writing with the Company to be bound by all of the
terms and conditions of this Agreement, including, without limitation, the
provisions of this Section 6.
6.2. AMENDMENT OF RIGHTS.
Any provision of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Purchaser (and/or any of their permitted successors or assigns) holding
shares representing a majority of all the Registrable Securities. Any amendment
or waiver effected in accordance with this section 6.2 shall be binding upon the
Purchaser, a permitted successor of the Purchaser, an Acquiror/Assignee or the
Company.
7. GENERAL PROVISIONS.
7.1. NOTICES.
Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered, if sent by facsimile transmission or if deposited in the
U.S. mail by registered or certified mail, return receipt requested, postage
prepaid, as follows:
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(a) if to the Purchaser:
Magnum Technology Limited
c/o Rothschild Corporate Fiduciary Services Ltd. (Guernsey)
P.O. Box 472
St. Peter's House
Le Bordage
St. Peter Port, Guernsey
Channel Islands GY1 6AX
Attention: Mr. Nicholas Moss
(b) if to the Company:
DSP Group, Inc.
3120 Scott Boulevard
Santa Clara, CA 95054
Fax: 408-__________
Any party hereto (and such party's permitted assigns) may by notice so given
change its address for future notices hereunder. Notice shall conclusively be
deemed to have been given when personally delivered, if sent by facsimile
transmission, upon confirmation of error-free receipt, or when deposited in the
mail in the manner set forth above.
7.2. ENTIRE AGREEMENT.
This Agreement constitutes and contains the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties respecting the subject
matter hereof.
7.3. GOVERNING LAW.
This Agreement shall be governed by and construed exclusively in
accordance with the internal laws of the State of New York without regard to
conflict of laws and choice of law provisions.
7.4. SEVERABILITY.
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, then such provision(s) shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
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7.5. THIRD PARTIES.
Nothing in this Agreement, express or implied, is intended to confer
upon any person, other than the parties hereto and their successors and assigns,
any rights or remedies under or by reason of this Agreement.
7.6. CAPTIONS.
The captions to sections of this Agreement have been inserted for
identification and reference purposes only and shall not be used to construe or
interpret this Agreement.
7.7. COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
7.8. COSTS AND ATTORNEYS' FEES.
In the event that any action, suit or other proceeding is instituted
concerning or arising out of this Agreement or any transaction contemplated
hereunder, the prevailing party shall recover all of such party's costs and
attorneys' fees incurred in each such action, suit or other proceeding,
including any and all appeals or petitions therefrom.
7.9. BLACKOUT PERIODS.
The Purchaser agrees that it will not dispose of any Registrable
Securities during any period in which directors of the Company are subject to a
"blackout period" or other prohibitions against the sale or disposition of
Common Stock.
7.10. ADJUSTMENTS FOR STOCK SPLITS, ETC.
Wherever in this Agreement there is a reference to a specific number of
shares of Common Stock of the Company of any class or series, then, upon the
occurrence of any subdivision, combination or stock dividend of such class or
series of stock, the specific number of shares so referenced in this Agreement
shall automatically be proportionally adjusted to reflect the effect on the
outstanding shares of such class or series of stock by such subdivision,
combination or stock dividend.
7.11. EXECUTION.
This Agreement may be executed by facsimile transmission each of which
will be deemed an original.
7.12. REMEDIES.
In the event of a breach by the Company or by Purchaser, of any of
their obligations under this Agreement, the Purchaser or the Company, as the
case may be, in addition to being entitled to exercise all rights granted by law
and under this Agreement, including recovery of
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damages, will be entitled to specific performance of its rights under this
Agreement. The Company and the Purchaser agree that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach by
it of any of the provisions of this Agreement and hereby further agrees that, in
the event of any action for specific performance in respect of such breach, it
shall waive the defense that a remedy at law would be adequate.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first written above.
DSP GROUP, INC.
By: /s/ IGAL KOHAVI
---------------------------
Name: Igal Kohavi
Title: Chairman of the Board
MAGNUM TECHNOLOGY LIMITED
By: /s/ ZVI LIMON
---------------------------
Name: Zvi Limon
Title:
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