Exhibit 10.36
STOCKHOLDER AGREEMENT
     THIS STOCKHOLDER AGREEMENT (the “Agreement”) dated as of May 14, 2009, by
and between Trident Microsystems (Far East) Ltd., a corporation organized under
the laws of the Cayman Islands, B.W.I. and a subsidiary of the Company (“TMFE”),
Trident Microsystems, Inc., a Delaware corporation (the “Company”), and Micronas
Semiconductor Holding AG, an Aktiengesellschaft organized and existing under the
laws of the Switzerland (“Stockholder”).
     A. WHEREAS, the Company and Stockholder have entered into a Purchase
Agreement (the “Purchase Agreement”) dated as of March 31, 2009, pursuant to
which (i) Stockholder and certain of its affiliates will sell, transfer and
assign to Purchaser and its affiliates all right, title and interest in and to
the Product Lines, as defined in the Purchase Agreement, as well as certain
assets related to the operation of the Product Lines (the “Business”), and
(ii) the Company shall issue to Stockholder 7,000,000 shares of restricted
common stock, par value $.001 per share (“Restricted Common Stock”), and
warrants to purchase up to 3,000,000 shares of common stock of the Company (the
“Warrants”), subject to satisfaction or waiver of the conditions therein.
     B. WHEREAS, upon consummation of the transactions (the “Closing”)
contemplated by the Purchase Agreement (the “Transaction”), Stockholder will own
approximately, 13.72% of all outstanding shares of Common Stock of the Company
(the “Applicable Percentage”), assuming exercise of the Warrants in full.
     C. WHEREAS, the parties desire to set forth certain understandings and
agreements with respect to governance arrangements and other matters following
the consummation of the Transaction.
     D. NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
     1. Definitions.
          1.1 Certain Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
     “Acquisition Transaction” means any transaction or series of transactions
involving:
          (a) any merger, consolidation, reorganization, share exchange,
business combination, issuance of securities, recapitalization, acquisition of
securities, tender offer, exchange offer or other similar transaction (i) in
which the Company or any of its Significant Subsidiaries (as defined in
Rule 1-02 of Regulation S-X of the Commission) is a constituent corporation,
(ii) in which a Person or “group” (as defined in the Exchange Act) of Persons
directly or indirectly acquires beneficial or record ownership of securities
representing more than 20% of the outstanding securities of any class of voting
securities of the Company or any of its Significant Subsidiaries or (iii) in
which the Company or any of its Significant Subsidiaries issues securities
representing more than 20% of the outstanding securities of any class of voting
securities of the Company or any of its Significant Subsidiaries;
          (b) any sale, lease, exchange, transfer, exclusive license,
acquisition or disposition of any business or businesses or assets that
constitute or account for 20% or more of the consolidated net revenues, net
income or assets of the Company or any of its Significant Subsidiaries; or

 

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          (c) any liquidation or dissolution of any of the Company or any of its
Significant Subsidiaries.
     “Affiliate” means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person. For
purposes of this definition, “control means with respect to a corporation or
limited liability company the right to exercise, directly or indirectly, more
than fifty percent (50%) of the voting rights attributable to the controlled
corporation or limited liability company and, with respect to any individual,
partnership, trust, other entity or association, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled entity.
     “Affiliate Holder” has the meaning set forth in Section 5.3 below.
     “Beneficial Ownership” or “Beneficially Own” and words of similar import
have the meanings ascribed to such terms in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act; provided, however, that for purposes of
determining any Person’s Beneficial Ownership, such Person shall be deemed to be
the Beneficial Owner of any Equity Securities which may be acquired by such
Person (disregarding any legal impediments to such Beneficial Ownership),
whether within 60 days or thereafter, upon the conversion, exchange, redemption
or exercise of any warrants, options, rights or other securities issued by the
Company or any subsidiary thereof.
     “Block Transfer” has the meaning set forth in Section 5.2 below.
     “Board” means the Board of Directors of the Company.
     “Business Day” means any day other than a Saturday, Sunday, any day which
is a federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.
     “Bylaws” means the Bylaws of the Company as amended and restated through
such date.
     “Change of Control” means (i) the Company’s sale of all or substantially
all of its assets, (ii) any transaction or series of related transactions
(including, without limitation, any reorganization, merger or consolidation)
which will result in the holders of the outstanding Voting Securities
immediately prior to such transaction or series of related transactions holding
less than fifty percent (50%) of the voting equity securities of the surviving
entity immediately following such transaction or (iii) any Person or group
(other than Stockholder or any of its Affiliates) becomes the beneficial owner
of more than fifty percent (50%) of the total number of the outstanding Voting
Securities of the Company.
     “Commission” means the Securities and Exchange Commission.
     “Common Stock” means the common stock, par value $0.001 per share, of the
Company.
     “Disinterested Director” means a director of the Company who is not a
Stockholder Director and who is as to the Company, “independent” within the
meaning of the rules and regulations of the NASDAQ Stock Market, Inc. or, if the
Company’s Common Stock is not at the time of determination listed on NASDAQ, the
rules and regulations of such other national securities exchange on which such
securities are primarily traded.

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     “Disinterested Director Approval” means approval by the Board of Directors,
which approval included votes to approve by a majority of all the Disinterested
Directors, or a public recommendation to the stockholders of the Company
approved by a majority of the Disinterested Directors.
     “Effective Date” means the date of Closing under the Purchase Agreement.
     “Equity Securities” means the equity securities of the Company, including
shares of the Company’s Common Stock, and shares of the Company’s Common Stock
or other equity securities of the Company issuable upon exercise, conversion,
exchange or redemption of any warrants, options, rights or other securities
issued by the Company, including the Warrants.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or
any successor rule (together with the rules and regulations of the Commission
promulgated thereunder).
     “Excluded Securities” means any options, restricted stock, restricted stock
units, performance-based shares or other forms of equity participation rights
issued to employees, consultants, officers or directors of the Company pursuant
to any stock option plan, stock purchase plan, stock bonus arrangement or other
agreement approved by the Board.
     “Lock-Up Period” has the meaning set forth in Section 5.1 below.
     “Micronas Parties” means Micronas, and each Affiliate of Micronas that
acquires record ownership of any Equity Securities, until such time as such
Person is not an Affiliate of Micronas or ceases to have record ownership of any
Equity Securities.
     “Ownership Percentage” of any Person means, at any time, the ratio,
expressed as a percentage, of (i) the total number of shares of Equity
Securities Beneficially Owned by such Person and its Affiliates to (ii) the sum
of (x) the total number of Equity Securities issued and outstanding by the
Company and (y) with respect to such Person, the total number of the shares of
the Company’s Common Stock included in clause (i) that are issuable upon
conversion, exchange, redemption or exercise of Equity Securities that are not
included in clause (x).
     “Person” means an individual, partnership, corporation, trust or
unincorporated organization or any federal, state, local or foreign government
or any political subdivision thereof (including, without limitation, the
executive and legislative branches thereof) or any department, commission,
board, bureau, agency, court, panel or other instrumentality of any kind of any
of the foregoing.
     “Rights Offering” means the issuance by the Company to existing holders of
Common Stock of rights to buy, within a fixed time period, a proportional number
of newly issued shares of Common Stock or other Equity Securities.
     “Securities Act” means the Securities Act of 1933, as amended, or any
successor rule (together with the rules and regulations of the Commission
promulgated thereunder).
     “Stockholder Director” means (x) any person designated by Stockholder to
serve on the Board of Directors of the Company who is reasonably acceptable to
the Board of Directors of the Company (in the case of the person designated by
Stockholder to so serve effective as of the Effective Date) or (y) any person
designated to serve on the Board of Directors of the Company by Stockholder who
is reasonably acceptable to a majority of the Disinterested Directors (in all
other cases);

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     “Subsidiary” means, with respect to any party, any corporation, limited
liability company, partnership, joint venture or other business association or
entity, at least a majority of the voting securities or economic interests of
which is directly or indirectly owned or controlled by such party or by any one
or more of its Subsidiaries.
     “Voting Securities” means Common Stock, any Equity Securities convertible
into or exchangeable for Common Stock or any other right or option to acquire
Common Stock of the Company entitled to vote generally in the election of
directors.
     “Warrants” shall be those several warrants to purchase up to 3,000,000
shares of Common Stock issued to Stockholder pursuant to the terms of the
Purchase Agreement.
     “Warrant Shares” shall be those shares of Common Stock issuable upon
exercise of the Warrants.
          1.2 Capitalized Terms. Capitalized terms used but not defined herein
have the meanings given such terms in the Purchase Agreement.
     2. Governance Matters.
          2.1 Access to Board and Management. Commencing on the Effective Date
and so long as the Ownership Percentage of Stockholder is 5% or higher, the
Company shall provide Stockholder with access to its management and members of
the Disinterested Directors at times mutually agreeable to both parties, to
periodically visit the Company’s headquarter facility, and to discuss with
management at times mutually convenient to Stockholder and management the
Company’s affairs, finances and accounts; provided, however, that the Company
shall not be obligated to provide access to any information which it reasonably
considers to be a trade secret or similar confidential information. Stockholder
agrees to keep any such nonpublic information confidential and will not, without
the prior written consent of the Company, disclose to any other Person, in any
manner whatsoever, in whole or in part, or use such information directly or
indirectly for any purpose other than in connection with the evaluation
assessment, review or other similar matters related to Stockholder’s investment
in the Company. All right, title and interest in and to any such information
provided by the Company will remain the exclusive property of the Company.
          2.2 Other Governance Matters. The Company represents and warrants to
Stockholder that:
               (a) the Board of Directors of the Company has duly adopted a
resolution prior to the date hereof, which resolution the Board of Directors of
the Company shall not rescind or amend so long as the Purchase Agreement shall
not have been terminated in accordance with its terms prior to the Effective
Date, providing that the Board of Directors has approved the Transaction,
including for the purposes of Section 203 of the Delaware General Corporation
Law.
               (b) The Company shall have, effective immediately prior to the
Effective Date, amended the Rights Agreement between the Company and Mellon
Investor Services LLC, as rights agent, dated July 23, 2008 (the “Trident Rights
Agreement”) in substantially the form of Exhibit 1 hereto.
          2.3 Investor Representations. Stockholder is an “accredited investor”
as defined in Rule 501(a) under the Securities Act of 1933, as amended. In
making its investment decision to acquire the Shares and the Warrants, including
the shares issuable upon exercise of the Warrants, Stockholder is not relying on
any oral or written representations or assurances from the Company or any other
person other than as set forth in the Purchase Agreement, in a document duly
executed by a duly authorized

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representative of the Company making reference to the Purchase Agreement or in
reports or other documents filed by the Company with the Securities and Exchange
Commission. Stockholder has such experience in business and financial matters
that it is capable of evaluating the risk of its investment in the Shares,
Warrants and the Warrant Shares, and determining the suitability of its
investment. By reason of Stockholder’s business and financial experience and the
business and financial experience of its professional advisors, Stockholder has
the capacity and ability to protect its own interest in connection with the
transactions contemplated by the Purchase Agreement and the issuance of the
Shares, Warrants and the Warrant Shares. Stockholder represents that it is able
to bear the economic risk of an investment in the Shares and the Warrant Shares.
Stockholder understands that no United States federal or state agency or similar
agency of any other country has passed upon or made any recommendation or
endorsement of the Company, the transaction set forth in the Purchase Agreement
or the acquisition of the Shares, the Warrants or the Warrant Shares. The Shares
represent a speculative investment and the Stockholder is aware of the Company’s
business affairs and financial condition and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the
Shares and is acquiring the Shares for investment for its own account only and
not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act. Stockholder understands that the
Shares have not been registered under the Securities Act and are being
transferred to it by reason of a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Stockholder’s
investment intent as expressed herein. Stockholder understands that the
instruments evidencing the Shares, the Warrants and the Warrant Shares will be
imprinted with legends that prohibit the transfer of the Shares, the Warrants
and the Warrant Shares unless they are registered or such registration is not
required in the opinion of counsel satisfactory to the Company (other than in
the case of sales made pursuant to the provisions of Rule 144, for which no
opinion of counsel shall be required).
          2.4 Legends. Each certificate representing Shares and each certificate
representing Warrant Shares will bear a legend to the following effect:
     “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT
BE OFFERED OR SOLD UNLESS REGISTERED OR EXEMPT FROM REGISTRATION UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS. IN ADDITION, THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A STOCKHOLDERS’ AGREEMENT AND MAY
NOT BE SOLD OR TRANSFERRED EXCEPT IN ACCORDANCE WITH SUCH AGREEMENT.”
     The Company shall promptly upon request remove the legend set forth above
in connection with any transfer, other than a transfer to an Affiliate, made in
accordance with the terms of this Agreement after the expiration of the Lockup
Period; provided that the legend set forth in the first sentence above shall
remain on the Warrant Shares to the extent required by federal securities law.
It is understood for this purpose: (i) that such first sentence shall not be
placed on Warrant Shares issued upon “cashless exercise” of a Warrant pursuant
to Section 3(iii) of such Warrant; (ii) that such first sentence shall in any
event be removed from Warrant Shares one year after the issuance of such Warrant
Shares; (iii) that the first sentence of the legend shall be removed in
connection with a sale or transfer of Warrant Shares pursuant to a valid
registration statement or pursuant to Rule 144; and (iv) that the second
sentence of the legend shall be removed in connection with any transfer
permitted under this Agreement other than a transfer to an Affiliate pursuant to
Section 5.3.
     3. Stockholder Support of the Company.

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          3.1 Acquisition Transactions. In the event that an Acquisition
Transaction is proposed prior to the Expiration Date, and such Acquisition
Transaction receives Disinterested Director Approval, the Stockholder will
consent to such Acquisition Transaction, will raise no objection to consummation
thereof and will tender its shares of Equity Securities, as applicable, upon the
consummation of such Acquisition Transaction. In the event any such Acquisition
Transaction requires the approval of the Company’s stockholders, the Stockholder
agrees, if the matter is to be brought to a vote at a stockholder meeting, after
receiving proper notice of any meeting of stockholders of the Company, the
Stockholder will be present, in person or by proxy, as a holder of Voting
Securities, at all such meetings and be counted for the purposes of determining
the presence of a quorum at such meetings and will vote for the approval of any
Acquisition Transaction receiving Disinterested Director Approval. The
Stockholder agrees to vote (in person, by proxy or by action by written consent,
as applicable) all shares of Voting Securities Beneficially Owned by the
Stockholder in favor of such Acquisition Transaction and for approval of the
terms thereof and in opposition of any and all other proposals that are
intended, or could reasonably be expected, to delay, prevent, impair, interfere
with, postpone or adversely affect the ability of the Company to consummate such
Acquisition Transaction.
          3.2 Other Stockholder Proposals. In the event that any other proposal
is submitted to stockholders of the Company for approval prior to the Expiration
Date, the Stockholder will vote in favor of all such proposals that receive
Disinterested Director Approval, and will vote against all such proposals that
are submitted to stockholders with a recommendation of the Board to vote against
such proposal. The Stockholder agrees, if the matter is to be brought to a vote
at a stockholder meeting, after receiving proper notice of any meeting of
stockholders of the Company, the Stockholder will be present, in person or by
proxy, as a holder of Voting Securities, at all such meetings and be counted for
the purposes of determining the presence of a quorum at such meetings and will
vote for or against the proposal, as provided in the preceding sentence. The
Stockholder agrees to vote (in person, by proxy or by action by written consent,
as applicable) all shares of Voting Securities Beneficially Owned by the
Stockholder in favor of such proposals that receive Disinterested Director
Approval and for approval of the terms thereof and in opposition of any and all
other proposals that are intended, or could reasonably be expected, to delay,
prevent, impair, interfere with, postpone or adversely affect the ability of the
Company to consummate such proposals that receive Disinterested Director
Approval.
     4. Standstill Restrictions on Further Purchases of Company Voting
Securities.
          4.1 Restriction on Acquisition of Voting Securities. Except with prior
Disinterested Director Approval, and except as otherwise provided in Section 4.3
of this Agreement, Stockholder shall not (and Stockholder shall not permit any
of its Affiliates, other than natural persons for their own account, to) acquire
(other than upon exercise of the Warrants, or upon exercise of any securities
issued pursuant to rights distributed to holders of Common Stock generally (a
“Rights Offering”), or an acquisition in connection with an offer that was made
generally available by the Company to all holders of Equity Securities as a
result of their ownership of Equity Securities, subject to the provisions of
this Section), either directly or indirectly, agree to acquire by means of a
purchase, tender or exchange offer, business combination or in any other manner,
Beneficial Ownership of Equity Securities of the Company, including rights or
options to acquire such ownership; provided, however, that the foregoing
restriction shall not apply to a transfer by Stockholder of all or any portion
of the Equity Securities Beneficially Owned by Stockholder to any of its
Affiliates made in accordance with Section 5.3, or any transfer back to
Stockholder pursuant to such Section 5.3. Notwithstanding the foregoing, no
acquisition of Beneficial Ownership of Equity Securities by Stockholder which
results solely from Stockholder holding Equity Securities at a time when the
Company effects any subdivision, stock split, reverse stock split, stock
dividend, combination, reclassification or similar event shall be deemed to be
an acquisition of Beneficial Ownership of Equity Securities for purposes of this
Section 4.1. The foregoing restrictions of this Section

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4.1 shall not apply to any acquisitions made by Stockholder pursuant to the
exercise of its pre-emptive rights under Section 7 below.
          4.2 No Participation in Solicitations. No Participation in
Solicitations. Except with prior Disinterested Director Approval, Stockholder
shall not (and Stockholder shall not permit any of its Affiliates to) (i)
“solicit” or participate in the “solicitation” of “proxies”, as those terms are
defined in Rule 14a-1 under the Exchange Act, in respect of Voting Securities in
a manner that would require Stockholder to make a filing pursuant to Rule 14a-3
with the Securities and Exchange Commission in connection with such
solicitation, (ii) issue a public statement encouraging stockholders to vote
against a proposal that Stockholder has agreed to vote for under Section 3.1 or
Section 3.2 above, or to vote for a proposal that Stockholder has agreed to vote
against under Section 3.1 or Section 3.2 above, (iii) deposit any shares of
Voting Securities in a voting trust or subject any Voting Securities to any
arrangement or agreement with respect to the voting of such Voting Securities
with any Person or “group” (as such term is defined under the Exchange Act)
other than the Company or other entities within Stockholder’s control group,
(iv) intentionally form or join any “group” (as such term is defined under
Section 13(d)(3) of the Exchange Act) with any other Person for the purpose of
voting, holding, purchasing or disposing of Voting Securities, or
(v) intentionally effect or intentionally publicly propose any business
combination, sale or transfer of assets, recapitalization, dividend, share
repurchase, liquidation or other extraordinary corporate transaction of the
Company that would result in a Change of Control of the Company that has not
received Disinterested Director Approval.
          4.3 Right to Maintain Ownership. Notwithstanding the provisions of
Section 4.1, to the extent that Stockholder’s Ownership Percentage is reduced as
a result of any issuance of Equity Securities by the Company, other than
issuances of Excluded Securities or issuances by the Company in connection with
any Acquisition Transaction receiving Disinterested Director Approval,
Stockholder may purchase additional shares of Common Stock in the open market or
otherwise as required to maintain its Applicable Percentage.
          4.4 Notice of Stockholder Position. Upon written request from the
Company, but not more than once each fiscal quarter, a duly authorized officer
of Stockholder will certify to the Company in writing the numbers and classes of
shares of Equity Securities beneficially owned by Stockholder and its
Affiliates, other than natural persons holding for their own account, as of any
record date or other date reasonably requested.
          4.5 Termination. Notwithstanding any other provision in this
Agreement, all rights and obligations of any party under this Section 4 shall
terminate upon the earlier of (x) the fifth (5th) anniversary of the Effective
Date regardless of whether such rights and obligations are suspended for any
portion of such five-year period or (y) the termination of this Agreement
pursuant to Section 8 hereof.
     5. Restrictions on Transfer of Equity Securities by Stockholder.
          5.1 Lockup Period. For a period of two (2) years commencing upon the
Effective Date (“Lockup Period”), except with prior Disinterested Director
Approval, Stockholder shall not intentionally offer, or pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or lend any
Equity Securities; provided, however, that Stockholder shall be permitted to
transfer all or any portion of the Equity Securities to an Affiliate of
Stockholder in accordance with Section 5.3 and provided such transferee shall
execute a counterpart to this Agreement, including an agreement to be bound by
the provisions of Sections 3, 4 and 5 hereof; and provided further, that any
transfer during the Lockup Period of any interest in Equity Securities, other
than a transfer in accordance with Section 5.3, shall not include a

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transfer of the voting rights in such Equity Securities, or affect in any way
Stockholder’s obligations under Sections 3, 4 or 5 hereof..
          5.2 Right of First Refusal on Permitted Sales by Stockholder.
               (a) General. The following restrictions shall apply to any sale
or transfer of Equity Securities representing 5% or more of the Company’s
outstanding stock where such sale or transfer would result in one Person or
group of Affiliated Persons, which Person or group is (x) generally understood
in the marketplace to be a competitor of the Company, or (y) an investor whose
primary business is commonly understood to be a “hedge” fund, owning 5% or more
of the Company’s outstanding Voting Securities (a “Block Transfer”). The rights
and restrictions set forth herein in this Section 5.2 shall not apply to any
sale or transfer of Equity Securities made (i) pursuant to an underwritten
offering pursuant to a registration statement filed with the SEC, (ii) pursuant
to any sale in the open market pursuant to any registration statement on Form
S-3 or other form of registration statement filed by the Company to register the
Shares or the Warrant Shares, (iii) pursuant to Rule 144, or (iv) to a Person or
group of Affiliated Persons, which Person or group is not a direct competitor of
the Company or a hedge fund. Prior to consummating any sale or transfer of any
Equity Securities in a Block Transfer to Competitor, Stockholder shall give the
Company the opportunity to purchase such Equity Securities proposed to be sold
or transferred in such Block Transfer in the following manner: A “Hedge Fund”
for this purpose shall mean an investor whose primary business is commonly
understood to be a “hedge” fund and which (i) has a history of proposing or
seeking, with respect to any of its present or prior investments, matters of the
type described in Schedule 13D item(4) of the General Rules and Regulations
promulgated under the Securities Exchange Act of 1934, (ii) has made at any time
a public statement through a press release or Schedule 13D filing regarding
Company or (iii) otherwise has a history of disruptive or litigious activity
regarding companies in which such fund holds or has held an investment. For
purposes of making such determination, Holder shall review the potential
transferee’s SEC filings and conduct a search of SharkRepellent.net.
               (b) Stockholder shall give notice (the “Transfer Notice”) to the
Company in writing of such intention, specifying the names of the proposed
purchasers or transferees, the securities proposed to be sold or transferred in
such Block Transfer, the proposed price per share therefor (the “Transfer
Price”) and the other material terms upon which such disposition is proposed to
be made.
               (c) The Company shall have the right, exercisable by written
notice given by the Company to Stockholder within five (5) days after receipt of
such Transfer Notice, to agree to purchase all, but not less than all, of the
securities specified in such Transfer Notice relating to such Block Transfer.
The Company shall have the right to pay for such securities: (a) the same amount
in cash per share, if the consideration to be paid by the third party consists
of cash, or (b) to the extent the consideration to be paid by the third party
does not consist of cash, consideration per share equivalent to that offered by
the third party, or an amount of cash having equivalent value as determined, at
the expense of the Company, by an investment banking firm mutually agreed to by
the Company and Stockholder.
               (d) If the Company exercises its right of first refusal
hereunder, the closing of the purchase of the securities with respect to which
such right has been exercised shall take place within five (5) days after the
Company gives notice of such exercise, or, if later, upon the date on which the
proposed transfer was to occur with the third party. Upon exercise by the
Company of its right of first refusal, the Company and Stockholder shall be
legally obligated to consummate the purchase contemplated thereby and shall use
their reasonable commercial efforts to secure any approvals required in
connection therewith. The Company may elect by notice in writing to Stockholder
that, at the closing of such transaction, the shares be delivered to and payment
made to Stockholder by a designee of the Company, provided that the Company
shall remain liable for its obligations under this Section 5.2.

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               (e) If the Company does not exercise its right of first refusal
hereunder within the time specified for such exercise, Stockholder shall be
free, during the period of one hundred and eighty (180) days following the
expiration of such time for exercise, to sell the securities specified in such
Transfer Notice on terms no less favorable to Stockholder than the terms
specified in such Transfer Notice.
          5.3 Affiliate Transfer; Obligation to Transfer Back. Even during the
Lockup Period, Stockholder may transfer Equity Securities to any Affiliate of
Stockholder (an “Affiliate Holder”). As a condition to the permitted transfer of
Equity Securities held by Stockholder to any Affiliate of Stockholder, such
Affiliate Holder must agree to be bound by the terms and conditions of this
Agreement and to hold such Equity Securities subject to all obligations and
restrictions applicable to Stockholder, in which event such Affiliate Holder
shall be entitled to share, jointly with Stockholder, the rights and benefits
applicable to Stockholder under this Agreement, other than the right to appoint
a Stockholder Director. If any Affiliate Holder ceases to be an Affiliate of
Stockholder, then not later than thirty (30) days following the date on which
the control relationship ends between such Affiliate Holder and Stockholder,
such Affiliate Holder shall transfer its Equity Securities to Stockholder or to
an Affiliate of Stockholder.
          5.4 Merger of Stockholder. For avoidance of doubt, nothing in this
Section 5 shall be deemed to prohibit a transfer of Voting Securities by
operation of law to a successor entity as a result of a merger involving
Stockholder.
          5.5 Transfers in Violation are Null and Void. Any transfer of the
Shares, the Warrants or the Warrant Shares made in violation of the terms of
this Agreement shall be null and void.
     6. Registration Rights.
          6.1 Definitions. For purposes of this Section 6:
               (a) The terms “Holder” or “Holders” means Stockholder and/or any
other person who shall subsequently own or have the right to acquire Registrable
Securities or any assignee thereof in accordance with Section 6.9 hereof.
               (b) The terms “register,” “registered” and “registration” refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
               (c) The term “Registrable Securities” means (i) any shares of
Common Stock issued by the Company to Stockholder pursuant to the Purchase
Agreement or subsequently acquired by Stockholder in compliance with this
Agreement; (ii) any and all shares of Common Stock issued or issuable upon
exercise, conversion or exchange of the Warrants or any other Equity Securities
acquired by Stockholder in compliance with this Agreement; (iii) Equity
Securities issued in lieu thereof in any reorganization; or (iv) equity
securities issued in respect of the stock referred to in (i) or (ii), above, as
a result of a stock split, stock dividend, recapitalization or the like,
excluding in all cases, however, any of the foregoing sold by a Holder pursuant
to a registration statement, in a transaction pursuant to Rule 144 promulgated
under the Securities Act, or in any other transaction in which registration
rights are not transferred pursuant to this Section 6.
               (d) The number of shares of “Registrable Securities then
outstanding” shall be determined by the number of shares of Common Stock
outstanding which are, and the number of

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shares of Common Stock issuable pursuant to then exercisable or convertible
securities which are exercisable or convertible into, Registrable Securities.
          6.2 Company Registration
               (a) If (but without any obligation to do so) the Company proposes
to register any of its Common Stock under the Securities Act for sale after the
Lockup Period, in connection with an offering of such securities solely for cash
(other than a registration relating solely to Excluded Securities or to the sale
of securities to participants in a Company stock option, stock purchase or
similar plan, or a registration relating solely to a transaction of the type
described in Rule 145(a) under the Securities Act), or in an underwritten
offering effected by the Company for both its own account and for the account of
other stockholders, the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of any Holder
given within twenty (20) days after notice shall have been deemed given by the
Company in accordance with Section 9.3 of this Agreement, the Company shall,
subject to the provisions of Section 6.2(b), 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 that each such
Holder has requested to be registered; provided that the number of Registrable
Securities of all Holders included in such registration including any Holders
and any other selling shareholders, shall not, without the approval of the
Company, exceed 20% of all Common Stock registered by the Company in such
registration.
               (b) In connection with any offering involving an underwriting of
shares being issued by the Company, the Company shall not be required under this
Section 6.2 to include any Holder’s securities in such underwriting unless such
Holder accepts the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it. If any Holder disapproves of the terms of
any such underwriting, it may elect to withdraw therefrom by written notice to
the Company and the underwriter delivered at least seven (7) days prior to the
effective date of the Registration Statement. Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration. The Holders shall have no right to participate in the
selection of the underwriters for an offering pursuant to this Section 6.2.
               (c) The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 6.2 prior to the effectiveness
of such registration whether or not any Holder has elected to include securities
in such registration.
          6.3 Resale Registration Statement. After the expiration of the Lockup
Period, the Company shall prepare and, as soon as practicable but in no event
later than thirty days following the expiration of the Lockup Period, file with
the SEC a Registration Statement on Form S-3 covering the resale of all of the
Registrable Securities (the date of such filing, the “Filing Date”). In the
event that Form S-3 is unavailable to the Company for such a registration, the
Company shall use such other form as is available to the Company for such a
registration. The Registration Statement prepared pursuant hereto shall register
for resale that number of shares of Common Stock equal to the number of
Registrable Securities as of the trading day immediately preceding the date the
Registration Statement is initially filed with the SEC. In no event shall the
Company include any securities other than Registrable Securities on any such
resale registration statement without the prior written consent of the Holders.
          6.4 Form S-3 Demand Registration.
               (a) After the expiration of the Lockup Period, in addition to the
rights under Section 6.3 above, Holders shall have the right to request a
registration on Form S-3, or, if the Company is not then eligible to use Form
S-3, then on whichever other form would be most appropriate for such an

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offering (such request shall be in writing and shall state the number of shares
of Registrable Securities to be disposed of and the intended methods of
disposition of such shares by the Holders); provided, however, that the Company
shall not be obligated to effect any such registration: (i) prior to the end of
the Lockup Period, (ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) on such form at
an aggregate price to the public of less than $5,000,000, (iii) if the Company
reasonably determines, following consultation with its outside counsel, that a
Holder’s sale of Registrable Securities pursuant to the registration statement
would require disclosure of material information and such disclosure would be
materially detrimental to the Company, but only for so long as such disclosure
is required and would be materially detrimental; (iv) in a given twelve-month
period, after the Company has effected one (1) such registration pursuant to
this Section 6.4 in any such period; or (v) within ninety (90) days of the
effective date of a Company registration statement of the type described in
Section 6.2 involving an underwritten offering, or within ninety (90) days of
the effective date of a registration statement in which the Holders shall have
been entitled to participate pursuant to Section 6.2 hereto and in which there
shall have been effectively registered all of the Registrable Securities as to
which registration shall have been requested by the Holders, if any; provided;
however, that the Company may not postpone any registration pursuant to clause
(iii) above for more than 90 days from the date of such request; and, provided,
further that such right to delay a request shall be exercised by the Company not
more than once in any twelve-month period.
               (b) In the event that Form S-3 is not available to the Company
for the registration of the resale of Registrable Securities hereunder, the
Company shall register the resale of the Registrable Securities on Form S-1 or
another appropriate form.
               (c) Following receipt of any notice from Holders initiating a
request for registration in accordance with Section 6.4(a), the Company shall
use its best efforts to register under the Securities Act, for public sale in
accordance with the method of disposition specified in such notice from Holders,
the number of shares of Registrable Securities specified in such notice received
by the Company.
               (d) Subject to the provisions of Section 6.4(b) above, the
Company shall be entitled to include in any registration statement referred to
in this Section 6.4, for sale in accordance with the method of disposition
specified by the requesting Holders, shares of Common Stock to be sold by the
Company for its own account, except as and to the extent that, in the opinion of
the managing underwriter (if such method of disposition shall be an underwritten
public offering), such inclusion would adversely affect the marketing of the
Registrable Securities to be sold.
          6.5 Obligations of the Company. Whenever required under this Agreement
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
               (a) (x) in the case of a demand registration statement pursuant
to Section 6.4, prepare and file with the Commission a registration statement
with respect to such Registrable Securities within 90 days after receipt of
requisite request from Holders for registration and use its best efforts to
cause such registration statement to become effective and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective for the period of the distribution
contemplated thereby (determined as hereinafter provided), but in no event for a
period in excess of 18 months, and (y) in the case of the resale registration
statement pursuant to Section 6.3 above, to keep such registration statement
continuously effective for a period ending on the date that is two years after
the earlier to occur of (i) the date that that each of the Warrants have been
exercised or converted in full and (ii) expiration of the Warrants;

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               (b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to keep the registration
statement effective for the period specified in paragraph (a) above and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
               (c) furnish to the Holders of Registrable Securities covered by
such registration statement such numbers 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 such Registrable Securities;
               (d) use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be requested by the Holders thereof,
provided that (i) 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 and (ii) notwithstanding
anything in this Agreement to the contrary, in the event any jurisdiction in
which the securities shall be qualified imposes a non-waivable requirement that
expenses incurred in connection with the qualification of the securities be
borne by selling stockholders, such expenses shall be payable pro rata by
selling stockholders;
               (e) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement;
               (f) promptly notify each Holder participating in the registration
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities 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 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 and at the request of any Holder, within 5 days, prepare and
furnish to such Holder so requesting 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, such
prospectus shall not include 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 are made, not
misleading; provided that, if the Company reasonably determines, following
consultation with its outside counsel, that such a supplement or amendment would
require disclosure of material information and such disclosure would be
materially detrimental to the Company, then upon written notice to participating
Holders to that effect, each Holder shall suspend any sales or trades of the
Company’s securities under any registration statement for so long as the Company
determines such disclosure is required and materially detrimental;
               (g) cause all such Registrable Securities registered pursuant to
this Agreement to be listed on each securities exchange or national market
system on which similar securities issued by the Company are then listed or
traded;
               (h) in the event of an underwritten offering, furnish, at the
request of any Holder requesting registration of Registrable Securities pursuant
to this Agreement, (i) such representations and warranties to such Holder and
the underwriters, if any, as is customary in primary underwritten offerings,
(ii) an opinion, dated such date, of the counsel representing the Company for
the purposes of such registration, in form and substance as is customarily given
to underwriters in an

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underwritten public offering, addressed to the underwriters, and (iii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters;
               (i) in the event of an underwritten offering, make available upon
reasonable notice for inspection by any underwriter participating in any
distribution pursuant to such registration statement, and any attorney,
accountant or other agent retained by such seller of Registrable Securities or
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with
preparation and verification of such registration statement;
               (j) in the event of an underwritten offering, negotiate in good
faith and execute all indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements; and
               (k) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen (18) months, beginning with the
first month after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
     For purposes of Sections 6.5(a) and 6.5(b), the period of distribution of
Registrable Securities in a firm commitment underwritten public offering shall
be deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and in a demand registration under Section 6.4 that
is not a firm commitment underwritten public offering, the period of
distribution of Common Stock shall be deemed to extend until the earlier of the
sale of all Common Stock covered thereby or 120 days after the effective date
thereof..
     For the avoidance of doubt, Holders shall have the right to distribute the
Registrable Securities pursuant to Section 6.4 by means of an underwritten
offering, provided that: (i) the electing Holders provide written notice to the
Company of their intention to distribute Registrable Securities by means of an
underwritten offering; and (ii) the underwriters thereof shall be designated by
the Company (provided, however, that such designated managing underwriter or
underwriters shall be reasonably acceptable to the electing Holders.
          6.6 Provision of Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 6 that
the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method of
disposition of such securities as shall be required to effect the registration
of the Registrable Securities.
          6.7 Expenses of Registration. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications of Registrable Securities pursuant to Sections 6.2, 6.3 and 6.4,
including (without limitation) all registration, filing and qualification fees,
printers’ and accounting fees, fees and disbursements of counsel for the
Company, shall be borne by the Company, including the reasonable legal fees and
expenses of one counsel to the Holders.

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          6.8 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Agreement:
               (a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder of such Registrable Securities, the officers and
directors of each such Holder, any underwriter (as defined in the Securities
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Exchange Act,
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”): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
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 or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law; and the
Company will reimburse each such Holder, officer or director, underwriter or
controlling person for any 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 6.8(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 which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, officer, director, underwriter or controlling
person.
               (b) To the extent permitted by law, each selling Holder,
severally and not jointly, 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 the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities in such
registration statement or any of its directors or officers or any person who
controls such Holder, against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer, controlling
person, underwriter, or other such Holder or director, officer, controlling
person or 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 such Holder expressly for use in connection with such registration;
and each such Holder will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, controlling person,
underwriter, or other such Holder or director, officer, controlling person or
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 6.8(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 Holder from whom indemnification is sought
(which consent shall not be unreasonably withheld or delayed); provided, that,
in no event shall any indemnity under this Section 6.8(b) exceed the gross
proceeds from the offering received by such Holder.
               (c) Promptly after receipt by an indemnified party under this
Section 6.8 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 6.8,

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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 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 differing 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, shall only relieve such indemnifying party of
any liability to the indemnified party under this Section 6.8 if and to the
extent the indemnifying party is materially prejudiced by such omission, 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 6.8. No indemnifying party, in the defense of any such claim
or litigation against an indemnified party, shall 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 of such claim or litigation, unless
such indemnified party shall otherwise consent in writing.
               (d) In order to provide for just and equitable contributions in
any case in which either (i) any Holder exercising registration rights under
Sections 6.2, 6.3 or 6.4 of this Agreement, or any controlling person of any
such Holder, makes a claim for indemnification pursuant to this Section 6.8 but
it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and following 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 6.8 provides
for indemnification in such case, or (ii) contribution under the Act may be
required on the part of any such Holder or any such controlling person in
circumstances for which indemnification is provided under this Section 6.8;
then, and in each such case, the Company and such Holder shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion as is appropriate to reflect
both the relative benefit received by such Holder and the relative fault of the
Company and such Holder; provided, however, that, in any such case, (A) no such
Holder will be required to contribute any amount in excess of the net proceeds
received by such selling Holder from the sale of Registrable Securities covered
by such registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation. For purposes of the preceding sentence, the
relative benefit received by such Holder shall be deemed to be in the same
proportion as the public offering price of its Registrable Securities offered by
the registration statement bears to the public offering price of all securities
offered by such registration statement; and the relative fault of the Company
and such Holder shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission of a
material fact relates to information supplied by the Company or by such Holder
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
               (e) The obligations of the Company and Holders under this
Section 6.8 shall survive the completion of any offering of Registrable
Securities in a registration statement filed pursuant to this Agreement, the
termination of this Agreement pursuant to Section 8 hereof and otherwise.
          6.9 Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Agreement may not be
assigned by a Holder except in connection with the transfer of Equity Securities
to an Affiliate of Stockholder in accordance with the terms of this Agreement;
provided, that within a reasonable time after such transfer, the Company is
furnished with

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written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Securities Act. Any
assignee or transferee asserting rights under this Agreement shall be deemed to
have consented to the terms and conditions hereof.
          6.10 “Market Stand-Off” Agreement. Each Holder hereby agrees that it
shall not, to the extent requested by the Company and an underwriter of Common
Stock (or other securities) of the Company, sell, make short sale of, loan,
grant any option for the purchase of or otherwise transfer or dispose (other
than to donees who agree to be similarly bound) of any Registrable Securities
for a period of time, as agreed to by the Company and the underwriter not to
exceed ninety (90) days, following the effective date of a registration
statement of the Company filed under the Securities Act for an offering in which
the Holder participates; provided, however, that all officers and directors of
the Company and all other persons with registration rights (whether or not
pursuant to this Agreement) enter into similar agreements.
          6.11 Termination of Registration Rights. The Company’s obligations
pursuant to this Section 6 shall terminate as to any Holder of Registrable
Securities on the earlier of (i) when the Holder can sell all of such Holder’s
Registrable Securities pursuant to the final sentence of Rule 144(b)(1)(i) under
the Securities Act, and (ii) a period ending on the date that is two years after
the earlier to occur of (x) the date that that each of the Warrants have been
exercised or converted in full and (y) expiration of the Warrants; and shall be
suspended, but not terminated, during any three-month period in which such
Holder is entitled to sell all shares issued or issuable to such Holder under
Rule 144. This Section 6 shall expressly survive termination of this Agreement
pursuant to Section 8 hereto.
          6.12 Facilitation of Sales Pursuant to Rule 144. To the extent it
shall be required to do so under the Exchange Act, the Company shall timely file
the reports required to be filed by it under the Exchange Act or the Securities
Act (including the reports under Sections 13 and 15(d) of the Exchange Act
referred to in subparagraph (c)(1) of Rule 144), and shall take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable the Holders to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144. Upon the request of any Holder in connection with that
holder’s sale pursuant to Rule 144, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
          6.13 Other Registration Rights. As of the date hereof, the Company has
no remaining obligations under any registration rights previously granted to any
Person. The Company has outstanding one registration statement, filed on
July 15, 2005 with the Securities and Exchange Commission (file no. 333-126625),
relating to the public offering, which is not being underwritten, of shares of
common stock of the Company issued to selling stockholders identified therein in
connection with the Company’s acquisition of the minority interest in Trident
Technologies, Inc. in March 2005 (the “Prior Resale Registration Statement”).
The Prior Resale Registration Statement registered the resale, from time to
time, of up to 1,856,089 shares of the Company’s common stock for the account of
the selling shareholders identified therein. Should the Company grant any
registration rights to any Person after the date of this Agreement, the Company
agrees that such rights will not limit the Company’s obligations to grant
registration rights to Stockholder under this Section 6.
     7. Pre-Emptive Rights.
          7.1 Grant of Pre-emptive Rights. The Company hereby grants to the
Stockholder so long as such Stockholder shall own, of record or beneficially, at
least 5% of the outstanding Voting

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Securities of the Company, the right to purchase all or part of such
Stockholder’s Ownership Percentage of New Securities (as defined below) that the
Company proposes to sell and issue. As used herein, the Stockholder’s Ownership
Percentage shall be such Ownership Percentage of Voting Securities outstanding
as of the date of notice provided by the Company to Stockholder pursuant to the
terms set forth below, times the number of New Securities approved by the Board
of Directors for sale or issuance by the Company.
          7.2 New Securities. “New Securities” shall mean any Equity Securities
of the Company whether now authorized or not; provided that the term “New
Securities” does not include (i) any Equity Securities issued as a stock
dividend to holders of any Equity Securities, or upon any stock split,
subdivision or combination of shares of any Equity Securities, (ii) any shares
of Common Stock granted to, or issuable upon exercise of options, warrants,
restricted stock units, performance grants or other securities granted to
employees and directors of, and consultants to, the Company pursuant to a stock
plan or plans approved by the Board of Directors of the Company, (iii) Equity
Securities issued in connection with any Acquisition Transaction; (iv) Equity
Securities issued in connection with a strategic or collaborative relationship
for the purposes of technology development, licensing arrangements, partnering,
or other similar collaborative transactions pursuant to an agreement duly
approved by the Board of Directors of the Company; and (v) Equity Securities
issued in connection with any commercial credit arrangements or other borrowings
or equipment lease financings from financial or other institutions regularly
engaged in the business of lending money or leasing equipment if such issuance
is or has been duly approved by the Board of Directors of the Company.
          7.3 Notice of Issuance. In the event the Company proposes to undertake
an issuance of New Securities, it shall provide the Stockholder with written
notice of its intention, describing the type of New Securities and the price and
the terms upon which the Company proposes to issue the same. Stockholder shall
have ten (10) business days from the date of receipt of any such notice to agree
to purchase of the Stockholder’s pro rata share of such New Securities for the
price and upon the terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased. The
closing of the purchase of the New Securities shall be at such time and place as
the Company shall specify in the notice.
          7.4 Subsequent Sale. In the event the Stockholder fails to exercise in
full its preemptive rights pursuant to this Section 7, the Company shall have
one hundred twenty (120) days thereafter to sell the New Securities at a price
and upon terms no more favorable to purchasers thereof than those specified in
the Company’s notice to the Stockholder. To the extent the Company does not sell
all the New Securities offered within such period, the Company shall not
thereafter issue or sell such New Securities without first again offering such
securities to the Stockholder in the manner provided above.
          7.5 Nontransferability. The rights granted to the Stockholder in this
Section 7 shall not be transferable by Stockholder to any Person other than an
Affiliate of Stockholder. The rights granted to Stockholder in this Section 7
shall expire and terminate upon the earlier of (i) a transfer of the Shares or
the Warrant Shares to any Person other than an Affiliate of Stockholder, or
(ii) the date upon which Stockholder’s Ownership Percentage of Common Stock is
less than 5%.
     8. Effectiveness; Termination.
          8.1 Effectiveness. This Agreement shall become effective upon the
Closing of the Transaction as contemplated by the Purchase Agreement (the
“Effective Date”) and prior thereto shall be of no force or effect. If the
Purchase Agreement is terminated in accordance with its terms, this Agreement
shall automatically be deemed to have been terminated and shall thereafter be of
no force or effect.

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          8.2 Termination. Except with respect to the rights and obligations set
forth in Section 6 which by their terms expressly survive until terminated
pursuant to Section 6.11 and the general provision set forth in Section 9, and
except as may otherwise be provided in any section of this Agreement, all
rights, remedies, obligations and liabilities of the parties under this
Agreement shall terminate upon the earliest to occur of:
               (a) Stockholder’s Beneficial Ownership of Voting Securities
constituting less than one percent (1%) of the then-outstanding Voting
Securities; or
               (b) a material breach by the Company of any of its material
obligations under this Agreement. Notwithstanding the foregoing, a good faith
disagreement with respect to the Company’s indemnification obligations under
Section 6.8, or the failure by the Company to timely satisfy a notice or filing
obligation under Sections 6.2, 6.3, or 6.4, if such notice or filing is
ultimately made by the Company not more than sixty (60) days after the date
prescribed therefor, shall not result in termination of the parties’ rights,
remedies, obligations and liabilities under this Section 8.2(b); provided, that
nothing contained in this Section 8.2(b) shall limit any rights Stockholder may
have to damages or other remedies, whether at law or in equity, as a result of
any of the breaches described in this Section 8.2(b).
     9. Miscellaneous.
          9.1 Entire Agreement; Other Agreements Superseded. This Agreement
(and, to the extent referenced herein, the Purchase Agreement and any other
agreement expressly contemplated by such agreement or entered into in connection
with the execution of the Purchase Agreement), constitutes the entire agreement
among the parties hereto and supersedes any prior agreements, representations or
understandings written or oral by or among the parties hereto, or any of them,
relating to the subject matter hereof, and incorporates the entire understanding
of the parties with respect thereto.
          9.2 Amendment or Modification; Waiver. This Agreement may be amended
or supplemented only by a written instrument signed by the party against whom
the amendment or supplement is sought to be enforced. The party benefited by any
condition or obligation may waive the same, but such waiver shall not be
enforceable by another party unless made by written instrument signed by the
waiving party. Any waiver by any party of a breach of any provision of this
Agreement on one occasion shall not operate as or be construed to be a waiver of
any breach of any other provision of this Agreement. The failure of a party to
insist upon strict compliance with any term of this Agreement on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict compliance with that term or any other term of
this Agreement.
          9.3 Notices. All notices, requests, permissions, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) five Business Days following sending by registered or certified
mail, postage prepaid, (b) when sent, if sent electronically or by facsimile,
during the normal business hours on any Business Day, or one Business Day after
the date sent, if sent electronically or by facsimile, after the normal business
hours of the recipient, provided that the electronic message is promptly
confirmed by facsimile confirmation thereof and the sending party receives
written confirmation that the facsimile has been successfully transmitted in its
entirety to the intended recipient, (c) when delivered, if delivered personally
to the intended recipient and (d) one Business Day following sending by
overnight delivery via a national courier service (two Business Days following
sending by overnight international delivery via international courier service),
in each case, addressed to a party at the following address for such party:

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(a) If to the Company or TMFE:
Trident Microsystems, Inc.
3808 Garrett Drive
Santa Clara, California 95054-2803
Attn: Chief Executive Officer
Fax: +1 408 988 9176
Attn: General Counsel
Fax: +1 408 988 9176
with a copy to:
DLA Piper LLP (US)
2000 University Avenue
East Palo Alto, California 94303
Attn: Sally J. Rau, Esq.
Fax: +1 650 833 2001
(b) If to Stockholder:
Micronas Semiconductor Holding AG
Technoparkstrasse 1
8005 Zurich
Switzerland
Attn. CFO
Telefax: +41 44 445 39 61
with a copy to:
Meyer Lustenberger
Forchstrasse 452
P.O.Box 1432
8032 Zurich
Switzerland
Attn: Dr. Wolfgang Müller MBA
Fax: +41-44-396 91 92
     Any party to this Agreement may change the address or addresses to which
notices and other communications hereunder are to be delivered by giving the
other parties to this Agreement notice in the manner herein set forth.
          9.4 Law Governing; Consent to Jurisdiction; Equitable Relief;
Attorneys’ Fees.
               (a) This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of laws thereof.
               (b) This Agreement shall be construed in accordance with and
governed by the internal laws of the State of Delaware, without giving effect to
the principles of conflicts of laws. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the Court of Chancery of the State of Delaware in Wilmington, Delaware or, if
exclusive jurisdiction of such matter is vested in the Federal courts, any
Federal court located in the State of

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Delaware, for any action, proceeding or investigation in any court or before any
governmental authority (“Litigation”) arising out of or relating to this
Agreement and the transactions contemplated hereby and further agrees that
service of any process, summons, notice or document by U.S. mail to its
respective address set forth in this Agreement shall be effective service of
process for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Litigation arising out of this Agreement or the
transactions contemplated hereby in the Court of Chancery of the State of
Delaware in Wilmington, Delaware or, if exclusive jurisdiction of such matter is
vested in the Federal courts, any Federal court located in the State of
Delaware, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such Litigation brought in any
such court has been brought in an inconvenient forum. Each of the parties
irrevocably and unconditionally waives, to the fullest extent permitted by
applicable law, any and all rights to trial by jury in connection with any
Litigation arising out of or relating to this Agreement or the transactions
contemplated hereby.
          9.5 Successors; Assignability. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any right, remedy,
obligation or liability hereunder may be assigned by any of the parties hereto
without the prior written consent of the other parties hereto, other than to a
Permitted Transferee of the assignor. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns, and no other Person shall have any right,
benefit or obligation under this Agreement.
          9.6 Counterparts. This Agreement may be executed in any number of
counterparts, and each such executed counterpart shall be deemed to be an
original instrument, but all such executed counterparts together shall
constitute one and the same instrument. Each of the parties hereto (a) has
agreed to permit the use, from time to time, of faxed or otherwise
electronically transmitted signatures in order to expedite the consummation of
the transactions contemplated hereby, (b) intends to be bound by its respective
faxed or otherwise electronically transmitted signature, (c) is aware that the
other parties hereto will rely on the faxed or otherwise electronically
transmitted signature, and (d) acknowledges such reliance and waives any
defenses to the enforcement of the documents effecting the transaction
contemplated by this Agreement based on the fact that a signature was sent by
fax or otherwise electronically transmitted.
          9.7 Remedies. Each party, in addition to being entitled to exercise
all rights granted by applicable law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. Each party
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate. In any action or proceeding brought to enforce
any provision of this Agreement or where any provision of this Agreement is
validly asserted as a defense, the successful party will be entitled to recover
reasonable attorneys’ fees in addition to any other remedy.
          9.8 Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any Person other than the parties hereto and their respective
permitted successors and assigns, nor is anything in this Agreement intended to
relieve or discharge any obligation of any third Person to any party hereto or
give any third Person any right of subrogation or action over or against any
party hereto.
          9.9 Headings. The headings used in this Agreement are provided for
convenience only and this Agreement shall be interpreted as though they did not
appear herein.

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          9.10 Interpretation. When a reference is made in this Agreement to an
Article or a Section, such reference shall be to an Article or a Section of this
Agreement unless otherwise indicated. Whenever the words “include,” “includes”
or “including” are used in this Agreement, they shall be deemed to be followed
by the words “without limitation.” The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Reference to a Person are also to its
permitted successors and assigns.
          9.11 Transactional Expenses. Except as otherwise specifically provided
herein, each party shall pay its own fees and expenses incident to the
negotiation, preparation, execution, delivery and performance of this Agreement
including, without limitation, the fees and expenses of its counsel, accountants
and other advisors.
          9.12 Severability. If one or more provisions of this Agreement are
held to be unenforceable to any extent under applicable law, such provision
shall be interpreted as if it were written so as to be enforceable to the
maximum extent permitted by law so as to effectuate the parties’ intent to the
maximum extent, and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its terms
to the maximum extent permitted by law.
[Signature page follows.]

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     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.

            TRIDENT MICROSYSTEMS (FAR EAST) LTD.
      By:   /s/ SYLVIA SUMMERS COUDER         Sylvia Summers Couder       
Director            By:   /s/ PETE MANGAN         Pete Mangan        President
and Director        TRIDENT MICROSYSTEMS, INC.
      By:   /s/ SYLVIA SUMMERS COUDER         Sylvia Summers Couder       
President and Chief Executive Officer            By:   /s/ PETE MANGAN        
Pete Mangan        Chief Financial Officer        MICRONAS SEMICONDUCTOR HOLDING
AG
      By:   /s/ MANFRED HÄNER         Manfred Häner, CFO     

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