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EXHIBIT 10.41
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of May __, 1999, by and among Digital Entertainment Network,
Inc., a Delaware corporation (the "Company"), and the purchasers of the Series B
Convertible Preferred Stock, par value $.01 per share (the "Convertible
Preferred Stock") of the Company (the "Holders").
WHEREAS, certain of the Holders and the Company are parties to that
certain Purchase Agreement of even date herewith (the "Purchase Agreement")
pursuant to which the Company has agreed to issue to the Holders, and the
Holders have agreed to purchase from the Company, shares of the Company's
Convertible Preferred Stock;
WHEREAS, certain other Holders and the Company are parties to separate
Subscription Agreements of even date herewith ("Subscription Agreements")
pursuant to which the Company has agreed to issue to the Holders, and the
Holders have agreed to purchase from the Company, shares of the Company's
Convertible Preferred Stock;
WHEREAS, the Convertible Preferred Stock is convertible into shares of
the Company's common stock, par value $0.01 per share (the "Common Stock");
WHEREAS, to induce the Holders to enter into the Purchase Agreement and
to purchase the Convertible Preferred Stock, the Company has agreed to grant to
the Holders the registration and other rights contained in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Capital Stock: Any and all shares, interests, participations, or
other equivalents (however designated) of capital stock, or any and all
equivalent ownership interests.
Certificate of Designation: The Company's Certificate of
Designations, Preferences and Relative, Optional and Other Special Rights of
Series B Convertible Preferred Stock and Qualifications, Limitations and
Restrictions Thereof, filed with the Delaware Secretary of State pursuant to
Section 151 of the General Corporation Law of the State of Delaware.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Holder: Each of the Persons listed under the caption "Holders" on
the signature pages hereto and any assignee thereof in accordance with Section
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Market Value: As of any date with respect to any security, the
average of the Quoted Prices of such security for the twenty (20) consecutive
trading days (or, if such security is publicly
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traded but has been so traded for less than twenty (20) consecutive trading
days, such shorter period in which such security has been publicly traded)
immediately preceding such date; provided, however, that, if an event described
in Section 6(a) of the Certificate of Designation occurs with respect to such
security during the period from the first of such consecutive trading days
through the last of such consecutive trading days, the computation of Market
Value shall be appropriately adjusted to take account of such event. "Quoted
Price" of any security for any date shall be the last reported sales price (or,
in case no such sale takes place on such date, the average of the reported
closing bid and ask prices) of such security as reported by the principal
national securities exchange on which such security is listed or traded, or as
reported by the Nasdaq National Market System, or if such security is neither so
reported nor listed or traded, the average of the last reported bid and ask
prices of such security in the over-the-counter market on such date. If such
security is not listed or traded on any national securities exchange or quoted
in the over-the-counter market, the Market Value shall be deemed an amount
mutually agreed upon between the Company and the Holders of a majority of the
Registrable Securities then outstanding, and if no agreement can be reached,
then the Market Value of such security as of any date shall be the fair market
value thereof as determined by an independent nationally recognized investment
banking firm selected by investment banking firms representing each of the
Company and the Holders of a majority of the Registrable Securities then
outstanding. The Company shall pay all costs of all determinations of fair
market value by such nationally recognized investment banking firm.
Person: Any individual, partnership, corporation, limited
liability company, trust, unit trust, unincorporated organization, government or
agency or political subdivision thereof, or any other entity.
Proceeding: An action, claim, suit or proceeding (including,
without limitation, an investigation or partial proceeding, such as a
deposition), whether commenced or threatened.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Qualified Offering: As defined in the Purchase Agreement.
Register, registered, and registration: 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
Registrable Securities: The Common Stock and any other Capital
Stock which is part of a series or class of securities that is (i) publicly
traded or (ii) subject to a registration rights agreement, in each case issued
or issuable by the Company upon conversion of the Convertible
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Preferred Stock (including shares received from the Company with respect to or
in replacement of such shares by reason of splits, dividends, combinations and
recapitalizations), and any Capital Stock into which such Common Stock or other
Capital Stock may be changed and securities of any successor or acquiring
corporation in the event the Company is acquired by or merged or consolidated
with or into another corporation, received by or distributed to the holders of
such Common Stock or other Capital Stock (such securities, together with the
Company's Common Stock, collectively, the "Common Stock"), but excluding any
securities (x) which are effectively registered under the Securities Act and
disposed of in accordance with a Registration Statement covering such shares, or
(y) which may be resold by the Holder owning such securities without restriction
pursuant to Rule 144 or other comparable provision of the Securities Act ("Rule
144"), provided that the Company delivers an opinion of counsel reasonably
satisfactory to such Holder, in form and substance satisfactory to such Holder,
that such Holder is not an "affiliate" (as such term is defined in Rule 144) of
the Company or an "issuer" (as such term is used in Section 2(11) of the
Securities Act) with respect to securities of the Company. The "Registrable
Securities then outstanding" will be determined by the number of shares
outstanding which are, and the number of shares issuable upon conversion of then
outstanding shares of Convertible Preferred Stock which are, Registrable
Securities.
Registration Statement: Any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended.
Special Counsel: Any one special counsel to the Holders, which
counsel shall be selected by the Holders of a majority of the Registrable
Securities requested to be included in the applicable registration.
underwritten registration or underwritten offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Demand Registration
(a) If the Company receives at any time after the date that is
180 days after the effective date of the Qualified Offering, a written request
from the Holders of a majority of the Registrable Securities then outstanding
that the Company file a Registration Statement on Form S-1 or any similar
long-form registration ("Long-Form Registrations") under the Securities Act
covering the registration of such Holder's or Holders' Registrable Securities
(the "Initiating Holders"), then
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the Company will, within ten business days of the receipt thereof, give written
notice of such request to all Holders and will, subject to the limitations set
forth below and of subsection 2(b), effect as soon as practicable, and in any
event shall use its reasonable best efforts to effect within sixty (60) days of
the receipt of such request, a Registration Statement under the Securities Act
of all Registrable Securities then outstanding which the Holders request to be
registered within fifteen (15) days of the mailing of such notice by the
Company. Notwithstanding the foregoing, the Company's obligation to effect the
requested registration shall be conditioned upon the anticipated aggregate
offering price of Registrable Securities equaling or exceeding $10,000,000.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they will so advise the Company as a part of their request made pursuant to this
Section 2 and the Company will include such information in the written notice
referred to in subsection 2(a). The underwriter (the "Underwriter") will be
selected by a majority in interest of the selling stockholders (the "Selling
Holders"), subject to approval by the Company, not to be unreasonably withheld.
In such event, the right of any Holder to include such Holder's Registrable
Securities in such registration will be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Selling Holders and such Holder) to the extent
provided in this Agreement. All Holders proposing to distribute their securities
through such underwriting will (together with the Company as provided in
subsection 5(e)) enter into an underwriting agreement in customary form with the
Underwriter. Notwithstanding any other provision of this Section 2, if the
Underwriter advises the Selling Holders and the Company in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company will so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant to this Agreement, and
the number of shares of Registrable Securities that may be included in the
underwriting will be allocated pro rata among the Holders and the holders
("Series A Holders") of the Company's Series A Convertible Preferred Stock, par
value $.01 per share (the "Series A Preferred Stock"), who have exercised
piggyback registration rights to participate in such offering on the basis of
the number or dollar amount of securities requested by such Holders and Series A
Holders to be included in such offering.
(c) Notwithstanding the foregoing, (i) the Company shall not be
obligated to register any Registrable Securities pursuant to this Section 2 if
such Registrable Securities may be, and the Company causes them to be,
registered pursuant to Section 3, and (ii) the Company shall be obligated to
effect only three registrations pursuant to this Section 2; provided, however,
that the Company shall be deemed to fulfill its obligations pursuant to this
Section 2 only (x) if the number of shares of Registrable Securities included in
the Registration Statement has not been reduced by more than 25% pursuant to
subsection 2(b) (unless such Registrable Securities are not so included due to
the fault of the Holder), and (y) when such registration has become effective
(unless such registration has not become effective due to the fault of the
Holder) and remained effective in compliance with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such Registration Statement for a period of not less than 180 days,
(unless such Registrable Securities are not disposed of due to the fault of the
Holder); and, provided further, that the Company will pay all registration
expenses in connection with any registration initiated at
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the request of a Holder to the extent provided below in Section 7 (unless such
registration is not consummated due to the fault of the Holder).
(d) Notwithstanding the foregoing, the Company may postpone for
up to three (3) months the filing or the effectiveness of a Registration
Statement for any registration if (i) the Company reasonably believes that such
registration would have a material adverse effect on any proposal or plan by the
Company or any of its Subsidiaries (as defined in the Purchase Agreement) to
engage in any acquisition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or other significant
transaction pending at the time a request is made for a registration, (ii) such
registration would require the Company to disclose contract negotiations pending
at the time a request is made for a registration or other information, the
disclosure of which would, in the reasonable belief of the Company, have a
material adverse effect on the Company or (iii) the holders of the Series A
Preferred Stock have previously requested a registration. Such postponement may
be effected by delivery of written notice to the Holders within fifteen (15)
business days of the Company's receipt of a request for a registration. Failure
to so notify the Holders of such a postponement within said 15 business day
period shall constitute a waiver of the Company's right under this paragraph
2(d). During such period, the Company shall not be entitled to file any other
Registration Statement relating to the Company's securities pursuant to any
other outstanding registration rights agreement or for any other secondary
offering, other than such demand registration previously requested by the Series
A Holders; and provided further, that the Company shall not have the right to so
defer such action more than once in any three hundred sixty-five (365) day
period. Upon the expiration of the deferral period the Company shall be required
to file a Registration Statement covering the Registrable Securities requested
to be registered. Notwithstanding the foregoing, in the event that the Company
has deferred the filing of a Registration Statement pursuant to clause (iii) and
a Registration Statement requested by the holders of the Series A Preferred
Stock becomes effective, the deferral period shall be a period of up to 120 days
from the date of the request by the holders of the Series A Preferred Stock plus
a period of 180 days after the effectiveness of such registration or the closing
date of any underwritten offering.
(e) The Company shall have no obligation to any Holder under this
Section 2 with respect to the Registrable Securities then outstanding of such
Holder if the Company has obtained an opinion of counsel reasonably satisfactory
to such Holder, in form and substance satisfactory to such Holder, to the effect
that all such Registrable Securities then outstanding of such Holder may be
immediately sold to the public without registration thereof, whether pursuant to
Rule 144 or otherwise.
3. S-3 Registration Undertaking.
(a) Short-Form Registrations. In addition to the Long-Form
Registrations provided pursuant to Section 2, at any time after the date that is
180 days after the effective date of the Qualified Offering, the holders of
Registrable Securities shall be entitled to request an unlimited number of
registrations on Form S-2 or S-3 or any similar short-form registration
("Short-Form Registrations") under the Securities Act. If the Company at any
such time receives a written request from the Holder(s) of a majority of the
Registrable Securities then outstanding that the Company file a Short Form
Registration covering the registration of the Holder's or Holders' Registrable
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Securities (the "S-3 Initiating Holders"), then the Company will, within ten
business days of the receipt thereof, give written notice of such request to all
Holders and will, subject to the limitations set forth below and of subsection
3(b), effect as soon as practicable, and in any event shall use its reasonable
best efforts to effect within sixty (60) days of the receipt of such request, a
Registration Statement under the Securities Act of all Registrable Securities
then outstanding which the Holders request to be registered within fifteen (15)
days of the mailing of such notice by the Company. Notwithstanding the
foregoing, the Company's obligation to effect the requested registration shall
be conditioned upon the anticipated aggregate offering price of Registrable
Securities equaling or exceeding $5,000,000. Demand Registrations shall be
Short-Form Registrations whenever the Company is permitted to use any applicable
short form. After the Company has become subject to the reporting requirements
of the Securities Exchange Act, the Company shall use all commercially
reasonable efforts to make Short-Form Registrations on Form S-3 available for
the sale of Registrable Securities.
(b) If the Initiating S-3 Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they will so advise the Company as a part of their request made pursuant to this
Section 3 and the Company will include such information in the written notice
referred to in subsection 3(a). The Underwriter will be selected by a majority
in interest of the Selling Holders, subject to approval by the Company, not to
be unreasonably withheld. In such event, the right of any Holder to include such
Holder's Registrable Securities in such registration will be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Selling Holders and such Holder) to the
extent provided in this Agreement. All Holders proposing to distribute their
securities through such underwriting will (together with the Company as provided
in subsection 6(n)) enter into an underwriting agreement in customary form with
the Underwriter. Notwithstanding any other provision of this Section 3, if the
Underwriter advises the Selling Holders and the Company in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company will so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant to this Agreement, and
the number of shares of Registrable Securities that may be included in the
underwriting will be allocated pro rata among the Holders and the Series A
Holders who have exercised piggyback registration rights to participate in such
offering on the basis of the number or dollar amount of securities requested by
such Holders and Series A Holders to be included in such offering.
(c) Notwithstanding the foregoing, the Company may postpone for
up to three (3) months the filing or the effectiveness of a Registration
Statement for any registration if (i) the Company reasonably believes that such
registration would have a material adverse effect on any proposal or plan by the
Company or any of its Subsidiaries (as defined in the Purchase Agreement) to
engage in any acquisition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or other significant
transaction pending at the time a request is made for a registration, (ii) such
registration would require the Company to disclose contract negotiations pending
at the time a request is made for a registration or other information, the
disclosure of which would, in the reasonable belief of the Company, have a
material adverse effect on the Company or (iii) the holders of the Series A
Preferred Stock have previously requested a registration. Such
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postponement may be effected by delivery of written notice to the Holders within
fifteen (15) business days of the Company's receipt of a request for a
registration. Failure to so notify the Holders of such a postponement within
said 15 business day period shall constitute a waiver of the Company's right
under this paragraph 2(d). During such period, the Company shall not be entitled
to file any other Registration Statement relating to the Company's securities
pursuant to any other outstanding registration rights agreement or for any other
secondary offering, other than such demand registration previously requested by
the Series A Holders; and provided further, that the Company shall not have the
right to so defer such action more than once in any three hundred sixty-five
(365) day period. Upon the expiration of the deferral period the Company shall
be required to file a Registration Statement covering the Registrable Securities
requested to be registered. Notwithstanding the foregoing, in the event that the
Company has deferred the filing of a Registration Statement pursuant to clause
(iii) and a Registration Statement requested by the holders of the Series A
Preferred Stock becomes effective, the deferral period shall be a period of up
to 120 days from the date of the request by the holders of the Series A
Preferred Stock plus a period of 180 days after the effectiveness of such
registration or the closing date of any underwritten offering.
(d) The Company shall have no obligation to any Holder under this
Section 3 with respect to the Registrable Securities then outstanding of such
Holder if the Company has obtained an opinion of counsel reasonably satisfactory
to such Holder, in form and substance satisfactory to such Holder, to the effect
that all such Registrable Securities then outstanding of such Holder may be
immediately sold to the public without registration thereof, whether pursuant to
Rule 144 or otherwise.
4. Piggyback Registration.
(a) Right to Piggyback. If at any time after the Qualified
Offering the Company proposes to file a registration statement under the
Securities Act with respect to an offering of Common Stock (other than a
registration statement (i) on Form S-4 or Form S-8 or any successor forms
thereto or (ii) filed solely in connection with an exchange offer or an offering
made solely to employees of the Company), for its own account or the account of
any other Person (other than the Series A Holders), then the Company shall give
written notice of such proposed filing to the Holders at least 30 days before
the anticipated filing date. Such notice shall offer such Holders the
opportunity to register such amount of Registrable Securities as each such
Holder may request (a "Piggyback Registration"). Subject to Section 4(b) hereof,
the Company shall include in each such Piggyback Registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15 days after notice has been given to the applicable
Holder (which request shall specify the intended method of distribution). The
Holders shall be permitted to withdraw all or part of the Registrable Securities
from a Piggyback Registration at any time prior to the effective date of such
Piggyback Registration.
(b) Priority on Piggyback Registrations. The Company shall cause
the managing underwriter of a proposed underwritten offering to permit the
Holders that requested their Registrable Securities to be included in the
registration for such offering to include all such Registrable Securities on the
same terms and conditions as any other shares of Common Stock, if any, of the
Company included therein. Notwithstanding the foregoing, if the managing
underwriter
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of such underwritten offering informs such Holders that the total number or
dollar amount of securities that such Holders, the Company and any other Persons
having rights to participate in such registration, propose to include in such
offering is such as to materially and adversely affect the success of such
offering, then the amount of Common Stock to be offered (i) for the account of
Holders and (ii) for the account of all such other Persons (other than the
Series A Holders) exercising piggy back registration rights shall be reduced or
limited pro rata in proportion to the respective dollar amounts of Common Stock
requested by such persons to be included in such offering.
5. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holders of Registrable
Securities. Each Holder agrees, in connection with any sale of securities by the
Company and in connection with any Registration Statement filed pursuant to
Section 2, Section 3 or Section 4 hereof, if requested (pursuant to a timely
written notice) by the Company or the managing underwriter or underwriters in an
underwritten offering, not to effect any public sale or distribution of any of
the Company's securities, including a sale pursuant to Rule 144 (except as part
of such underwritten offering), during the period beginning 10 days prior to,
and ending 180 days after, the closing date of each underwritten offering made
by the Company or pursuant to such Registration Statement.
The foregoing provisions shall not apply to any Holder if such Holder is
prevented by applicable statute or regulation from entering into any such
agreement; provided, however, that any such Holder shall undertake in its
request to participate in any such underwritten offering, not to effect any
public sale or distribution of the class of securities covered by such
Registration Statement (except as part of such underwritten offering) during
such period unless it has provided 90 days' prior written notice of such sale or
distribution to the managing underwriter or underwriters.
(b) Restrictions on Public Sale by the Company. The Company
agrees that without the written consent of the managing underwriter in an
underwritten offering of Registrable Securities covered by a Registration
Statement filed pursuant to Section 2, Section 3 or Section 4 hereof, it will
not effect any public or private sale or distribution of any of its equity
securities for its own account or for the account of the Series A Holders
pursuant to a demand registration, including a sale pursuant to Regulation D
under the Securities Act, during the 10-day period prior to, and during the
180-day period beginning on, the closing date of each underwritten offering made
pursuant to such Registration Statement (except (i) as part of such underwritten
registration, (ii) pursuant to registrations on Form S-4 or Form S-8 or any
successor forms thereto or filed solely in connection with an offering made
solely to employees of the Company, (iii) in connection with an exchange offer
or (iv) in connection with the acquisition of assets by the Company or its
subsidiaries).
6. Registration Procedures
In connection with the Company's registration obligations pursuant to
Section 2, Section 3 or Section 4 hereof, the Company shall effect such
registrations to permit the sale of such
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Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall as expeditiously as
possible:
(a) Prepare and file with the Securities and Exchange Commission
(the "SEC") a Registration Statement or Registration Statements on any
appropriate form under the Securities Act that shall be available for the sale
of the Registrable Securities by the Holders thereof in accordance with the
intended method or methods of distribution thereof, and use its best efforts to
cause each such Registration Statement to become effective and remain effective
as provided herein. Before filing any Registration Statement or Prospectus or
any amendments or supplements thereto (including documents that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall furnish or otherwise make available to the Holders of the Registrable
Securities covered by such Registration Statement, the Special Counsel and the
managing underwriters, if any, copies of all such documents proposed to be
filed, which documents will be subject to the review of such Holders, the
Special Counsel and such underwriters, if any; provided, however, that the
Company shall not be required to deliver to such Holders a copy of any such
document that has not been materially changed from a copy of such document that
was previously delivered to such Holders.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for a period of up to
six (6) months; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the sellers thereof
set forth in such Registration Statement as so amended or to such Prospectus as
so supplemented.
(c) Notify the selling Holders of Registrable Securities, the
Special Counsel and the managing underwriters, if any, promptly, and (if
requested by any such Person) confirm such notice in writing:
(i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the SEC or any other Federal or
state governmental authority for amendments or supplements to a Registration
Statement or related Prospectus or for additional information (provided, that
the Company shall not be required to notify the Holders or the Special Counsel
of all comments letters or the Company's responses thereto to the Holders or the
Special Counsel unless such letters request information from or about the
Holders),
(iii) of the issuance by the SEC or any other Federal or
state governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
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(iv) if at any time the representations and warranties
of the Company contained in any agreement contemplated by Section 6(n)
(including any underwriting agreement) below cease to be true and correct,
(v) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any proceeding for such purpose,
(vi) of the happening of any event that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
or that requires the making of any changes in a Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or is necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and
(vii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) Use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction.
(e) If requested by the managing underwriters, if any, or the
Holders of a majority of the Registrable Securities being sold, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and such Holders reasonably
agree should be included therein as may be required by applicable law, (ii) make
all required filings of such Prospectus supplement or such post-effective
amendment as soon as the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment, and
(iii) supplement or make amendments to any Registration Statement; provided,
however, that the Company shall not be required to take any actions under this
Section 6(e) that are not, in the opinion of counsel for the Company, in
compliance with applicable law.
(f) Furnish to each selling Holder of Registrable Securities, the
Special Counsel and each managing underwriter, if any, without charge, at least
one conformed copy of the Registration Statement or Statements and any
post-effective amendment thereto, including financial statements (but excluding
schedules, all documents incorporated therein by reference or deemed
incorporated therein by reference and all exhibits, unless requested in writing
by such Holder, Special Counsel or underwriter).
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(g) Deliver to each selling Holder of Registrable Securities, the
Special Counsel and the underwriters, if any, without charge, as many copies of
the Prospectus or Prospectuses relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request; and the Company hereby consents to the
use of such Prospectus or each amendment or supplement thereto by each of the
selling Holders of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities to use
its reasonable best efforts to register or qualify or cooperate with the selling
Holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any seller or underwriter reasonably
requests in writing; keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the applicable Registration Statement; provided, however,
that the Company will not be required to (i) qualify generally to do business in
any jurisdiction where it is not then so qualified or (ii) take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject.
(i) Cooperate with the selling Holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends; and enable such Registrable
Securities to be registered in such names as the managing underwriters, if any,
shall request at least two business days prior to any sale of Registrable Secu-
rities to the underwriters.
(j) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States, except as may be
required solely as a consequence of the nature of such selling Holder's
business, in which case the Company will cooperate in all respects with the
filing of such Registration Statement and the granting of such approvals, as may
be necessary to enable the seller or sellers thereof or the underwriters, if
any, to consummate the disposition of such Registrable Securities.
(k) Upon the occurrence of any event contemplated by Section
6(c)(vi) or 6(c)(vii) above, prepare a supplement or post-effective amendment to
each Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference, or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
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(l) Use its best efforts to cause all Registrable Securities
covered by such Registration Statement to be (i) listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed, or (ii) authorized to be quoted on The Nasdaq Stock Market National
Market if the securities so qualify; in each case, if requested by the Holders
of a majority of shares of the Registrable Securities covered by such
Registration Statement or the managing underwriters, if any.
(m) Prior to the effective date of the Registration Statement
relating to the Registrable Securities, (i) provide the transfer agent with
printed certificates for the Registrable Securities in a form eligible for
deposit with The Depository Trust Company and (ii) provide a CUSIP number for
the Registrable Securities.
(n) Enter into such agreements (including an underwriting
agreement in form, scope and substance as is customary in underwritten
offerings) and take all such other actions in connection therewith (including
those reasonably requested by the managing underwriters, if any, or the Holders
of a majority of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration;
(i) make such representations and warranties to the
Holders of such Registrable Securities and the underwriters, if any, with
respect to the business of the Company and its subsidiaries, the Registration
Statement, Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and scope as
are customarily made by issuers to underwriters in underwritten offerings and,
if true, confirm the same if and when requested;
(ii) use its reasonable best efforts to obtain opinions of
counsel to the Company and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the Holders of a majority of the Registrable
Securities being sold) addressed to each selling Holder of Registrable
Securities and each of the underwriters, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Holders and underwriters,
including without limitation the matters referred to in Section 6(n)(i) above;
(iii) use its reasonable best efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data is, or is required to
be, included in the Registration Statement), addressed to each selling Holder of
Registrable Securities (unless such accountants shall be prohibited from so
addressing such letters by applicable standards of the accounting profession)
and each of the underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings; and
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(iv) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority of the Registrable Securities
being sold, the Special Counsel and the managing underwriters, if any, to
evidence the continued validity of the representations and warranties of the
Company and its subsidiaries made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.
(o) Make available for inspection by a representative of the
Holders of Registrable Securities being sold, any underwriter participating in
any disposition of Registrable Securities, if any, and any attorney or
accountant retained by such selling Holders or underwriter, at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors and employees of the Company and
its subsidiaries to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with such
Registration Statement; provided, however, that any records, information or
documents that are designated by the Company in writing as confidential at the
time of delivery of such records, information or documents shall be kept
confidential by such Persons unless (i) such records, information or documents
are in the public domain or otherwise publicly available, (ii) disclosure of
such records, information or documents is required by court or administrative
order or is necessary to respond to inquiries of regulatory authorities or (iii)
disclosure of such records, information or documents, in the opinion of counsel
to such Person, is otherwise required by law (including, without limitation,
pursuant to the requirements of the Securities Act). Without limiting the
foregoing, no such information shall be used by such Person as the basis for any
market transactions in securities of the Company or its subsidiaries in
violation of law.
(p) Comply with all applicable rules and regulations of the SEC
and make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to underwriters
in a firm commitment or best efforts underwritten offering, and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company, after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Securities as the
Company may, from time to time, reasonably request in writing and the Company
may exclude from such registration the Registrable Securities of any seller who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 6(c)(ii), 6(c)(iii),
6(c)(v), 6(c)(vi) or 6(c)(vii) hereof, such Holder will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
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Statement or Prospectus until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(k) hereof, or until
it is advised in writing by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus.
7. Registration Expenses
All reasonable fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not any of the Registration Statements become effective. Such fees
and expenses shall include, without limitation, (i) all registration and filing
fees (including, without limitation, fees and expenses (x) with respect to
filings required to be made with the National Association of Securities Dealers,
Inc. and (y) of compliance with securities or Blue Sky laws (including, without
limitation, fees and disbursements of counsel for the underwriters or selling
Holders in connection with Blue Sky qualifications of the Registrable Securities
pursuant to Section 6(h) hereof)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the Holders of a
majority of the Registrable Securities included in any Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) fees and disbursements of all independent certified
public accountants referred to in Section 6(n)(iii) hereof (including the
expenses of any "cold comfort" letters required by this Agreement), (vi) the
fees and expenses of any "qualified independent underwriter" or other
independent appraiser participating in an offering pursuant to Section 3 of
Schedule E to the By-laws of the National Association of Securities Dealers,
Inc. and (vii) fees and expenses of all other Persons retained by the Company.
In addition, the Company shall pay its internal expenses (including without
limitation all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit, the fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange on which similar securities issued by the
Company are then listed and the fees and expenses of any Person, including
special experts, retained by the Company.
In addition, whether or not any of the Registration Statements become
effective, the Company shall pay the reasonable fees and disbursements of a
Special Counsel for the Holders, together with appropriate local counsel, if
any, not to exceed $50,000 in the aggregate, for any Long-Form Registration, and
$25,000 in the aggregate, for any Short-Form Registration.
The Company shall not be required to pay any underwriter's fees and
expenses (including discounts, commissions or fees of underwriters, selling
brokers, dealer managers or similar securities industry professionals) relating
to the distribution of Registrable Securities.
8. Indemnification.
(a) Indemnification by the Company. The Company shall, without
limitation as to time, indemnify and hold harmless, to the fullest extent
permitted by law, each Holder of
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Registrable Securities whose Registrable Securities are registered pursuant to
this Agreement, the officers, directors, agents and employees of each of them,
each Person who controls such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors,
agents and employees of any such controlling person, from and against all
losses, claims, damages, liabilities, costs (including, without limitation, the
costs of preparation and reasonable attorneys' fees) and expenses (collectively,
"Losses") to be reimbursed promptly, as incurred, arising out of or based upon
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or form of Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are based solely upon information furnished in
writing to the Company by such Holder expressly for use therein; provided,
however, that the Company shall not be liable to any Holder of Registrable
Securities to the extent that (A) any such Losses arise out of or are based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if (i) such Holder failed to send or deliver
a copy of the Prospectus with or prior to the delivery of written confirmation
of the sale by such Holder of a Registrable Security to the person asserting the
claim from which such losses arise and (ii) the Prospectus would have corrected
in all material respects such untrue statement or alleged untrue statement or
such omission or alleged omission; or (B) any such Losses arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus, if (x) such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in all material
respects in an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended and supplemented, prior to or concurrently
with the sale of a Registrable Security to the Person asserting the claim from
which such Losses arise.
(b) Indemnification by Holder of Registrable Securities. In
connection with any Registration Statement in which a Holder of Registrable
Securities is participating, such Holder of Registrable Securities shall furnish
to the Company in writing such information relating to such Holder, as such, or
the Registrable Securities being sold by such Holder (the "Holder Information")
as the Company reasonably requests for use in connection with any Registration
Statement or Prospectus and agrees to indemnify, to the fullest extent permitted
by law, the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling persons, from and against all Losses arising out
of or based upon any untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or arising out of
or based upon any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue statement or omission is contained in any Holder
Information so furnished in writing by such Holder to the Company expressly for
use in such Registration Statement or Prospectus and that such Holder
Information was solely relied upon by the Company in preparation of such
Registration Statement, Prospectus or preliminary prospectus. In no event shall
the liability of any selling Holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the proceeds (net of payment of all
expenses) received by such
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Holder directly from the sale of the Registrable Securities giving rise to such
indemnification obligation. The Company shall be entitled to receive indemnities
from underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution to the same extent as
provided above with respect to information so furnished in writing by such
Persons expressly for use in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. If any Person shall
be entitled to indemnity hereunder (an "indemnified party"), such indemnified
party shall give prompt notice to the party from which such indemnity is sought
(the "indemnifying party") of any claim or of the commencement of any Proceeding
with respect to which such indemnified party seeks indemnification or
contribution pursuant hereto; provided, however, that the delay or failure to so
notify the indemnifying party shall not relieve the indemnifying party from any
obligation or liability except to the extent that the indemnifying party has
been prejudiced materially by such delay or failure. The indemnifying party
shall have the right, exercisable by giving written notice to an indemnified
party promptly after the receipt of written notice from such indemnified party
of such claim or Proceeding, to assume, at the indemnifying party's expense, the
defense of any such claim or Proceeding, with counsel reasonably satisfactory to
such indemnified party; provided, however, that an indemnified party shall have
the right to employ separate counsel in any such claim or Proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless: (1) the indemnifying
party agrees to pay such fees and expenses; (2) the indemnifying party fails
promptly to assume the defense of such claim or Proceeding or fails to employ
counsel reasonably satisfactory to such indemnified party or (3) counsel for the
indemnified party advises the indemnifying party in writing that there are
issues that raise conflicts of interest between the indemnified party and the
indemnifying party requiring the use of independent counsel; in which case the
indemnified party shall have the right to employ counsel and to assume the
defense of such claim or proceeding; provided, however, that the indemnifying
party shall not, in connection with any one such claim or Proceeding or separate
but substantially similar or related claims or Proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one firm of attorneys (together
with appropriate local counsel) at any time for all of the indemnified parties,
or for fees and expenses that are not reasonable.
Whether or not such defense is assumed by the indemnifying party,
such indemnified party will not be subject to any liability for any settlement
made without its consent (but such consent will not be unreasonably withheld).
All such fees and expenses (including any fees and expenses incurred in
connection with investigating or preparing to defend such action or proceeding)
shall be paid to the indemnified party, as incurred, within five days of written
notice thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder). The indemnifying party shall not consent to entry of any judgment or
enter into any settlement or otherwise seek to terminate any Proceeding in which
any indemnified party is a party and as to which indemnification or contribution
could be sought by such indemnified party under this Section 8, unless such
judgment, settlement or other termination includes as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release, in form and substance reasonably satisfactory to the indemnified party,
from all
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liability in respect of such claim or litigation for which such indemnified
party would be entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an indemnified party under Section 8(a) or 8(b)
hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall, jointly and severally, contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or indemnifying parties, on the one hand, and such indemnified party, on
the other hand, in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party or indemnifying parties, on the
one hand, and such indemnified party, on the other hand, shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include any
legal or other fees or expenses incurred by such party in connection with any
Proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provision of this Section 8(d), an indemnifying party that
is a selling Holder of Registrable Securities shall not be required to
contribute any amount in excess of the amount by which the net proceeds (after
deducting the aggregate underwriters' discount) received by such indemnifying
party from the sale of such Registrable Securities exceeds the amount of any
damages that such indemnifying party has otherwise been required to pay
(including, without limitation, pursuant to any other indemnification or
contribution obligation such indemnifying party may have) by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement obligations of the
Company hereunder shall be in addition to any liability the Company may
otherwise have hereunder or otherwise. The provisions of this Section 8 shall
survive so long as Registrable Securities remain outstanding, notwithstanding
any transfer of the Registrable Securities by any Holder or any termination of
this Agreement.
9. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
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(a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 (at any
time after ninety (90) days after the effective date of the first registration
statement filed by the Company), the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company with the SEC, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to
such form.
10. Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Agreement may be assigned
(but only with all related obligations) by a Holder to (i) transferee(s) or
assignee(s) of such securities who, after such assignment or transfer, holds
Registrable Securities (subject to appropriate adjustment for stock splits,
stock dividends, combinations and other recapitalizations) with an aggregate
Market Value of at least $1,000,000 or (ii) transferee(s) or assignee(s) of such
securities who, after such assignment or transfer, holds all of the Registrable
Securities of the transferring Holder, provided that the Company is, within a
reasonable time after such transfer, furnished with written notice of the name
and address of such transferee(s) or assignee(s) and the securities with respect
to which such registration rights are being assigned. Notwithstanding any
assignment by a Holder of its registration and other rights hereunder in
connection with its transfer of Registrable Securities, such Holder shall retain
all such registration and other rights under this Agreement in respect of those
Registrable Securities that it continues to hold.
11. No Inconsistent Agreements; Limitations on Subsequent Registration
Rights.
(a) The Company represents and warrants to the Holders that it is
not a party to any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders in this Agreement.
(b) From and after the date of this Agreement, the Company will
not, without the prior written consent of the Holders of a majority of the then
outstanding Registrable Securities, enter into any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder (i) to include such securities in any registration
filed under Section 2, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of his securities will not reduce the amount of
the Registrable Securities of the Holders which is included
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or (ii) to make a demand registration which could result in such registration
statement being declared effective within 180 days of the effective date of any
registration effected pursuant to Section 2.
(c) From and after the date of this Agreement, if the Company
grants any person rights (i) to demand that the Company register securities of
the Company under the Securities Act or (ii) to have securities of the Company
included in a registration statement, which are more favorable than these
registration rights provisions in any regard (including, without limitation,
those relating to the expenses to be borne by the Company), the rights granted
herein shall be deemed to be amended to include such more favorable rights in
addition to these set forth herein.
12. Adjustments Affecting Registrable Securities. The Company will not
take any action, or permit any change to occur, with respect to its securities
which would adversely affect the ability of the Holders to include Registrable
Securities in a registration undertaken pursuant hereto. However, nothing in
this Agreement shall limit the Company's ability to register, offer and sell
securities.
13. Miscellaneous
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss 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.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority of the then outstanding Registrable Securities. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Registrable Securities may be given by Holders of at
least a majority of the Registrable Securities being sold by such Holders;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing and shall be deemed given (i) when
made, if made by hand delivery, (ii) upon confirmation, if made by telecopier or
(iii) one business day after being deposited with a reputable next day courier,
postage prepaid, to the parties as follows:
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(x) if to a Holder of Registrable Securities, at the
most current address given by such Holder to the Company in accordance with the
provisions of this Section 13(c), which address initially is, with respect to
each Holder, the address set forth on his respective signature page attached
hereto; and
(y) if to the Company, at 0000 Xxxxxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000, Attention: Chief Executive Officer;
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
(d) Owner of Registrable Securities. The Company will maintain,
or will cause its registrar and transfer agent to maintain, a stock book with
respect to the Common Stock, in which all transfers of Registrable Securities of
which the Company has received notice will be recorded. The Company may deem and
treat the person in whose name Registrable Securities are registered in the
stock book of the Company as the owner thereof for all purposes, including
without limitation, the giving of notices under this Agreement.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder of any Registrable
Securities. The Company may not assign its rights or obligations hereunder
without the prior written consent of each Holder of any Registrable Securities.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
(i) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
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provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
(j) Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein.
(k) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
END OF PAGE
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
"THE COMPANY"
DIGITAL ENTERTAINMENT NETWORK, INC.
By:
-------------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
"THE HOLDERS"
XXXXXXXXX/DIGITAL ENTERTAINMENT
NETWORK PARTNERS, L.L.C.
By Xxxxxxxxx-Xxxxx Entertainment Partners, L.L.C.
By:
-------------------------------------------
Xxxxxx X. Xxxxxxxxxx, Member
CHASE VENTURE CAPITAL ASSOCIATES
By:
-------------------------------------------
Xxxxxxxx Xxxxx, Executive Partner
DELL USA L.P., a Texas limited partnership
By: Dell Gen. P. Corp., a Delaware corporation
By:
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Xxxx Xxxxx, Vice President
MICROSOFT CORPORATION
By:
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Name:
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Title:
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22
23
DEN PARTNERS LLC
By:
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Said Armutcuoglu, Managing Member
XXXXX X. XXXXXXX
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SUBSCRIBER
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Name:
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Address:
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