Exhibit 99.2
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of November 28, 2003, by and between ROO Media Corporation
Inc., a Delaware corporation (the "Company"), and Avenue Group, Inc., a Delaware
corporation (the "Shareholder"), with reference to the following facts.
W I T N E S S E T H:
WHEREAS, on the date hereof, pursuant to the terms of the Subscription
Agreement dated November 28, 2003, between the Company and the Shareholder,
(the "Offering") the Shareholder has acquired an aggregate amount of
seventy-five (75) shares of the Company's common stock (the "Common Stock")
(hereinafter collectively referred to as the "Shares");
WHEREAS, the Company has agreed with the Shareholder to grant certain
registration rights to Shareholder with respect to the Shares.
NOW, THEREFORE, in consideration of the mutual representations,
covenants and agreements contained herein, the parties hereto agree as follows:
1. Registration of the Shares.
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(a) The Company agrees, subject to the requirements and
restrictions of the Securities Act of 1933, as amended (the "Act"), and the
terms and conditions herein, to include the reoffer and resale by the
Shareholder of the Shares purchased by the Shareholder in this Offering in a
registration statement under the Act (the "Registration Statement"). The
Registration Statement shall also, at the Shareholder's option, cover the
distribution of the Shares to the Shareholder's shareholders. The Company has
agreed to utilize its best efforts to (i) file the Registration Statement with
the Securities and Exchange Commission (the "SEC") no later than March 31, 2004,
and (ii) to take such further actions and file such amendments to the
Registration Statement as may be necessary to respond to any comments that the
SEC may have in a timely manner and to otherwise take such steps as may be
necessary so that the Registration Statement is declared effective as soon as
reasonably practicable after the filing thereof. Notwithstanding the Company's
best efforts, in the event the Company has not filed the Registration Statement
with the SEC on or prior to April 15, 2004, or the Registration Statement is not
declared effective by the SEC on or prior to August 1, 2004, the Company agrees
to issue to the Shareholder a number of shares of its common stock equal to two
percent (2%) of the total number of Shares sold to Shareholder pursuant to the
Subscription Agreement (the "Additional Shares"). In addition, if, at the end of
each fifteen (15) calendar day period following April 15, 2004 or August 1,
2004, as applicable, the Company still has not filed the Registration Statement
with the SEC, the Company shall issue to Shareholder a number of shares of its
common stock equal to two percent (2%) of the total number of Shares (including
any Additional Shares) sold or issued to Shareholder pursuant to this
Subscription Agreement. Any Additional Shares issued by the Company shall be
included with the Shares on the Registration Statement. Notwithstanding the
foregoing, the Company shall not be obligated to issue the Additional Shares if
the delay in filing of the Registration Statement is caused solely by the
Shareholder's failure to deliver, in a commercially reasonable and timely
manner, the information regarding the Shareholder that is needed by the Company
to complete the Registration Statement.
In connection with the foregoing, the Shareholder agrees to cooperate
with the Company and to provide the Company in a timely manner with all
information regarding the Shareholder as the Company may reasonably request in
connection with the preparation of the Registration Statement. In addition, the
Shareholder agrees to promptly notify the Company of any changes in the
information set forth in the Registration Statement regarding Shareholder or
Shareholder's plan of distribution as set forth in such Registration Statement.
(b) The Company shall prepare and file with the SEC (i) such
amendments and supplements to the Registration Statement and any "Prospectus,"
as such term is hereinafter defined, used in connection therewith, and (ii) such
other filings required by the SEC, in each case as may be necessary to keep the
Registration Statement continuously effective and not misleading until the first
to occur of (A) all of the Shares have been previously sold, distributed or
disposed of pursuant to the Registration Statement; (B) all of the Shares have
otherwise been sold, distributed, transferred or disposed of to any entity other
than an Affiliate of the Shareholders; or (C) one hundred and eighty (180) days
from the effective date of the Registration Statement or such other time
thereafter as the Company in its sole discretion may agree to.
(c) In order to facilitate the public sale or other
disposition or distribution of all or any of the Shares by the Shareholders
pursuant to the Registration Statement, the Company shall furnish to the
Shareholders with respect to the Shares registered under the Registration
Statement such number of copies of prospectuses, prospectus supplements and
preliminary prospectuses as such Shareholders reasonably requests in conformity
with the requirements of the Act (collectively, the "Prospectus").
(d) The Company shall file such documents, if any, reasonably
required of the Company for normal blue sky clearance in New York, California
and such other state(s) as the Company in its sole discretion may agree to;
provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this clause (d), (ii) subject itself to general
taxation in any such jurisdiction; (iii) consent to general service of process
in any such jurisdiction; or (iv) undertake compliance with substantive
requirements of the blue sky laws or regulations of a jurisdiction which are
unreasonably burdensome or onerous, including escrow requirements.
2. Registration Statement Delaying or Suspension Events.
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(a) Notwithstanding anything to the contrary contained herein,
the Company shall be entitled to (i) postpone the filing of the Registration
Statement required to be prepared and filed by it hereunder or (ii) withdraw the
Registration Statement after its filing but before it has been declared
effective, if, in either case, the Company in its good faith discretion
determines that such registration would interfere in any material respect with
any proposal or plan by the Company to engage in any financing or any material
acquisition or disposition by the Company or any subsidiary thereof of the
capital stock or assets (other than in the ordinary course of business), any
tender offer or any offering, merger, consolidation, corporate reorganization or
restructuring or other similar transaction material to the Company and its
subsidiaries as a whole ("Material Event"). In the event the filing of the
Registration Statement is postponed or withdrawn, the Company shall file or
re-file the Registration Statement within ten (10) days after the Company, in
its good faith discretion, determines that the Material Event has been completed
or terminated. Nothing in this paragraph shall effect the Company's obligations
to deliver to Shareholder the Additional Shares pursuant to paragraph 1(a)
herein.
(b) The Shareholders further acknowledge and agree that after
the effective date of the Registration Statement the Company may, in its good
faith discretion, determine that there is a Material Event and that the use of
the Prospectus should be suspended until such time as an amendment or supplement
to the Registration Statement or the Prospectus has been filed by the Company
and any such amendment to the Registration Statement is declared effective by
the SEC, or until such time as the Company has filed an appropriate report with
the SEC pursuant to the Securities Exchange Act of 1934, as amended, to report
the Material Event. Each Shareholder hereby covenants that it will not sell any
Shares pursuant to the Prospectus during the period commencing at the time at
which the Company gives such Shareholder written notice of the suspension of the
use or the Prospectus and ending at the time the Company gives such Shareholder
written notice that the Shareholders may thereafter effect sales pursuant to the
Prospectus.
(c) The Company shall disclose to the Shareholders the nature
of any Material Event or the business purpose for which it has delayed or
withdrawn the Registration Statement or suspended the use of the Prospectus,
provided the Shareholders agree to keep any information so disclosed
confidential and not complete any trades of Common Stock until the Company
informs the Shareholders the information is considered public information or is
no longer material.
3. Transfer of Shares. Shareholders agree not to effect any
disposition of the Shares that would constitute a "sale" within the meaning of
the Act, except pursuant to the Registration Statement or in a transaction
exempt from registration under the Act, in which case the Shareholders shall,
prior to effecting such disposition, submit to the Company an opinion of counsel
in form and substance reasonably satisfactory to the Company to the effect that
the proposed transaction is in compliance with the Act.
4. Registration Expenses
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All expenses incident to the Company's performance of or compliance
with this Agreement including, without limitation (i) all registration and
filing fees, all fees and expenses associated with filings required to be made
with the NASD, as may be required by rules and regulations of the NASD, fees and
expenses of compliance with securities or blue sky laws (including fees and
disbursements of counsel in connection with blue sky qualifications for the
Shares), if any, rating agency fees, printing expenses (including expenses of
printing certificates for the Shares in a form eligible for deposit with the
Depository Trust Company and of printing prospectuses, messenger and delivery
expenses, (ii) internal expenses (including, without limitation, all salaries
and expenses of their officers and employees performing legal or accounting
duties), and (iii) fees and expenses of (a) counsel for the Company, (b) the
Company's independent certified public accountants, and (c) counsel for the
Shareholders, (all such expenses being herein called "Registration Expenses")
will be borne by the Company. Any underwriting discounts or commissions
attributable to the sale of the Shares shall be borne by the Shareholders. In
the event that following effectiveness of the Registration Statement, it becomes
necessary for the Company to prepare and file a supplemental prospectus or
amended prospectus in order to maintain the effectiveness of such Registration
Statement, the Company shall pay all printing costs associated with the printing
of such supplemental or amended Prospectus to be distributed in connection with
sales of their securities pursuant thereto.
5. Miscellaneous
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(a) Publicity. No press release, publicity, disclosure or
notice to any Person concerning any of the transactions contemplated by this
Agreement shall be issued, given, made or otherwise disseminated by the
Shareholders, or any of their respective Associates at any time, without the
prior written approval of the Company. Notwithstanding anything to the contrary
contained herein, the Company shall be entitled to issue press releases
regarding the transactions contemplated by this Agreement.
(b) Governing Law. This Agreement shall be construed in
accordance with, and governed in all respects by, the laws of the State of New
York (without giving effect to principles of conflicts of law).
(c) Arbitration of Disputes.
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(i) All Disputes arising between the parties hereto with
respect to the making, construction, terms, or interpretation of this Agreement
or any breach thereof, or the rights or obligations of any party hereto or
thereto, shall, in lieu of court action, be submitted to mandatory, binding
arbitration, pursuant to the terms of Section F5 of each Shareholder's
Subscription Agreement.
(ii) BY INITIALING IN THE SPACE BELOW, YOU ARE AGREEING TO
HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF
DISPUTES" SECTION OF YOUR SUBSCRIPTION AGREEMENT DECIDED BY NEUTRAL ARBITRATION
AS PROVIDED BY THE LAWS OF THE STATE OF CALIFORNIA AND YOU ARE GIVING UP ANY
RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL.
BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE
"ARBITRATION OF DISPUTES" SECTION OF YOUR SUBSCRIPTION AGREEMENT. IF YOU REFUSE
TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED
TO ARBITRATE UNDER THE AUTHORITY OF THE LAWS OF THE STATE OF CALIFORNIA. YOU
AGREE THAT YOUR AGREEMENT TO THIS ARBITRATION SECTION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" SECTION OF
YOUR SUBSCRIPTION AGREEMENT TO NEUTRAL ARBITRATION.
INITIALS RP
COMPANY'S INITIALS JH
(d) Notices. All notices and other communications required or
permitted under this Agreement shall be in writing which are addressed as
provided in this Section 5(d) if delivered personally against proper receipt or
by confirmed facsimile transmission shall be effective upon delivery and (ii) if
delivered (A) by certified or registered mail with postage prepaid shall be
effective five (5) Business Days or (B) by Federal Express or similar courier
service with courier fees paid by the sender, shall be effective two (2)
Business Days following the date when mailed or couriered, as the case may be.
Any party hereto may from time to time change its address for the purpose of
notices to such party by a similar notice specifying a new address, but no such
change shall be deemed to have been given until it is actually received by the
party sought to be charged with its contents. Initially, all notices shall be
sent to the parties hereto as follows:
if to the Company:
AVENUE GROUP, INC.
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxx, XX. 91403
Attention: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to (not constituting notice):
Xxxxx X. Xxxxxx, Esq.
Jeffer, Mangels, Xxxxxx & Marmaro LLP
1900 Ave. of the Stars, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Shareholders at the addresses or facsimile numbers set forth beneath
their respective names on the signature page hereof.
(e) Headings. The table of contents of this Agreement and the
underlined headings contained in this Agreement are for convenience of reference
only, shall not be deemed to be a part of this Agreement and shall not be
referred to in connection with the construction or interpretation of this
Agreement.
(f) Assignment. No Shareholder may assign any of its rights or
delegate any of its obligations under this Agreement to any other person without
the prior written consent of the Company. The Company may assign the Company's
rights and obligations hereunder to an Affiliate or pursuant to the acquisition
of all or substantially all of the voting securities or assets of the Company by
means of a merger, stock purchase or other similar transaction.
(g) Third Party Beneficiaries. Nothing in this Agreement is
intended to provide any rights or remedies to any person (including any employee
or creditor of any Shareholder) other than the parties hereto.
(h) Severability. In the event that any provision of this
Agreement, or the application of such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or unenforceable, shall not
be affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
(i) Integration, Entire Agreement. Except as expressly noted
in Section 5(c) above, this Agreement sets forth the entire understanding of the
Parties hereto and supersedes all other agreements and understandings between
any of the parties relating to the subject matter hereof and thereof.
(j) No Waiver. No failure on the part of either party hereto
to exercise any power, right, privilege or remedy under this Agreement, and no
delay on the part of either party hereto in exercising any power, right,
privilege or remedy under this Agreement, shall operate as a waiver thereof; and
no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy.
(k) Amendments. This Agreement may not be amended, modified,
altered or supplemented except by means of a written instrument executed by the
Company and the Shareholder.
(l) Representations and Warranties, Representatives. No party
hereto shall make any warranties or representations, or assume or create any
obligations, on the other party's behalf except as may be expressly permitted
hereunder or in writing by such other party. Each party hereto shall be solely
responsible for the actions of all its representative employees, agents and
representatives.
(m) Interpretation of the Agreement:
(i) Each party hereto acknowledges that it has
participated in the drafting of this Agreement, and any applicable rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in connection with the construction or
interpretation of this Agreement;
(ii) Whenever required by the context hereof, the singular
number shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; and the neuter gender shall include the
masculine and feminine genders;
(iii) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, and shall be deemed to be followed by the words "without
limitation"; and
(iv) References herein to "Sections" and "Exhibits" are
intended to refer to Sections of and Exhibits to this Agreement.
(o) Counterparts This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMPANY: ROO MEDIA CORPORATION
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: CEO
SHAREHOLDER: AVENUE GROUP, INC.
By: /s/ Xxxxxxxx Xxxxxx
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Name: Xxxxxxxx Xxxxxx
Title: Executive Vice President
