EXHIBIT 99.5
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
October 1, 1998, is entered into by and among TOY BIZ, INC., a Delaware
corporation (the "Company"), and the undersigned stockholders (each, a "Buyer,"
and collectively, the "Buyers").
RECITALS:
WHEREAS, the Buyers have entered into either (i) a Stock
Purchase Agreement, dated as of October 1, 1998 (the "Stock Purchase Agreement")
with the Company or (ii) have executed a Subscription Election Form (the
"Subscription Election Forms") with the Company, pursuant to which the Company
is selling to Buyers, and Buyers are purchasing from the Company, 9,000,000
shares (the "Shares") of the Company's 8% cumulative convertible exchangeable
preferred stock, par value $0.01 per share (the "Preferred Stock");
WHEREAS, the Buyers are requiring the Company to enter into
this Agreement in connection with the Stock Purchase Agreement and the
Subscription Election Forms and as a condition to the purchase of the Shares by
the Buyers;
WHEREAS, pursuant to the Fourth Amended and Restated Joint
Plan of Reorganization Plan Proposed by the Secured Lenders and the Company. In
Re: Marvel Entertainment Group, Inc. et al (case No. 97-638-RRM) in the United
States District Court for the District of Delaware (the "Plan"), those Buyers
who are Secured Lenders (as defined in the Plan) will receive shares of
Preferred Stock (the "Plan Preferred Shares") and shares of Common Stock (as
herein defined) (the "Plan Common Shares") in respect of their Allowed Fixed
Senior Secured Claims (as defined in the Plan);
WHEREAS, the Board of Directors of the Company has authorized
the officers of the Company to execute and deliver this Agreement in the name
and on behalf of the Company;
NOW, THEREFORE, in consideration of these premises and the
mutual promises herein contained, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions.
Business Day: Any Monday, Tuesday, Wednesday, Thursday or Friday that
is not a day on which banking institutions in the City of New York are
authorized by law, regulation or executive order to close.
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Common Stock: The common stock, par value $0.01 per share, of the
Company or any securities issued in exchange therefor in any recapitalization,
reclassification, merger, consolidation or similar transaction.
Debentures: The 8% Convertible Subordinated Voting Debentures of the
Company.
Effective Date: The Consummation Date (as defined in the Plan of
Reorganization).
Exchange Act: The Securities Exchange Act of 1934, as amended from time
to time, or any successor statute, and the rules and regulations of the SEC
thereunder, all as in effect at the time.
Holder: Each of the Buyers and any other Person that becomes an owner
of Registrable Securities; provided, however, that no Person shall become a
Holder unless such Person has executed and delivered to the Company, an
agreement, in the form of Annex A hereto, to be bound by the provisions of this
Agreement.
Person: An individual, partnership, corporation, limited liability
company, joint venture trust or unincorporated organization, a government or
agency or political subdivision thereof or any other entity.
Plan of Reorganization: The Fourth Amended Joint Plan of Reorganization
filed by the Secured Lenders and by the Company, as the same may be amended or
modified.
Prospectus: The prospectus included in any Registration Statement, as
amended or supplemented by a prospectus supplement with respect to the terms of
the offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications or registrations (or the
obtaining of exemptions therefrom) of the Registrable Securities), printing
expenses (including expenses of printing Prospectuses), messenger and delivery
expenses, internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
fees and disbursements of its counsel and its independent certified public
accountants (including the expenses of any special audit or "comfort" letters
required by or incident to such performance or compliance), securities acts
liability insurance (if the Company elects to obtain such insurance), fees and
expenses of any special experts retained by the Company in connection with any
registration hereunder, and fees and expenses of other Persons retained by the
Company; provided, however, that
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Registration Expenses shall not include any underwriting discounts, commissions
or fees attributable to the sale of the Registrable Securities.
Registrable Securities: (i) The Shares, (ii) Plan Preferred Shares,
(iii) any shares of Common Stock into which the Shares or the Plan Preferred
Shares may be converted from time to time, (iv) any Debentures issued in
exchange for the Shares, or the Plan Preferred Shares, (v) if the Debentures are
issued, any shares of Common Stock issued or issuable upon conversion of the
Debentures, (vi) the Plan Common Shares, (vii) all other shares of Common Stock
held by any of the Buyers as of the date hereof and (viii) any other securities
issued or issuable as a result of or in connection with any stock dividend,
stock split or reverse stock split, combination, recapitalization,
reclassification, merger or consolidation, exchange or distribution in respect
of the securities referred to in clauses (i) through (v) above; provided,
however, that any Registrable Security shall cease to be such if (A) such
Registrable Security shall have been transferred pursuant to an effective
Registration Statement or in compliance with Rule 144 or (B) such Registrable
Securities may be sold pursuant to section (k) of Rule 144.
Registration Statement: Any registration statement of the Company,
including, without limitation, the Shelf Registration Statement, filed with the
SEC which provides for the registration for sale or other transfer of the
Registrable Securities, including the Prospectus included therein, all
amendments and any supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by
reference in such Registration Statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar successor rule thereto that may
be promulgated by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar successor rule thereto that may
be promulgated by the SEC.
SEC: The United States Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended from time to
time, or any successor statute, and the rules and regulation of the SEC
thereunder, all as in effect from time to time.
Underwritten Offering: A registered offering in which securities are
sold to one or more underwriters on a firm commitment basis for reoffering to
the public.
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Whippoorwill Account: Each partnership or account which enters into
this Agreement as a Buyer through execution and delivery hereof by Whippoorwill
Associates, Incorporated as its agent or General Partner.
2. Registration under the Securities Act
(a) Filing and Effectiveness. As soon as reasonably
practicable following the date hereof (and in no event later than fifty (50)
days after the Effective Date), the Company shall file with the SEC a shelf
registration statement under the Securities Act registering the resale of the
Registrable Securities by the Holders (the "Shelf Registration Statement"). The
Company shall use its reasonable best efforts to cause the Shelf Registration
Statement to be declared effective as soon as practicable after the filing
thereof, and thereafter to keep it continually effective until such time as
there shall cease to be outstanding any Registrable Securities.
(b) Subsequent Holders. If any Person becomes a Holder of
Registrable Securities that were included in the Shelf Registration Statement
subsequent to the time that the Shelf Registration Statement became effective,
the Company shall add such Holder to the Shelf Registration Statement, on a
timely basis, through a post-effective amendment or a supplement to the
Prospectus, as shall be necessary in accordance with the rules of the SEC under
the Securities Act to include such Holder as a selling securityholder in a
distribution under the Shelf Registration Statement.
(c) Methods of Distribution. The Registrable Securities may be
sold or distributed under the Shelf Registration Statement directly by the
Holders as principal or through one or more brokers, dealers or agents from time
to time in one or more transactions, including, without limitation, (i) on any
securities exchange (or quotation system operated by a national securities
association) on which the Registrable Securities are then listed, (ii) in
private transactions, (iii) in block trades, or (iv) though the writing of
options (whether such options are listed on an exchange or otherwise) on, or
settlement of short sales of, the Registrable Securities in compliance with
applicable law. The Holders may not sell or distribute the Registrable
Securities under the Shelf Registration Statement in an Underwritten Offering
except as provided in Section 3 hereof.
Nothing in this Agreement shall in any way restrict any Holder
from selling or otherwise transferring the risk or benefit of ownership of
securities of the Company in any manner not provided in this Agreement in
accordance with the Securities Act and other applicable law.
3. Piggyback Registration.
(a) Piggyback Registration. If the Company at any time
proposes to effect an Underwritten Offering of any class of its equity
securities for its own account or for the
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account of a holder of securities of the Company pursuant to registration rights
granted by the Company (a "Requesting Shareholder"), whether under a previously
effective shelf registration statement or a registration statement filed for the
purpose of such Underwritten Offering (a "Piggyback Registration"), then the
Company shall in each case give written notice of such proposed offering to the
Holders at least ten (10) Business Days before the proposed date of filing of
such registration statement (or, in the case of a previously effective shelf
registration statement, the filing of any amendment or supplement to such shelf
registration statement to permit such Underwritten Offering), and such notice
shall offer to all Holders the opportunity to have any or all of the Registrable
Securities then held by the Holders included in such Underwritten Offering. Each
Holder desiring to have its Registrable Securities offered under this Section
shall so advise the Company in writing within five (5) Business Days after the
date of receipt of the Company's aforesaid notice (which request shall set forth
the amount of Registrable Securities proposed to be offered), and the Company
shall cause to be included in such Underwritten Offering all such Registrable
Securities so requested to be included therein, provided that the Holders
thereof execute and deliver the underwriting agreement and other customary
documents related to such offering including, if requested by the managing
underwriter or underwriters, selling stockholder questionnaires, powers of
attorney and custody agreements.
(b) Cutback. (i) Priority on Primary Registrations. If a
Piggyback Registration is an Underwritten Offering by the Company on a primary
basis (a "Primary Registration"), and the managing underwriters advise the
Company in writing that in their good faith opinion the amount of securities
requested to be included in such registration is sufficiently large as to be
likely to materially adversely affect the success of such offering, the Company
will include in such registration, to the extent such managing underwriters
advise the Company that such securities can be included in the Offering without
being likely to materially adversely affect the success of the Offering (i)
first, the securities the Company proposes to sell, and (ii) second, the
securities requested to be sold by any of the Holders and other holders of
securities of the Company exercising similar piggy-back registration rights with
respect to that Offering, pro rata, based on the number of securities requested
to be sold by the Holders and the holders.
(ii) Priority on Secondary Registrations. If a Piggyback
Registration is an Underwritten Offering other than a Primary Registration, and
the managing underwriters advise the Company in writing that in their good faith
opinion the amount of securities requested to be included in such registration
is sufficiently large as to be likely to materially adversely affect the success
of such registration, the Company will include in such registration, to the
extent such managing underwriters advise the Company that such securities can be
included in the Offering without being likely to materially adversely affect the
success of the Offering (i) first, the securities requested to be included
therein by a Requesting Shareholder exercising demand registration rights, (ii)
second, the securities requested to be included therein by the Company and (iii)
third, as requested by any other Holders and other holders of securities of the
Company exercising similar piggy-back registration rights with respect to that
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Offering, pro rata, based on the number of securities requested to be sold by
those Holders or holders.
4. Registration Procedures.
(a) General. In connection with the Company's registration
obligations pursuant to this Agreement, the Company shall:
(i) prepare and file with the SEC the Shelf
Registration Statement and such amendments and post-effective
amendments thereto as may be necessary to keep the Shelf Registration
Statement continuously effective for the time period set forth in
Section 2, including as required in accordance with Item 512(a) of
Regulation S-K under the Securities Act; provided that as soon as
practicable, but in no event later than three (3) Business Days before
the filing of any Registration Statement and any amendment thereto, any
related Prospectus or any amendment or supplement thereto (other than
any amendment or supplement made solely as result of incorporation by
reference of documents filed with the SEC subsequent to the filing of
such Registration Statement), the Company shall furnish to the Holders
of the Registrable Securities covered by such Registration Statement,
copies of all such documents proposed to be filed, which documents
shall be subject to the review of such Holders; not file any
Registration Statement or any amendment thereto or any Prospectus or
any supplement thereto (other than any amendment or supplement made
solely as a result of incorporation by reference of documents filed
with the SEC subsequent to the filing of such Registration Statement)
to which the Holders of a majority of the Registrable Securities shall
have reasonably objected in writing within (2) Business Days after
receipt of such documents to the effect that such Registration
Statement or amendment thereto or Prospectus or supplement thereto does
not comply in all material respects with the requirements of the
Securities Act; and comply with the provisions of the Securities Act
applicable to the Company with respect to the disposition of all
securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus in accordance with this
Agreement;
(ii) notify the selling Holders of Registrable
Securities promptly (1) when a Registration Statement, Prospectus or
any Prospectus supplement or post-effective amendment has been filed,
and, with respect to any Registration Statement or post-effective
amendment, when it has become effective, (2) of any request by the SEC
for amendments or supplements to any Registration Statement or
Prospectus or for additional information, (3) of the issuance by the
SEC of any comments with respect to any filing, (4) of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose, (5) of any suspension
of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation
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or threatening of any proceeding for such purpose and (6) of the
happening of any event which makes any statement of a material fact
made in any Registration Statement, Prospectus or any document
incorporated therein by reference untrue or which requires the making
of any changes in any Registration Statement, Prospectus or any
document incorporated therein by reference in order to make the
statements therein (in the case of any Prospectus, in the light of the
circumstances under which they were made) not misleading; and use
reasonable best efforts to obtain as promptly as practicable the
withdrawal of any order or other action suspending the effectiveness of
any Registration Statement or suspending the qualification or
registration (or exemption therefrom) of the Registrable Securities for
sale in any jurisdiction;
(iii) promptly after the filing of any document which
is to be incorporated by reference into a Registration Statement or
Prospectus, provide without charge copies of such document to the
Holders of the Registrable Securities covered thereby;
(iv) furnish to the selling Holders of Registrable
Securities, without charge, at least one manually signed or "edgarized"
copy, and as many conformed copies as may reasonably be requested, of
the then effective Registration Statement and any post-effective
amendments thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits (including
those incorporated by reference);
(v) deliver to the selling Holders, without charge,
as many copies of the then effective Prospectus (including each
prospectus subject to completion) and any amendments or supplements
thereto as such Persons may reasonably request;
(vi) use reasonable best efforts to register or
qualify or cooperate with the selling Holders and their respective
counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any selling Holder reasonably
requests in writing and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions
of the Registrable Securities covered by the then effective
Registration Statement; provided, however, that the Company will not be
required to (1) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (vi)
or (2) subject itself to general taxation in any such jurisdiction;
(vii) cooperate with the selling Holders to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the Holders may
request at least
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two (2) Business Days prior to any sale of Registrable Securities to
the underwriters, if any;
(viii) upon the occurrence of any event contemplated
by clause (6) of paragraph (ii) above, promptly prepare a supplement or
post-effective amendment to the Registration Statement or the related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances in which they were made, not misleading;
(ix) cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange (or
quotation system operated by a national securities association) on
which identical securities issued by the Company are then listed, and
enter into customary agreements to effect that listing, including, if
necessary, a listing application in customary form, and provide a
transfer agent for such Registrable Securities;
(x) if the Registrable Securities are to be sold in
an Underwritten Offering pursuant to Section 3 or in a block trade or
other private placement: (1) obtain an opinion of counsel covering
matters that are no more extensive in scope than would be customarily
covered in opinions obtained in such types of transactions by issuers
with similar market capitalization and reporting and financial
histories; (2) obtain a "cold comfort" letter from the independent
public accountants of the Company and covering matters that are no more
extensive in scope than would be customarily covered in "cold comfort"
letters and updates obtained in secondary Underwritten Offerings by
issuers with similar market capitalization and reporting and financial
histories, provided, however, that the letter described in this clause
(2) shall only be required in connection with a block trade or other
private placement to the extent such letters are being issued in
respect of such types of transactions under then prevailing accounting
practices and to the extent the Company's independent public
accountants do not have a policy against issuing such letters in
connection with such offerings; and (3) deliver a certificate of a
senior executive officer of the Company to cover matters no more
extensive in scope than those matters customarily covered in officer's
certificates delivered in connection with Underwritten Offerings by
issuers with similar market capitalization and reporting and financial
histories;
(xi) provide a CUSIP number for the Registrable
Securities no later than the effective date of a Registration Statement
applicable thereto;
(xii) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC relating to
such registration and the
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distribution of the securities being offered and make generally
available to its securities holders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act, no later than 60
days after the end of any 12-month period (or 90 days, if such period
is a fiscal year) commencing at the end of any fiscal quarter in which
the Registrable Securities are sold in an Underwritten Offering, block
trade or other private placement, which earnings statements shall cover
such 12-month periods;
(xiii) cooperate and assist in any filings required
to be made with the National Association of Securities Dealers, Inc.;
and
(xiv) make available for inspection by
representatives of the Holders of the Registrable Securities, and any
attorneys or accountants retained by the Holders, all financial and
other records, pertinent corporate documents and properties of the
Company and cause the Company's officers, directors and employees to
supply all information reasonably requested by, and to reasonably
cooperate with, any such representative, attorney or accountant in
connection with such registration, and otherwise to cooperate fully in
connection with any due diligence investigation, including making
reasonably available its officers during ordinary business hours, and
permitting discussions with the independent public accountants who have
certified the Company's most recent annual financial statements, in
each case to the extent necessary to enable any Holder to conduct a
"reasonable investigation" for purposes of Section 11(a) of the
Securities Act; provided, however, that such representatives, attorneys
or accountants enter into a confidentiality agreement, in customary
form and substance reasonably satisfactory to the Company, prior to the
release or disclosure to them of any such information, records or
documents.
(b) Holder Information. The Company may require each selling
Holder to furnish to the Company such information regarding such Holder and the
distribution of Registrable Securities to be sold by such Holder as the Company
may from time to time reasonably request in writing.
(c) Occurrence of Certain Events. Each Holder of Registrable
Securities agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Subsection (a)(ii)(4), (5) or
(6) above, such Holder will forthwith refrain from disposing or discontinue
disposition of Registrable Securities pursuant to the then current Prospectus
(but, in the case of an event described in Subsection (a)(ii)(5), only in the
affected jurisdiction(s)) until such Holder is advised in writing by the Company
that the use of the Prospectus may be resumed. The Company shall use its best
efforts to limit the duration of any discontinuance with respect to the
disposition of Registrable Securities pursuant to this paragraph.
(d) Additional Procedures. If the Holders become
entitled, pursuant to an event described in clause (viii) of the definition of
Registrable Securities, to receive any
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securities in respect of Registrable Securities that were already included in
the Shelf Registration Statement subsequent to the date the Shelf Registration
Statement is declared effective, and the Company is unable under the securities
laws to add such securities to the Shelf Registration Statement, the Company, as
promptly as reasonably practicable, shall file, in accordance with the
procedures more particularly set forth in this Section, an additional Shelf
Registration Statement with respect to any such Registrable Securities. The
Company shall use its reasonable best efforts to have any such additional
Registration Statement declared effective as promptly as reasonably practicable
after such filing and to keep such additional Shelf Registration Statement
continuously effective during the period specified in Section 2.
5. Holdback Agreements.
(a) Hold-Back Election. Subject to subsection (c) and the
final sentence of this Subsection (a), in the case of any Underwritten Offering
by the Company, whether for its own account or for the account of a holder of
securities of the Company pursuant to registration rights granted by the
Company, each Holder agrees, if and to the extent requested in writing by the
managing underwriter or underwriters administering such offering as promptly as
reasonably practicable prior to the commencement of the 10-day period referred
to below (a "Hold-Back Election"), not to effect any public sale or distribution
of securities of the Company except as part of such Underwritten Offering,
during the period beginning ten (10) days prior to the closing date of such
underwritten offering and during the period ending on the earlier of (i) sixty
(60) days after such closing date and (ii) the date such sale or distribution is
permitted by such managing underwriter or underwriters, provided that, if and to
the extent it is reasonable to do so, the Company will request of the managing
underwriter or underwriters to permit such sale or distribution prior to the
date permitted under clause (i) above.
(b) Material Development Election. Subject to Subsection (c),
the Company shall be entitled, for a period of time not to exceed forty-five
(45) consecutive days, to require that the Holders refrain from effecting any
distribution of their Registrable Securities pursuant to the Shelf Registration
Statement if the chief executive officer of the Company determines in his
reasonable good faith judgment that, in accordance with his understanding of the
disclosure requirements of applicable securities law, such distribution would
require disclosure of any financing (other than an underwritten secondary
offering of any securities of the Company), acquisition, disposition, corporate
reorganization or other transaction or development involving the Company or any
subsidiary of the Company that is or would be material to the Company and that,
in the reasonable good faith business judgment of such chief executive officer,
such disclosure would not at that time be in the best interests of the Company
(a "Material Development Election"). The Company shall, as promptly as
practicable, give the Holders written notice of any such Material Development
Election. If the Holders have been required to refrain from disposing of their
Registrable Securities as a result of a Material Development Election, the
Company shall, as promptly as practicable following the determination that the
Holders may recommence such sales, notify such Holders in writing of such
determination (but in any event no later than the end of such 45-day period).
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(c) Limitation. In no event shall the restrictions under
Subsection (a) or Subsection (b), pursuant to one or more Hold-Back Elections or
Material Development Elections, remain in effect for more than ninety (90) days
in the aggregate in any calendar year.
6. Registration Expenses
The Company shall pay all Registration Expenses in connection with the
registration, offering and sale of the Registrable Securities pursuant to this
Agreement. The Holders shall pay any underwriting discounts, commissions or
fees, fees and expenses of their counsel and all other expenses incurred by them
which are attributable to the offering and sale of any Registrable Securities in
accordance with this Agreement.
7. Rule 144
The Company shall use its reasonable best efforts to make publicly
available, pursuant to Rule 144, such information as is necessary to enable the
Holders to make sales of Registrable Securities pursuant to that Rule. The
Company shall use its reasonable best efforts to file timely with the SEC all
documents and reports required of the Company under the Exchange Act. The
Company shall furnish to any Holder, upon request, a written statement executed
on behalf of the Company as to compliance with the current public information
requirements of Rule 144.
8. Indemnification.
(a) Indemnification by The Company. The Company agrees to indemnify, to
the extent permitted by law (or if indemnification is held by a court of
competent jurisdiction to be unavailable, to contribute to the amount paid or
payable by), each Holder and (as applicable) its officers and directors and each
person or entity who controls such Holder (within the meaning of the Securities
Act) and each person or entity which participates as or may be deemed to be an
underwriter in the offering or sale of such securities against all losses,
claims, damages, liabilities and expenses to which the Holders may be subject
under the Securities Act or any other statute or common law, insofar as such
losses, claims, damages, liabilities and expenses arise out of or are based upon
(i) any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or (ii) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (in the case of a prospectus, always in light of the
circumstances under which the statements are made) or (iii) any violation by the
Company of the Securities Act or any state securities law, "blue sky" law, or
any other law, applicable to the Company in connection with such registration,
qualification, or compliance; provided, however, that the Company will not be
liable to any holder in such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon (a) any untrue
statement or omission made in such
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Registration Statement or amendment or supplement thereto in reliance upon and
in conformity with the written information furnished to the Company by such
Holder expressly for use in the registration statement or (b) any untrue
statement or alleged untrue statement of a material fact contained in, or any
omission or alleged omission of a material fact from, a Registration Statement
if (x) such Registration Statement had been later amended or supplemented in a
manner that would correct the untrue statement or alleged untrue statement,
omission or alleged omission, which is the basis of the loss, liability, claim,
damage or expense for which indemnification is sought, (y) a copy of such
amendment or supplement had been timely provided to the Holder and had not been
sent to or given to a purchaser at or prior to confirmation of sale to such
purchaser and the Holder shall have been under an obligation to deliver such
amendment or supplement, and (z) there would have been no such liability but for
such failure to deliver such prospectus by the Holder. The Company will also
indemnify underwriters participating in the distribution, their officers,
directors, employees, partners and agents, and each Person who controls such
underwriters (within the meaning of the Securities Act), to the same extent as
provided above with respect to the indemnification of the Holders of Registrable
Securities, if so requested.
(b) Indemnification by the Holders. Each Holder agrees to indemnify, to
the extent permitted by law (or if indemnification is held by a court of
competent jurisdiction to be unavailable, to contribute to the amount paid or
payable by), the Company, its directors and officers and each person or entity
who controls the Company (within the meaning of the Securities Act) and each
person or entity which participates as or may be deemed to be an underwriter in
the offering or sale of such securities against any losses, claims, damages,
liabilities and expenses resulting from (i) any untrue or alleged untrue
statement of material fact contained in the Registration Statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or (ii)
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, (in the case
of a prospectus, always in light of the circumstances under which the statements
are made) or (iii) any violation by the Company of the Securities Act or any
state securities law, "blue sky" law, or any other law, applicable to the
Company in connection with such registration, qualification, or compliance, but
only to the extent that such loss, claim, damage, liability or expense arises
out of or is based upon any untrue statement or omission made in such
registration statement or amendment or supplement thereto or any document in
reliance upon and in conformity with the written information furnished to the
Company by such Holder expressly for use in the registration statement.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification;
provided, however, that failure to give such notice will not prejudice such
person's or entity's right to indemnification from the indemnifying party,
except as to any losses suffered by such Person which are attributable to such
Person's failure to promptly give such notice to such indemnifying party and
(ii) (A) have the right to assume the defense of any claim with respect to which
it seeks indemnification and
703450.15
12
with respect to which it has given the notice required by clause (i) of this
Subsection if (x) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel reasonably satisfactory to the indemnified
party in a timely manner or (y) in the reasonable judgment of such Person, based
upon advise of its counsel, a conflict of interest may exist between such person
and the indemnifying party with respect to such claims (in which case, if such
Person notifies the indemnifying party in writing that such Person elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such Person) or (B) permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party. The indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim shall not be obligated to
pay the fees and expenses of more than one counsel for all parties indemnified
by such indemnifying party with respect to such claim (as well as one local
counsel in each relevant jurisdiction), unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim. The
indemnifying party will not consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to the indemnified party of a release from all
liability in respect of such claim or litigation.
(d) Contribution. If for any reason the indemnification provided for in
this Section is unavailable to an indemnified party or insufficient to hold it
harmless as contemplated by this Section, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such loss, claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and the indemnified party
in connection with the statements or omissions that resulted in such loss,
claim, damage or liability, as well as any other relevant equitable
considerations, provided, however, that no indemnifying Holder shall be required
to contribute an amount greater than the dollar amount of the net proceeds
received by such indemnifying Holder with respect to the sale of the Registrable
Securities giving rise to such indemnification obligation. The relative fault of
any indemnifying or indemnified party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by such indemnifying or indemnified party or its affiliates or
representatives, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Subsection were determined by (i) pro rata allocation (even if
all Holders or any agents for the Holders or any underwriters of the Registrable
Securities, or all of them, were treated as one entity for such purpose), or
(ii) by any other method that does not take into account the equitable
consideration referred to in this Subsection. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above shall be deemed to
include any legal or other
703450.15
13
fees or expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action, proceeding or claim. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentations.
(e) The indemnification and contribution provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling person or entity of such indemnified party and will survive the
transfer of securities and the termination of this Agreement.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered into and
will not on or after the date of this Agreement enter into any agreement which
is inconsistent with the rights granted in this Agreement to the Holders or
which otherwise conflicts with the provisions hereof.
(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, without the consent in writing of the Company and all affected Holders.
(c) Notices. All notices, requests, demands, deliveries and other
communications (collectively, "Notices") that are required or may be given under
this Agreement shall be in writing. All Notices shall be deemed to have been
duly given or made: if by hand, immediately upon delivery; if by telecopier or
similar device, immediately upon sending, provided notice is sent on a business
day during the hours of 9:00 a.m. and 6:00 p.m. at the location of the party
receiving the Notice, but if not, then immediately upon the beginning of the
first business day after being sent; if by Federal Express, United States Postal
Service, Express Mail or any other reputable overnight delivery service, on the
scheduled delivery date thereof; and if mailed by certified mail, return receipt
requested, ten Business Days after mailing. Notwithstanding the foregoing, with
respect to any Notice given or made by telecopier or similar device, such Notice
shall not be effective unless and until (i) the telecopier or similar device
being used prints a written confirmation of the successful completion of such
communication by the party sending the Notice, and (ii) a copy of such Notice is
deposited in first class mail to the appropriate address for the party to whom
the Notice is sent. In addition, notwithstanding the foregoing, a Notice of a
change of address by a party hereto shall not be effective until received by the
party to whom such Notice of a change of address is sent. All notices are to be
given or made to the parties at the following addresses (or to such other
address as either party may designate by Notice in accordance with the
provisions of this Section):
703450.15
14
i. if to any of the Holders, to its address set forth on
Schedule 1 hereto or on the Secured Lender Execution Pages attached:
ii. If to Toy Biz, to
Toy Biz, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
Facsimile No.: 212-682-5272
Confirm: 000-000-0000
with a copy to
Battle Xxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
Confirm: 212-856-7000
(d) 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.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware.
(g) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(h) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective
703450.15
15
successors and assigns of the parties hereto whether so expressed or not. In
addition, whether or not any express assignment has been made, the provisions of
this Agreement which are for the benefit of Holders are also for the benefit of,
and enforceable by, any subsequent holder of Registrable Securities.
(i) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically or to recover
damages or to exercise any other remedy available to it at law or in equity. The
foregoing rights and remedies shall be cumulative and the exercise of any right
or remedy provided herein shall not preclude any Person from exercising any
other right or remedy provided herein. 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 agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.
(j) Jurisdiction; Forum. Each party hereto consents and submits to the
non-exclusive jurisdiction of any state court sitting in the County of New York
or federal court sitting in the Southern District of the State of New York in
connection with any dispute arising out of or relating to this Agreement. Each
party hereto waives any objection to the laying of venue in such courts and any
claim that any such action has been brought in an inconvenient forum. To the
extent permitted by law, any judgment in respect of a dispute arising out of or
relating to this Agreement may be enforced in any other jurisdiction within or
outside the United States by suit on the judgment, a certified copy of such
judgment being conclusive evidence of the fact and amount of such judgment. Each
party hereto agrees that personal service of process may be effected by any of
the means specified in Subsection (c), addressed to such party. The foregoing
shall not limit the rights of any party to serve process in any other manner
permitted by law.
(k) Whippoorwill Obligations Several and Not Joint. With respect to any
obligations hereunder assumed by any Whippoorwill Account, such obligations
shall be several and not joint and shall be limited to the percentage held by
such Whippoorwill Account of the total Registrable Shares held by all such
Whippoorwill Accounts, and no such Whippoorwill Account shall be liable for any
obligation of any other Whippoorwill Account.
703450.15
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TOY BIZ, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title:President and Chief Executive Officer
XXXXXXXXX & CO., L.P.
By: Xxxxxxxxx Partners, L.P.
By: Xxxxxxxxx Partners Inc.
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXXXXXX FOCUS FUND L.P.
By: Xxxxxxxxx Partners, L.P.
By: Xxxxxxxxx Partners Inc.
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXXXXXX INTERNATIONAL LIMITED
By: Xxxxxxxxx Partners Inc.
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
703450.15
XXXXXX XXXXXXXXX, XXXXXXX XXXXXXX
AND XXXX XXXXXX AS TRUSTEES
U/T/A/D 12/27/88, XXXX XXXXXXXXX,
GRANTOR
By:
-----------------------------------------
Xxxx X. Xxxxxx
Trustee
XXXX XXXXXXXXX AND XXXXXX
XXXXXXXXX, AS TRUSTEES OF THE
XXXX AND XXXXXX XXXXXXXXX
FOUNDATION
By:
-----------------------------------------
Xxxx Xxxxxxxxx
Trustee
-----------------------------------------
Xxxxxx Xxxxxxxxx
OBJECT TRADING CORP.
By:
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: President
WHIPPOORWILL/MARVEL OBLIGATIONS
TRUST - 1997
By: Whippoorwill Associates, Inc.,
solely in its capacity as investment
advisor for the Whippoorwill/Marvel
Obligations Trust - 1997, and not in
its individual capacity
By:
-----------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Managing Director
703450.15
WHIPPOORWILL ASSOCIATES, INCORPORATED, as
agent for and/or general partner for the
accounts listed on Schedule 1 hereto
By:
-----------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Managing Director
703450.15
Schedule 1
----------
Name and Address
----------------
Xxxxxxxxx Parties:
XXXXXXXXX & CO., L.P.
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
XXXXXXXXX FOCUS FUND L.P.
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
XXXXXXXXX INTERNATIONAL
LIMITED
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
XXXXXX XXXXXXXXX, XXXXXXX
XXXXXXX AND XXXX XXXXXX AS
TRUSTEES U/T/A/D 12/27,88,
XXXX XXXXXXXXX, GRANTOR
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
XXXX XXXXXXXXX AND XXXXXX
XXXXXXXXX, AS TRUSTEES OF THE
XXXX AND XXXXXX XXXXXXXXX
FOUNDATION
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
703450.15
Name and Address
----------------
Xxxxxx Xxxxxxxxx
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
OBJECT TRADING CORP.
X. X. Xxx 0000
Xxxx Xxxxx, Xxxxxxx
WHIPPOORWILL/MARVEL
OBLIGATIONS TRUST -- 1997
c/o Whippoorwill Associates, Incorporated
00 Xxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
WHIPPOORWILL ASSOCIATES,
INCORPORATED, as agent for or
general partner of each account or
partnership listed on the Addendum
to Schedule 1 00 Xxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
703450.15
Addendum to Schedule 1
----------------------
Fund/Account
------------
President and Fellows of Harvard College
The Rockefeller Foundation
Xxxx Partners II, X.X. Xxxx Partners III, X.X.
Xxxx Partners IV, X.X.
Xxxx Offshore Fund Trust
Whippoorwill Profit Sharing Plan
Saranac Partners, L.P.
25307 Partners
Xxxx Partners, L.P.
703450.15
SECURED LENDER EXECUTION PAGE
By signing below, the undersigned is hereby executing and
agreeing to be bound by the Registration Rights Agreement, dated October 1,
1998, by and among Object Trading Corp., Toy Biz, Inc., certain affiliates of
Xxxxxxxxx Partners, Inc., Whippoorwill Marvel Obligations Trust - 1997 and
certain purchasers of Preferred Stock who have executed subscription election
forms with the Chase Manhattan Bank.
NAME OF SECURED LENDER
By:
---------------------------------
Name:
Title:
Address for Notices:
-------------------------
-------------------------
-------------------------
Telecopy No.
-------------
703450.15
