Exhibit 10.34
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 12, 1999 (the "Effective Date")
by and between Interactive Magic, Inc., a North Carolina corporation
("Purchaser"), and Multiplayer Games Network, Inc., Tantalus, Inc. and Xxxx X.
Xxxxxxxxx (collectively, the "Stockholders").
WHEREAS, pursuant to a separate Agreement and Plan of Merger,
dated as of January 25, 1999, among MPG-Net, Inc., a Delaware corporation
("MPGN""), Purchaser, iMagicOnline Corporation ("I-Magic"), Xxx Xxxxxxxxx and
each of the Stockholders (the "Merger Agreement"), the Stockholders are
acquiring on the date hereof, shares of Common Stock of Purchaser, par value
$.10 per share (the "Common Stock") set forth opposite their names on Schedule A
(the "Equity Securities");
The Stockholders and Purchaser wish to establish certain
rights and obligations with respect to the Stockholders' Equity Securities.
It is therefore agreed as follows:
1. DEFINITIONS. In this Agreement, the following terms shall
have the meaning specified, unless the context otherwise requires:
1.1 "Affiliate" of an entity means any person or entity
who or which, directly or indirectly, controls, is under common control with or
is controlled by that entity. For the purposes of this definition, "control," as
used with respect to any entity, shall mean the beneficial ownership, directly
or indirectly, of a majority of the voting securities of that entity.
1.2 "Convertible Securities" means any evidence of
indebtedness, debt securities, shares of stock (other than Common Stock) or
other securities directly or indirectly convertible into or exchangeable for
Common Stock, including options and warrants.
1.3 "Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder, or any
successor act, all as the same shall be in effect at the time.
1.4 "Merger Documents" means the Merger Agreement and all
exhibits thereto.
1.5 "Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
1.6 "Registrable Securities" means the Equity Securities,
Common Stock or Common Stock issued or issuable upon exercise or conversion of
Convertible Securities.
1.7 "Registration Expenses" means all expenses incident
to Purchaser's performance of or compliance with SECTION 4, including, without
limitation, all registration and filing fees, all fees and expenses of complying
with securities or blue sky laws (including reasonable fees and disbursement of
counsel in connection with blue sky qualifications of the Registrable
Securities), rating agency fees, all printing expenses, messenger and delivery
expenses, internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the fees and expenses incurred in connection with the listing of the securities,
the fees and disbursements of counsel for Purchaser and of its independent
public accountants, including the expenses of any special audits required by or
incident to such performance and compliance, but excluding any fees and expenses
of counsel for holders of Registrable Securities or any underwriting discounts
and commissions applicable to the Registrable Securities.
1.8 "SEC" means the Securities and Exchange Commission.
1.9 "Securities Act" means the Securities Act of 1933, as
amended and the rules and regulations promulgated thereunder, or any successor
act, all as the same shall be in effect at the time.
1.10 "Transfer" means any sale, bequest, exchange,
assignment or gift, the creation of any security interest or other encumbrance
and any other disposition of any kind, whether voluntary or involuntary,
affecting title to or possession of any of the Equity Securities.
2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder severally represents and warrants to Purchaser as follows:
2.1 Such Stockholder is acquiring the Equity Securities
for its own account and not on behalf of any other Person, and not with a view
to resale or distribution in whole or in part in a manner that would violate the
Securities Act.
2.2 Such Stockholder understands that the Equity
Securities have not been registered under the Securities Act and will be
"restricted securities" within the meaning of the regulations under the
Securities Act, and by reason of the foregoing the Equity Securities may not be
resold in the absence of an effective registration statement under, or
applicable exemption from, the Securities Act, and that a restrictive legend
will be affixed to the Equity Securities upon issuance to such Stockholder.
2.3 Such Stockholder has full knowledge of the operations
of MPGN, Purchaser, I-Magic and the transactions contemplated by the Merger
Documents. Each of the Stockholders has received and reviewed a copy of the
Merger Documents. Each of the Stockholders through its representatives has had
an opportunity to ask questions and receive
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answers concerning Purchaser, I-Magic, MPGN and the transactions contemplated by
the Merger Documents and to obtain any additional information such Stockholder
has requested in order to verify the accuracy of the information contained in
the Merger Documents. Such Stockholder has relied solely on the representations
and warranties contained in the Merger Documents and its own knowledge about
Purchaser, I-Magic and MPGN in making its decision to acquire the Equity
Securities.
2.4 Except as set forth in Schedule 4.24 to the Merger
Agreement, such Stockholder has not employed any broker, finder, consultant,
intermediary or advisor in connection with the transactions contemplated by this
Agreement which would be entitled to a broker's, finder's or similar fee or
commission from Purchaser or such Stockholder in connection with the
transactions contemplated by the Merger Documents.
3. DISPOSITION OF REGISTRABLE SECURITIES.
3.1 POOLING OF INTERESTS ACCOUNTING. Each Stockholder
agrees that from and after the date of this Agreement, such Stockholder shall
not take any action, or knowingly fail to take any action, which action or
failure is reasonably likely to disqualify the transactions contemplated by the
Merger Agreement from pooling of interests accounting treatment by Purchaser,
and each Stockholder agrees to take all reasonable actions necessary to cause
the transactions contemplated by the Merger Agreement to qualify as a pooling of
interests. Notwithstanding any other provision of this SECTION 3.1, and without
limiting the foregoing, each Stockholder agrees that such Stockholder shall not
Transfer such Stockholder's interests in or reduce such Stockholder's risk
relative to any of the Equity Securities until Purchaser shall have published
financial results covering at least thirty (30) days of combined operations of
I-Magic and MPGN after consummation of the transactions contemplated by the
Merger Agreement. Each Stockholder acknowledges and agrees with Purchaser that
such Stockholder is not a party to any agreement or arrangement with any third
party regarding the transactions contemplated by the Merger Documents or the
subject matter thereof other than the Merger Documents and any other applicable
documents related to the transactions contemplated by the Merger Agreement.
3.2 RESTRICTIONS ON TRANSFER. In addition to the
restrictions set forth in SECTION 3.1 hereof, in no event shall any Stockholder
Transfer any Equity Securities or any other securities of Purchaser for a six
month period following the Effective Date, except for Transfers pursuant to an
effective registration statement in accordance with SECTION 4 of this Agreement
and in compliance with all applicable laws, including, without limitation, the
Securities Act.
3.3 TRANSFERS IN VIOLATION. Any Transfer of any Equity
Securities or other securities of Purchaser in violation of any provision of
this Agreement shall be void and of no effect and shall not be recognized by
Purchaser as transferring any interest in any of such securities. In the case of
any such violation, Purchaser shall have the right to issue an oral or written
order to the Purchaser's transfer agent (if any) not to transfer such
securities.
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3.4 CERTIFICATES LEGENDED. Until the expiration of all
applicable transfer restrictions established by this Agreement, each certificate
representing any Equity Securities subject to any such restriction shall bear
the following legend conspicuously:
TRANSFER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS
SUBJECT TO A REGISTRATION RIGHTS AGREEMENT, DATED AS OF [the
date of this agreement], BETWEEN PURCHASER AND THE ORIGINAL
HOLDER HEREOF. A COPY OF SAID AGREEMENT IS ON FILE IN THE
OFFICE OF PURCHASER, AND A COPY THEREOF WILL BE MAILED TO THE
HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT OF A WRITTEN REQUEST
THEREFOR.
4. REGISTRATION RIGHTS.
4.1 DEMAND REGISTRATION.
4.1.1 Subject to the provisions of SECTION 4.1.3,
for a two year period commencing at any time after July 21, 1999, if Purchaser
shall be requested in writing by any Stockholder to effect the registration
under the Securities Act of Equity Securities having a proposed aggregate
offering price (net of discounts and commissions) equal to or greater than
$1,250,000, then Purchaser shall promptly give written notice of such proposed
registration to the other Stockholder, and thereupon, Purchaser shall promptly
as practicable prepare and file a registration statement on Form S-3, if
available and if not available, on such other form which is available and
suitable for a secondary offering of securities under the Securities Act (the
"Resale Registration Statement") with regard to Equity Securities which
Purchaser has been requested to register for disposition in the request of a
Stockholder and in any response received from any Stockholder within 20 days
after the giving of written notice by Purchaser, to the end that the Equity
Securities may be publicly sold under the Securities Act thereafter, subject to
the provisions of this Agreement, and Purchaser will use reasonable efforts to
cause such registration to become effective; provided, that the Stockholders
shall furnish Purchaser with appropriate information in connection therewith as
Purchaser may request.
4.1.2 All Registration Expenses in connection with
such registration statement under this SECTION 4.1 shall be borne by Purchaser,
except that the Stockholders or other holders shall bear the fees of their own
counsel and any underwriting discounts or commissions applicable to any of the
Equity Securities sold by them.
4.1.3 The obligation of Purchaser pursuant to this
SECTION 4.1, shall be limited to one Resale Registration Statement and shall not
apply to any Equity Securities that at such time are eligible for immediate
resale under Rule 144 during any three month period. A Resale Registration
Statement will not be deemed to have been effected unless it has become
effective.
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4.1.4 The provisions of this SECTION 4.1 shall be
subject to the condition that if:
4.1.4.1 prior to filing of the Resale
Registration Statement, Purchaser has fixed plans (as evidenced
by a resolution of the Board of Directors of Purchaser adopted
prior to the date Purchaser receives such request) to engage in,
or has become party to an agreement or letter of intent
contemplating, a public offering of Common Stock or Convertible
Securities for its own account through one or more underwriters
proposing to underwrite such offering on a firm commitment basis
(or, if such offering involves the issuance of rights to
stockholders of Purchaser, on a standby basis), then Purchaser
shall either: (a) include the Stockholders' Equity Securities,
subject to the provisions of SECTION 4.4 herein or (b) file a
Resale Registration Statement within one hundred and twenty (120)
days after the effectiveness (or such shorter period as the
managing underwriter of such offering may agree) or abandonment
of the registration statement relating to the offering; or
4.1.4.2 prior to filing of the Resale
Registration Statement, Purchaser has become party to an
agreement or letter of intent or filed materials with the SEC
contemplating a material business acquisition by Purchaser,
whether by way of merger, consolidation, acquisition of assets,
acquisition of securities or otherwise, and, if such proposed
acquisition were consummated, Purchaser would be required to
include in such registration statement financial statements
and/or other information concerning the business of any other
party to such proposed acquisition, then Purchaser may delay the
filing of the Resale Registration Statement to a date after such
business combination has become effective; or
4.1.4.3 prior to the filing of the Resale
Registration Statement, Purchaser has become party to an
agreement or letter of intent contemplating a merger or
consolidation of Purchaser into or with, or a sale or transfer of
all or substantially all of the business and assets of Purchaser
to, any other corporation or entity, then Purchaser may delay the
filing of the Resale Registration Statement to a date after the
transaction contemplated by such agreement or letter of intent
becomes effective or is abandoned.
4.2 PIGGY-BACK AND INCIDENTAL REGISTRATION.
4.2.1 Subject to the provisions of SECTIONS 4.2.4,
4.2.5 AND 4.4 hereof, for a two year period commencing at any time after the
Effective Date, if Purchaser proposes to register any Registrable Securities
under the Securities Act, whether or not for sale for its own account or for the
account of any security holder (other than securities to be issued pursuant to
an employee compensation program or securities issued in a merger, acquisition
or similar transaction) in a manner and on a form which would permit
registration of Equity
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Securities for sale to the public under the Securities Act, it shall each such
time give written notice to the Stockholders of its intention to do so and, upon
the written request of any such Stockholder made within ten (10) business days
after the receipt of any such notice (which request shall specify the Equity
Securities intended to be disposed of by such Stockholder), Purchaser will use
its best efforts to effect the registration under the Securities Act of all
Equity Securities which Purchaser has been so requested to register by any
Stockholder, subject to limitations on such inclusion contained in contracts
existing prior to the date of this Agreement, to the extent requisite to permit
the disposition of the Equity Securities so to be registered; PROVIDED that if,
at any time after giving written notice of its intention to register any
Registrable Securities and prior to the effective date of the registration
statement filed in connection with such registration, Purchaser shall determine
for any reason not to register such Registrable Securities, Purchaser may, at
its election, give written notice of such determination to the Stockholders and,
thereupon, shall be relieved of its obligation to register any Equity Securities
in connection with such registration.
4.2.2 A registration effected under this SECTION
4.2 shall relieve Purchaser of its obligation to effect a Resale Registration
Statement under SECTION 4.1, if the registration effected under this SECTION 4.2
includes Equity Securities.
4.2.3 Purchaser will pay all Registration Expenses
in connection with any registration of Equity Securities pursuant to this
SECTION 4.2, except that the Stockholders or other holders shall bear the fees
of their own counsel and any underwritten discounts or commissions applicable to
any of the Equity Securities sold by them.
4.2.4 The obligation of Purchaser pursuant to this
SECTION 4.2 shall be limited to two registration statements and shall not apply
to any Equity Securities that at such time are eligible for immediate resale
under Rule 144 during any three month period.
4.2.5 Purchaser shall not be obligated to notify
the Stockholders or include any of their Equity Securities pursuant to this
SECTION 4.2 in any registration statement contemplated by the Registration
Rights Agreement entered into between RGC International Investors LDC and
Purchaser.
4.3 REGISTRATION PROCEDURES. If and whenever Purchaser is
required by the provisions of SECTION 4.1 OR 4.2 to effect the registration of
Equity Securities under the Securities Act, Purchaser will, subject to the
provisions of SECTION 4.4:
4.3.1 prepare and file with the SEC a registration
statement with respect to such Equity Securities, and use reasonable efforts to
cause such registration statement to become and remain effective for such period
as may be reasonably necessary to effect the sale of such Equity Securities, not
to exceed the period expiring on the earlier of (i) the sale of all the Equity
Securities, or (ii) the date on which the Equity Securities become eligible for
resale under Rule 144 during any three month period;
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4.3.2 prepare and file with the SEC such amendments
to such registration statement and supplements to the prospectus contained
therein as may be necessary to keep such registration statement effective for
such period as may be reasonably necessary to effect the sale of such Equity
Securities, not to exceed the period expiring on the earlier of (i) the sale of
all the Equity Securities, or (ii) the date on which the Equity Securities
become eligible for resale under Rule 144 during any three month period;
4.3.3 furnish to the Stockholders participating in
such registration, if any, such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other documents as
the Stockholders may reasonably request in order to facilitate the public
offering of the Equity Securities;
4.3.4 use reasonable efforts to register or qualify
the Equity Securities covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as the Stockholders, if any,
participating in such registration may reasonably request in writing within five
(5) days following the original filing of such registration statement, except
that Purchaser shall not for any purpose be required to qualify to do business
as a foreign corporation or execute a general consent to service of process in
any jurisdiction wherein it is not so qualified;
4.3.5 notify the Stockholders, if any,
participating in such registration after Purchaser shall receive notice thereof,
of the time when such registration statement has become effective or a
supplement to any prospectus forming a part of such registration statement has
been filed;
4.3.6 for a period expiring on the earlier of (i)
the sale of all the Equity Securities, or (ii) the date on which the Equity
Securities become eligible for resale under Rule 144(k), prepare and file with
the SEC and notify the Stockholders, if any, participating in such registration
of the filing of such amendment or supplement to such registration statement or
prospectus as may be necessary to correct any statements or omissions if, at the
time when a prospectus relating to such securities is required to be delivered
under the Securities Act, any event shall have occurred as the result of which
any such prospectus or any other prospectus as then in effect would include 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;
4.3.7 advise the Stockholders, if any,
participating in such registration after Purchaser shall receive notice thereof,
of the issuance of any stop order by the SEC suspending the effectiveness of
such registration statement and use reasonable efforts to obtain its withdrawal;
4.3.8 use reasonable efforts to list such
securities on each securities exchange on which the Common Stock are then
listed, if such securities are not already so listed and if such listing is then
permitted under the rules of such exchange.
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4.4 UNDERWRITTEN OFFERINGS IN CONNECTION WITH
"PIGGY-BACK" AND INCIDENTAL REGISTRATIONS. Subject to SECTION 4.2, if at any
time (i) Purchaser proposes to register any Registrable Securities under the
Securities Act for sale for its own account or for the account of any security
holder and such Registrable Securities are to be distributed by or through one
or more underwriters, and (ii) Purchaser agrees to include in such registration
among those to be distributed by such underwriters the Equity Securities
requested to be included by the Stockholders pursuant to the terms of SECTION
4.2 herein (subject to any contracts existing between Purchaser and other
security holders prior to the date of this Agreement limiting such inclusion),
then the holders of Equity Securities to be distributed by such underwriters
shall be parties to the underwriting agreement between Purchaser and such
underwriters, such agreement to contain such representations and warranties by
Purchaser and the Stockholders, and such other terms and provisions as are
customarily contained in agreements of this type, including, without limitation,
indemnities and rights to contribution to the effect and to the extent provided
in SECTION 5. Purchaser may also require that the Equity Securities requested
for inclusion pursuant to this SECTION 4.4 be included in the offering on the
same financial terms as the securities otherwise being sold through the
underwriters. If in the good faith judgment of the managing underwriter of such
underwritten public offering, the inclusion of any or all of the Equity
Securities requested for inclusion pursuant to SECTION 4.2 together with any
other Registrable Securities which have similar piggyback registration rights
(such securities and the Registrable Securities being collectively referred to
as the "Requested Stock") would jeopardize the success of the offering, the
number of shares of Requested Stock otherwise to be included in the underwritten
public offering may be reduced pro rata (by number of shares of Common Stock (on
an as-converted basis, if applicable, solely for purposes of determining
participation rights)) among the holders thereof requesting such registration or
excluded in their entirety if so required by such managing underwriter.
4.5 PREPARATION; REASONABLE INVESTIGATION. In connection
with the preparation and filing of each registration statement registering
Equity Securities under the Securities Act, Purchaser will give the holders of
such Equity Securities so registered and their underwriters, if any, and their
respective counsel and accountants, the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the SEC, and each amendment thereof or supplement thereto, and will
give each of them such reasonable access to its books and records and such
opportunities to discuss the business of Purchaser with its officers and the
independent public accountants who have certified its financial statements as
shall be reasonably necessary, in the opinion of counsel to Purchaser, to
conduct a reasonable investigation within the meaning of the Securities Act.
Each holder of such Equity Securities shall furnish to Purchaser such
information regarding such Stockholder and the distribution proposed by such
Stockholder as Purchaser may request and as shall be required in connection with
any registration referred to in this SECTION 4.
4.6 HOLDBACK AGREEMENT. Each Stockholder agrees that if
requested in writing by the managing underwriter(s) of any underwritten public
offering of Purchaser's securities, such Stockholder shall not effect any sale
or distribution of any securities of Purchaser, including a private sale or a
sale pursuant to Rule 144 or 144A (or any similar
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provision then in force) under the Securities Act, during the 30-day period
prior to, and during the 180-day period (or such other period as may be
requested by the managing underwriter of such underwritten offering) beginning
on the effective date of such registration statement, except as part of such
underwritten offering or as otherwise permitted by the managing underwriters.
5. INDEMNIFICATION AND CONTRIBUTION.
5.1 INDEMNIFICATION.
5.1.1 Purchaser will indemnify and hold harmless
each Stockholder whose Equity Securities are included in a registration
statement pursuant to the provisions of SECTION 4 hereof, from and against, any
and all loss, damage, liability, cost and expense, including reasonable
attorney's fees and expenses, to which such Stockholder may become subject under
the Securities Act or otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by any untrue statement or alleged untrue statement
of any material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading; PROVIDED,
HOWEVER, that Purchaser will not be liable in any such case to the extent that
any such loss, damage, liability, cost or expenses arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in reliance upon information furnished by or on behalf of such
Stockholder for use in the preparation thereof.
5.1.2 Each Stockholder whose Equity Securities are
included in a registration pursuant to the provisions of SECTION 5 hereof will
indemnify and hold harmless Purchaser, its directors and officers, any
controlling Person and any underwriter from and against, and will reimburse
Purchaser, its directors and officers, any controlling Person and any
underwriter with respect to, any and all loss, damage, liability, cost or
expense to which Purchaser or any controlling Person and/or any underwriter may
become subject under the Securities Act or otherwise, insofar as such losses,
damages, liabilities, costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, in each case to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance upon
information furnished by or on behalf of such Stockholder for use in the
preparation thereof.
5.1.3 Promptly after receipt by an indemnified
party pursuant to the provisions of SECTION 5.1.1 OR 5.1.2 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of SECTION 5.1.1
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OR 5.1.2, promptly notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party unless such failure to
give notice shall materially prejudice the indemnifying party in the defense of
such claim. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party,
PROVIDED, HOWEVER, if the defendants in any action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or in addition to those available
to the indemnified party, or if there is a conflict of interest which would
prevent counsel for the indemnifying party from also representing the
indemnified party, the indemnified party or parties have the right to select one
separate counsel to participate in the defense of such action on behalf of such
indemnified party or parties at the expense of the indemnifying party unless in
the reasonable judgment of the indemnified parties a conflict of interest may
exist among such indemnified parties, in which event the indemnified parties
shall be obligated to pay the fees and expenses of such additional counsel. An
indemnified party may retain its own counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the indemnified party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party pursuant to the provisions of said SECTION
5.1.1 OR 5.1.2 for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
5.2 CONTRIBUTION.
5.2.1 If the indemnification provided for in
SECTION 5.1.3 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages or liabilities referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities in such proportion as
is appropriate to reflect the relative fault of such indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties 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 to state a material fact, such
statement or omission has been made by, or relates to information supplied by,
such indemnifying party or indemnified parties and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages and liabilities referred to above shall be deemed to include, subject to
the limitations set forth in SECTION 5.1.3, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
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5.2.2 The parties hereto agree that it would not be
just and equitable if contribution pursuant to this SECTION 5.2.2 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in SECTION
5.2.1. 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.
5.2.3 If indemnification is available under SECTION
5.1.3 the indemnifying parties shall indemnify each indemnified party to the
full extent provided in SECTIONS 5.1.1 AND 5.1.2 without regard to the relative
fault of said indemnifying party or indemnified party or any other equitable
consideration provided for in this SECTION 5.2.3.
6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed in Delaware.
6.2 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of Purchaser, each Stockholder and their
respective successors and assigns.
6.3 NOTICES. Any notice or other communication under this
Agreement shall be considered given and received when (i) delivered personally
in writing, (ii) received by registered mail, return receipt requested or (iii)
sent by facsimile, with a copy confirmed by registered mail, return receipt
requested, by the parties at the following addresses and telecopier numbers (or
at such other addresses and telecopier numbers as a party may specify by notice
to the others):
If to Purchaser:
Interactive Magic, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
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If to the Stockholders:
(At the addresses listed on Schedule A)
with a copy to:
Xxxxxxx Xxxxxxxxxx, Esq.
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile No.: (000) 000-0000
6.4 WAIVER. Purchaser shall have the right to waive any
of its rights or any obligations owing to it hereunder without the consent of
the other parties to this Agreement.
6.5 TITLES AND SUBTITLES. The titles of the Articles and
Sections of this Agreement are for convenience of reference only and are not to
be considered in construing this Agreement.
6.6 COUNTERPARTS; FACSIMILE. This Agreement may be
executed in one or more 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 instrument. This Agreement may be executed by facsimile, which
shall be deemed an original.
6.7 FURTHER ASSURANCES. Each of Purchaser and the
Stockholders agree to take such actions and execute such documents as is
necessary to carry out the intents and purposes of this Agreement and the
transactions contemplated hereby.
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6.8 COMPLETE AGREEMENT; MODIFICATION AND TERMINATION.
This Agreement contains a complete statement of all the arrangements among the
parties with respect to its subject matter, supersedes all existing agreements
among them concerning that subject matter and cannot be changed or terminated
except in writing signed by all of the parties.
INTERACTIVE MAGIC, INC.
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Financial Officer
STOCKHOLDERS:
MULTIPLAYER GAMES NETWORK, INC.
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
TANTALUS, INC.
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
/s/ Xxxx X. Xxxxxxxxx
------------------------------
Xxxx X. Xxxxxxxxx
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SCHEDULE A
Name and Address Number of Equity Securities
Multiplayer Games Network, Inc. 262,500 shares of
Common Stock
Tantalus, Inc. 262,500 shares of
Common Stock
Xxxx X. Xxxxxxxxx 30,000 shares of
Common Stock
-14-
