Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") dated this 23rd day
of June, 1997, is between Koala Corporation, a Colorado corporation ("Koala"),
and Delta Play Ltd., a British Columbia, Canada corporation ("Seller").
RECITALS
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1. By an Agreement for Sale and Purchase of Assets dated as of June 23,
1997 (the "Purchase Agreement"), Koala (through newly created subsidiaries)
agreed to purchase all of the assets of Seller.
2. In connection with the Purchase Agreement and as part of the purchase
price, Koala has agreed to issue to Seller 40,000 shares of Common Stock of
Koala (the "Shares").
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants
and conditions contained herein, the parties agree as follows:
1. Registration Rights. Upon the written request of Seller, Koala shall
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file, within 60 days of receipt of such request, a registration statement with
the Securities and Exchange Commission ("SEC") under the Act registering all
Shares then owned by Seller; provided, however, that Koala shall have no
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obligation to register any Shares that are then eligible for resale by Seller
pursuant to Rule 144 under the Securities Act of 1933 (the "Act"). Any such
request by Seller shall specify the aggregate number of Shares proposed to be
sold and shall also specify the intended method of disposition thereof. Koala
shall use its best efforts to keep the registration statement effective until
the earlier of six (6) months after the date of effectiveness of the
registration statement or until Seller has sold the number of Shares for which
it requested registration (the "Distribution Period"). Seller shall not be
entitled to make a demand pursuant to this Section 1 more than one (1) time;
provided, however, that (i) if no registration statement is declared effective
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with respect to a demand which Seller has made (other than because Seller has
requested that the registration statement not be declared effective) or (ii) if
the registration statement does not include all of the Shares that Seller
requests to be included, that demand shall not be counted for purposes of this
limit. Koala may defer filing a registration statement pursuant to this Section
1 for up to 120 days if in the reasonable judgment of Koala's Board of Directors
the filing of such registration statement would compel Koala to disclose
material nonpublic information the disclosure of which would be detrimental to
Koala or would materially interfere with any material financing, acquisition,
corporate reorganization, or merger involving the Corporation.
2. Registration Procedures.
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(a) Seller shall furnish Koala with all information and statements
about or pertaining to Seller in such reasonable detail and on such timely basis
as is reasonably deemed by Koala to be necessary or appropriate for the
preparation of the registration statement.
(b) Whenever Seller has requested that Shares be registered pursuant
to Section 1 hereof, Koala shall, subject to the provisions of Section 1 hereof:
(i) prepare and file with the SEC a registration statement with
respect to such Shares and use its best efforts to cause such registration
statement to become effective as soon as practicable after the filing thereof
(provided that before filing a registration statement or prospectus or any
amendments or supplements thereto, Koala shall furnish counsel for Seller with
copies of all such documents proposed to be filed);
(ii) prepare and file with the SEC such amendments and supplements
to such registration statement and prospectus contained therein as may be
necessary to keep such registration statement effective during the Distribution
Period;
(ii) furnish to Seller the number of copies of such registration
statement, each amendment and supplement thereto, the prospectus contained in
such registration statement (including each preliminary prospectus), and such
other documents as Seller may reasonably request;
(iv) use its best efforts to register or qualify such Shares under
the state blue sky or securities ("Blue Sky") laws of such jurisdictions as
Seller reasonably requests (and to keep such registrations and qualifications
effective during the Distribution Period, and to do any and all other acts and
things that may be reasonably necessary or advisable to enable Seller to
consummate the disposition of such Shares in such jurisdictions; provided,
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however, that Koala will not be required to do any of the following: (i) qualify
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generally to do business in any jurisdiction where it would not be required but
for this Section 2(b), (ii) subject itself to taxation in any such jurisdiction,
or (iii) file any general consent to service of process in any such
jurisdiction; and
(v) promptly notify Seller, at any time when a prospectus relating
thereto is required to be delivered under the Act during the period that Koala
is required to keep the registration statement effective, of the occurrence of
any event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein in the light of the circumstances under
which they were made, not misleading, and prepare a supplement or amendment to
the prospectus so that, as thereafter delivered to the purchasers of such
Shares, the prospectus will not contain an untrue statement of a material fact
or omit to state any fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
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3. Registration Expenses.
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(a) If, pursuant to Section 1 hereof, Shares owned by Seller are
included in a registration statement, then Seller shall pay the fees and
expenses of its own counsel, and its pro rata portion of any underwriting or
brokerage discounts or commissions or the equivalent thereof.
(b) Except for the fees and expenses specified in Section 3(a) hereof,
Koala shall pay all expenses incident to the registration and to Koala's
performance of or compliance with this Agreement, including, without limitation,
all registration and filing fees, expenses of compliance with Blue Sky laws,
printing expenses, messenger and delivery expenses, and fees and expenses of
counsel for Koala and all independent certified public accountants and other
persons retained by Koala.
4. Transfer of Registration Rights. The rights to cause Koala to
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register securities granted under Section 1 may be assigned or otherwise
conveyed by the Seller to any transferee of all of the Shares in a transfer made
within one (1) year from the date of this Agreement in compliance with the Act;
provided, however, that (a) in no event will the period of time for the
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Company's obligation to register the Shares under Section 1 be extended beyond
the period of time applicable to Seller under Section 5, and (b) Koala is given
written notice by the transferor at the time of or within a reasonable time
after said transfer, stating the name and address of said transferee and said
transferee's agreement to be bound by the provisions of the Agreement.
5. Termination of Registration Rights. The rights provided for in
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Section 1 shall terminate once the Seller is free to sell all of its Shares to
the public during a three (3) month period pursuant to Rule 144, including Rule
144(k).
6. Indemnification.
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(a) Koala will indemnify the Seller, and each of its officers,
directors and shareholders, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, against all expenses,
claims, losses, damages or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any such registration, qualification or
compliance, or based on any 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,
or any violation by Koala of the Act or any rule or regulation promulgated under
the Act applicable to Koala in connection with such registration, qualification
or compliance, and Koala will reimburse the Seller, and each of its officers,
directors and shareholders, for any legal and any other expenses incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that Koala will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
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information furnished to Koala by an instrument duly executed by the Seller and
stated to be specifically for use therein.
(b) The Seller will, if Shares held by the Seller are included in the
securities as to which a registration, qualification or compliance is being
effected pursuant to this Agreement, indemnify Koala, each of its directors and
officers, and each person who controls Koala within the meaning of Section 15 of
the Act, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any 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, and will reimburse Koala, each of its officers
and directors, and each person who controls Koala within the meaning of Section
15 of the Act, for any legal and any other expenses incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement or omission or alleged untrue statement or omission is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished by Koala by
an instrument duly executed by the Seller and stated to be specifically for use
therein. Notwithstanding the foregoing, the liability of the Seller under this
subsection (b) shall be limited to an amount equal to the gross proceeds
received by the Seller in connection with the sale of its Shares.
(c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be withheld
unreasonably), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 6 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action,
and provided further that the Indemnifying Party shall not be entitled to assume
the defense for matters as to which there is a conflict of interest or separate
and different defenses. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to the entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
7. Notices. All notices or other communications which are required or
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permitted hereunder shall be in writing and sufficient if delivered personally
or sent by telecopier,
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nationally recognized over-night courier, or registered or certified mail,
postage prepaid, addressed as follows:
(i) If to Koala:
Koala Corporation
00000 Xxxx 00xx Xxxxxx, Xxxx X
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx
Telecopy: (000)000-0000
(ii) If to Seller:
Delta Play Ltd.
00000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Attn: Xxx Xxxxxxxx
Telecopy: (000) 000-0000
Any party may by notice change the address to which notices or other
communications to it are to be delivered or mailed.
8. Binding Effect. This Agreement shall be binding upon and shall inure
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to the benefit of the parties hereto and their respective successors and
assigns.
9. Governing Law. This Agreement shall be deemed to be an agreement made
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under the laws of the State of Colorado and for all purposes shall be governed
by and construed in accordance with such laws.
10. Entire Agreement. This Agreement constitutes the full and entire
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understanding and agreement between the parties with regard to the subjects
hereof. Nothing in the Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto and their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by reason
of the Agreement, except as expressly provided herein.
11. Severability. In the case any provision of the Agreement shall be
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invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
12. Amendments and Waivers. Any term of this Agreement may be amended or
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terminated and the observance of any term of the Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
by the written consent of each of the parties.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date first above written.
KOALA CORPORATION
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, Chairman
DELTA PLAY LTD.
By: /s/ Xxx Xxxxxxxx
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Xxx Xxxxxxxx, President
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