REGISTRATION RIGHTS AGREEMENT
Exhibit 10.2
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of May 13, 2008, by
and among FX Real Estate and Entertainment Inc., a Delaware corporation (the “Company”),
and each of the investors listed on Schedule 1 attached hereto (each an “Investor”,
and collectively, the “Investors”).
RECITALS:
A. On January 9, 2008, the Company and the Investors entered into that certain Investment
Agreement, as amended from time to time (the “Investment Agreement”).
B. On January 10, 2008, pursuant to the Distribution (as such term is defined in the
Investment Agreement), the Investors received an aggregate of 2,802,442 shares of the Company’s
common stock, par value $0.01 per share (the “Common Stock”).
C. On April 1, 2008, the Investors exercised certain of the rights they received in the Rights
Offering (as such term is defined in the Investment Agreement), resulting in the Investors’
purchase of 1,150,000 shares of Common Stock.
D. On the date hereof, pursuant to the Investment Agreement, the Company exercised its right
to require the Investors to purchase, and the Investors purchased from the Company, an aggregate of
2,659,556 shares of Common Stock underlying rights that were not exercised in the Rights Offering
as consummated on April 18, 2008.
E. As required by the Investment Agreement, the Company has agreed to grant the Holders (as
defined below) the registration rights set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT:
1. Definitions. The following terms when used in this Agreement, including its
Preamble and Recitals, shall, except where the context otherwise requires, have the following
meanings (such meanings to be equally applicable to the singular and plural forms thereof):
(a) “Affiliate” as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common control with, such
Person. For purposes of this definition, “control” (including, with correlative meanings, the
terms “controlling,” “controlled by” and “under common control with”), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting securities, by
contract or otherwise, and, in addition to the foregoing, a Person shall be deemed to control
another Person if the controlling Person owns 15% or more of any class of voting securities (or
other ownership interest) of the controlled Person.
(b) “Agreement” has the meaning set forth in the Preamble.
(c) “Common Stock” has the meaning set forth in the Recitals.
(d) “Company” has the meaning set forth in the Preamble.
(e) “Distribution” has the meaning set forth in the Recitals.
(f) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, all as the same shall be in effect at the time.
(g) “FINRA” means the Financial Industry Regulatory Authority, Inc.
(h) “Form S-1” means such form under the Securities Act as in effect on the date
hereof or any registration form under the Securities Act subsequently adopted by the SEC used for
the initial public offering of securities.
(i) “Form S-3” means such form under the Securities Act as in effect on the date
hereof or any registration form under the Securities Act subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
(j) “Holder” means any Person owning or having the right to acquire Registrable
Securities, or any assignee thereof in accordance with Section 11 hereof. If the Company receives
conflicting instructions, notices or elections from two or more Persons with respect to the same
Registrable Securities, the Company may act upon the basis of the instructions, notice or election
received from the registered owner of such Registrable Securities.
(k) “Initiating Holders” has the meaning set forth in Section 2(a).
(l) “Investment Agreement” has the meaning set forth in the Recitals.
(m) “Investor” has the meaning set forth in the Preamble.
(n) “Investor Shares” means 6,611,998 shares of Common Stock, consisting of (i)
2,802,442 shares of Common Stock received by the Investors in the Distribution, (ii) 1,150,000
shares of Common Stock acquired by the Investors in the Rights Offering and (iii) 2,659,556 shares
of Common Stock acquired by the Investors pursuant to the Investment Agreement.
(o) “Majority Holders” means Holders of a majority of Registrable Securities then
outstanding.
(p) “Permitted Transferee” means, with respect to any Investor, any Affiliate of such
Investor.
(q) “Person” means any individual, partnership, corporation, joint venture, limited
liability company, association, trust, unincorporated organization, or government or agency or
political subdivision thereof or any other entity of whatever nature.
(r) “Piggyback Registration” has the meaning set forth in Section 3.
(s) “Register,” “registered,” and “registration” refer to a
registration effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document by the SEC.
(t) “Registrable Securities” means (i) the Investor Shares and (ii) any shares of
Common Stock hereafter distributed by the Company as a result of a stock dividend, stock split,
reclassification, recapitalization or otherwise by virtue of the ownership of the Investor Shares
described in the immediately preceding clause (i); provided, however, that any such
securities shall cease to be Registrable Securities when (A) such securities shall have been
registered under the Securities Act, the registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such securities shall have been
disposed of pursuant to such effective registration statement; (B) such securities shall have been
otherwise transferred, if new certificates or other evidences of ownership for them not bearing a
legend restricting further transfer and not subject to any stop transfer order or other
restrictions on transfer shall have been delivered by the Company and subsequent disposition of
such securities shall not require registration or qualification of such securities under the
Securities Act or any state securities law then in force; (C) such securities shall cease to be
outstanding; (D) the holding period that would be applicable under Rule 144 of the Securities Act
expires, such securities are freely tradable by the Holder thereof under Rule 144 without regard to
volume limitations or other restrictions and the Company shall have removed any restrictive legends
and stop transfer restrictions with respect to such securities; or (E) such securities are sold to
the public pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A) under
the Securities Act.
(u) “Request” has the meaning set forth in Section 2(a).
(v) “Rights Offering” has the meaning set forth in the Recitals.
(w) “Rule 144” means Rule 144 under the Securities Act, as such rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the SEC.
(x) “Rule 144A” means Rule 144A under the Securities Act, as such rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the SEC.
(y) “SEC” means the Securities and Exchange Commission.
(z) “Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute and the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the time.
(aa) “Time of Sale Information” means any registration statement filed under or
referred to in this Agreement including any preliminary prospectus or final prospectus contained
therein and any amendments or supplements thereto and each “free-writing prospectus” (as defined
pursuant to Rule 405 under the Securities Act) used, disseminated or filed in connection therewith.
(bb) “Violation” means any of the following statements, omissions or violations: (i)
any untrue statement or alleged untrue statement of a material fact contained or incorporated by
reference in a registration statement filed under or referred to in this Agreement, including any
preliminary prospectus or final prospectus contained therein or any amendments or supplements
thereto, any other Time of Sale Information, or any documents filed under state securities or “blue
sky” laws in connection therewith, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, including, without limitation, in any document
incorporated by reference therein, or necessary to make the statements therein, including, without
limitation, in any document incorporated by reference therein, not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or
any state securities law arising from, relating to or in connection with the offer and sale of
Registrable Securities pursuant to this Agreement.
2. Demand Registration.
(a) Request for Demand Registration. If the Company shall receive a written request
(a “Request”) from the Investors (or their Permitted Transferees) (the “Initiating
Holders”) that the Company file a registration statement under the Securities Act to register
all or such lesser number of Registrable Securities held by the Initiating Holders, then the
Company shall, within ten (10) days of the receipt thereof, give written notice of such request to
all Holders and, subject to the limitations of Section 2(d) below, shall file (as expeditiously as
practicable, but in no event (i) earlier than ninety (90) days following the closing of the Rights
Offering) or (ii) later than one hundred twenty (120) days after the closing of the Rights Offering
or thirty (30) days after the Request, if later, and use commercially reasonable efforts to effect,
a registration statement on Form S-1 under the Securities Act with respect to all Registrable
Securities which the Holders request to be registered within twenty (20) days of the mailing of
such notice by the Company in accordance with Section 18 below.
(b) If the Initiating Holders intend to distribute the Registrable Securities covered by their
request pursuant to Section 2(a) by means of an underwriting, they shall so advise the Company as a
part of their request made pursuant to this Section 2 and the Company shall include such
information in the written notice referred to in Section 2(a). In such event, the right of any
Holder to include such Holder’s Registrable Securities in such registration shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in
interest of the Initiating Holders and such Holder) to the extent provided herein. A majority in
interest of the Initiating Holders of Registrable Securities participating in the underwriting, in
consultation with the Company, shall select the managing underwriter or underwriters in such
underwriting.
(c) All Holders proposing to distribute their securities through such underwriting shall
(together with the Company as provided in Section 4(f)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders; provided, however, that no Holder participating
in such underwriting shall be required to make any representations, warranties or indemnities
except as they relate to such Holder’s ownership of shares and authority to enter into the
underwriting agreement and to such Holder’s intended method of distribution, and the liability of
such Holder shall be limited to an amount equal to the net proceeds from the offering received by
such Holder.
(d) Notwithstanding any other provision of this Section 2, if the underwriter advises the
Initiating Holders in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Initiating Holders shall so advise the Company and the Company shall
so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included in the underwriting
shall be allocated among Holders of Registrable Securities that have elected to participate in such
underwritten offering, in proportion (as nearly as practicable) to the aggregate amount of
Registrable Securities held by all such Holders, until such Holders have included in the
underwriting all shares requested by such Holders to be included. Without the consent of a
majority in interest of the Holders of Registrable Securities participating in a registration
referred to in Section 2(a), no securities other than Registrable Securities shall be covered by
such registration if the inclusion of such other securities would result in a reduction of the
number of Registrable Securities covered by such registration or included in any underwriting or
if, in the opinion of the managing underwriter, the inclusion of such other securities would
adversely impact the marketing of such offering.
(e) The Company shall not be obligated to effect in the case of a demand request pursuant to a
Request in accordance with the provisions of Section 2(a), more than one (1) registration,
provided, however, that once the Company has satisfied the requirements to file a
Form S-3 there shall be no limit on the number of demand requests made by the Initiating Holders
with respect to any and all Registrable Securities held by them and not so registered pursuant to a
demand request pursuant to a Request in accordance with the provisions of Section 2(a). In order
to count as the demand registration pursuant to Section 2(a), the registration statement in respect
thereof must have not been withdrawn and all Registrable Securities which the Holders requested to
be registered pursuant to it must have been so included in an effective registration statement.
Notwithstanding anything to the contrary set forth in this Section 2, and in particular, the
limitation on demand registrations set forth in this Section 2(e), if the Company has not satisfied
the requirements to file a Form S-3 on or before January 1, 2009, the Initiating Holders shall have
the right to demand registration pursuant to Section 2(a) until all Registrable Securities held by
them (to the extent not registered pursuant to Section 2(a)) have been so registered.
3. Piggyback Registration. If (but without any obligation to do so) the Company
proposes to register (including for this purpose a registration effected by the Company for
stockholders other than the Investors) any of its stock or other securities under the Securities
Act in connection with the public offering of such securities solely for cash (other than a
registration
on Form S-8 (or similar or successor form) relating solely to the sale of securities to
participants in a Company stock option, stock purchase or other stock-based compensation
arrangement to the extent includable on Form S-8 (or similar or successor form), or a registration
relating solely to a transaction under Rule 145 of the Securities Act on Form S-4 (or similar or
successor form) or a registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities or Common Stock comprising part of a unit or otherwise
sold in connection with the issuance or sale of debt securities which are also being registered)
(each such registration not withdrawn or abandoned prior to the effective date thereof being herein
called a “Piggyback Registration”), the Company shall, at such time, promptly give each
Holder of Registrable Securities written notice of such registration not later than thirty (30)
days prior to the anticipated filing date of such Piggyback Registration. Upon the written request
of each Holder of Registrable Securities given within fifteen (15) days after the delivery of such
notice by the Company in accordance with Section 18, the Company shall, subject to the provisions
of Section 8, use commercially reasonable efforts to cause to be registered under the Securities
Act all of the Registrable Securities that each such Holder of Registrable Securities has requested
to be registered. The Company shall have no obligation under this Section 3 to make any offering
of its securities, or to complete an offering of its securities that it proposes to make. Any
selling Holder of Registrable Securities shall be permitted to withdraw all or any part of its
Registrable Securities from any Piggyback Registration at any time prior to the effective date of
such Piggyback Registration.
4. Obligations of the Company. Whenever required under this Agreement to effect the
registration of any Registrable Securities, the Company shall use its commercially reasonable
efforts to:
(a) Prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use commercially reasonable efforts to cause such registration statement to become
effective, keep such registration statement effective for up to one hundred eighty (180) days or
until the Holders have completed the distribution referred to in such registration statement,
whichever occurs first (but in any event for at least any period required under the Securities
Act); provided that before filing such registration statement or any amendments thereto,
the Company will furnish to the Holders copies of all such documents proposed to be filed and
provide the Initiating Holders not less than five (5) business days to review and comment on such
registration statement or any amendment thereto.
(b) Prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of such registration statement and of each
amendment and supplement thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each preliminary prospectus and
any summary prospectus) and any free writing prospectus or other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the Securities Act, and such other
documents as Holders may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them.
(d) Use commercially reasonable efforts to register and qualify the securities covered by such
registration statement for offer and sale under such other securities or “blue sky” laws of such
states or jurisdictions as shall be reasonably requested by the Holders, provided that the
Company shall not be required in connection therewith or as a condition thereto (i) to qualify to
do business in any state or jurisdiction where it would not otherwise be required to qualify but
for the requirements of this clause (d), or (ii) to file a general consent to service of process in
any such state or jurisdiction.
(e) Use diligent efforts to cause all Registrable Securities covered by such registration
statement to be registered with or approved by such other governmental agencies or authorities as
may be necessary by virtue of the Company’s business or operations to enable the seller or sellers
thereof to consummate the disposition of such Registrable Securities.
(f) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter of such
offering.
(g) Notify each Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event of which it has knowledge as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(h) Notify each Holder of Registrable Securities covered by such registration statement and
such Holder’s underwriters, if any, and confirm such advice in writing: (i) when the registration
statement has become effective, (ii) when any post-effective amendment to the registration
statement becomes effective and (iii) of any request by the SEC for any amendment or supplement to
the registration statement or prospectus or for additional information.
(i) Cooperate with the selling holders of Registrable Securities and the managing
underwriters, if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive legends; and enable
such Registrable Securities to be in such dominations and registered in such names as the managing
underwriters may request at least two (2) business days prior to any sale of Registrable Securities
to the underwriters.
(j) If any fact contemplated by clause (g) above shall exist, 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 of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(k) Notify each Holder of Registrable Securities if at any time the SEC should institute or
threaten to institute any proceedings for the purpose of issuing, or should issue, a stop order
suspending the effectiveness of the Registration Statement. Upon the occurrence of any of the
events mentioned in the preceding sentence, the Company will use commercially reasonable efforts to
prevent the issuance of any such stop order or to obtain the withdrawal thereof as soon as
possible. The Company will advise each Holder of Registrable Securities promptly of any order or
communication of any public board or body addressed to the Company suspending or threatening to
suspend the qualification of any Registrable Securities for sale in any jurisdiction.
(l) Furnish, to any Holder requesting registration of Registrable Securities pursuant to this
Agreement, on the date that such Registrable Securities are delivered to the underwriters for sale
in connection with a registration pursuant to this Agreement, if such securities are being sold
through underwriters, or, if such securities are not being sold through underwriters, on the date
that the registration statement with respect to such securities becomes effective, an opinion,
dated such date, of the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten public offering and
reasonably acceptable to the Holders requesting registration, addressed to the underwriters, if
any, and to the Holders requesting registration of Registrable Securities.
(m) On the date that the registration statement with respect to such securities becomes
effective, furnish a “comfort” letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable Securities, and, if
such securities are being sold through underwriters, a reaffirmation of such letter on the date
that such Registrable Securities are delivered to the underwriters for sale, and furnish, upon the
request of the Holders, all financial statements and officers’ certificates, in form and substance
as is customarily given to underwriters in an underwritten public offering.
(n) As soon as practicable after the effective date of the registration statement, and in any
event within sixteen (16) months thereafter, have “made generally available to its security
holders” (within the meaning of Rule 158 under the Securities Act) an earning statement (which need
not be audited) covering a period of at least twelve (12) months beginning after the effective date
of the registration statement and otherwise complying with Section 11(a) of the Securities Act.
(o) Cause all such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange or quotation system on which similar securities issued by the Company are then
listed.
(p) Provide a transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the
effective date of such registration and provide the transfer agent with printed certificates for
Registrable Securities in a form eligible for deposit with The Depositary Trust Company.
(q) Make available for inspection by a representative of the Majority Holders, any underwriter
participating in any disposition pursuant to such Registration Statement, and any attorney or
accountant retained by the sellers or underwriter 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 any such representative, underwriter,
attorney or accountant in connection with the registration, with respect to each at such time or
times as the Company shall reasonably determine; subject to reasonable restrictions and agreements
to safeguard the confidentiality of confidential information.
(r) Cooperate and assist in any filings required to be made with the FINRA and in the
performance of any due diligence investigation by any underwriter (including any “qualified
independent underwriter” that is required to be retained in accordance with the rules and
regulations of the FINRA).
5. Obligations of the Holders.
(a) It shall be a condition precedent to the obligations of the Company to take any action
pursuant to this Agreement with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities as shall be
reasonably required to effect the registration of such Holder’s Registrable Securities. If any
registration statement or comparable statement under the Securities Act refers to an Investor or
any of their respective Affiliates, by name or otherwise, as the holder of any securities of the
Company then, unless counsel to the Company advises the Company that the Securities Act requires
that such reference be included in any such statement, each such Holder shall have the right to
require the deletion of such reference to itself and its Affiliates.
(b) Upon receipt of any notice from the Company of the happening of any transaction or
occurrence of any event of the kind specified in Sections 4(g) or 4(k), such Holder will forthwith
discontinue disposition of Registrable Securities pursuant to any registration statement at issue
until such Holder’s receipt of copies of a supplemented or amended prospectus contemplated by
Section 4(c) and receives notice that any post-effective amendment (if required) has become
effective or until it is advised in writing by the Company that the use of the applicable
prospectus and registration statement may be resumed, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company’s expense) all copies in such Holder’s
possession, other than permanent file copies then in such Holder’s possession, of the registration
statement and prospectus covering such Registrable Securities current at the time of receipt of
such notice.
6. Expenses of Demand Registration. All expenses (other than underwriting discounts
and commissions with respect to any underwritten offering of Registrable Securities) incurred in
connection with registrations, filings or qualifications pursuant to Section 2, including, without
limitation, all registration, filing and qualification fees, printers’ and accounting fees, fees
and disbursements of counsel for the Company, and the reasonable fees and disbursements of one
counsel (selected by the Initiating Holders) for the selling Holders shall be
borne by the Company.
7. Expenses of Company Registration. The Company shall bear and pay all expenses
incurred in connection with any registration, filing or qualification of Registrable Securities
with respect to the registrations pursuant to Section 3 for each Holder, including without
limitation all registration, filing and qualification fees, printers’ and accounting fees relating
or apportionable thereto and the fees and disbursements of one counsel for the selling Holders
(selected by the Holders of a majority of the Registrable Securities being registered), but
excluding underwriting discounts and commissions relating to Registrable Securities.
8. Underwriting Requirements. In connection with any offering initiated by the
Company involving an underwriting of shares being issued by the Company, the Company shall not be
required under Section 3 to include any Holder’s securities in such underwriting unless such Holder
accepts the terms of the underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the written opinion of the
underwriters, exceed the largest number of securities requested to be included in such offering
which can be sold without having an adverse effect on such offering by the Company;
provided, however, that no Holder participating in such underwriting shall be
required to make any representations, warranties or indemnities except as they relate to such
Holder’s ownership of shares and authority to enter into the underwriting agreement and to such
Holder’s intended method of distribution, and the liability of such Holder shall be limited to an
amount equal to the net proceeds from the offering received by such Holder. If the total number of
securities, including Registrable Securities, requested by stockholders to be included in such
offering (or in any other offering in which Holders shall have the right to include Registrable
Securities pursuant to Section 3) exceeds the largest number of securities that, in the written
opinion of the underwriters, the underwriters reasonably believe can be sold without having an
adverse effect on such offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the underwriters believe
will not have an adverse effect on such offering, in the following priority:
(a) if initiated by the Company: (i) first, securities of the Company to be sold for the
account of the Company and (ii) second, any securities beneficially owned by Xxxxxx F.X. Sillerman
or any of his Affiliates requested to be included in the offering, the Registrable Securities
requested to be included by the Holders thereof and securities of the Company requested to be
included by holders of registration rights granted by the Company after the date hereof, allocated
(if necessary) pro rata on the basis of the number of Registrable Securities and the securities of
the Company that such holders have so requested to be included; or
(b) if initiated by a Person (other than Xxxxxx F.X. Sillerman or his Affiliates) other than
the Company: (i) first, the securities requested to be included by such other Person, (ii) second,
the Registrable Securities requested to be included by Holders thereof, allocated (if necessary)
pro rata on the basis of the number of Registrable Securities that each Holder has requested to be
included in such offering, (iii) third, securities of the Company to be sold for the account of the
Company and (iv) fourth, any securities beneficially owned by Xxxxxx F.X. Sillerman or any of his
Affiliates requested to be included in the offering.
(c) if initiated by Sillerman (or his Affiliates) (i) first, securities requested to be
included by Xxxxxx F.X. Sillerman and his Affiliates and any Registrable Securities requested to be
included by the Holders thereof allocated (if necessary) pro rata on the basis of the number of
Registrable Securities and the securities of the Company that such holders have so requested to be
included, (ii) second, securities of the Company requested to be included by holders of
registration rights granted by the Company after the date hereof (to the extent that such holders
have the right to be so included), allocated (if necessary) pro rata on the basis of the number of
Registrable Securities and (iii) third, securities of the Company to be sold for the account of the
Company.
For purposes of this Section 8 for any selling stockholder which is a Holder of Registrable
Securities and which is a partnership, limited liability company or corporation, the partners,
retired partners, members and shareholders of such Holder, or the estates and family members of any
such partners, retired partners and members and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to
such “selling Holder” shall be based upon the aggregate amount of shares carrying registration
rights owned by all entities and individuals included in such “selling Holder,” as defined in this
sentence.
9. Indemnification. In the event any Registrable Securities are included in a
registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder,
its heirs, personal representatives, successors and assigns, each of such Holder’s partners,
officers, directors, members, employees and affiliates, any underwriter (as defined in the
Securities Act) for such Holder and each Person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon a Violation; and the Company will
pay to each such indemnified party, as incurred, any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage, liability, or
action in enforcing this Section 9; provided, however, that the indemnity agreement
contained in this Section 9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld, delayed or conditioned), nor shall the
Company be liable in any such case to a particular indemnified party for any such loss, claim,
damage, liability or action solely to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by or on behalf of such indemnified party;
provided, further, that the indemnity agreement contained in this Section 9(a)
shall not apply to any underwriter to the extent that any such loss is based on or arises out of an
untrue statement or alleged untrue statement of a material fact, or an omission or alleged omission
to state a material fact, contained in or omitted from any preliminary prospectus if the final
prospectus shall correct such untrue statement or alleged untrue statement, or such omission or
alleged omission, and a copy of the final prospectus has not been sent or given to such Person
at or prior to the confirmation of sale to such Person.
(b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the registration statement,
each Person, if any, who controls the Company within the meaning of the Securities Act, any
underwriter, any other Person selling securities in such registration statement and any controlling
Person of any such underwriter or other Person, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing Persons may become subject, under the Securities
Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon a Violation, in each
case to the extent (and only to the extent) that such Violation solely occurs in reliance upon and
in conformity with written information furnished by or on behalf of such Holder expressly for use
in connection with such registration; and each such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any Person intended to be indemnified pursuant to this
Section 9(b), in connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained in
this Section 9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; and provided further, that, in no event shall
the liability of any Holder under this Section 9(b) exceed the net proceeds from the offering
received by such Holder; provided, further, that the indemnity agreement contained
in this Section 9(b) shall not apply to any underwriter to the extent that any such loss is based
on or arises out of an untrue statement or alleged untrue statement of a material fact, or an
omission or alleged omission to state a material fact, contained in or omitted from any preliminary
prospectus if the final prospectus shall correct such untrue statement or alleged untrue statement,
or such omission or alleged omission, and a copy of the final prospectus has not been sent or given
to such Person at or prior to the confirmation of sale to such Person.
(c) Promptly after receipt by an indemnified party under this Section 9 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 9, deliver
to the indemnifying party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties, acting reasonably; provided, however,
that an indemnified party shall have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party represented by such counsel
in such proceeding. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such indemnifying party of
any liability to the indemnified party under this Section 9 except if, and only to the extent that,
the indemnifying party is actually prejudiced thereby; and such failure to deliver written notice
to the indemnifying party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 9. An indemnifying party may settle any action or claim
under this Section 9 at any time without the consent of the indemnified party so
long as such settlement involves no cost or liability to the indemnified party and includes an
unconditional release of the indemnified party from all liability with respect to such claim or
action.
(d) The obligations of the Company and Holders under this Section 9 shall survive the
completion of any offering of Registrable Securities in a registration statement under this
Agreement, and otherwise.
(e) Any indemnity agreements contained herein shall be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant to law or contract
and shall remain operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party.
(f) If a court of competent jurisdiction holds that the foregoing indemnity is unavailable,
then the indemnifying party shall contribute to the amount paid or payable by the indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party on the one hand and
the indemnified party on the other (taking into consideration, among other things, the fact that
the provision of the registration rights and indemnification hereunder was a material inducement to
the Investors to purchase Registrable Securities) or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law or provides a lesser sum to the indemnified party than the
amount hereinafter calculated, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and the indemnified party on
the other (taking into consideration, among other things, the fact that the provision of the
registration rights and indemnification hereunder is a material inducement to the Investors to
purchase Registrable Securities) but also the relative fault of the indemnifying party and the
indemnified party as well as any other relevant equitable considerations. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by or on behalf of the indemnifying party or the indemnified party and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. Notwithstanding anything to the contrary
in this Section 9, no Holder shall be required, pursuant to this Section 9, to contribute any
amount in excess of the net proceeds received by such indemnifying party from the sale of
securities in the offering to which the losses, claims, damages, liabilities or expenses of the
indemnified party relate.
10. Reports Under the Exchange Act. With a view to making available to the Holders
the benefits of Rule 144 under the Securities Act and any other rule or regulation of the SEC that
may at any time permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees at all times after 90
days after any registration statement covering a public offering of securities of the Company under
the Securities Act shall have become effective, to:
(a) make and keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act;
(b) use commercially reasonable efforts (without unreasonable expense) to enable the Holders
to utilize Form S-3 for the sale of their Registrable Securities;
(c) file with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has complied with the reporting
requirements of Rule 144 under the Securities Act (at any time after the effective date of the
first registration statement filed by the Company) and the Securities Act and Exchange Act (at any
time after it has become subject to such reporting requirements) or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time it so qualifies), (ii)
a copy of the most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be reasonably requested
in availing any Holder of any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
11. Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Agreement may be assigned in whole or in part by a Holder
to one or more of its Affiliates (including, without limitation, in the case of the Investors,
transfers between them and to their respective members and partners and any members or partners
thereof) or to one or more transferees or assignees of the Registrable Securities owned by such
Holder, provided that (in each case) such transferee or assignee delivers to the Company a
written instrument by which such transferee or assignee agrees to be bound by the obligations
imposed on Holders under this Agreement to the same extent as if such transferee or assignee was a
party hereto; provided, further, such assignment shall not require registration
under the Securities Act. Except as specifically permitted in the preceding sentence, neither this
Agreement nor any Holder’s rights or privileges under this Agreement can be assigned or transferred
in whole or in part without the prior written consent of the other parties.
12. [Intentionally Omitted].
13. Amendment; Waiver. Any term of this Agreement may be amended only with the
written consent of the Company and the Majority Holders. The observance of any provision of this
Agreement may be waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the party to be charged, provided that the
Majority Holders may act on behalf of all Holders of Registrable Securities. Any amendment or
waiver effected in accordance with this Section 13 shall be binding upon each Holder of Registrable
Securities at the time outstanding, each future Holder of all such securities, and the Company.
14. Changes in Registrable Securities. If, and as often as, there are any changes in
the Registrable Securities by way of stock split, stock dividend, combination or reclassification,
or
through merger, consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so
that the rights and privileges granted hereby shall continue with respect to the Registrable
Securities as so changed. Without limiting the generality of the foregoing, the Company will
require any successor by merger or consolidation to assume and agree to be bound by the terms of
this Agreement, as a condition to any such merger or consolidation.
15. Entire Agreement. This Agreement constitutes the entire understanding and
agreement among the parties relating to the subject matter hereof and supersedes any and all prior
agreements or understandings (written or oral) with respect to the subject matter hereof,
including, without limitation, the letter agreement, dated January 9, 2008, by and among the
Company and the Investors. Nothing in this Agreement, express or implied, is intended to confer
upon any Person, other than the parties hereto and their respective successors and assigns, any
rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as
expressly provided herein.
16. Governing Law.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State
of New York as applied to agreements among New York residents entered into and to be performed
entirely within New York.
(b) The jurisdiction and venue in any action brought by any party hereto pursuant to this
Agreement shall properly lie in any federal or state court located in the State of New York. By
execution and delivery of this Agreement, each party hereto irrevocably submits to the jurisdiction
of such courts for himself or itself and in respect of his or its property with respect to such
action. The parties irrevocably agree that venue would be proper in such court, and hereby waive
any objection that such court is an improper or inconvenient forum for the resolution of such
action. The parties further agree that the mailing by certified or registered mail, return receipt
requested, of any process required by any such court shall constitute valid and lawful service of
process against them, without necessity for service by any other means provided by statute or rule
of court.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II)
EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH
PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 16(C).
17. Successors and Assigns. The provisions hereof shall inure to the benefit of, and
be binding upon, the successors, permitted assigns (as provided in Section 11), heirs, executors
and administrators of the parties hereto.
18. Notices. Unless otherwise provided, any notice, consent, request or other
communication required or permitted under this Agreement shall be given in writing and shall be
deemed effectively given or delivered upon receipt by the party to be notified (including by
telecopier, receipt confirmed) or five (5) days after deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed to the party to be notified (a) if
to a party other than the Company, at such party’s address set forth on Schedule 1 attached hereto
or at such other address as such party shall have furnished the Company in writing, or, until any
such party so furnishes an address to the Company, then to and at the address of the last holder of
the shares covered by this Agreement who has so furnished an address to the Company, or (b) if to
the Company, at its address set forth on the signature page to this Agreement, or at such other
address as the Company shall have furnished to the parties in writing.
19. Severability. The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other provision of this
Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be
declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced
in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum
extent permissible consistent with applicable law and the remaining conditions and provisions or
portions thereof shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other
covenant or provision unless so expressed herein.
20. Descriptive Headings, etc. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement. All references herein to “Sections” shall refer to corresponding
provisions of this Agreement unless otherwise expressly noted.
21. Delays or Omissions; Remedies Cumulative. It is agreed that no delay or omission
to exercise any right, power or remedy accruing to the parties shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any
waiver of any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character by a party of any breach or default under this Agreement, or any
waiver by a party of any provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in writing and that all remedies, either under
this Agreement, or by law or otherwise afforded to a party, shall be cumulative and not
alternative.
22. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one instrument. Facsimile
counterpart signatures shall be acceptable.
[Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of
the date first above written.
| FX REAL ESTATE AND ENTERTAINMENT INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxxx X. Xxxxxx | |||
| Title: | Executive Vice President | |||
| Address: |
000 Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 |
|||
| THE XXXX ALTERNATIVE FUND, L.P. |
||||
| By: | WRH Partners II, LLC, | |||
| its General Partner | ||||
| By: | /s/ Xxxxx Xxxxx | |||
| Name: | Xxxxx Xxxxx | |||
| Title: | Counsel | |||
| THE XXXX ALTERNATIVE PARALLEL FUND, L.P. |
||||
| By: | WRH Partners II, LLC, | |||
| its General Partner | ||||
| By: | /s/ Xxxxx Xxxxx | |||
| Name: | Xxxxx Xxxxx | |||
| Title: | Counsel | |||
[Signature page to Registration Rights Agreement]
SCHEDULE 1
| Name | Address | |
The Xxxx Alternative Fund, L.P.
|
1776 On the Green 00 Xxxx Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000 Facsimile: (000) 000-0000 Attention: Xxxxx Xxxxx, Esq. |
|
| Copies to: Xxxxx Xxxxxxx LLP 000 Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Facsimile: (000) 000-0000 Attn: Xxxxxx X. Xxxxxxxxxx, Esq. |
||
The Xxxx Alternative Parallel Fund, L.P.
|
1776 On the Green 00 Xxxx Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000 Facsimile: (000) 000-0000 Attention: Xxxxx Xxxxx, Esq. |
|
| Copies to: Xxxxx Xxxxxxx LLP 000 Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Facsimile: (000) 000-0000 Attn: Xxxxxx X. Xxxxxxxxxx, Esq. |
