Exhibit 10.5
STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT
This STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT, dated as of January
19, 2006, is by and among Soft Wave Media, Inc., a Delaware corporation (the
"CORPORATION"), each of the holders of the Corporation's Common Stock (as
defined below) as of the date hereof (such holders being set forth on SCHEDULE A
hereto) and such additional persons who become holders of the Corporation's
Common Stock from and after the date hereof (as set forth on SCHEDULE A hereto,
as it may be supplemented from and after the date hereof) (collectively, the
"STOCKHOLDERS").
W I T N E S S E T H:
WHEREAS, the Stockholders own all of the issued and outstanding shares
(the "SHARES") of the Corporation's Common Stock, par value $.01 per share (the
"COMMON STOCK"); and
WHEREAS, the Stockholders and the Corporation believe that it is in
their best interests to impose certain restrictions and obligations with respect
to the transfer of the Shares; and
WHEREAS, the Stockholders and the Corporation believe that it is in
their best interests to set forth certain agreements with respect to the
governance of the Corporation; and
WHEREAS, the Stockholders and the Corporation believe that it is in
their best interests to set forth certain agreements with respect to the
registration of the shares of the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, it is mutually agreed by and among the parties as follows:
1. DEFINITIONS. As used in this Agreement, unless the context otherwise
requires:
"AGREEMENT" means this Stockholder and Registration Rights Agreement
and any amendments and supplements hereto.
"BONA FIDE OFFER" means a written offer from a financially responsible
party or parties identified therein by name and address, reasonably appearing
able to comply with the terms of such offer.
"COMMON STOCK" shall have the meaning set forth in the recitals to this
Agreement.
"CORPORATION" shall have the meaning set forth in the introduction to
this Agreement.
"EFFECTIVE DATE" means the date upon which a Notice of Offer is deemed
to have been first delivered to the Corporation.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
"FOUNDING STOCKHOLDER(S)" means Soft Wave Media, LLC, Alowex, LLC and
Remnant Media, LLC.
"FOUNDING STOCKHOLDER SHARES" means all shares of Common Stock which
are held on the date hereof by the Founding Stockholder(s).
"INVESTORS" means those Stockholders set forth on SCHEDULE A hereto,
other than Soft Wave Media, LLC.
"INVESTOR SHARES" means all shares of Common Stock which are held on
the date hereof by the Investors.
"NOTICE OF EXERCISE" means the written notice required to be given by
the Corporation or a Stockholder to exercise the option to purchase the Shares
offered for Transfer.
"NOTICE OF OFFER" means the written notice of a Stockholder's intention
to Transfer any of his Shares and which sets forth the name of the proposed
Transferee, the number of Shares to be Transferred and the terms and conditions
of the proposed Transfer. Such notice shall be accompanied by a copy of a Bona
Fide Offer received in connection with such proposed Transfer.
"PERMITTED TRANSFER" means, in the case of a given Stockholder, a
transfer to a Permitted Transferee of such Stockholder.
"PERMITTED TRANSFEREE" means (i) in the case of a Founding Stockholder
(or any direct or indirect Permitted Transferee of a Founding Stockholder), one
or more of the following persons or entities: Soft Wave Media, LLC, Alowex, LLC,
Remnant Media, LLC, Xxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx
Xxxxxxxxx, Xxx Xxxx or Xxxxx Xxxxxxxx, and (ii) in the case of an Investor, any
entity in which Xxxxxx X. Xxxxxx, Xxxxx Xxxxxxxxx and/or such Investor,
singularly or collectively, owns at least 51% of the outstanding voting
securities; PROVIDED, HOWEVER, that no person or entity shall be deemed to be a
Permitted Transferee unless such person or entity, in connection with the
purported Permitted Transfer to such person or entity, shall execute a
counterpart to this Agreement, in form and substance reasonably satisfactory to
the Board of Directors of the Corporation, pursuant to which such person or
entity agrees to be bound by all of the terms and provisions of this Agreement.
"REGISTRABLE HOLDER" means the Founding Stockholder(s), the Investors
and any person to whom Registrable Shares are transferred in accordance with the
terms of this Agreement (so long as such person holds Registrable Shares).
"REGISTRABLE SHARES" means (i) the Founding Stockholder Shares, (ii)
the Investor Shares, and (iii) any shares of Common Stock issued or issuable in
respect of such shares upon any stock split, reverse stock split, stock
dividend, recapitalization, or similar event; PROVIDED, HOWEVER, as to any
particular Registrable Shares, such securities shall cease to be Registrable
Shares when (i) such securities shall have been sold pursuant to an effective
registration statement under the Securities Act, (ii) such securities can be
sold in the public market pursuant to Rule 144 of the Securities Act, without
regard to volume limitations, (iii) such securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Corporation and subsequent disposition
of them shall not require registration under the Securities Act, or (iv) such
securities shall have ceased to be outstanding.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
"SELLING STOCKHOLDER" means any Stockholder who has delivered a Notice
of Offer.
"SHARES" means the issued and outstanding shares of the Common Stock of
the Corporation.
"STOCKHOLDERS" shall have the meaning set forth in the introduction to
this Agreement.
"TRANSFER" means to directly or indirectly sell, assign, hypothecate,
transfer, pledge, mortgage or in any other way encumber or dispose of Shares and
shall be defined to include the process whereby Shares are transferred.
"TRANSFEREE" means the person or entity to which a Selling Stockholder
desires to Transfer Shares.
2. RESTRICTIONS ON TRANSFER OF SHARES. No Stockholder shall Transfer
any Shares that he or it may now or hereafter hold, nor shall any such Shares be
transferable, except in compliance with the terms of this Agreement and in
compliance with all applicable federal and state securities laws. No Transfer of
Shares will be recognized by the Corporation unless a registration statement
relating thereto has been declared effective under the Securities Act or the
Selling Stockholder establishes to the satisfaction of the Corporation that such
Transfer of Shares is exempt from registration under the Securities Act and
applicable state securities laws.
3. RIGHTS OF FIRST REFUSAL.
(a) No less than 21 days prior to any Transfer, other than a Permitted
Transfer, a Stockholder desiring to Transfer Shares shall furnish a Notice of
Offer to the Corporation and to each other Stockholder. For a period of 7 days
after the Effective Date of the Notice of Offer (to the Corporation), the
Corporation shall have an option to purchase all or any portion of the Shares
offered for Transfer by the Selling Stockholder on the same terms and conditions
as set forth in the Notice of Offer. If the Corporation elects to exercise such
option, it must deliver to the Selling Stockholder a Notice of Exercise within 7
days of the Effective Date of the Notice of Offer (to the Corporation).
(b) If the Corporation elects not to exercise said option for all of
the Shares to be Transferred by the Selling Stockholder, then it shall give
prompt notice thereof (by courier or other means of personal service or by
national overnight delivery service) to the Selling Stockholder and the other
Stockholders, after which such other Stockholders will have an option for an
additional 7 days to purchase all or any portion of the remaining Shares offered
for Transfer by the Selling Stockholder on the same terms and conditions as set
forth in the Notice of Offer. If such a Stockholder elects to exercise its
option to acquire Shares to be Transferred, it must deliver to the Selling
Stockholder a Notice of Exercise within 14 days of the Effective Date of the
Notice of Offer (to the Corporation). If more than one such other Stockholder
exercises said option, then each such other Stockholder shall have the right to
purchase Shares of the Selling Stockholder on a pro rata basis based on the
current number of Shares owned by each purchasing Stockholder.
(c) The Notice of Exercise delivered by the Corporation or any other
Stockholder shall specify a closing date within 21 days after the Effective Date
of the Notice of Offer (to the Corporation). The Selling Stockholder and the
purchasers may extend the closing date by mutual written consent.
(d) If either the Corporation or any other Stockholders elect to
exercise their option to purchase all or any portion of the Shares, then the
Selling Stockholder may not Transfer such Shares to any other party. If the
periods during which the Corporation and the other Stockholders are entitled to
exercise their options to purchase such Shares expire without the exercise of
said options with respect to any of the Shares so offered, then the Selling
Stockholder shall, for a period ending 30 days after the termination of the last
applicable option period, be free to Transfer such Shares to the Transferee
making the Bona Fide Offer contained in the Notice of Offer, but only so long as
such Transfer is effected on terms and conditions no less favorable to the
Selling Stockholder as those set forth in the Bona Fide Offer contained in the
Notice of Offer. Any Transferee shall, as a condition to the recognition by the
Corporation of such Transfer, execute an instrument acceptable to the
Corporation acknowledging the terms and restrictions of this Agreement and the
Transferee's obligation to be bound hereby and all Shares shall be marked with a
legend referencing a restriction on Transfer pursuant to the terms hereof.
(e) If the Selling Stockholder does not Transfer the Shares within the
period specified in paragraph (d) hereof, then such Shares shall again become
subject to the restrictions of this Agreement.
(f) Any Shares purchased by the Corporation shall be restored to the
status of authorized but unissued Shares.
(g) The Selling Stockholder will be responsible for the payment of any
and all expenses incurred by the Selling Stockholder in the exercise of the
rights specified in this Section 3 and the sale of his or its Shares.
4. BOARD OF DIRECTORS AND OFFICERS. During the term of this Agreement
(as set forth in Section 13), each Stockholder shall vote his Shares and
otherwise act so as to cause the Board of Directors of the Corporation (the
"BOARD") to be comprised of four persons, constituted as follows: (i) two
persons nominated by Alowex, LLC, such persons to initially be Xxxxxxx Xxxxxxx
and Xxxx Xxxxxx; and (ii) two persons nominated by Remnant Media, LLC, such
persons to initially be Xxxxxxx Xxxxxxxxx and Xxxx Xxxxxx.
5. INCIDENTAL REGISTRATION RIGHTS.
(a) If the Corporation proposes to file a registration statement under
the Securities Act with respect to a primary or secondary offering of equity
securities of the Corporation (other than a registration statement relating
solely to (i) securities to be offered to employees pursuant to a stock option,
stock savings, or other employee benefit plan of the Corporation or its
affiliates; (ii) securities proposed to be issued by the Corporation in exchange
for securities or assets of, or in connection with a merger or consolidation
with, another corporation; (iii) securities to be offered by the Corporation
generally to any class or series of its then-existing security holders; or (iv)
securities to be offered or issued pursuant to a combination of the foregoing
transactions), then the Corporation shall give written notice of such proposed
filing to each Registrable Holder as soon as practicable, and such notice shall
offer the opportunity to register all or any part of the Registrable Shares
owned by such Registrable Holder. Registrable Holders shall have 15 days
following receipt of such notice to request in writing inclusion of their
Registrable Shares in such registration, which request shall specify the number
of Registrable Shares a Registrable Holder proposes to register.
(b) Whenever a Registrable Holder requests that all or part of his
Registrable Shares be included in a proposed registration, the Corporation shall
use its reasonable best efforts to effect the registration of such Registrable
Shares and to cause the managing underwriter of any proposed underwritten
offering to permit the requested Registrable Shares to be included in such
registration. Registrable Holders may only participate in the underwritten
portion of such registration if each of them (i) agrees to sell their
Registrable Shares on the basis provided in any underwriting arrangements and
(ii) completes and executes all questionnaires, powers of attorney, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and these registration rights. Among other things,
each Registrable Holder agrees, if his or its Registrable Shares are included in
an underwritten offering, that he or it will, upon the reasonable request of the
managing underwriter, join in any general agreement with the managing
underwriter not to effect any public sale or distribution of his or its
remaining Registrable Shares pursuant to such registration for a period of time
not to exceed 180 days after the date any such registration statement is
declared effective under the Securities Act.
(c) Notwithstanding anything else set forth in paragraph (a) of this
Section 5, the Corporation may, at the discretion of a majority of its Board of
Directors and without the consent of any requesting Registrable Holder, withdraw
any registration and abandon the proposed offering. Furthermore, if the managing
underwriter of an underwritten offering advises the Corporation that in its
opinion either because of (i) the size of the offering that the Corporation and
any Registrable Holders desire to make or (ii) the kind of securities that the
Corporation and any Registrable Holders intend to include in such offering, the
success of the offering could be materially and adversely affected by inclusion
of the Registrable Shares requested to be included, then (A) in the event that
the size of the offering is the basis of such managing underwriter's opinion,
the amount of Registrable Shares to be offered for the account of Registrable
Holders shall be reduced on a pro rata basis among such Registrable Holders (on
the basis of the amount of Registrable Shares intended to be included in such
registration by each such Registrable Holder as compared to the aggregate amount
of Registrable Shares intended to be included by all such Registrable Holders)
to the extent necessary to reduce the total amount of Registrable Shares to be
included in such offering to the amount recommended by such managing
underwriter; and (B) in the event that the kind or combination of securities to
be offered is the basis of such managing underwriter's opinion, the amount of
Registrable Shares to be included in such offering shall be reduced as described
in clause (A) above or, if any such reduction would, in the judgment of the
managing underwriter, be insufficient to substantially eliminate the adverse
effect that inclusion of the Registrable Shares requested to be included could
have on such offering, such Registrable Shares shall be excluded from such
underwritten offering. Notwithstanding the exclusion of such Registrable Shares
from such underwritten offering, the Corporation will cause such Registrable
Shares to be registered for resale in the same registration statement, provided
that the requesting Registrable Holders agree not to consummate any such resale
of their Registrable Shares pursuant to such registration statement for a period
of 180 days after such registration statement is declared effective under the
Securities Act. The Corporation agrees to maintain the effectiveness of such
registration statement under the Securities Act for up to 12 months after such
180-day period has expired or until all such registered Registrable Shares are
sold, whichever is earlier.
(d) The registration rights under this Section 5 shall only apply to
the first three registration statements filed by the Corporation and declared
effective under the Securities Act, other than registration statements relating
to those offerings described in items (i) through (iv) of paragraph (a) of this
Section 5.
6. ADDITIONAL REGISTRATION RIGHTS.
(a) If at any time (1) the Corporation shall receive from any one or
more Registrable Holders of Registrable Shares a written request that the
Corporation effect a registration of all or any portion of such Registrable
Shares on Form S-3 or any successor thereto, (2) the reasonably anticipated
proceeds from such Registrable Shares shall be at least $1,500,000, and (3) the
Corporation is a registrant entitled to use Form S-3 or any successor thereto to
register such shares, the Corporation will:
(i) promptly give written notice of the proposed registration
to all Registrable Holders; and
(ii) use its reasonable best efforts to effect, as soon as
reasonably practicable, such registration as may be so requested and as
would permit or facilitate the sale and distribution of all or such
portion of such Registrable Holder's or Registrable Holders'
Registrable Shares as are specified in such request, together with all
or such portion of the Registrable Shares of any Registrable Holder or
Registrable Holders of Registrable Shares joining in such request as
are specified in a written request given within fifteen (15) days after
receipt of such written notice from the Company.
(b) Notwithstanding any other provision of this Section 6, if the
contemplated distribution pursuant to this Section 6 shall be by means of an
underwriting and if the underwriter advises the holders of Registrable Shares
initiating the registration request ("INITIATING HOLDER(S)") that marketing
factors require a limitation of the number of shares to be underwritten, then
the Initiating Holder(s) shall so advise all Registrable Holders whose
Registrable Shares would otherwise be underwritten pursuant hereto, and the
number of Registrable Shares that may be included in the underwriting shall be
allocated among such Registrable Holders on the basis of the amount of
Registrable Shares intended to be included in such registration by each such
Registrable Holder as compared to the aggregate amount of Registrable Shares
intended to be included by all such Registrable Holders; provided that the
Company may accommodate the request of any such Holder that it be allowed to
withdraw as a whole or in part from such offering.
(c) The Corporation shall not, pursuant to Section 6(a), be obligated
to (i) complete more than three such registrations, or (ii) effect more than one
such registration per 180-day period; PROVIDED, HOWEVER, that a registration
shall not be counted as a registration under this Section 6 unless such
registration statement shall include at least thirty percent (30%) of the
Registrable Shares for which such registration has been requested; and PROVIDED
FURTHER, that if the Initiating Holders withdraw their request for registration
during a deferral period under Section 6(d) hereof, such withdrawal request
shall not be counted towards the number of S-3 registrations permitted
hereunder.
(d) Notwithstanding the foregoing, if the Corporation shall furnish to
the holders requesting a registration statement pursuant to this Section 6,
within 30 days of such request, a certificate signed by the President of the
Corporation stating that in good faith judgment of the Board of Directors of the
Corporation, it would be seriously detrimental to the Corporation and its
stockholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Corporation
shall have the right to defer taking action with respect to such filing for a
period of not more than 180 days after receipt of the request of the Initiating
Holders. During any such deferral period, the Initiating Holders may withdraw
their request, in which case the Initiating Holders will not have been deemed to
have made a request for registration under this Section 6.
7. REGISTRATION PROCEDURES.
(a) The Corporation shall pay all of its expenses in connection with
the registration of Registrable Shares pursuant to Section 5 or Section 6,
including expenses incurred in connection with any registration statements that
do not become effective. Registrable Holders participating in such registration
shall pay their pro rata share of all underwriting fees, discounts or
commissions attributable to any sale of all or part of their Registrable Shares
in connection with any registration, and shall be required to pay expenses that
they incur for their own attorneys or advisors in connection with the
registration, but shall not be required to cover other expenses of the
registration contracted for by the Corporation. A Registrable Holder's pro rata
share of such underwriting fees, discounts or commissions will be determined by
reference to the number of shares to be sold by such Registrable Holder compared
with the number of shares to be sold by all Registrable Holders and the
Corporation pursuant to the registration.
(b) Whenever the Corporation files a registration statement pursuant to
Section 5 or Section 6 that is declared effective and that registers any
Registrable Shares for resale, the Corporation agrees to use its best efforts to
register or qualify the Registrable Shares for sale in those states requested by
the person selling the Registrable Shares; PROVIDED THAT, the Corporation shall
not be required to (i) register or qualify the Registrable Shares for sale in
any state in which the sale of the Registrable Shares by the person selling the
Registrable Shares would be exempt from having to be registered or qualified in
such state; (ii) qualify as a foreign corporation to do business under the laws
of any such jurisdiction; (iii) take any action that would subject it to annual
service of process in any jurisdiction in which it is not so subject; or (iv)
take any action that would subject it to the assessment of taxes in any
jurisdiction in which it is not so subject.
(c) If, subsequent to the effectiveness of a registration statement
described in the foregoing provisions of Section 5 or Section 6, (i) the
Corporation determines that there are material developments relating to the
Corporation that require the filing of a post-effective amendment to the
registration statement, then each Registrable Holder shall refrain from selling
any Registrable Shares until such post-effective amendment is declared effective
or (ii) a stop order has been issued against the registration statement, each
Registrable Holder shall refrain from selling any Registrable Shares until such
Registrable Holder is notified by the Corporation that the stop order has been
withdrawn.
(d) In connection with any registration under Section 5 or Section 6:
(i) The Corporation shall indemnify each Registrable Holder
against any loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which he or it may become subject
under the Securities Act, the Exchange Act or any other statute, common
law or otherwise, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in such
registration statement or based upon written information furnished by
the Corporation filed in any jurisdiction in order to qualify the
Registrable Shares under the securities laws thereof or filed with the
Securities and Exchange Commission, any state securities commission or
agency, the National Association of Securities Dealers, Inc., The
Nasdaq Stock Market or any securities exchange, or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements contained therein not
misleading, unless such statement or omission was made in reliance upon
and in conformity with written information furnished to the Corporation
by such Registrable Holder expressly for use in or intended to be
relied upon for such registration statement, any amendment or
supplement thereto or any application, as the case may be. If any
action is brought against a Registrable Holder in respect of which
indemnity may be sought against the Corporation pursuant to this
Section 7(d)(i), such Registrable Holder shall, within thirty (30) days
after the receipt of a summons or complaint, notify the Corporation in
writing of the institution of such action and the Corporation shall
assume the defense of such action, including the employment and payment
of reasonable fees and expenses of counsel of recognized standing
(which shall include counsel serving as the Corporation's outside
general counsel), but the failure to give such notice shall not affect
such indemnified person's right to indemnification hereunder except to
the extent that the Corporation's defense of such action was materially
adversely affected thereby. Each Registrable Holder shall have the
right to employ his or her own counsel in any such case, but the fees
and expenses of such counsel shall be borne by such Registrable Holder
unless the employment of such counsel is authorized in writing by the
Corporation in connection with the defense of such action, the
Corporation fails to employ counsel to handle the defense of such
action or such indemnified party reasonably concludes that there may be
defenses available to him or it that are different from or additional
to those available to the Corporation (in which case the Corporation
shall not have the right to direct the defense of such action on behalf
of the indemnified party or parties), in any of which events the fees
and expenses of not more than one additional firm of attorneys for such
Registrable Holders shall be borne by the Corporation. Except as
expressly provided in the previous sentence, in the event that the
Corporation shall have assumed the defense of any such action or claim,
the Corporation shall not thereafter be liable to any Registrable
Holder in investigating, preparing or defending any such action or
claim. The Corporation agrees to promptly notify each Registrable
Holder of the commencement of any litigation or proceeding against the
Corporation or any of its officers, directors or controlling persons in
connection with the resale of the Registrable Shares or in connection
with such registration statement.
(ii) Each Registrable Holder shall severally, but not jointly,
indemnify the Corporation, its officers and directors and each person,
if any, who controls the Corporation within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act, against any
loss, claim, damage, expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which it or they may become subject under the
Securities Act, the Exchange Act or otherwise, arising from written
information furnished by or on behalf of such Registrable Holder
expressly for use in or intended to be relied upon for such
registration statement.
(iii) If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnitee, then
the indemnifying party shall contribute to the amount paid or payable
by the indemnitee as a result of such loss, claim, damage, expense or
liability (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand
and the indemnitee on the other from the registration or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, or provides a lesser sum to the indemnitee 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 indemnitee on the other but also the relative
fault of the indemnifying party and the indemnitee as well as any other
relevant equitable considerations. 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.
8. LEGEND. Each certificate representing Shares shall have the
following legend printed or typed thereon, for so long as such legend shall be
applicable:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE APPLICABLE SECURITIES UNDER
THE ACT AND ANY STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION."
"THE SECURITIES EVIDENCED HEREBY ARE SUBJECT TO A CERTAIN STOCKHOLDER
AND REGISTRATION RIGHTS AGREEMENT, DATED AS OF JANUARY 19, 2006, BY AND
AMONG THE CORPORATION AND THE STOCKHOLDER PARTIES THERETO, A COPY OF
WHICH MAY BE OBTAINED FROM THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL OFFICES OF THE CORPORATION."
Each certificate representing Shares shall also have any other legends required
by applicable state or federal securities laws or any applicable state laws
regulating the Corporation's business.
All Shares hereafter issued shall bear the same legend.
9. NOTICES. All notices, requests and other communications hereunder
shall be in writing and shall be delivered by courier or other means of personal
service, national overnight delivery service, or certified U.S. mail, return
receipt requested, addressed (i) to the Corporation at Xxx Xxxxxx Xxxxxx, Xxxxx
00, Xxxxxxxxx, XX 00000, attention: Xxxx Xxxxxx, or (ii) to a Stockholder at the
address set forth in SCHEDULE A hereto or at such other address of which a
Stockholder has given the Corporation notice. All such notices shall be deemed
to have been delivered on the date personally delivered, one business day after
being delivered to a national overnight delivery service or five business days
after being deposited in the U.S. Mail.
10. WAIVER. No waiver of any provision of this Agreement in any
instance shall be or for any purpose be deemed to be a waiver of the right of
any party hereto to enforce strict compliance with the provisions hereof in any
subsequent instance.
11. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware without giving effect to its
conflict of laws principals.
12. BINDING EFFECT AND BENEFITS. Except as otherwise provided herein,
the terms of this Agreement shall be binding upon the parties hereto and their
respective heirs, executors, administrators, personal representatives,
successors and assigns, and shall be binding upon any person to whom any of the
Shares of the parties are transferred and upon the heirs, executors,
administrators, personal representatives, successors and assigns of each such
person.
13. TERM OF AGREEMENT. This Agreement shall become effective as of the
date first written above and shall remain in full force and effect until the
earliest to occur of the following: (i) Corporation and all of the Stockholders
then holding Shares subject to this Agreement shall agree in writing to its
termination; (ii) the offering by the Corporation of shares of the Common Stock
of the Corporation pursuant to a registration statement that is effective under
the Securities Act or the Corporation otherwise becoming a reporting company
under Section 12 of the Exchange Act, PROVIDED, HOWEVER, that the provisions of
Sections 5, 6 and 7 of this Agreement (and the defined terms and miscellaneous
provisions of this Agreement pertaining thereto) shall remain in effect until
satisfied; (iii) the purchase by one Stockholder of all the issued and
outstanding Shares of the Corporation; or (iv) the dissolution, bankruptcy or
receivership of the Corporation. Upon termination of this Agreement, the
Secretary of the Corporation shall, as appropriate, upon tender of the
certificates for Shares, delete the legends endorsed thereon pursuant to Section
8 of this Agreement.
14. REMEDIES FOR VIOLATIONS. Without limiting other remedies that may
be available on account of a breach of this Agreement, in the event of any
controversy concerning the rights or obligations under this Agreement, such
right or obligation shall be enforceable in a court of equity by a decree of
specific performance.
15. ENTIRE AGREEMENT. This Agreement contains the entire understanding
and agreement between the parties with respect to the subject matter hereof, and
supersedes any prior agreements among the parties concerning the subject matter
hereof.
16. AMENDMENT. No change, modification or amendment of this Agreement
shall be valid unless the same shall be in writing and signed by all of the
parties to this Agreement; PROVIDED, HOWEVER, that the holders of at least
ninety percent (90%) of the then outstanding Registrable Shares may effect any
such change, modification or amendment, or may waive any term or provision, of
Sections 5, 6 or 7 of this Agreement (and the defined terms and miscellaneous
provisions of this Agreement pertaining thereto), which change, modification,
amendment or waiver shall then be binding on all holders of Registrable Shares;
PROVIDED FURTHER, HOWEVER, that if any such change, modification, amendment or
wavier shall directly affect any holder of Registrable Shares in a manner that
is materially and adversely different than its affect on any other holder of
Registrable Shares, then such change, modification, amendment or wavier shall
require the written agreement of the holder or holders of Registrable Shares so
materially and adversely affected.
17. SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions of this
Agreement, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
18. SECTION AND OTHER HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the interpretation of this Agreement. The parties hereto agree that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or interpretation of
this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
20. CONSTRUCTION. Whenever required by the context, references herein
to the singular shall include the plural and the masculine gender shall include
the feminine and neuter genders.
[Signature page follows]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
SOFT WAVE MEDIA, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title:CEO
SOFT WAVE MEDIA, LLC
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Manager
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx
VISTA DEVELOPMENT, LLC
By:
/s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Manager
SOFTWAVE HOLDINGS TRUST
By:
/s/ Xxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
/s/ Xxxxxx Xxxxxxxxx
------------------------------------
Xxxxxx Xxxxxxxxx
XXXXXXXXX FAMILY LIMITED PARTNERSHIP
By:
/s/ Xxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxx
Title: General Partner
KFP TRUST
By:
/s/ Xxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Trustee
/s/ Xxxx xxXxxx
------------------------------------
Xxxx xxXxxx
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx
FOX HOLLOW LANE, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Manager
THE ZITTLOSEN XXXXXXXXXX
FAMILLY, LLC
By: /s/ Xxxxx Xxxxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxx Xxxxxxx
Title: Director
/s/ Xxxxxxxx Xxxxxx
------------------------------------
Xxxxxxxx Xxxxxx
XXXXXX LIVING TRUST
DATED 2/17/00
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
/s/ Xxxxxx Xxxx
------------------------------------
Xxxxxx Xxxx
