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EXHIBIT 4(b)
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REGISTRATION RIGHTS AGREEMENT
Among
SPORT SUPPLY GROUP, INC.
XXXXXXX RADIO CORP.
and
XXXXXXX RADIO (HONG KONG) LIMITED
Dated as of December 10, 1996
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TABLE OF CONTENTS
Page
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SECTION 1. CERTAIN DEFINITIONS AND TERMS . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . 1
1.2 Number and Gender of Words; Other References . . . . . 2
SECTION 2. REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . 3
2.1 Required Registration and Notice;
Transfer of Registrable Securities . . . . . . . . . . 3
2.2 Conditions to Required Registration. . . . . . . . . . 4
2.3 Incidental Registration. . . . . . . . . . . . . . . . 6
2.4 Registration Procedures. . . . . . . . . . . . . . . . 7
2.5 Furnish Information. . . . . . . . . . . . . . . . . . 12
2.6 Expenses of Registration . . . . . . . . . . . . . . . 13
2.7 Indemnification. . . . . . . . . . . . . . . . . . . . 13
2.8 Reports Under the Exchange Act . . . . . . . . . . . . 16
2.9 Lockup Agreement . . . . . . . . . . . . . . . . . . . 16
2.10 Preparation; Investigation . . . . . . . . . . . . . . 17
SECTION 3. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 17
3.1 Relationships and Rights of the Holders. . . . . . . . 17
3.2 Headings . . . . . . . . . . . . . . . . . . . . . . . 17
3.3 Communications . . . . . . . . . . . . . . . . . . . . 18
3.4 Governing Law. . . . . . . . . . . . . . . . . . . . . 18
3.5 Invalid Provisions . . . . . . . . . . . . . . . . . . 18
3.6 Successors and Assigns . . . . . . . . . . . . . . . . 19
3.7 Amendments . . . . . . . . . . . . . . . . . . . . . . 19
3.8 Multiple Counterparts. . . . . . . . . . . . . . . . . 19
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REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of December 10,
1996 between Sport Supply Group, Inc., a Delaware corporation (the "Company"),
Xxxxxxx Radio Corp., a Delaware corporation ("Xxxxxxx"), and Xxxxxxx Radio
(Hong Kong) Limited, an entity organized under the laws of Hong Kong ("Xxxxxxx
(HK)").
WHEREAS, Xxxxxxx and Xxxxxxx (HK) own common stock of the Company and
warrants to purchase common stock of the Company; and
WHEREAS, such holders desire that the limitations on further
distributions of such securities be reduced and the Company is willing to offer
certain registration rights to such holders to reduce such limitations, all as
more specifically set forth herein;
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. CERTAIN DEFINITIONS AND TERMS.
1.1 Definitions. As used herein, the following terms have the
meanings indicated:
"Common Stock" means the Common Stock, par value $0.01 per share, of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Holder" or "holder" means the holder of any Registrable Securities as
shown on the stock ownership and transfer records maintained by or on behalf of
the Company.
"Person" means any individual, firm, corporation, trust, association,
partnership, joint venture or other entity.
"Register," "registered, " and "registration" refer to a registration of
securities effected by preparing and filing a
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registration statement in compliance with the Securities Act and/or state
securities laws and the declaration or ordering of effectiveness of such
registration statement.
"Registrable Securities" means (a) any of the shares of Common Stock
outstanding on the date hereof which are held by Xxxxxxx and Xxxxxxx (HK), (b)
any share or shares of Common Stock issued upon exercise of any Warrants
outstanding on the date hereof, and (c) any share or shares of Common Stock
issued hereafter in respect of either of the foregoing, in each case to the
extent that such shares are, at the time in question, "restricted securities"
or shares held by an "affiliate" as such terms are defined in Rule 144
promulgated under the Securities Act.
"Rights" means rights, remedies, powers, benefits, and privileges.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Warrants" means the warrants to purchase up to an aggregate of
1,000,000 shares of Common Stock at an initial exercise price of $7.50 per
share, subject to adjustment, represented by a Warrant Agreement dated as of
even date herewith, which are owned and held by Xxxxxxx.
1.2 Number and Gender of Words; Other References. Whenever in this
Agreement the singular is used, the same shall include the plural where
appropriate, and vice versa; and words of any gender herein shall include each
other gender where appropriate. References herein to "sections" are, unless
specified otherwise, references to sections of this Agreement. The words
"herein," "hereof," and "hereunder," and other words of similar import refer to
this Agreement as a whole and not to any particular part or subdivision hereof.
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SECTION 2. REGISTRATION RIGHTS.
2.1 Required Registration and Notice; Transfer of Registrable
Securities. (a) At the request of any holders of Registrable Securities,
setting forth such holders' intent to transfer not less than 200,000 shares of
Registrable Securities describing briefly the manner and circumstances of such
transfer, and requesting that the Company effect the registration or
qualification or filing for exemption under applicable Federal or State law of
such Registrable Securities, the Company shall promptly give written notice to
all holders of Registrable Securities of a proposed registration or
qualification or filing for exemption and shall, subject to the conditions of
Section 2.2, as expeditiously as practicable, use its best efforts to effect
any such registration or qualification or filing for exemption of:
(i) such Registrable Securities specified by the holder or holders
giving the initial notice, and
(ii) any other Registrable Securities the holders of which (or
prospective holders thereof upon exercise) shall have requested the
Company in writing, within 20 days after the giving of such written
notice by the Company, to register or qualify or file for exemption,
with any governmental authority under any Federal or State law, and any listing
with any securities exchange, which may be required to permit the offering and
sale or other disposition of any such Registrable Securities which the holders
(or prospective holders thereof upon exercise) propose to make upon the
effectiveness of such registration, qualification, or filing for exemption, and
the Company shall keep effective such registration, qualification, or exemption
for at least 150 days; provided, that the Company shall only be required
initially to file a registration statement or qualification application no
later than 145 days after any final year end of the Company and at such
reasonable time as it has available for utilization therein the audited
consolidated financial statements of the Company as of the preceding fiscal
year end.
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(b) The managing underwriter or underwriters, if any, for any
offering of Registrable Securities to be registered pursuant to this Section
shall be selected by the holders of a majority of the shares of Registrable
Securities being registered and must be acceptable to the Company in its
reasonable judgment. If requested by the underwriters for any underwritten
offering of Registrable Securities registered pursuant to a registration
requested under Section 2.1, the Company shall enter into an underwriting
agreement with such underwriters for such offering, such agreement to contain
such representations and warranties by the Company and such other terms and
provisions as are customarily contained in agreements with respect to secondary
distributions, including, without limitation, indemnity and contribution as
described in Section 2.7. The Holders of Registrable Securities who have
requested that Registrable Securities held by them be distributed by such
underwriters shall be parties to such underwriting agreement and the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Holders of Registrable Securities and the conditions
precedent to the obligations of such Holders of Registrable Securities under
such underwriting agreement shall be satisfactory to such Holders of
Registrable Securities.
(c) A registration requested pursuant to this Section 2.1 will not be
deemed to have been effected unless it has become effective and does not become
subject to any stop order.
2.2 Conditions to Required Registration. (a) The Company's
obligation to make any filing under Section 2.1 may be deferred by the Company
for an appropriate period (not to exceed 90 days) if the Company shall in good
faith determine that the registration, qualification, or filing for exemption
would have a material adverse affect on an offering or contemplated offering or
a material acquisition, merger, or other corporate transaction to which the
Company or any of its subsidiaries is, or is expected to be, a party or any
other pending material corporate development. The Company shall have no
obligation to register, qualify, or file for exemption with respect to shares
of Registrable Securities in accordance with this Section 2 if counsel to the
Company provides a written opinion to the Company and the requesting holders
that
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the shares of Registrable Securities requested to be registered may be sold in
one or more public transactions within a period of 90 days pursuant to Rule 144
under the Securities Act, or any successor rule thereto.
(b) In addition, the Company shall not be required to take any action
under Section 2.1:
(i) more than once during any period of 12 consecutive
calendar months;
(ii) for any holder of Registrable Securities, within 90
days after the effective date of a registration
referred to in Section 2.1 or Section 2.3 pursuant
to which such holder was afforded the opportunity
to register Registrable Securities under the
Securities Act but declined so to do;
(iii) within 90 days following the execution of an
underwriting agreement with respect to any
underwritten public offering of securities by the
Company if the managing underwriter with respect to
such proposed public offering by the Company
advises the Company and the holder or holders
requesting registration in writing that such
proposed public offering by such holder or holders
would impair the public offering by the Company;
provided that if such managing underwriter shall
have advised the Company that a portion of the
Registrable Securities as to which registration
shall have been requested could be registered, then
such shares shall be registered in proportion to
the total number of shares of Registrable
Securities which each holder shall have requested
to have registered hereunder;
(iv) if such action would require the Company to qualify
as a foreign corporation to do business or file a
general consent to service of process in any state
or jurisdiction in which it is not then
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qualified or as to which it has not previously
filed a general consent to service of process; or
(v) if filing the registration statement would require
a special audit.
2.3 Incidental Registration. The Company agrees that at any time it
proposes to register any of its securities, whether held by third parties or to
be issued by the Company, under the Securities Act on Form S-1 or any other
form of registration statement then available for the registration under the
Securities Act of securities of the Company (other than a registration
statement on Form S-4 or Form S-8 or any form of registration statement not
available for general registration of securities) it shall give written notice
to all holders of outstanding shares of Registrable Securities of its intention
so to do, and upon the written request of the holder of any such shares of
Registrable Securities, given within 20 days after receipt of any such notice
from the Company, the Company shall in each instance use its best efforts,
subject to the next sentence, to cause all Registrable Securities held by any
such requesting holder of Registrable Securities to be registered under the
Securities Act and registered or qualified under any State securities law, all
to the extent necessary to permit the offering and sale or other disposition
thereof in the manner stated in such request by the prospective seller of the
securities so registered. If the managing underwriter of a proposed public
offering by the Company shall advise the Company in writing that, in its
opinion, the distribution of some or all of the shares of Registrable
Securities requested to be included in the registration concurrently with the
securities to be offered by the Company would materially impair the
distribution of securities by the Company, then the Company need not include in
such registration any shares which such underwriter believes would cause such
impairment and each holder of Registrable Securities requesting registration
shall reduce, on a pro rata basis (or such other basis as shall be agreed upon
by the holders requesting registration), the amount of securities as to which
such holder requested registration in such manner that the aggregate number of
shares being registered for holders does not exceed that number recommended by
such underwriter. Any holder of shares of
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Registrable Securities requesting registration of such Registrable Securities
shall in its request describe briefly the manner of any proposed transfer of
such Registrable Securities. Nothing in this Section 2.3 shall be deemed to
require the Company to proceed with any registration of its securities after
giving the notice herein provided.
2.4 Registration Procedures. In connection with the obligations of
the Company with respect to the Registration Statements contemplated by
Sections 2.1 and 2.3, the Company shall use its best efforts to effect each
such registration to permit the sale of the Registrable Securities covered
thereby in accordance with the intended method or methods of disposition
thereof, and pursuant thereto it will, as expeditiously as possible:
(i) at least five days prior to filing a Registration
Statement or any amendments or supplements thereto, furnish to the
Holders of the Registrable Securities covered by such Registration
Statement and the underwriter(s), if any, copies of all such documents
proposed to be filed, and the Company will consider any comments thereon
by any of the foregoing and will not file any Registration Statement or
amendment thereto to which any of the Holders of the Registrable
Securities covered by such Registration Statement or the managing
underwriter(s), if any, shall reasonably object in writing;
(ii) in accordance with (i) above, promptly thereafter
prepare and file with the SEC, any such Registration Statement, which
Registration Statement (a) shall be available for the sale of the
Registrable Securities covered thereby in accordance with the intended
method or methods of distribution by the selling Holders thereof and (b)
shall comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required by
the SEC to be filed therewith;
(iii) (a) prepare and file with the SEC such amendments
to such Registration Statement as may be reasonably requested by any
Holder of Registrable Securities or the managing
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underwriter(s), if any, or as may be required by the Securities Act, the
Exchange Act, or by the rules, regulations, or instructions applicable
to the registration form utilized by the Company or as may otherwise be
necessary to keep such Registration Statement effective; (b) cause the
prospectus contained in any such Registration Statement to be amended or
supplemented as may be reasonably requested by any of the Holders or the
managing underwriter(s), if any, or as may be required by the Securities
Act, the Exchange Act, or by the rules, regulations, or instructions
applicable to the registration form utilized by the Company or as may
otherwise be necessary to keep such Registration Statement effective;
(c) cause such prospectus as so amended or supplemented to be filed
pursuant to Rule 424 (or any successor rule) under the Securities Act;
(d) respond as promptly as practicable to any comments received from the
SEC with respect to the Registration Statement or any amendment thereto;
and (e) comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof;
(iv) promptly notify the selling Holders of Registrable
Securities and the managing underwriter(s), if any, and if requested by
any such Person, confirm such advice in writing:
(a) of the filing of a prospectus or any
supplement to such prospectus and of the effectiveness of the
Registration Statement and/or any post-effective amendment,
(b) of any request by the SEC for amendments or
supplements to the Registration Statement or such prospectus or for
additional information,
(c) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, and
(d) of the receipt by the Company of any
notification with respect to the suspension of the
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qualification of the Registrable Securities for sale in any jurisdiction
or the initiation or threat of any proceeding for such purpose.
(v) use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of any Registration Statement or
any qualification referred to in paragraph (iv)(d) at the earliest
possible moment;
(vi) if requested by the managing underwriter(s) or any
of the Holders of Registrable Securities being sold in connection with
an underwritten offering, promptly incorporate in a supplement to a
prospectus or post-effective amendment to the Registration Statement
such information as the managing underwriter(s) or any such Holder of
the Registrable Securities being sold reasonably request to have
included therein relating to the plan of distribution with respect to
such Registrable Securities, including, without limitation, information
with respect to the amount of Registrable Securities being sold to such
underwriters, the purchase price being paid therefor by such
underwriters, and any other terms of the underwritten (or best-efforts
underwritten) offering of the Registrable Securities to be sold in such
offering; and make all required filings of such supplement to such
prospectus or post-effective amendment to the Registration Statement
promptly after being notified of the matters to be incorporated in such
supplement to such prospectus or post-effective amendment to the
Registration Statement;
(vii) promptly furnish to each selling Holder of
Registrable Securities and each managing underwriter, if any, at least
one signed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits (including
those incorporated by reference);
(viii) promptly deliver to each Holder of Registrable
Securities and the managing underwriter(s), if any, as many copies of
the Registration Statement, each prospectus, and
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any amendment or supplement thereto (in each case including all
exhibits), as such Persons may reasonably request, and such other
documents as such selling Holder may reasonably request to facilitate
the disposition of its Registrable Securities; and, in connection
therewith, the Company confirms that it consents to the use of such
prospectus and any amendment or supplement thereto by each such Holder
of Registrable Securities and the underwriter(s), if any, in connection
with the offering and sale of the Registrable Securities covered by such
prospectus or amendment or supplement thereto;
(ix) prior to the time the Registration Statement is
declared effective by the SEC, register or qualify the Registrable
Securities covered thereby or cooperate with the selling Holders, the
underwriter(s), if any, and their respective counsel in connection with
the registration or qualification of such Registrable Securities for
offer and sale under the securities or blue sky laws of such
jurisdictions as any selling Holder or managing underwriter(s), if any,
reasonably request(s), keep each such registration or qualification
effective during the period such Registration Statement is required to
be kept effective, and do any and all other acts or things necessary to
enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement;
(x) cooperate with the selling Holders of Registrable
Securities and the managing underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any legends restricting the
transfer thereof; and enable such Registrable Securities to be in such
denominations and registered in such names as the selling Holders or the
managing underwriters may reasonably request at least two business days
prior to any sale of Registrable Securities;
(xi) upon execution and delivery of such mutually
acceptable confidentiality agreements as the Company may reasonably
request, make available to any underwriter
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participating in any disposition pursuant to such Registration
Statement, and any attorney or accountant retained by such 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 requested by any such
underwriter, attorney, or accountant in connection with the
registration, at such time or times as the Person requesting such
information shall determine;
(xii) otherwise use its best efforts to comply with the
Securities Act, the Exchange Act, all applicable rules and regulations
of the SEC and all applicable state blue sky and other securities laws,
rules, and regulations, and make generally available to its security
holders, as soon as practicable after the end of its first fiscal
quarter in which the first anniversary of the effective date of such
Registration Statement occurs, an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act;
(xiii) cooperate and assist in any filings required to be
made with the National Association of Securities Dealers, Inc.; and
(xiv) enter into such customary agreements (including, if
such Registration Statement relates to an underwritten offering, an
underwriting agreement) and take all such other customary actions in
connection therewith to expedite or facilitate the disposition of such
Registrable Securities and, in such connection, if the registration is
in connection with an underwritten offering, (a) make such
representations and warranties to the underwriters in such form,
substance, and scope as are customarily made by issuers to underwriters
in underwritten offerings and confirm the same if and when requested;
(b) obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions in form, scope, and substance shall be satisfactory
to the underwriters) addressed to the underwriters covering the matters
of the type customarily covered in opinions requested in underwritten
offerings and such other matters as may be
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requested by such underwriters; (c) obtain "comfort" letters and updates
thereof from the Company's accountants addressed to the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "comfort" letters by underwriters in connection
with underwritten offerings; (d) set forth in full in any underwriting
agreement entered into the indemnification provisions and procedures of
Section 2.7 hereof with respect to all parties to be indemnified
pursuant to said Section; and (e) deliver such documents and
certificates as may be requested by the underwriters to evidence
compliance with clause (a) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into
by the Company; the above shall be done at each closing under such
underwriting or similar agreement or as and to the extent required
hereunder.
2.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 2 that
the holders of Registrable Securities shall furnish to the Company such
information regarding them, the Registrable Securities held by them, and the
intended method of disposition of such securities as the Company shall
reasonably request and as shall reasonably be required in connection with the
action to be taken by the Company. If a holder of Registrable Securities
refuses to provide the Company with any of such information on the grounds that
it is not necessary to include such information in the registration statement,
the Company may exclude such holder's Registrable Securities from the
registration statement, unless such holder provides the Company with an opinion
of counsel, such opinion to be reasonably satisfactory to the Company, to the
effect that such information need not be included in the registration
statement. The exclusion of such holder's Registrable Securities from a
registration shall not affect the registration of the other Registrable
Securities to be included in such registration, except that each other holder
proposing to include Registrable Securities in such registration may, if
Registrable Securities have been excluded from such registration on the advice
of a managing underwriter as provided in Section 2.2(d) or Section 2.3,
increase the number of shares of such holder's Registrable Securities being
registered by his or its pro
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rata (or such other proportion as shall be agreed upon by holders wishing to
increase their number of shares being registered) amount of such excluded
Registrable Securities.
2.6 Expenses of Registration. All expenses incurred in connection
with all registrations pursuant to Section 2.1 or Section 2.3 (in each case
excluding underwriters' discounts and commissions applicable to the shares of
Registrable Securities being registered), including without limitation all
registration, filing, and qualification fees (except that the Company shall not
be obligated to pay any registration, filing, or qualification fees payable by
any holder to the extent that such payment is prohibited by the laws or
regulations of any state), printers' and accounting fees, and fees and
disbursements of counsel for the Company shall be paid by the Company. Each
holder of Registrable Securities shall pay the underwriters' discounts and
commissions applicable to the securities sold by such holder and fees and
disbursements of such holder and fees and disbursements of such holder's
counsel, if any. No holder of Registrable Securities shall have the right to
cause the Company to employ any expert or professional to act on behalf of the
Company. Notwithstanding the foregoing, if a registration is withdrawn at the
request of the holder requesting such registration and if such requesting
holder elects not have such registration counted as a registration requested
under Section 2.1, then the requesting holder (the "Withdrawing Holder") shall
promptly pay all of the reasonable registration expenses of such registration;
provided, however, that the Withdrawing Holder shall not be responsible for any
such registration expenses if the Company or any other holder of securities of
the Company do not concurrently withdraw the registration or the transfer of
securities of the Company proposed to be issued or held by them.
2.7 Indemnification. (a) In connection with any registration,
qualification, or filing for exemption of Registrable Securities under Section
2.1 or Section 2.3, the Company will agree to indemnify the holder of such
Registrable Securities, and each underwriter thereof, including each Person, if
any, who controls such holder of Registrable Securities or such underwriter
within the meaning of Section 15 of the Securities Act, against all losses,
claims, damages, and liabilities caused
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by any untrue, or alleged untrue, statement of a material fact contained in any
registration statement or prospectus or offering circular (and as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus or caused by any omission, or alleged
omission, to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the Company shall have no liability insofar as such losses, claims,
damages, or liabilities are caused by any untrue statement or alleged untrue
statement or omission or alleged omission based upon information furnished in
writing to the Company by such holder, or any such underwriter, expressly for
use therein, and the Company and each officer, director, and controlling Person
of the Company shall be indemnified by such holder of the Registrable
Securities, or such underwriter, for all such losses, claims, damages, and
liabilities caused by any untrue, or alleged untrue, statement or omission, or
alleged omission, based upon information furnished in writing to the Company by
such holder or such underwriter, as the case may be, for any such use;
provided, further, that the liability of each such holder shall be limited to
the proceeds net of discounts and commissions received by such holder from the
sale of Registrable Securities covered by such registration statement.
(b) The indemnification provisions shall provide that, promptly upon
receipt by a party indemnified pursuant to this Section 2.6 of notice of the
commencement of any action against such indemnified party in respect of which
indemnity or reimbursement may be sought against any indemnifying party
pursuant to this Section 2.6, such indemnified party shall notify the
indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying the party shall not relieve it of any
liability which it may have to any indemnified party otherwise than pursuant to
the indemnification agreement provided for by this Section 2.6. In case notice
of commencement of any such action shall be given to the indemnifying party as
above provided, the indemnifying party shall be entitled to participate in and,
to the extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by such indemnifying party and satisfactory to such indemnified party in
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its reasonable judgment. The indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be paid by the indemnified party unless (i) the
indemnifying party agrees to pay the same, (ii) the indemnifying party fails to
assume the defense of such action with counsel satisfactory to the indemnified
party in its reasonable judgment, or (iii) the indemnified party has been
advised by counsel that one or more legal defenses may be available to the
indemnified party which are different from those available to the indemnifying
party, in which case the indemnifying party shall not be entitled to assume the
defense of such action on behalf of the indemnified party notwithstanding its
obligation to bear the fees and expenses of such counsel. No indemnifying
party shall be liable for any settlement entered into without its consent.
(c) (i) If the indemnification provided for in this Section 2.7 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities, or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities, or expenses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified party in connection with the actions which resulted in
such losses, claims, damages, liabilities, or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact, has been made by, or related to information
supplied by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information, and opportunity to correct
or prevent such action. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities, and expenses referred to above shall
be deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with any investigation or proceeding.
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(ii) The parties hereto agree that it would not be just
and equitable if contribution pursuant to this subsection 2.7(c) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. No person or entity 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.
2.8 Reports Under the Exchange Act. With a view to making available
to the Holders the benefits of Rule 144 promulgated 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,
the Company agrees to:
(a) 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
(b) furnish to any Holder so long as such Holder owns any of the
Registrable Securities forthwith upon written request a written statement by
the Company to the effect that it has complied with the reporting requirements
of the Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as may be reasonably requested in availing any Holder of any
rule or regulation of the SEC permitting the selling of any such securities
without registration, provided that nothing herein shall impose upon the
Company any obligation to prepare or file any reports under the Securities Act,
the Exchange Act, or any other federal securities law or regulation if, by
virtue of the number of Persons owning its outstanding securities or any other
applicable circumstances, the Company is not so required to prepare or file any
such reports or other documents.
2.9 Lockup Agreement. In consideration of the performance by the
Company of its obligations under this Section 2, each holder of Registrable
Securities agrees in connection with a registration of the Company's securities
that, upon the written
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request of the Company or the underwriters managing any underwritten offering
of the Company's securities, such holder will not sell, make any short sale of,
lend, grant any option for the purchase of, or otherwise dispose of, any
Warrants or shares of Common Stock (other than those included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 120
days) from the effective date of such registration as the Company or the
underwriters may specify.
2.10 Preparation; Investigation. In connection with the preparation
and filing of each registration statement registering Registrable Securities
under the Securities Act, the Company will give the holders of any such
Registrable Securities or to whom any such Registrable Securities are issuable
and their counsel the opportunity to participate in the preparation of such
registration statement, each prospectus contained therein or filed with the
Securities and Exchange Commission, and each amendment thereof or supplement
thereto, and will give each of them reasonable access to its books and records
and the officers of the Company and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of
such holders' counsel, to conduct an investigation within the meaning of the
Securities Act.
SECTION 3. MISCELLANEOUS.
3.1 Relationships and Rights of the Holders. Notwithstanding that
certain Rights of each holder of Registrable Securities herein may be affected
by similar Rights of other holders, the holders shall, in respect of the
ownership of the Registrable Securities, not be related as, or deemed to be, a
partnership, joint venture, or other "group" for the purpose of acquiring,
holding, voting, or disposing of capital stock of the Company.
3.2 Headings. The headings, captions, and arrangements used herein
are, unless specified otherwise, for convenience only and shall not be deemed
to limit, amplify, or modify the terms hereof, nor affect the meaning thereof.
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3.3 Communications. Unless otherwise specifically provided, whenever
this Agreement requires or permits any consent, approval, notice, request, or
demand from one party to another, such communication must be in writing (which
may be tested cable, tested telefacsimile, or tested telex) to be effective and
shall be deemed to have been given on the day actually delivered, cabled, sent
by telefacsimile, or telexed, or, if sent by nationally recognized delivery
service providing for overnight delivery, on the next commercial banking
business day in the State of Texas after it is delivered to such delivery
service with all delivery charges prepaid, or, if mailed, on the third
commercial banking business day in the State of Texas after it is enclosed in
an envelope, addressed to the party to be notified at the address stated below,
properly stamped, sealed, and deposited in the appropriate official postal
service. For purposes hereof, until changed by written notice pursuant hereto,
the Company, Xxxxxxx and Xxxxxxx (HK) are set forth below:
If to the Company:
Sport Supply Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 00000
Attn: Corporate Secretary
If to Xxxxxxx or Xxxxxxx (HK):
c/x Xxxxxxx Radio Corp.
Nine Xxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
3.4 Governing Law. This Agreement is being executed and delivered
and is intended to be performed in the State of Texas, and the substantive laws
of such state and of the United States of America shall govern the rights and
duties of the parties hereto and the validity, construction, enforcement, and
interpretation hereof.
3.5 Invalid Provisions. If any provision of this Agreement is deemed
or held to be illegal, invalid, or unenforceable, this Agreement shall be
considered divisible and inoperative as to such
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provision to the extent it is deemed to be illegal, invalid, or unenforceable,
and in all other respects this Agreement shall remain in full force and effect;
provided, however, that if any provision of this Agreement is deemed or held to
be illegal, invalid, or unenforceable, there shall be added hereto
automatically a provision as similar as possible to such illegal, invalid, or
unenforceable provision while still being legal, valid, and enforceable.
Further, should any provision contained in this Agreement ever be reformed or
rewritten by any judicial body of competent jurisdiction, such provision as so
reformed or rewritten shall be binding upon all parties hereto.
3.6 Successors and Assigns. All of the terms and provisions of this
Agreement shall inure to the benefit of an be binding upon the parties hereto
and their respective successors and assigns.
3.7 Amendments. This Agreement may be amended only by an instrument
in writing executed by the holders of a majority of then outstanding
Registrable Securities and by the Company (or their respective successors or
assigns); provided, however, that no amendment providing one or more holders of
Registrable Securities with priority over other holders of Registrable
Securities in registering Registrable Securities, or providing for the
elimination of registration rights as to any holders, shall be made without the
consent of all holders adversely affected.
3.8 Multiple Counterparts. This Agreement may be executed in one or
more identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement; but, in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart. This Agreement shall become effective when
counterparts hereof shall have been executed and delivered to the Company by
all of the holders of Registrable Securities and to all of the holders of
Registrable Securities by the Company.
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EXECUTED as of the day and year first mentioned in this agreement.
SPORT SUPPLY GROUP, INC.
By:
---------------------------------
Name:
Title:
XXXXXXX RADIO CORP.
By:
---------------------------------
Name:
Title:
XXXXXXX RADIO (HONG KONG) LIMITED
By:
---------------------------------
Name:
Title:
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