Exhibit 4.1
NTN INVESTOR RIGHTS AGREEMENT
THIS NTN INVESTOR RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of May 7, 2003 by and among NTN Communications, Inc., a Delaware
corporation (the "Company"), and Media General, Inc., a Virginia corporation
(the "Investor").
RECITALS
A. The Company, Buzztime Entertainment, Inc. ("Buzztime") and the Investor
have entered into a Securities Purchase Agreement (the "Purchase
Agreement") dated as of May 5, 2003, pursuant to which the Investor
will purchase from the Company and Buzztime 2,000,000 units (the
"Units"), each unit consisting of one share of Common Stock and
one-fourth of a warrant to purchase one share of Buzztime's common
stock (the "Warrants").
B. Concurrently with the execution of this Agreement, the Company,
Buzztime and the Investor have entered into a Licensing Agreement (the
"Licensing Agreement") dated as of May 7, 2003, pursuant to which the
Investor will license certain intellectual property in exchange for
666,667 shares of Common Stock.
C. A condition to the Investor's obligations under the Purchase Agreement
and the Licensing Agreement is that the Company and the Investor enter
into this Agreement in order to provide the Investor with (i) the right
to nominate one person to the Company's board of directors, (ii) the
opportunity to purchase and/or participate, upon the terms and
conditions set forth in this Agreement, in subsequent sales of
securities in the Company, and (iii) to provide certain registration
rights for shares of the Common Stock held by the Investor.
D. The Company and Buzztime desire to induce the Investor to purchase
shares of Common Stock pursuant to the Purchase Agreement and the
Licensing Agreement by agreeing to the terms and conditions set forth
below.
E. Concurrently with the execution of this Agreement, the Company,
Buzztime and the Investor have entered into the Buzztime Investor
Rights Agreement (the "Buzztime Investor Rights Agreement") dated as
of May 7, 2003.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants and conditions contained in this Agreement, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions. Unless otherwise defined in this Agreement, capitalized terms
used herein shall have the following meanings:
(a) "Common Stock" means the Company's common stock, $.005 par value
per share.
(b) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
(c) "SEC" means the U.S. Securities and Exchange Commission and any
successor agency thereto.
(d) "Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations thereunder, or any successor
statute.
2. Preemptive Rights.
2.1 Preemptive Rights Granted. If the Company proposes to issue or sell
any New Securities (as defined below), the Investor shall have a preemptive
right to purchase up to a pro rata share of such New Securities proposed to be
issued or sold in accordance with the terms of this Section 2. The Investor's
pro rata share is the ratio of the number of shares of Common Stock held by such
Investor immediately prior to the issuance or sale of New Securities to the
total number of shares of Common Stock outstanding immediately prior to the
issuance or sale of New Securities.
2.2 New Securities. "New Securities" shall mean any capital stock or
similar security or any security convertible or exchangeable, with or without
consideration, into or for any capital stock or similar security, or any
security carrying any warrant or right to subscribe for or purchase any capital
stock or similar security, or any such warrant or right, of the Company whether
now authorized or not, provided that the New Securities do not include:
(a) securities issuable upon conversion or exercise of currently
outstanding warrants, options or other contractual obligations of the Company
as disclosed on Schedule 4.6(a) of the Purchase Agreement;
(b) securities issued or issuable to employees, officers, directors,
contractors, advisors or consultants of the Company pursuant to stock options or
other stock incentive agreements or plans approved by the Board of Directors and
the stockholders of the Company;
(c) securities in an aggregate amount of up to 5% of the fully-diluted
Common Stock issued or issuable to employees, officers, directors, contractors,
advisors or consultants of the Company pursuant to stock options or other stock
incentive agreements or plans approved by the Board of Directors but not
approved by the stockholders of the Company;
(d) securities issued pursuant to acquisition transactions, joint
ventures or strategic partnerships;
(e) securities offered by the Company in an underwritten offering to
the public pursuant to a registration statement filed under the Securities Act;
(f) securities issued in connection with any stock split, stock
dividend or recapitalization of the Company; and
(g) securities in an aggregate amount of up to 5% of the fully-diluted
Common Stock issued in connection with arrangements with financial institutions
or lessors in connection with commercial credit arrangements, equipment
financings or similar transactions.
2.3 Notice; Exercise of Preemptive Rights. In the event the Company
proposes to issue or sell New Securities, it shall give the Investor written
notice of its intention, describing the New Securities, their price and the
terms upon which the Company proposes to issue or sell the same. Investor shall
have five (5) business days after such notice is given to agree to purchase up
to such Investor's pro rata share of such New Securities for the price and upon
the terms specified in the notice by giving written notice to the Company and
stating therein the quantity of New Securities to be purchased.
2.4 Sale of New Securities. In the event that the Investor fails to
exercise fully all preemptive rights within said five-business day period, the
Company shall have 120 days thereafter to sell the remaining New Securities that
the Investor does not elect to purchase upon exercise of the preemptive rights
pursuant to this Section 2, at a price and upon terms no more favorable to the
purchasers thereof than specified in the Company's notice to Investor pursuant
to subsection 2.3. In the event the Company has not sold all such remaining New
Securities within such 120-day period, the Company shall not thereafter issue or
sell any New Securities, without first again offering such securities to the
Investor in the manner provided in subsection 2.3 above.
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2.5 Termination. The covenants set forth in this Section 2 shall
terminate and be of no further force or effect in the event that the Investor
and its affiliates neither (i) hold at least half the shares of Common Stock
that the Investor acquired under the Purchase Agreement and Licensing Agreement
on the closing date; nor (ii) beneficially own 5% or more of the outstanding
Common Stock. For purposes of this Section 2, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act.
3. Representation on the Board of Directors
3.1 Board Representation. Effective as of the Closing under the
Purchase Agreement, the Company's Board of Directors has appointed Xxxx X.
Xxxxxxx to the Board of Directors as the Investor's designee to serve in the
class of directors whose current term expires in 2005. Hereafter, so long as the
Investor and its affiliates beneficially own at least (i) 5% of the outstanding
Common Stock or (ii) seventy-five percent (75%) of the shares of Common Stock
acquired by the Investor under the Purchase Agreement and the Licensing
Agreement on the closing date (and further provided that, except as permitted
under Section 5.15, the Investor and its affiliates have not sold any shares of
Common Stock acquired under such agreements prior to one year after the
execution of this Agreement), the Company shall use its best efforts to cause
and maintain the election to its Board of Directors of one individual designated
by the Investor and approved by the Company, whose approval shall not be
unreasonably withheld, and in furtherance of the foregoing, the Company shall
include the Investor's designee in the slate of nominees to the Board of
Directors proposed and recommended by the Board of Directors for election at
each annual meeting at which the class of directors whose current term expires
in 2005 shall be subject to election, and such designee shall be included in
any proxy statement prepared by the Company in respect of such annual meeting.
3.2 Observer Rights. In the event the Investor is entitled to designate
one individual to the Company's Board of Directors and elects not to select an
individual or such individual is not elected to such Board of Directors, or in
the event the Investor is not entitled to designate one individual to the
Company's Board of Directors but so long as the Investor and its affiliates
beneficially own at least (i) 3% of the outstanding Common Stock or (ii) fifty
percent (50%) of the shares of Common Stock acquired by the Investor under the
Purchase Agreement and the Licensing Agreement on the closing date, then the
Company shall invite a representative of the Investor to attend all meetings of
its Board of Directors in a nonvoting observer capacity and, in this respect,
shall give such representative copies of all notices, minutes, consents, and
other materials that it provides to its directors; provided, however, that such
representative shall agree to hold in confidence and trust and to act in a
fiduciary manner with respect to all information so provided; and, provided
further, that the Company reserves the right to withhold any information and to
exclude such representative from any meeting or portion thereof (1) if access to
such information or attendance at such meeting could (A) adversely affect the
attorney-client privilege between the Company and its counsel or (B) would
result in disclosure of trade secrets to such representative and such
representative has not entered into a confidentiality and non-disclosure
agreement with the Company, or (2) if such Investor or its representative is a
direct competitor of the Company.
3.3 Termination. The covenants set forth in this Section 3 shall
terminate and be of no further force or effect once the Investor and its
affiliates no longer are entitled to designate an individual for director under
Section 3.1 and no longer are entitled to designate a nonvoting observer under
Section 3.2. For purposes of Sections 3.1(i) and 3.2(i), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act, but
such calculation shall exclude any shares of Common Stock issued after the date
of this Agreement which did not constitute New Securities under Section 2.2
(other than shares described in Section 2.2(a) and disclosed on Schedule 4.6(a)
of the Purchase Agreement) from the number of shares of Common Stock outstanding
and shall include in the number of shares of Common Stock held by the Investor
any shares of Common Stock issuable to the Investor upon exercise of its
exchange rights under the Buzztime Investor Rights Agreement.
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4. Registration Rights.
4.1 Registrable Securities. "Registrable Securities" means all shares
of Common Stock now or hereafter owned or held by the Investor acquired under
the Purchase Agreement, the Licensing Agreement and the Buzztime Investor Rights
Agreement.
4.2 Mandatory Registration. The Company shall prepare, and, on or prior
to ten (10) days after the date of this Agreement, file with the SEC a
registration statement on Form S-3, covering the resale of the 2,666,667 shares
of Common Stock included in the Registrable Securities acquired by the Investor
under the Purchase Agreement and the Licensing Agreement on the closing date.
The Company shall use its best efforts to have the registration statement
declared effective by the SEC as soon as possible thereafter and shall cause
such registration statement to be kept effective until the earlier of (i) such
time as all such Registrable Securities have been disposed of in accordance with
the intended methods of distribution set forth in such registration statement
and (ii) the two-year period commencing on the date such registration statement
becomes effective, provided that the end of such two-year period shall be
extended by the aggregate number of days included in all periods of
postponement, suspension and/or lockup of sales pursuant to this Section 4
(including Sections 4.4, 4.8 and 4.18). The Company represents and warrants to
the Investor that it meets the registrant eligibility and transaction
requirements for the use of Form S-3 for registration of the sale of such
Registrable Securities by the Investor.
4.3 Registrations on Form S-3. The Company shall file all reports
required to be filed by the Company with the SEC in a timely manner and
otherwise use commercially reasonable efforts so as to maintain its eligibility
for the use of Form S-3 or any comparable or successor form or forms. The
Investor shall have the right at any time and from time to time to request a
registration on Form S-3 or any comparable or successor form or forms (a "Short
Form Registration") if the estimated offering price of shares subject to such
registration shall be at least $1,000,000; provided, that the Company shall not
be required to effect a Short Form Registration more frequently than twice
(counting for these purposes only registrations which have been declared or
ordered effective) during any 12 consecutive month period. Such requests shall
be in writing and shall state the number of shares of Registrable Securities
proposed to be disposed of and the intended method of distribution of such
shares by the holders.
4.4 Right to Defer Registration. The Company may postpone for up to
ninety (90) days the filing or the effectiveness of a registration statement
for a Short Form Registration pursuant to Section 4.3 if its Board of Directors
determines, reasonably and in good faith, that such registration might have a
material and adverse effect on any proposal or plan by the Company to engage in
any acquisition, merger, consolidation, tender offer or any other material
transaction; provided, that the Company may not postpone the filing or
effectiveness of a registration statement pursuant to this Section 4.4 more than
twice during any period of 12 consecutive months. Any suspension under this
Section 4.4, along with any suspension of a prospectus under Section 4.8 and any
market standoff period under Section 4.18, shall not exceed an aggregate of 180
days in any twelve month period.
4.5 Right to Piggyback Registrations. If the Company proposes to
register any of its securities under the Securities Act either for its own
account or the account of a security holder or holders in an underwritten
offering (other than a registration solely in connection with an employee
benefit or stock ownership plan) and the registration form to be used may be
used for the registration of Registrable Securities (a "Piggyback
Registration"), the Company will give prompt written notice to the Investor of
its intention to effect such a registration (each, a "Piggyback Notice").
Subject to Section 4.6, the Company will include in such registration all shares
of Registrable Securities that the Investor requests the Company to include in
such registration by written notice given to the Company within five business
days after the date of receiving the Piggyback Notice.
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4.6 Priority on Piggyback Registrations. If the managing underwriters
in a Piggyback Registration advise the Company in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number that can be sold in an orderly manner in such offering within a price
range acceptable to the Company, the Company will include in such registration
(i) first, in the case of a registration initiated by the Company, the
securities proposed to be sold by the Company, or in the case of a registration
initiated by a security holder, the securities proposed to be sold by such
holder, (ii) second, the securities held by those holders who have existing
piggyback registration rights as disclosed on Schedule 4.6(b) of the Purchase
Agreement and have requested to be included in such registration, (iii) third,
to the Registrable Securities of the holders requested to be included in such
registration, pro rata among all holders entitled to participate in such
offering on the basis of the number of shares of Registrable Securities
requested to be included in such registration, and (iv) fourth, other securities
requested to be included in such registration. The Company agrees that the
Investor shall have priority over any holder of securities of the Company who is
accorded registration rights in the future; provided that any holder who
purchases $5 million or more of securities from the Company and its subsidiaries
may have shared priority with the holders of the Registrable Securities on a
pari passu basis.
4.7 Registration Procedures. Whenever the Investor has requested that
any Registrable Securities be registered pursuant to this Agreement, the Company
will use commercially reasonable efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended method of
distribution thereof (which may include an underwritten offering conducted by an
underwriter or underwriters selected by the Investor) and will as expeditiously
as possible:
(a) prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective as soon as possible thereafter and to
remain effective as otherwise provided in this Section 4, provided that before
filing a registration statement or prospectus or any amendments or supplements
thereto, the Company will furnish to the counsel selected by the Investor copies
of all such documents proposed to be filed, which documents will be subject to
the review of such counsel and the sections of the registration statement
covering information with respect to the Investor, the Investor's beneficial
ownership of securities of the Company and the Investor's intended method of
disposition of the Registrable Securities shall conform to the information
provided by the Investor;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for a period of
at least two years (as extended by the aggregate number of days included in all
periods of postponement, suspension and/or lockup of sales under Sections 4.4,
4.8 and 4.18) or until the Investor has completed the distribution described in
the registration statement relating thereto, whichever first occurs, and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of distribution by the sellers thereof set
forth in such registration statement;
(c) furnish to the Investor such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as the Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by the Investor;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
the Investor reasonably requests and do any and all other acts and things that
may be reasonably necessary or advisable to enable the Investor to consummate
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the disposition in such jurisdictions of the Registrable Securities owned by the
Investor, provided that the Company will not be required (i) to qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph, (ii) to subject itself to
taxation in any such jurisdiction, or (iii) to consent to general service of
process in any such jurisdiction;
(e) notify Investor, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of the Investor,
the Company will prepare a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and to be qualified for trading on each system on which similar
securities issued by the Company are from time to time qualified, and the
Company agrees to use commercially reasonable efforts to maintain listing of the
Common Stock on the American Stock Exchange or the other primary national
exchange or quotation system that constitutes the principal market for the
Common Stock at the time;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement and
thereafter maintain such a transfer agent and registrar;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Investor or
the underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities being sold, including obtaining
customary letters and consents from the Company's independent certified public
accountants and the participation of management in at least one "road show" if
requested by the underwriters at a time and location reasonably acceptable to
management;
(i) make available for inspection by any underwriter participating in
any disposition pursuant to such registration statement and any attorney,
accountant or other agent retained by any such underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent accountants
to supply all information reasonably requested by any such underwriter,
attorney, accountant or agent in connection with such registration statement;
(j) permit the Investor, if it might be deemed, in the sole and
exclusive judgment of the Investor, to be an underwriter or a controlling person
of the Company, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material, furnished
to the Company in writing, that in the reasonable judgment of the Investor or
its counsel should be included;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such registration statement for sale in
any jurisdiction, the Company will notify the Investor and use its reasonable
best efforts promptly to obtain the withdrawal of such order; and
(l) take all other reasonable actions necessary to expedite and
facilitate the registration and the sale of the Registrable Securities in
accordance with the intended method of distribution thereof.
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If any such registration statement refers to the Investor by name or
otherwise as the holder of any securities of the Company and if, in the sole and
exclusive judgment of the Investor, the Investor is or might be deemed to be a
controlling person of the Company, the Investor shall have the right to require
(a) the inclusion in such registration statement of language, in form and
substance reasonably satisfactory to Investor, to the effect that the holding of
such securities by Investor is not to be construed as a recommendation by
Investor of the investment quality of the Company's securities covered thereby
and that such holding does not imply that the Investor will assist in meeting
any future financial requirements of the Company, or (b) in the event that such
reference to Investor by name or otherwise is not required by the Securities Act
or any similar federal statute then in force, the deletion of the reference to
the Investor; provided, that with respect to this clause (b) the Investor shall
furnish to the Company an opinion of counsel to such effect, which opinion of
counsel shall be reasonably satisfactory to the Company.
4.8 Suspension of Prospectus. For not more than 45 consecutive days or
for a total of not more than 90 days in any twelve month period, the Company may
delay the disclosure of material non-public information concerning the Company
by suspending the use of any prospectus included in any registration
contemplated by this Section 4 containing such information, the disclosure of
which at the time would be, in the good faith opinion of the Company,
detrimental to the Company; provided, that the Company shall promptly (a) notify
the Investor in writing of the existence of (but in no event, without the prior
written consent of the Investor, shall the Company disclose to such Investor any
of the facts or circumstances regarding) material non-public information giving
rise to such delay, and (b) advise the Investor in writing to cease all sales
under the registration statement until the end of such allowed delay. Any
suspension under this Section 4.8, along with any deferral of a registration
statement under Section 4.4 and any market standoff period under Section 4.18,
shall not exceed an aggregate of 180 days in any twelve month period.
4.9 Registration Expenses. The term "Registration Expenses" means any
and all expenses incident to the Company's performance of or compliance with
Section 4, including without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, and fees and expenses of counsel for the
Company and all independent certified public accountants, underwriting fees and
expenses (excluding discounts and commissions, which shall be paid by Investor
out of the proceeds of the offering) and the fees and expenses of any other
persons retained by the Company.
4.10 Payment. The Company shall pay the Registration Expenses in
connection with the mandatory registration under Section 4.2, all Short Form
Registrations under Section 4.3 and all Piggyback Registrations under Section
4.5. All other expenses shall be paid by the Investor, pro rata on the basis of
the number of its shares included in the registration.
4.11 Indemnification by the Company. The Company agrees to indemnify,
to the extent permitted by law, each holder of Registrable Securities, his, her
or its general and limited partners, members, shareholders, officers and
directors and each person who controls such person (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses
caused by or based on any untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading or
caused by or based on any violation by the Company of any federal or state
securities law, rule or regulation, except insofar as the same are caused by or
contained in any information furnished in writing to the Company by such holder
of Registrable Securities expressly for use therein. In connection with an
underwritten offering, the Company will indemnify such underwriters, their
officers and directors and each person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities.
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4.12 Indemnification by Holders of Registrable Securities. In
connection with any registration statement in which a holder of Registrable
Securities is participating, such person will furnish to the Company in writing
such information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers and
each person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any written information
or affidavit so furnished in writing by Investor in connection with such
registration statement; provided, that the obligation to indemnify will be
limited to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.
4.13 Notice; Defense of Claims. Any person entitled to indemnification
hereunder will (i) give prompt written notice to the indemnifying party of any
claim with respect to which it seeks indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without his, her or its consent. An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
4.14 Contribution. If the indemnification provided for herein is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and of the indemnified party, on the other,
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The obligation to contribute will be limited to the
amount by which the net amount of proceeds received by a holder of Registrable
Securities from the sale of its Registrable Securities, as the case may be,
exceeds the amount of losses, liabilities, damages and expenses that the
Investor has otherwise been required to pay by reason of such statements or
omissions.
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4.15 Survival. The indemnification and contribution provided for under
this Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling person of such indemnified party and will survive the
transfer of securities and the termination of this Section 4 under Section 4.20.
4.16 Underwriting Agreement. To the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with an underwritten public offering are in conflict with the
indemnification provisions of this Agreement, the provisions of the underwriting
agreement shall control.
4.17 Participation in Underwritten Registrations. No person may
participate in any registration hereunder that is underwritten unless such
person (i) agrees to sell such person's securities on the basis provided in any
underwriting arrangements approved by the person or persons entitled hereunder
to approve such arrangements, and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
4.18 Market Stand-Off Agreement. Each holder of Registrable Securities
hereby agrees, for a period of 134 days following the effective date of any
registration statement covering securities to be sold on behalf of the Company
in an underwritten public offering (or for such shorter period as may be allowed
by the managing underwriter or underwriters of such offering), not to sell or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any Common Stock held by it at any time during such period except Common
Stock included in such registration or purchased on the open market. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities (and the shares or
securities of every other person subject to the foregoing restriction) until the
end of such period. This Section 4.18 shall not apply to the sale of any shares
to an underwriter pursuant to an underwriting agreement and shall only be
applicable to the Investor if (i) all officers and directors of the Company
enter into similar agreements and (ii) the Investor beneficially owns more than
five percent (5%) of the outstanding Common Stock. Any market stand-off period
under this Section 4.18, along with any deferral of a registration statement
under Section 4.4 and any suspension under Section 4.8, shall not exceed an
aggregate of 180 days in any twelve month period.
4.19 Transfer of Registration Rights. The rights of the Investor to
cause the Company to register securities and keep information available and
related rights, granted to the Investor by the Company under this Section 4 may
be assigned to a transferee or assignee who is a partner, member, stockholder
or affiliate of the Investor; provided that the transferee or assignee of such
rights has agreed in writing to comply with the obligations under this
Agreement.
4.20 Termination of Registration Rights. Section 4 of this Agreement
shall terminate with respect to any holder of Registrable Securities on the
earlier of (a) four years after the date of this Agreement or (b) eighteen
months after the earlier of (i) the date such holder can sell all of his/her/its
Registrable Securities in any three month period pursuant to Rule 144 or (ii)
the date such holder holds Registrable Securities in an amount less than one
percent of the outstanding shares of Common Stock; provided that the Company's
obligations under Section 4.21 shall survive any such termination.
4.21 Reports Under the Exchange Act. With a view to making available to
the Investor 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 the Investor
to sell securities of the Company to the public without registration or pursuant
to a Short Form 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 Exchange Act;
and
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(b) furnish to the Investor, so long as the Investor or any of its
affiliates 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, the Securities Act and the Exchange Act, or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3, (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 the Investor or its affiliates of any rule
or regulation of the SEC that permits the selling of any such securities without
registration or pursuant to such form.
5. Miscellaneous.
5.1 Successors and Assigns. Except as otherwise provided in this
Agreement, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties. The rights of the Investor hereunder may only be assigned to a
transferee or assignee that is an "affiliate" of such Investor as such term is
defined under Rule 405 of the Securities Act; provided, however, that (i) the
transferor shall, within ten (10) days after such transfer, furnish to the
Company written notice of the name and address of such transferee or assignee
and the securities that are being assigned and (ii) such transferee shall agree
to be subject to all restrictions set forth in this Agreement and all applicable
transfer restrictions under the Securities Act. In the event of a permitted
assignment, all references herein to the "Investor" will be deemed to include
references to the permitted assignee(s) and include the shares of Common Stock
owned by such permitted assignee(s) as appropriate. The Company may not assign
this Agreement or delegate any of its obligations hereunder
5.2 Amendments and Waivers. Any term of this Agreement may be amended
or waived only with the written consent of the Company, Buzztime and the
Investor. Any amendment or waiver effected in accordance with this Section 5.2
shall be binding upon the Company, Buzztime, and the Investor, and each of their
respective successors and assigns.
5.3 Notices. Notices are deemed delivered when actually delivered to
the address for notices. Notices must be given to parties at the address set
forth on the signature page below, although any party may furnish, from time to
time, other addresses for notices to it. All notices (including other
communications required or permitted) under this Agreement must be in writing
and must be delivered (i) in person; (ii) by registered or certified mail,
postage prepaid, return receipt requested; or (iii) by a generally recognized
courier or messenger service that provides written acknowledgement of receipt by
the addressee.
5.4 Severability. The provisions of this Agreement are severable. The
invalidity, in whole or in part, of any provision of this Agreement will not
affect the validity or enforceability of any other of its provisions. If one or
more provisions hereof will be declared invalid or unenforceable, the remaining
provisions will remain in full force and effect and will be construed in the
broadest possible manner to effectuate the purposes hereof. If it is determined
by a court of competent jurisdiction in any state that any restriction in this
Agreement is excessive in duration or scope or is unreasonable or unenforceable
under the laws of that state, it is the intention of the parties that such
restriction may be modified or amended by the court to render it enforceable to
the maximum extent permitted by the law of that state. The parties further agree
to replace such void or unenforceable provisions of this Agreement with valid
and enforceable provisions that will achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable provisions.
5.5 Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to its principles of conflicts of law.
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5.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. A facsimile signature
page shall be deemed an original.
5.7 Further Assurances. Each party agrees to cooperate fully with the
other parties, to take such actions, to execute such further instruments,
documents and agreements, and to give such further written assurances, as may be
reasonably requested by any other party to evidence and reflect the transactions
described herein and contemplated hereby, and to carry into effect the intents
and purposes of this Agreement.
5.8 No Presumption. The parties acknowledge that each party has been
represented by counsel in connection with this Agreement and the transactions
contemplated by this Agreement. Accordingly, any rule of law or any legal
decision that would require interpretation of any claimed ambiguities in this
Agreement against the party that drafted it has no application and is expressly
waived. If any claim is made by a party relating to any conflict, omission or
ambiguity in the provisions of this Agreement, no presumption or burden of proof
or persuasion will be implied because this Agreement was prepared by or at the
request of any party or its counsel.
5.9 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
5.10 Entire Agreement. This Agreement (together with the other
documents referred to herein) is the complete and exclusive statement of
agreement and understanding of the parties with respect to matters in this
Agreement and is a complete and exclusive statement of the terms and conditions
thereof. This Agreement replaces and supersedes all prior written or oral
agreements, statements, correspondence, negotiations and understandings by and
among the parties with respect to the matters covered by it. No representation,
statement, condition or warranty not contained in this Agreement or such other
documents is binding on the parties.
5.11 Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties hereto will be considered to be cumulative with and in
addition to any other rights, powers and remedies that such parties may have at
law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy will
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.
5.12 No Third Party Beneficiaries. Nothing herein expressed or implied
is intended to confer upon any person, other than the parties hereto and their
respective successors and permitted assignees, if any, any rights, obligations,
or liabilities under or by reason of this Agreement.
5.13 Specific Performance. Each of the parties acknowledges and agrees
that the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other parties will be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any other remedy to which they may be
entitled, at law or in equity.
5.14 Reorganization. The provisions of this Agreement shall apply to
any shares or other securities resulting from any stock split or reverse stock
split, stock dividend, reclassification, subdivision, consolidation or
reorganization of any shares or other equity securities of the Company and to
any shares or other securities of the Company or of any successor company that
may be received by the Investor by virtue of its ownership of any shares of
Common Stock.
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5.15 Comerica Bank. Notwithstanding any provision in this Agreement to
the contrary (including Sections 3.1 and 4.18), the Investor may transfer a
portion of the shares of Common Stock acquired under the Licensing Agreement on
the closing date to Comerica Bank-California or its nominee at any time after
the date hereof in order to comply with the Investor's obligations under that
certain Asset Purchase Agreement between the Investor and Comerica
Bank-California dated as of June 2, 2002, provided that Comerica Bank-California
will be subject to the one-year holding period requirement under the Licensing
Agreement with respect to such shares. In the event Comerica Bank-California
transfers all or any portion of any shares transferred to it by the Investor
back to the Investor, all such shares transferred back to the Investor will be
treated as if they had been continuously held by the Investor from and after the
date of original issuance for all purposes of this Agreement. The Company will
cooperate with the Investor to facilitate the transfer of any such shares and
the issuance of appropriate stock certificates, provided that Comerica
Bank-California provides customary investment representations and agreements.
[remainder of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
NTN COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
Address: The Campus - 0000 Xx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
MEDIA GENERAL, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice Chairman
Address: 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
S-1
