1
Exhibit 4.8
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
August 7, 2000, among Uproar Inc., a Delaware corporation (the "Company"),
Xxxxxxxxxx-Xxxxx Trust Company Ltd. (the "Shareholders' Representative") and the
other Persons (as hereinafter defined) signatory to this Agreement
(collectively, the "Holders").
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement and Plan of Merger, dated
as of August 7, 2000 (the "Merger Agreement"; capitalized terms used herein and
not otherwise defined herein shall have the respective meanings given to such
terms in the Merger Agreement), among the Company, Uproar Acquisition
Corporation ("Acquisition"), Take Aim Holdings Ltd. ("Take Aim") and the
Holders, Take Aim shall be merged into Acquisition (the "Merger"); and
WHEREAS, pursuant to the Merger Agreement the Holders will
receive an agreed amount of common stock, par value $0.01 per share, of the
Company (the "Common Stock");
WHEREAS, the parties hereto desire to enter into this
Agreement in order to set forth the rights of the Holders to register the Common
Stock received pursuant to the Merger Agreement and certain other matters as set
forth herein;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions. In addition to the terms defined
elsewhere in this Agreement, as used in this Agreement the following terms shall
have the following respective meanings:
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder, all as
the same shall from time to time be in effect.
"Founder Consideration" means the shares of Common Stock
issued to and received by Shoval Corporation Inc. or Ornet Inc. pursuant to the
Merger Agreement.
"Non-Founder Consideration" means the shares of Common Stock
issued pursuant to the Merger Agreement other than the Founder Consideration.
"Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government, governmental
authority or other entity.
2
The terms "register", "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registrable Securities" means (i) the Founder Consideration,
(ii) the Non-Founder Consideration and (iii) any shares of Common Stock issued
as (or issuable upon conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to
the Founder Consideration or the Non-Founder Consideration; provided, however,
that Registrable Securities shall only be treated as Registrable Securities if
and so long as such shares of Common Stock have not been (a) sold to or through
a broker, dealer or underwriter in a public distribution or a public securities
transaction or (b) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act such that all transfer
restrictions and restrictive legends with respect thereto are removed upon the
consummation of such sale.
"Registration Expenses" means all expenses (but expressly
excluding underwriting discounts and selling commissions in excess of $200,000
in the aggregate for all such registrations) incurred in connection with a
registration under Section 3 or 4, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, underwriting discounts and selling expenses of up to
$200,000 with respect to Registrable Securities and blue sky fees and expenses.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder, all as the same
shall be from time to time in effect.
"SEC" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
2. Restrictive Legend. Each certificate representing shares of
Registrable Securities shall be stamped or otherwise imprinted with a legend
substantially in the following form (in addition to any other legend or legends
required under applicable laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE OR FOREIGN SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS
EXEMPT UNDER THE PROVISIONS OF THE SECURITIES ACT AND ALL APPLICABLE
STATE AND FOREIGN SECURITIES LAWS, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH
APPLICABLE FEDERAL, STATE AND FOREIGN SECURITIES LAWS.
Upon request of a holder of such a certificate, the Company shall remove the
foregoing legend from the certificate or issue to such holder a new certificate
therefor free of any transfer legend if, with such request, the Company shall
have received either (i) a written opinion of legal counsel
-2-
3
to such holder reasonably satisfactory to the Company, addressed to the Company
and reasonably satisfactory in form and substance to the Company's counsel, to
the effect that the proposed transfer of the Registrable Securities may be
effected without registration under the Securities Act or (ii) a "no-action"
letter from the SEC to the effect that the distribution of such securities
without registration will not result in a recommendation by the staff of the SEC
that action be taken with respect thereto; provided, however, that any such
transfer legend may be removed in accordance with the provisions of Rule 144(k)
of the Securities Act without the delivery of such a legal opinion or
"no-action" letter.
3. Company Registration.
3.1 Notice. If the Company shall determine to register any
Common Stock (other than a registration relating solely to employee benefit
plans, a registration relating solely to a transaction under Rule 145 of the
Securities Act or a registration on any registration form which does not permit
secondary sales or does not include substantially the same information as would
be required to be included in a registration statement covering the sale of
Registrable Securities), the Company will (i) promptly give to the Shareholders'
Representative written notice thereof and (ii) subject to the provisions of
Sections 3.2, 3.3 and 5.3, include in such registration, and in any underwriting
involved therein, all of the Registrable Securities specified in a written
request or requests made by the Shareholders' Representative within 20 days
after receipt of such written notice from the Company.
3.2 Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Shareholders' Representative as a part of the
written notice given pursuant to Section 3.1. In such event the right of any
Holder to registration pursuant to Section 3 shall be conditioned upon
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. Each
Holder proposing to distribute such Holder's Registrable Securities through such
underwriting shall (together with the Company and the other Persons distributing
securities through such underwriting) enter into an underwriting agreement in
customary form with a nationally recognized underwriter selected to manage such
underwriting by the Company (the "Underwriter"). Notwithstanding any other
provision of this Section 3, if the Underwriter determines that marketing
factors require a limitation on the number of shares to be underwritten, the
Underwriter may limit the number (to none, if necessary) of Registrable
Securities to be included in the secondary portion of the registration and
underwriting. To the extent the Underwriter determines that any such limitation
is necessary, the Company shall so advise the Shareholders' Representative, and
the number, if any, of Registrable Securities that are entitled to be included
in the registration and underwriting by Holders shall be allocated among the
Holders by the Shareholders' Representative. If any Holder disapproves of the
terms of any such underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company and the Underwriter, and such Holder's Registrable
Securities shall be withdrawn from the related registration.
3.3 Termination of Piggyback Rights. The rights granted
pursuant to this Section 3 shall terminate with respect to any Holder upon Rule
144(k) of the Securities Act becoming available to sell or otherwise transfer
such Holder's Registrable Shares.
-3-
4
4. Demand Registration.
4.1 Request for Registration. (a) If the Company shall receive
from the Shareholders' Representative a written request that the Company effect
a registration of Registrable Shares, the Company will, as soon as practicable,
use commercially reasonable efforts to effect such registration (including,
without limitation, the execution of an undertaking to file post effective
amendments, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations under the
Securities Act) as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such Registrable Securities as
are specified in such request; provided, however, that the Company shall not be
obligated to effect, or to take any action to effect, any such registration
pursuant to this Section 4:
(i) in any jurisdiction in which the Company would be required
to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is
already subject to general service in such jurisdiction and except as
may be required by the Securities Act; or
(ii) after the Company has effected (including any
registration withdrawn but considered a registration as contemplated by
Section 6) one such registration pursuant to this Section 4.1.
(b) The Company shall file a registration statement covering
the Registrable Securities required to be registered in accordance with the
provisions of Section 4.1(a) as soon as practicable after receipt of the
relevant request with respect thereto; provided, however, that if the Company
shall furnish to the Shareholders' Representative a certificate signed by an
officer of the Company stating that, in the good faith judgment of the Board of
Directors of the Company, it would be materially detrimental to the Company and
its stockholders for such registration statement to be filed on or before the
time filing would be required and it is therefore essential to defer the filing
of such registration statement, the Company shall have the right to defer
commencement of the procedures leading to such a filing (but not more than once
during any 12-month period) for a period of not more than 150 days after receipt
of the relevant request.
(c) Any registration statement filed pursuant to a request of
the Shareholders' Representative in connection with the provisions of this
Section 4.1 may, subject to the provisions of Section 4.2, include other
securities of the Company which are held by officers or directors of the Company
or which are held by Persons who, by virtue of agreements with the Company, are
entitled to include securities in any such registration.
4.2 Underwriting. (a) If the Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting, the
Shareholders' Representative shall so advise the Company as a part of the
request made pursuant to Section 4. The right of any Holder to registration
pursuant to Section 4 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. A Holder may elect to include in
such underwriting all or a part of the Registrable Securities such Holder holds.
-4-
5
(b) The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by the Shareholders'
Representative and reasonably acceptable to the Company (the "Holder
Underwriter"). Notwithstanding any other provision of this Section 4, if the
Holder Underwriter determines that marketing factors require a limitation on the
number of shares to be underwritten, the Holder Underwriter may (subject to the
allocation priority set forth below) limit the number of Registrable Securities
to be included in the registration and underwriting. In the event any such
limitation is required, the Company shall so advise the Shareholders'
Representative and the number of shares of securities that are entitled to be
included in the registration and underwriting shall be allocated in the
following priority: first, among the Holders; second, to the Company; and third,
among all other stockholders in proportion, as nearly as practicable, to the
respective amounts of securities which they had requested to be included in such
registration at the time of filing the registration statement. If any Holder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the Holder Underwriter.
Any Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the related registration.
(c) Without limiting the generality of the foregoing, the
Company shall not be deemed to have registered Registrable Securities pursuant
to this Section 4 in connection with any registration with respect to which the
Shareholders' Representative has withdrawn or canceled the registration request
(i) at any time prior to the sale of Registrable Securities pursuant to such
registration if the Shareholders' Representative has learned, prior to such
withdrawal or cancellation, of a material adverse change in the condition,
business or prospects of Company from that which existed at the time of the
relevant request to register, (ii) in the case of an underwritten public
offering, at any time following the failure of any condition to the obligation
of the underwriters to effect such offering other than any such failure which is
caused by any action or failure to act on the part of the Shareholders'
Representative or the Holders or (iii) following any deferral of the filing of
such registration statement pursuant to Section 4.1(b).
5. Registration Procedures.
5.1 Company Obligations. If the Company is required by the
provisions of Section 3 or 4 to effect the registration of any Registrable
Securities under the Securities Act, the Company will, as expeditiously as
possible:
(a) furnish to each prospective seller and to each managing
underwriter, if any, a reasonable time in advance of their required
filing with the SEC, any registration statement, amendment or
supplement thereto required in connection with such registration, and
any prospectus to be used in connection therewith, and each such seller
shall have the opportunity to object to any information pertaining to
it and its plan of distribution that is contained therein, and the
Company will make the corrections reasonably required by such seller
with respect to such information prior to filing any such registration
statement or any amendment or supplement thereto, and furnish a copy of
any and all transmittal letters or other correspondence with the SEC or
any other governmental
-5-
6
agency or self-regulatory or other body having jurisdiction (including
any domestic or foreign securities exchange) with respect to such
offering;
(b) prepare and file (not later than 60 days after receipt of
the request to file such registration statement in case of a
registration pursuant to Section 4) with the SEC a registration
statement (which, in the case of a requested registration pursuant to
Section 4, shall be on a registration statement form which is
sufficient to permit the sale or other disposition of any or all shares
of Common Stock to be included therein in accordance with the intended
method of sale or other distribution stated by the Shareholders'
Representative) with respect to such securities and use commercially
reasonable efforts to cause such registration statement to become
effective as soon as practicable and to remain effective for the period
of the distribution contemplated thereby;
(c) prepare and file with the SEC such amendments and
supplements to such registration statements and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the period of time necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement in
accordance with the prospective sellers' intended method of disposition
set forth in such registration statement;
(d) furnish to each prospective seller of Registrable
Securities and to each underwriter such number of copies of the
registration statement and each amendment and supplement thereto (in
each case including all exhibits thereto and documents incorporated by
reference therein) and the prospectus included therein (including each
preliminary prospectus and prospectus) and any other prospectus filed
under Rule 424 of the Securities Act relating to the Registrable
Securities, and such other documents as such Persons reasonably may
request in order to facilitate the public sale or other disposition of
the Registrable Securities covered by such registration statement;
(e) after the filing of any registration statement, promptly
notify each prospective seller of Registrable Securities and each
managing underwriter, if any, of any stop order issued or, to the
knowledge of the Company, threatened to be issued by the SEC, and
promptly take all necessary actions to prevent the entry of such stop
order or to remove it if entered;
(f) use commercially reasonable efforts to register or qualify
the Registrable Securities covered by such registration statement under
the securities or "blue sky" laws of such jurisdictions (including any
foreign country or any political subdivision thereof) as the sellers of
Registrable Securities, or, in the case of an underwritten public
offering, the managing underwriter reasonably shall request, and use
commercially reasonable efforts to obtain all appropriate
registrations, permits and consents required in connection therewith,
and to keep such registrations, qualifications, permits and consents in
effect for so long as such registration statement remains in effect and
to take any other action which may be reasonably necessary to enable
such sellers to consummate the disposition in such jurisdictions of
such securities; provided, however, that the Company shall not for any
-6-
7
such purpose be required to qualify generally to transact business as a
foreign corporation in any jurisdiction where it is not so qualified or
to consent to general service of process in any such jurisdiction;
(g) use commercially reasonable efforts to list the
Registrable Securities covered by such registration statement with any
securities exchange or automated quotation system of a registered
securities association on which Common Stock is then listed;
(h) furnish, in a timely fashion, unlegended certificates
representing ownership of the Registrable Securities being sold;
(i) promptly inform each seller and the managing underwriter
or underwriters, if any, (i) of the date on which a registration
statement or any post-effective amendment thereto has been filed and
when the same has become effective and, if applicable, of the date of
filing a Rule 430A prospectus, (ii) of any written comments from the
SEC with respect to any filing referred to in clause (i) and of any
request by the SEC, any securities exchange, automated quotation system
of a registered securities association, government agency,
self-regulatory body or other body having jurisdiction for any
amendment of or supplement to any registration statement or preliminary
prospectus or prospectus included therein or any offering memorandum or
other offering document relating to such offering or (iii) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of any Registrable Securities for sale
under the applicable securities or blue sky laws of any jurisdiction;
(j) promptly notify each seller of Registrable Securities and
each underwriter under such registration statement, at any time when a
prospectus relating thereto is required by law to be delivered in
connection with sales by an underwriter or dealer, of the occurrence of
an event requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to purchaser of such
Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, and as promptly as practicable make available to each
such seller and underwriter any such supplement or amendment;
(k) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such sellers (and the underwriters, if any)
of (i) an opinion of counsel representing the Company, dated the
effective date of such registration statement or the date of any
amendment or supplement thereto, including the filing of documents
incorporated therein by reference (or, if such registration includes an
underwritten public offering, dated the date of any closing under the
underwriting agreement), for the purposes of such registration, stating
that such registration statement has become effective under the
Securities Act and that (A) to the best knowledge of such counsel, no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (B) the registration statement,
the related prospectus and each amendment or supplement thereof appear
on their face to
-7-
8
comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion
as to financial statements or financial or statistical data contained
therein or omitted therefrom) and (C) to such other effects as
reasonably may be requested by counsel for the underwriters or by such
seller or its counsel and (ii) a letter, dated the effective date of
such registration statement or the date of any amendment or supplement
thereto, including the filing of documents incorporated therein by
reference (or, if such registration includes an underwritten public
offering, dated the date of any closing under the underwriting
agreement), from the independent public accountants who have certified
the Company's financial statements included in such registration
statement, addressed to the underwriters and to such seller, stating
that they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration
statement or the prospectus, or any amendment or supplement thereof,
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information
as to the period ending no more than five business days prior to the
date of such letter) with respect to such registration as such
underwriter or underwriters reasonably may request;
(l) make available for inspection by each seller of
Registrable Securities, any underwriter participating in any
distribution pursuant to such registration statement and any attorney,
accountant or other agent retained by such seller or underwriter,
financial and other records and pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors
and employees to supply information reasonably requested by such
seller, underwriter, attorney, accountant or agent in connection with
such registration statement;
(m) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the sale of such
securities, including, without limitation, causing management of the
Company to participate in "road show" presentations;
(n) otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC;
(o) provide a transfer agent and registrar, and a CUSIP
number, for all Registrable Securities covered by such registration
statement not later than the effective date of such registration
statement; and
(p) pay all Registration Expenses incurred in connection with
such registration except as otherwise set forth herein.
5.2 Holder Obligations. In connection with each registration
hereunder, the sellers of Registrable Securities will furnish to the Company in
writing such information with respect to themselves and the proposed
distribution by them as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws.
-8-
9
5.3 Restrictions. Anything in this Agreement to the contrary
notwithstanding, the aggregate number of shares of Founder Consideration that
shall be registered hereunder on or prior to the first anniversary of the
Closing Date shall not exceed 59,303 shares of Shoval Corporation Inc. or 46,411
shares of Ornet Inc.
6. Expenses of Registration. All Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to this Agreement shall be borne by the Company except that the Company
shall not be required to pay any Registration Expenses if, as a result of the
withdrawal of a request for registration by the Shareholders' Representative,
the registration statement does not become effective, unless such withdrawal is
in accordance with the provisions of Section 4.2(c) or unless the Shareholders'
Representative agrees to have such registration considered a registration
pursuant to Section 4.1(a). If the Company is not required to pay any
Registration Expenses, then the Shareholders' Representative (on behalf of the
Holders) shall bear such Registration Expenses, and such registration shall not
be considered a registration for purposes of Section 4.1(a).
7. Indemnification.
7.1 Company. The Company will indemnify each Holder, each of
its officers, directors and partners, and each Person controlling such Holder
within the meaning of Section 15 of the Securities Act, if Registrable
Securities held by such Holder are included in the securities with respect to
which registration, qualification or compliance has been effected pursuant to
this Agreement, and each underwriter, if any, and each Person who controls any
underwriter within the meaning of Section 15 of the Securities Act (such
indemnified Persons, the "Company Indemnified Parties"), against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other document (including
any related registration statement) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, and will reimburse each Company Indemnified Party for any legal
and any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or information (or alleged untrue statement) or omission (or alleged
omission) thereof furnished (or not furnished) to the Company by such Holder or
underwriter specifically for use therein.
7.2 Holders. Each Holder will, if Registrable Securities or
other securities held by such Holder are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers and agents and each underwriter, if
any, of the Company's securities covered by such a registration statement, each
Person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, each other such Holder and each of their
officers, directors and partners, and each Person controlling such Holder within
the meaning of Section 15 of the Securities Act (such indemnified Persons, the
"Holder Indemnified Parties"), against all claims,
-9-
10
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
or information therein, in light of the circumstances in which they were made,
not misleading, and will reimburse each Holder Indemnified Party for any legal
or any other expenses reasonably incurred in connection with investigating of
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement or information (or
alleged untrue statement information) or omission (or alleged omission) is made
in such registration statement, prospectus, offering circular or other document
in reliance upon and in conformity with any statement or information furnished
to the Company by such Holder for use therein. In no event shall the aggregate
liability of a Holder for indemnification under this Section 7 exceed the net
proceeds received by such Holder from the sale of shares in such offering.
7.3 Procedures. Each party entitled to indemnification under
this Section 7 (each, an "Indemnified Party") shall give notice to the party
required to provide indemnification (each, an "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld or delayed), and the
Indemnified Party may participate in such defense at such party's expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement, except to the extent that the Indemnified Party is
prejudiced thereby. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request and as shall be reasonably required in connection with
defense of such claim and litigation resulting therefrom. An Indemnified Party
shall have the right to retain its own counsel, with the fees and expenses to be
paid by the Indemnifying Party, if representation of such Indemnified Party by
the counsel retained by the Indemnifying Party would be inappropriate due to
actual or potential differing interests between such Indemnified Party and any
other party represented by such counsel in such proceeding, provided that in no
event shall the Indemnifying Party be required to pay the fees and expenses of
more than one such separate counsel for all Indemnified Parties.
7.4 Equitable Relief. If the indemnification provided for in
this Section 7 is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party with respect to any losses, claims, damages or liabilities
referred to herein, the Indemnifying Party, in lieu of indemnifying such
Indemnified Party thereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by such Indemnified Party as the result
of such loss, claim, damage or liability 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 allegation(s) that
resulted in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by a court of law by reference to,
among other things,
-10-
11
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relevant intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided that in no event shall any
contribution by a Holder hereunder exceed the proceeds from the sale of shares
in the offering received by such Holder; and, provided further, that 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.
7.5 Survival. The obligations of the Company and Holders under
this Section 7 shall survive the completion of any offering of Registrable
Securities and the termination of this Agreement. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the prior written
consent of each Indemnified Party (which consent shall not be unreasonably
withheld or delayed), consent to the entry of any judgment or enter into any
settlement. Unless waived by the Indemnified Party, all judgments and
settlements must include, as an unconditional term thereof, the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.
8. Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 of the Securities Act;
(b) use commercially reasonable efforts to 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
(c) so long as any Holder owns any Registrable Securities,
furnish to the Shareholders' Representative forthwith upon request a
written statement by the Company as to its compliance with the
reporting requirements of Rule 144 of the Securities Act, and of the
Securities Act and the Exchange Act.
9. Termination. Except as otherwise provided in this
Agreement, the rights and obligations of the parties to this Agreement shall
terminate on December 31, 2002.
10. Shareholders' Representative. Each of the Holders hereby
appoints Xxxxxxxxxx-Xxxxx Trust Company Ltd., and Xxxxxxxxxx-Xxxxx Trust Company
Ltd. hereby agrees to act, as "Shareholders' Representative" under this
Agreement. Anything in this Agreement to the contrary notwithstanding, all
rights of the Holders under this Agreement shall be exercisable by the
Shareholders' Representative, and the Company shall be entitled to rely solely
on the Shareholders' Representative as having the right, power and authority to
represent, act for and bind all of the Holders in connection herewith.
-11-
12
11. Miscellaneous.
11.1 Transfer or Assignment of Registration Rights. The rights
to cause the Company to register Registrable Securities granted by the Company
under Sections 3 and 4 hereof may be transferred or assigned by any Holder to a
transferee or assignee that acquires at least 100,000 shares of Registrable
Securities, provided that (i) the Company is given written notice by such Holder
at the time of such transfer or assignment, stating the name and address of such
transferee or assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned, (ii) the transferee or
assignee of such rights is not deemed by the Board of Directors of the Company,
in its reasonable judgment, to be a competitor of the Company and (iii) the
transferee or assignee of such rights in a written instrument assumes the
obligations of a Holder under this Agreement and agrees to be bound by all terms
and provisions hereof.
11.2 Governing Law. This Agreement shall be governed by,
construed in accordance with, and enforced under, the laws of the State of New
York applicable to agreements or instruments entered into and performed entirely
within such state.
11.3 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.4 Jurisdiction. Any judicial proceeding brought against any
of the parties to this Agreement or any dispute arising out of this Agreement or
related hereto may be brought in the courts of the State of New York, or in the
United States District Court for the Southern District of New York, and, by
execution and delivery of this Agreement, each of the parties to this Agreement
waives any and all rights to a trial by jury in connection with any such
proceeding or dispute and accepts the exclusive jurisdiction of such courts and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement.
11.5 Captions. The article and section captions used herein
are for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
11.6 Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when delivered by hand, by mail with
postage paid, by overnight receipted courier service or by facsimile
transmission:
(a) If to the Company, to:
Uproar Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
-12-
13
with a copy to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Fax: (000) 000-0000
(b) If to the Shareholders' Representative or to any Holder,
in care of:
Xxxxxxxxxx, Xxxxx & Co., Adv.
00 Xxxxxx-Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxx
Attn: Xxxxx Xxxxx, Adv.
Fax: (011) (972) (0) 0000000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
or to such other Person or address as any party shall furnish by notice to the
Company or the Shareholders' Representative, as the case may be, given in
accordance with this Section 11.6.
11.7 Parties in Interest. Except as provided in Section 11.1
no portion of this Agreement may be transferred, assigned, pledged or
hypothecated by any party hereto without the prior written consent of the other
parties hereto. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, representatives,
successors and permitted assigns.
11.8 Amendments. This Agreement may not be changed orally, but
only by an agreement in writing signed by the Company and the Shareholders'
Representative.
11.9 Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
11.10 Third Party Beneficiaries. Each party hereto intends
that this Agreement shall not benefit or create any right or cause of action in
or on behalf of any Person other than the parties hereto.
-13-
14
11.11 Delays or Omissions. No delay or omission to exercise
any right, power or remedy accruing to any party to this Agreement, upon any
breach or default of any other party under this Agreement, shall impair any such
right, power or remedy of such party nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party hereto of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement must be made in writing and shall be effective only
to the extent specifically set forth in such writing.
11.12 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event any ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by all parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provision of this Agreement.
IN WITNESS WHEREOF, each of the Company, the Shareholders'
Representative and each Holder has executed this Agreement as of the date first
above written.
UPROAR INC.
By__________________________________
Name:
Title:
XXXXXXXXXX-XXXXX TRUST
COMPANY LTD.
By__________________________________
Name:
Title:
SHOVAL CORPORATION INC.
By__________________________________
Name:
Title:
-14-
15
ORNET INC.
By__________________________________
Name:
Title:
____________________________________
XXXXX XXXXX
____________________________________
ZEHAVA HAR ADIR
____________________________________
GILAD SIMHONI
HI TECH GROUP G.M.B.H
By__________________________________
Name:
Title:
PROSEED CAPITAL HOLDINGS LTD.
By__________________________________
Name:
Title:
____________________________________
XXXXX XXXXXXX
____________________________________
XXXX XXXXX
-15-
16
____________________________________
RAN XXXXX
AMANET TECHNOLOGIES LTD
By__________________________________
Name:
Title:
____________________________________
XXXXX XXXXXXX XXXXX
____________________________________
XXXX XXXXXX
XXXXXXX XXXXXXX MANAGEMENT
CONSULTANTS LTD
By__________________________________
Name:
Title:
SPGF PLACEMENTS ET GESTION
FIDUCIAIRE S.A.
By__________________________________
Name:
Title:
____________________________________
XXXXX XXXXX
-16-
17
OPAL MANAGEMENT & HOLDINGS LTD
By__________________________________
Name:
Title:
____________________________________
XXXXXX XXX OR
PILGON MANAGEMENT & HOLDINGS LTD
By__________________________________
Name:
Title:
____________________________________
XXX XXXXX
____________________________________
XXXX XXXXXXX
SHELRON INTERNET LTD.
By__________________________________
Name:
Title:
____________________________________
XXXX XXXX
-17-
18
YUDO INC.
By__________________________________
Name:
Title:
TOMBSTONE GROUP LIMITED
By__________________________________
Name:
Title:
GEMINI SYSTEMS CORPORATION N.V.
By__________________________________
Name:
Title:
A.G.T. TELEVISION PRODUCTIONS
(1999) LTD.
By__________________________________
Name:
Title:
TEKA HOLDINGS LTD.
By__________________________________
Name:
Title:
-18-
19
LOGICO INVESTMENTS LTD.
By__________________________________
Name:
Title:
XXXXXX, XXX & XXXXXX TRUST
COMPANY LTD
By__________________________________
Name:
Title:
____________________________________
XXXXX XXXXX
____________________________________
XXXXXX XXXX
XXXXXXX.XXX LLC
By__________________________________
Name:
Title:
-19-
