EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") dated as of
October 30, 1998, is made by and between iMall, Inc., a Nevada corporation (the
"Corporation"), and First Data Merchant Services Corporation, a Florida
corporation (the "Investor") .
RECITALS
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WHEREAS, the Investor is acquiring, on the date hereof from the
Corporation 1,540,000 shares of the authorized but unissued shares of Common
Stock, $.008 par value per share, of the Corporation (the "Common Stock"), has
agreed to acquire an additional 460,000 shares of Common Stock (the "Second
Closing Shares") and may in the future be issued a warrant (the "Warrant") to
acquire 5,000,000 shares of the Common Stock (subject to adjustment under
certain circumstances), in each case as contemplated by that certain Investment
Agreement dated as of October 30, 1998 (the "Investment Agreement"), between the
Corporation and the Investor, provided that certain registration rights are
granted to the Investor; and
WHEREAS, the Corporation deems it desirable for the Corporation to
grant certain registration rights to the Investor in order to induce the
Investor to consummate the transactions contemplated by the Investment
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. As used in this Agreement:
(a) "Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
(b) "Exchange Registrable Securities" means the securities of the
Corporation that are covered by the Exchange Registration Agreements.
(c) "Exchange Registration Agreements" means the agreement of the
Corporation to register under the Securities Act under certain limited
circumstances the Common Stock of the Corporation contained in the Share
Exchange Agreement between the Corporation and Madison York Associates dated
January 15, 1996, the Share Exchange Agreement between the Corporation and
Cabot, Xxxxxxxx & Xxxx, Inc. dated January 15, 1996, the Share Exchange
Agreement between the Corporation and R&R Advertising, Inc. dated January 15,
1996, the Share Exchange Agreement between the Corporation and Physicomp
Corporation dated April 26, 1996 (including the Registration Rights Agreement
attached thereto) and the Share Exchange Agreement between the Corporation and
Interactive Marketing Group, Inc. dated March 5, 1996.
(d) "Other Registrable Securities" means the securities of the
Corporation that are covered by the Other Registration Agreements and any
securities of the Corporation that the Corporation grants "piggyback
registration" rights in the future that have a priority in primary and secondary
registrations comparable to those of the Registrable Shares.
(e) "Other Registration Agreements" means the agreements of the
Corporation to register under the Securities Act certain securities of the
Corporation contained in the Common Stock Purchase Agreements (the "Common Stock
Purchase Agreement"), dated August/September 1997, among the Corporation and
various parties, the Warrants to purchase shares of Common Stock of the
Corporation issued in connection with the Subscription Agreement (as defined
below) and/or related bridge loan as part of the December 1997 private
placement, the Warrants issued in connection with the Common Stock Purchase
Agreement as part of the October 1997 private placement, the Warrant Agreement,
dated December 5, 1997, among the Corporation, Signature Stock Transfer, Inc.
and Commonwealth Associates and the Subscription Agreements (the "Subscription
Agreement") by and among the Corporation and the subscribers identified therein
pursuant to which the Corporation issued Series A 9% Convertible Preferred Stock
and the Warrants issued in December 1997.
(f) "Person" means an individual, partnership, corporation,
limited liability company, trust, joint stock company, association, joint
venture, or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
(g) "Registrable Shares" means at any time (i) the shares of the
Common Stock being acquired by the Investor on the date hereof from the
Corporation; (ii) the Second Closing Shares; (iii) any shares of the Common
Stock then issued or issuable upon exercise of the Warrant; (iv) any shares of
the Common Stock then outstanding which were issued as, or were issued directly
or indirectly upon the conversion or exercise of other securities issued as, a
dividend or other distribution with respect to or in replacement of other
Registrable Shares; and (v) any shares of the Common Stock then issuable
directly or indirectly upon the conversion or exercise of other securities which
were issued as a dividend or other distribution with respect to or in
replacement of other Registrable Shares; provided, however, that Registrable
Shares shall not include any shares (i) the sale of which has been registered
pursuant to the Securities Act and which shares have been sold pursuant to such
registration or (ii) which have been sold to the public pursuant to Rule 144 of
the Commission under the Securities Act. For purposes of this Agreement, a
Person will be deemed to be a holder of Registrable Shares whenever such Person
has the then existing right to acquire such Registrable Shares (by exercise,
conversion or otherwise), whether or not such acquisition has actually been
effected.
(h) "Registration Expenses" has the meaning ascribed to it in
Section 6 of this Agreement.
(i) "Securities Act" means the Securities Act of 1933, as
amended.
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(j) "Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(k) "Stockholders Agreement" means the Stockholders Agreement
dated as of the date hereof relating to the Corporation and among Investor and
the other parties named therein as such agreement may be amended from time to
time.
2. Demand Registrations.
(a) Requests for Registration. Investor or the holders of at least 50%
of the then outstanding Registrable Shares at any time may request registration
under the Securities Act of all or part of their Registrable Shares for sale in
the manner specified in such request. Within ten days after receipt of any
request pursuant to this paragraph 2(a), the Corporation will give written
notice of such request to all other holders of Registrable Shares and will
include in such registration all Registrable Shares with respect to which the
Corporation has received written requests for inclusion therein within 15 days
after the receipt of the Corporation's notice. All registrations requested
pursuant to this paragraph 2(a) are referred to herein as "Demand
Registrations."
(b) Number of Demand Registrations. The Corporation shall be obligated
to register Registrable Shares pursuant to a Demand Registration on two
occasions only; provided, however, that a registration will not count as a
Demand Registration until it has become effective and unless the holders of
Registrable Shares requesting such Registration are able to register and sell at
least 90% of the Registrable Shares requested to be included in such
registration; provided, further, that a registration that is withdrawn at the
request of the holders of Registrable Shares who demanded such Demand
Registration will count as a Demand Registration unless the Company is
reimbursed by holders of Registrable Shares for all reasonable out-of-pocket
expenses incurred by the Company in connection with such registration.
(c) Priority on Demand Registrations. If a Demand Registration is an
underwritten public offering, the holders of a majority of the Registrable
Shares to be sold pursuant to such offering may designate the managing
underwriter(s) for such offering, subject to the approval of the Corporation,
which approval may not be unreasonably withheld. If in such an underwritten
public offering the managing underwriter(s) advise the Corporation in writing
that in their opinion the number of Registrable Shares and other securities
requested to be included (x) creates a substantial risk that the price per share
in such registration will be materially and adversely affected or (y) exceeds
the number of Registrable Shares and other securities which can be sold in such
offering, except to the extent the Other Registration Agreements provide
otherwise, the Corporation will include in such registration, prior to the
inclusion of any securities which are not Registrable Shares, the number of
Registrable Shares requested to be included which in the opinion of such
underwriters can be sold, pro rata among the respective holders on the basis of
the number of Registrable Shares owned by such holders, with further successive
pro
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rata allocations among the holders of Registrable Shares if any such holder of
Registrable Shares has requested the registration of less than all such
Registrable Shares it is entitled to register.
(d) Restrictions on Registrations. The Corporation may postpone for up
to three months the filing or the effectiveness of a registration statement for
a Demand Registration (but no more than once in any twelve-month period or twice
in total) if the Corporation's board of directors determines in good faith that
such Demand Registration is reasonably likely to have a material adverse effect
on any proposal or plan by the Corporation or any of its subsidiaries to engage
in any acquisition of assets (other than in the ordinary course of business) or
any merger, consolidation, tender offer, material financing or similar
transaction. In the event of any such postponement, the holders of Registrable
Shares requesting such Demand Registration will be entitled to withdraw such
request and, if such request is so withdrawn, such Demand Registration will not
count as a Demand Registration.
3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Corporation proposes to register
any of its securities under the Securities Act (other than a Demand
Registration) and the registration form to be used may be used for the
registration of Registrable Shares (a "Piggyback Registration"), the Corporation
will give prompt written notice to all holders of Registrable Shares of its
intention to effect such a registration (which notice shall be given not less
than 30 days prior to the date the registration statement is to be filed) and
subject to the terms hereof will include in such registration all Registrable
Shares with respect to which the Corporation has received written requests for
inclusion therein within 15 days after the receipt of the Corporation's notice.
Notwithstanding the pendency of any Piggyback Registration, the Corporation
shall have the right in its sole discretion to terminate such registration and
any related offering at any time without any liability to any person pursuant to
this Agreement, it being understood that any Registrable Shares previously
included in such withdrawn registration statement shall not cease to be
Registrable Shares by reason of such inclusion or withdrawals; provided,
however, that if such registration is withdrawn, the Corporation will reimburse
the holders of Registrable Shares requesting inclusion in such registration
statement for all reasonable out-of-pocket expenses incurred by the Company in
connection with such registration.
(b) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Corporation, and the
managing underwriter(s) advise the Corporation in writing that in their opinion
the number of securities requested to be included in such registration (i)
creates a substantial risk that the price per share in such registration will be
materially and adversely affected, or (ii) exceeds the number which can be
reasonably sold in such offering, except to the extent the Other Registration
Agreements provide otherwise, the Corporation will include in such registration
(x) first, the securities the Corporation proposes to sell, (y) second, the
Registrable Shares, Other Registrable Securities and Exchange Registrable
Securities requested to be included in such registration which in such opinion
of such underwriter(s) can be sold, pro rata among the holders of such
Registrable Shares, Other
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Registrable Securities and Exchange Registrable Securities on the basis of the
number of Registrable Shares, Registrable Securities and Exchange Registrable
Securities owned by such holders, with further successive pro rata allocations
among the holders of Registrable Shares, Other Registrable Securities if any
such holder of Registrable Shares, Other Registrable Securities or Exchange
Registrable Securities had requested the registration of less than all such
Registrable Shares, Other Registrable Securities or Exchange Registrable
Securities it is entitled to register, and (z) third, other securities requested
to be included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the
Corporation's securities, and the managing underwriter(s) advise the Corporation
in writing that in their opinion the number of securities requested to be
included in such registration (i) creates a substantial risk that the price per
share in such registration will be materially and adversely affected, or (ii)
exceeds the number which can reasonably be sold in such offering, except to the
extent the Other Registration Agreements provide otherwise, the Corporation will
include in such registration (x) first, the securities requested to be included
therein by the holders requesting such registration, (y) second, the Registrable
Shares and Other Registrable Securities requested to be included in such
registration which in such opinion of such underwriter(s) can be sold, pro rata
among the holders of such Registrable Shares and Other Registrable Securities on
the basis of the number of Registrable Shares and Other Registrable Securities
owned or deemed to be owned by such holders, with further successive pro rata
allocations among the holders of Registrable Shares and Other Registrable
Securities if any such holder of Registrable Shares or Other Registrable
Securities has requested the registration of less than all such Registrable
Shares or Other Registrable Securities it is entitled to register, and (z)
third, other securities requested to be included in such registration.
(d) Other Registrations. Except to the extent the Other Registration
Agreements provide otherwise, if the Corporation has previously received a
request for a Demand Registration pursuant to paragraph 2 or has previously
filed a registration statement with respect to Registrable Securities pursuant
to this paragraph 3, and if such previous request or registration has not been
withdrawn or abandoned, the Corporation will not file or cause to be effected
any other registration of any of its equity securities or securities convertible
or exchangeable into or exercisable for its equity securities under the
Securities Act (except on Form S-8 or any successor form), whether on its own
behalf or at the request of any holder or holders of such securities, until a
period of 90 days has elapsed from the effective date of such Demand
Registration or previous registration, as the case may be.
4. Holdback Agreements.
(a) Each of the holders of Registrable Shares agrees not to effect any
public sale or distribution of equity securities of the Corporation, or any
securities convertible into or exchangeable or exercisable for such securities,
during the seven days prior to and the 90-day period beginning on the effective
date of any underwritten registration (except as part of such
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underwritten registration), unless the underwriter(s) managing the registered
public offering otherwise agree.
(b) The Corporation agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 90-day period beginning on the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration (except as part
of such underwritten registration or pursuant to registrations on Form S-4 or S-
8 or any successor form), unless the underwriters managing the registered public
offering otherwise agree, and (ii) to use its reasonable best efforts to cause
each holder of at least 5% (on a fully-diluted basis) of its equity securities
(other than equity securities acquired in a public trading market), or any
securities convertible into or exchangeable or exercisable for such securities,
purchased from the Corporation at any time after the date of this Agreement
(other than in a registered public offering) to agree not to effect any public
sale or distribution of any such securities during such period (except as part
of such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree.
5. Registration Procedures.
(a) Whenever the holders of Registrable Shares have requested that any
Registrable Shares be registered pursuant to this Agreement, the Corporation
will use its reasonable best efforts to effect the registration and the sale of
such Registrable Shares in accordance with the intended method of disposition
thereof, and pursuant thereto the Corporation will as expeditiously as possible:
(i) prepare and file with the Commission a registration
statement with respect to such Registrable Shares and use its
reasonable best efforts to cause such registration statement to become
effective;
(ii) prepare and file with the Commission 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, in the case of any registration
not constituting a shelf registration, not less than nine months (or
such longer period as is necessary for the underwriters in an
underwritten offering to sell unsold allotments), or, in the case of a
shelf registration, two years (or, in the case of any registration
statement, such shorter period which will terminate when all
Registrable shares covered by such registration statement have been
sold or withdrawn, but not prior to the expiration of any applicable
period referred to in Section 4(3) of the Securities Act or Rule 174
thereunder) 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 disposition by the sellers thereof set forth in
such registration statement;
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(iii) furnish to each seller of Registrable Shares and the
underwriters of the securities being registered 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 such seller or
underwriters may reasonably request in order to facilitate the
disposition of the Registrable Shares owned by such seller or the sale
of such securities by such underwriters;
(iv) use its reasonable best efforts to register or qualify such
Registrable Shares under such other securities or blue sky laws of
such jurisdictions as any seller reasonably requests and do any and
all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Shares owned by such seller;
provided, however, that the Corporation will not be required to (A)
qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this subparagraph or (B)
consent to general service of process in any such jurisdiction;
(v) cause all such Registrable Shares to be listed or authorized
for quotation on each securities exchange or automated quotation
system on which similar securities issued by the Corporation are then
listed or quoted;
(vi) provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such
registration statement;
(vii) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as the holders of a majority of the Registrable Shares being
sold or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Shares
(including, without limitation, making members of the Corporation's
management available for customary participation in any "road show" in
connection with an underwritten public offering);
(viii) make available for inspection by the seller of
Registrable Shares, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant
or other agent retained by any such seller or underwriter, all
financial and other records, pertinent corporate documents and
properties of the Corporation, and cause the Corporation's officers,
directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter,
attorney, accountant or agent, in each case for the sole purpose of
establishing a "due diligence" defense in connection with such
registration statement;
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(ix) notify each seller of such Registrable Shares, promptly
after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been
filed;
(x) notify each seller of such Registrable Shares of any request
by the Commission for the amending or supplementing of such
registration statement or prospectus or for additional information;
(xi) prepare and file with the Commission, promptly upon the
request of any seller of such Registrable Shares, any amendments or
supplements to such registration statement or prospectus which, in the
opinion of counsel selected by the holders of a majority of the
Registrable Shares being registered, is required under the Securities
Act or the rules and regulations thereunder in connection with the
distribution of Registrable Shares by such seller;
(xii) prepare and promptly file with the Commission and promptly
notify each seller of such Registrable Shares of the filing of such
amendment or supplement to such registration statement or prospectus
as may be necessary to correct any statements or omissions if, at the
time when a prospectus relating to such securities is required to be
delivered under the Securities Act, any event shall have occurred as
the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(xiii) advise each seller of such Registrable Shares, promptly
after it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the Commission suspending the
effectiveness of such registration statement or the initiation or
threatening of any proceeding for such purpose and promptly use its
reasonable best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such stop order should be issued;
(xiv) at least forty-eight hours prior to the filing of any
registration statement or prospectus or any amendment or supplement to
such registration statement or prospectus, furnish a copy thereof to
each seller of such Registrable Shares and refrain from filing any
such registration statement, prospectus, amendment or supplement to
which counsel selected by the holders of a majority of the Registrable
Shares being registered shall have objected on the grounds that such
amendment or supplement does not comply in all material respects with
the requirements of the Securities Act or the rules and regulations
thereunder, unless, in the case of an amendment or supplement, in the
opinion of counsel for the Corporation, the filing of such amendment
or supplement is reasonably necessary
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to protect the Corporation from any liabilities under any applicable
federal or state law and such filing will not violate applicable laws;
(xv) at the request of any seller of such Registrable Shares in
connection with an underwritten offering, furnish on the date or dates
provided for in the underwriting agreement: (i) an opinion of counsel,
addressed to the underwriters and the sellers of Registrable Shares,
covering such matters as such underwriters and sellers may reasonably
request and as are customarily covered by the issuer's counsel in an
underwritten offering; and (ii) a letter or letters from the
independent certified public accountants of the Corporation addressed
to the underwriters and the sellers of Registrable Shares, covering
such matters as such underwriters and sellers may reasonably request
and as are customarily covered in accountant's letters in connection
with an underwritten offering; and
(xvi) otherwise use its reasonable best efforts to comply with
the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement in accordance
with the intended method of disposition and to make generally
available to its security holders, as soon as reasonably practicable,
an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder.
(b) Each holder of Registrable Shares that sells Registrable Shares
pursuant to a registration under this Agreement agrees that in connection with
registration as follows:
(i) Such seller shall cooperate as reasonably requested by the
Corporation with the Corporation in connection with the preparation of
the registration statement, and for so long as the Corporation is
obligated to file and keep effective the registration statement, shall
provide to the Corporation, in writing, for use in the registration
statement, all such information regarding such seller and its plan of
distribution of the Registrable Shares as may be reasonably necessary
to enable the Corporation to prepare the registration statement and
prospectus covering the Registrable Shares, to maintain the currency
and effectiveness thereof and otherwise to comply with all applicable
requirements of law in connection therewith.
(ii) During such time as such seller may be engaged in a
distribution of the Registrable Shares, such seller shall comply with
Regulation M promulgated under the Securities Exchange Act and
pursuant thereto it shall, among other things: (x) not engage in any
stabilization activity in connection with the securities of the
Corporation in contravention of such regulation; (y) distribute the
Registrable Shares under the registration statement solely in the
manner described in the registration statement; (z) cease distribution
of such Registrable Shares pursuant to such registration statement
upon receipt of written notice from the Corporation
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that the prospectus covering the Registrable Shares contains any
untrue statement of a material fact or omits a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
6. Registration Expenses.
All expenses incident to the Corporation's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees of transfer agents and registrars, fees and expenses of
compliance with securities or blue sky laws, fees of the National Association of
Securities Dealers, Inc., printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for the Corporation and its independent
certified public accountants, underwriters (excluding discounts and commissions
attributable to the Registrable Shares included in such registration) and other
Persons retained by the Corporation (all such expenses being herein called
"Registration Expenses"), will be borne by the Corporation. In addition, the
Corporation will pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance obtained by the Corporation and the expenses
and fees for listing or authorizing for quotation the securities to be
registered on each securities exchange on which any shares of common stock are
then listed or quoted.
7. Indemnification.
(a) The Corporation agrees to indemnify, to the fullest extent
permitted by law, each seller of Registrable Shares, its officers and directors
and each Person who controls such seller (within the meaning of the Securities
Act or the Exchange Act) against all losses, claims, damages, liabilities and
expenses (including, without limitation, attorneys' fees except as limited by
paragraph 7(c)) caused by any untrue or alleged untrue statement of a material
fact contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the
Corporation by such seller expressly for use therein or by such seller's failure
to deliver a copy of the most recently dated version of such registration
statement or prospectus or any amendments or supplements thereto after the
Corporation has furnished such seller with at least the number of copies of the
same reasonably requested by such seller. In connection with an underwritten
offering, the Corporation will indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning of
the Securities Act or the Exchange Act) to the same extent as provided above
with respect to the indemnification of the sellers of Registrable Shares and in
connection therewith the Corporation shall enter into an underwriting agreement
in customary form containing such provisions for indemnification and
contribution as shall be reasonably requested by the underwriters. The
reimbursements required by this paragraph
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7(a) will be made by periodic payments during the course of the investigation or
defense, as and when bills are received or expenses incurred.
(b) In connection with any registration statement in which a seller of
Registrable Shares is participating, each such seller will furnish to the
Corporation in writing such information and affidavits as the Corporation
reasonably requests for use in connection with any such registration statement
or prospectus and, to the fullest extent permitted by law, will indemnify the
Corporation, its directors and officers and each Person who controls the
Corporation (within the meaning of the Securities Act) against any losses,
claims, damages, liabilities and expenses (including, without limitation,
attorneys' fees except as limited by paragraph 7(c)) resulting from any untrue
statement of a 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 information or affidavit so furnished
in writing by such seller; provided, however, that the obligation to indemnify
will be several, not joint and several, among such sellers of Registrable
Shares, and the liability of each such seller of Registrable Shares will be in
proportion to, and provided further that such liability will be limited to, the
net amount received by such seller from the sale of Registrable Shares pursuant
to such registration statement.
(c) 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 (provided that the failure to give such notice
shall not limit the rights of such Person except to the extent such failure to
give notice shall materially prejudice the rights of the indemnifying party) and
(ii) unless in such indemnified party's reasonable judgment (with written advice
of counsel) 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 its consent (but such consent will not be unreasonably withheld). 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.
(d) Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 7(a) or Section 7(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of
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a material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties hereto agree that it
would not be just and equitable if contribution pursuant to this Section 7(d)
were determined by pro rata allocation (even if the holders or any underwriters
or all of them were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this Section 7(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or, except as provided in Section 7(c), defending
any such action or claim. Notwithstanding the provisions of this Section 7(d),
no holder shall be required to contribute an amount greater than the dollar
amount of the proceeds received by such holder with respect to the sale of any
Registrable Shares. 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. The holders' obligations in this Section 7(d) to contribute
shall be several in proportion to the amount of Registrable Shares registered by
them and not joint.
(e) 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 for such
indemnified party and such officers, directors or controlling Persons of such
indemnified party the transfer of securities.
8. Compliance with Rule 144. The Corporation shall (i) make and
keep public information available, as those terms are understood and defined in
Rule 144 of the Commission, (ii) file with the Commission in a timely manner all
reports and other documents required of the Corporation under the Securities Act
and the Exchange Act and (iii) at the request of any holder who proposes to sell
securities in compliance with Rule 144, forthwith furnish to such holder a
written statement of compliance with the reporting requirements of the
Commission as set forth in Rule 144 as such rule may be amended from time to
time and make available to the public and such holders such information as will
enable the holders to make sales pursuant to Rule 144.
9. Other Securities. In the event the Registrable Shares shall be
changed into any other securities of the Corporation or any other Person or
other securities of the Corporation or any other Person are issued in lieu of or
in connection with Registrable Shares, then the holders of such other securities
shall be entitled, pursuant to this Agreement, to registration rights with
respect to such other securities that are substantially identical to those
expressly provided herein with respect to the Registrable Shares.
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10. No Inconsistent Agreements. The Corporation will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the holders of the Registrable Shares in this
Agreement.
11. Adjustments Affecting Registrable Shares. The Corporation will
not take any action, or permit any change to occur, with respect to its
securities which would adversely affect the ability of the holders of
Registrable Shares to include such Registrable Shares in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Shares in any such registration (including,
without limitation, effecting a stock split or a combination of shares).
12. Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
13. Amendments and Waivers. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or waived at any time
only by the written agreement of the Corporation and the holders of a majority
of the Registrable Shares provided that any such amendment or waiver shall apply
equally to all holders of Registrable Shares except to the extent a holder of
Registrable Shares adversely affected by unequal treatment otherwise consents.
Any waiver, permit, consent or approval of any kind or character on the part of
any such holders of any provision or condition of this Agreement must be made in
writing and shall be effective only to the extent specifically set forth in
writing.
14. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto (other than an assign to
which assignment would violate the terms of the Stockholders Agreement if such
agreement shall remain in effect), whether so expressed or not. In addition and
whether or not any express assignment has been made, the provisions of this
Agreement which are for the benefit of purchasers or holders of Registrable
Shares are also for the benefit of, and enforceable by, any subsequent holder of
Registrable Shares who consents in writing to be bound by this Agreement.
15. Final Agreement. This Agreement constitutes the final agreement
of the parties concerning the matters referred to herein, and supersedes all
prior agreements and understandings.
16. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will
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be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
17. Descriptive Heading. The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of
and shall not be utilized in interpreting this Agreement.
18. Notices. Any notice, demand or delivery required or permitted by
this Agreement shall be in writing and shall be given to the specified party at
its address (or facsimile number) set forth below, or such other address (or
facsimile number) as shall have been furnished to the party giving or making
such notice, demand or delivery:
If to the Corporation: iMall, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Investor: First Data Merchant Services Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
-and-
First Data Merchant Services Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to: Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
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If to any other holder of
Registrable Shares: Address set forth on the stock record books
of the Corporation.
Each such notice, demand or delivery shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the intended recipient confirms the receipt of such telecopy, or (ii)
if given by any other means, when received at the address specified herein.
19. GOVERNING LAW. THE VALIDITY, MEANING AND EFFECT OF THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.
20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument. Each
party shall receive a duplicate original of the counterpart copy or copies
executed by it and the Corporation.
21. Attorneys Fees. In the event of any action or suit based upon or
arising out of any actual or alleged breach by any party of any representation,
warranty or agreement in this Agreement, the prevailing party shall be entitled
to recover its reasonable attorneys' fees and expenses of such action or suit
from the other party, in addition to any other relief ordered by the court.
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This Registration Agreement was executed on the date first set forth
above.
iMALL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
_____________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chairman and Chief Executive Officer
FIRST DATA MERCHANT SERVICES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
_____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
