EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of February 28, 2007 among MPLC, Inc., a Delaware corporation
(the "COMPANY"), and the several purchasers signatory hereto (each such
purchaser is a "PURCHASER" and collectively, the "PURCHASERS").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof between the Company and each Purchaser (the
"PURCHASE AGREEMENT").
The Company and each Purchaser hereby agrees as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:
"ADVICE" shall have the meaning set forth in Section 6(d).
"EFFECTIVENESS PERIOD" shall have the meaning set forth in
Section 2(a).
"EVENT" shall have the meaning set forth in Section 2(b).
"EVENT DATE" shall have the meaning set forth in Section 2(b).
"FILING DATE" means, (i) with respect to the initial
Registration Statement required hereunder, the 75th calendar day
following the date hereof, (ii) with respect to any Registration
Statement required by Section 2(d) hereof, as soon as practicable
following the filing of the initial Registration Statement required
hereunder and in compliance with the Commission's rules and regulations
and (iii) with respect to any additional Registration Statements which
may be required pursuant to Section 3(c), the 30th calendar day
following the date on which the Company first knows, or reasonably
should have known that such additional Registration Statement is
required hereunder.
"HOLDER" or "HOLDERS" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"INDEMNIFIED PARTY" shall have the meaning set forth in
Section 5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in
Section 5(c).
"LOSSES" shall have the meaning set forth in Section 5(a).
"PLAN OF DISTRIBUTION" shall have the meaning set forth in
Section 2(a).
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"PROSPECTUS" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes
any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.
"REGISTRABLE SECURITIES" means, as of the date in question,
(i) all of the shares of Common Stock issuable upon conversion in full
of the shares of Preferred Stock and upon conversion in full of the
shares of any other series of preferred stock of the Company (including
the Series B and Series C Convertible Preferred Stock of the Company)
owned by a Purchaser as of the date of this Agreement or acquired by a
Purchaser prior to the filing of the initial Registration Statement
hereunder, (ii) any additional shares issuable in connection with any
anti-dilution provisions associated with the Preferred Stock and other
shares listed in (i) above (in each case, without giving effect to any
limitations on conversion set forth in the Certificate of Designation)
and (iii) any securities issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event with
respect to the foregoing, in each case not previously included in a
Registration Statement, provided that a Holder's security shall cease
to be Registrable Securities upon the earliest to occur of the
following: (A) sale pursuant to a Registration Statement or Rule 144
under the Securities Act (in which case, only such security sold shall
cease to be a Registrable Security); or (B) such security becoming
eligible for sale by the Holder pursuant to Rule 144(k).
"REGISTRATION STATEMENT" means the registration statements
required to be filed hereunder, including (in each case) the
Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"RULE 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same purpose and effect as such
Rule.
"RULE 424" means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same purpose and effect as such
Rule.
"SELLING SHAREHOLDER QUESTIONNAIRE" shall have the meaning set
forth in Section 3(a).
2. SHELF REGISTRATION
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(a) On or prior to each Filing Date, the Company shall prepare and
file with the Commission a Registration Statement covering the
resale of all of the Registrable Securities on such Filing
Date for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form S-3
(except if the Company is not then eligible to register for
resale the Registrable Securities on Form S-3, in which case
such registration shall be on another appropriate form in
accordance herewith) and shall contain (unless otherwise
directed by at least an 85% majority in interest of the
Holders) substantially the "PLAN OF DISTRIBUTION" attached
hereto as ANNEX A. Subject to the terms of this Agreement, the
Company shall use its best efforts to cause a Registration
Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof and shall use
its best efforts to keep such Registration Statement
continuously effective under the Securities Act until all
Registrable Securities covered by such Registration Statement
have been sold, or may be sold by non-affiliates without
volume restrictions pursuant to Rule 144(k), as determined by
the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the
Company's transfer agent and the affected Holders (the
"EFFECTIVENESS PERIOD"). The Company shall telephonically
request effectiveness of a Registration Statement as of 5:00
p.m. New York City time on a Trading Day. The Company shall
immediately notify the Holders via facsimile of the
effectiveness of a Registration Statement on the same Trading
Day that the Company telephonically confirms effectiveness
with the Commission, which shall be the date requested for
effectiveness of a Registration Statement. The Company shall,
by 9:30 a.m. New York City time on the Trading Day after the
Effective Date (as defined in the Purchase Agreement), file a
final Prospectus with the Commission as required by Rule 424.
Failure to so notify the Holder within 1 Trading Day of such
notification of effectiveness or failure to file a final
Prospectus as foresaid shall be deemed an Event under Section
2(b).
(b) If: (i) a Registration Statement is not filed on or prior to
its Filing Date (if the Company files a Registration Statement
without affording the Holders the opportunity to review and
comment on the same as required by Section 3(a), the Company
shall be deemed to have not satisfied this clause (i)), or
(ii) the Company fails to file with the Commission a request
for acceleration in accordance with Rule 461 promulgated under
the Securities Act, within five Trading Days of the date that
the Company is notified (orally or in writing, whichever is
earlier) by the Commission that a Registration Statement will
not be "reviewed," or not subject to further review, or (iii)
the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the
Commission in respect of such Registration Statement within 30
calendar days after the receipt of comments by or notice from
the Commission that such amendment is required in order for a
Registration Statement to be declared effective, or (iv)
during the Effectiveness Period, a Registration Statement
ceases for any reason to remain continuously effective as to
all Registrable Securities, for which it is required to be
effective, or the Holders are otherwise not permitted to
utilize the Prospectus therein to resell such Registrable
Securities for more than 30 consecutive Trading Days or more
than an aggregate of 60 Trading Days during any 12-month
period (which need not be consecutive Trading Days) (any such
failure or breach being referred to as an "EVENT", and for
purposes of clause (i) the date on which such Event occurs, or
for purposes of
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clause (ii) the date on which such five Trading Day period is
exceeded, or for purposes of clause (iii) the date on which
such 20 calendar day period is exceeded, or for purposes of
clause (iv) the date on which such 30 or 60 Trading Day
period, as applicable, is exceeded being referred to as "EVENT
DATE"), then, in addition to any other rights the Holders may
have hereunder or under applicable law, on each such Event
Date and on each monthly anniversary of each such Event Date
(if the applicable Event shall not have been cured by such
date) until the applicable Event is cured, the Company shall
pay to each Holder an amount in cash, as partial liquidated
damages and not as a penalty, equal to 1.0% of the aggregate
purchase price paid by such Holder pursuant to the Purchase
Agreement for any Registrable Securities then held by such
Holder (calculated as if all convertible securities had been
fully converted.) The parties agree that (1) the Company will
not be liable for liquidated damages under this Agreement with
respect to any Warrants or Warrant Shares, (2) in no event
will the Company be liable for liquidated damages under this
Agreement in excess of 1.0% of the aggregate Subscription
Amount of the Holders in any 30-day period and (3) the maximum
aggregate liquidated damages payable to a Holder under this
Agreement shall be twelve percent (12%) of the aggregate
Subscription Amount paid by such Holder pursuant to the
Purchase Agreement. The partial liquidated damages pursuant to
the terms hereof shall apply on a daily pro-rata basis for any
portion of a month prior to the cure of an Event, except in
the case of the first Event Date.
(c) Each Holder agrees to furnish to the Company a completed and
executed Selling Shareholder Questionnaire. The Company shall
not be required to include the Registrable Securities of a
Holder in a Registration Statement and shall not be required
to pay any liquidated or other damages under Section 2(b) to
any Holder who fails to furnish to the Company a fully
completed and executed Selling Shareholder Questionnaire at
least two Trading Days prior to the Filing Deadline (subject
to the requirements set forth in Section 3(a)).
(d) Notwithstanding anything in this Agreement to the contrary, if
the Commission refuses to declare a Registration Statement
filed pursuant to this Agreement effective as a valid
secondary offering under Rule 415 due to the number of
Registrable Securities included in such Registration Statement
relative to the outstanding number of shares of Common Stock,
then, without any obligation to pay any amount under Section
2(b) with respect to such excess Registrable Securities, (i)
the Company shall be permitted to reduce the number of
Registrable Securities included in such Registration Statement
to an amount that does not exceed an amount that the
Commission allows for the offering thereunder to qualify as a
valid secondary offering under Rule 415, and (ii) the Company
shall file, as soon as practicable thereafter and in
compliance with the Commission's rules and regulations, a
Registration Statement (or Registration Statements, as
required by the Commission) to register the Registrable
Securities excluded from the initial Registration Statement
filed hereunder, provided that the terms of Sections 2(b), (c)
and (d) shall apply to such Registration Statement or
Registration Statements once filed.
3. REGISTRATION PROCEDURES.
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In connection with the Company's registration obligations hereunder,
the Company shall:
(a) Not less than 5 Trading Days prior to the filing of each
Registration Statement and not less than one 1 Trading Day
prior to the filing of any related Prospectus or any amendment
or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by
reference), (i) furnish to each Holder copies of all such
documents proposed to be filed, which documents (other than
those incorporated or deemed to be incorporated by reference)
will be subject to the review of such Holders, and (ii) cause
its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to
each Holder to conduct a reasonable investigation within the
meaning of the Securities Act.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to a Registration
Statement and the Prospectus used in connection therewith as
may be necessary to keep a Registration Statement continuously
effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the Commission
such additional Registration Statements in order to register
for resale under the Securities Act all of the Registrable
Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement (subject to
the terms of this Agreement), and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) respond as
promptly as reasonably possible to any comments received from
the Commission with respect to a Registration Statement or any
amendment thereto and as promptly as reasonably possible
provide the Holders true and complete copies of all
correspondence from and to the Commission relating to a
Registration Statement (provided that the Company may excise
any information contained therein which would constitute
material non-public information as to any Holder which has not
executed a confidentiality agreement with the Company); and
(iv) comply in all material respects with the provisions of
the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a
Registration Statement during the applicable period in
accordance (subject to the terms of this Agreement) with the
intended methods of disposition by the Holders thereof set
forth in such Registration Statement as so amended or in such
Prospectus as so supplemented.
(c) If during the Effectiveness Period, the number of Registrable
Securities at any time exceeds 100% of the number of shares of
Common Stock then registered in a Registration Statement, then
the Company shall file as soon as reasonably practicable, but
in any case prior to the applicable Filing Date, an additional
Registration Statement covering the resale by the Holders of
not less than the number of such Registrable Securities.
(d) Notify the Holders of Registrable Securities to be sold (which
notice shall, pursuant to clauses (iii) through (vi) hereof,
be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made) as
promptly as
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reasonably possible (and, in the case of (i)(A) below, not
less than 1 Trading Day prior to such filing) and (if
requested by any such Person) confirm such notice in writing
no later than one Trading Day following the day (i)(A) when a
Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there
will be a "review" of such Registration Statement and whenever
the Commission comments in writing on such Registration
Statement; and (C) with respect to a Registration Statement or
any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or
supplements to a Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the
Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a
Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose;
(v) of the occurrence of any event or passage of time that
makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement
made in a Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions
to a Registration Statement, Prospectus or other documents so
that, in the case of a Registration Statement or the
Prospectus, as the case may be, it will not contain any 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 light of the circumstances under which
they were made, not misleading; and (vi) the occurrence or
existence of any pending corporate development with respect to
the Company that the Company believes may be material and
that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability
of a Registration Statement or Prospectus; provided that any
and all of such information shall remain confidential to each
Holder until such information otherwise becomes public, unless
disclosure by a Holder is required by law; PROVIDED, --------
further, notwithstanding each Holder's agreement to keep such
information confidential, the Holders make no acknowledgement
that any such information is material, non-public information.
(e) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any
suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable moment.
(f) If requested by a Holder, furnish to such Holder, without
charge, at least one conformed copy of each such Registration
Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed
to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent
requested by such Person (including those previously furnished
or incorporated by reference) promptly after the filing of
such documents with the
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Commission; provided, that the Company shall have no
obligation to provide any document pursuant to this clause
that is available on the Commission's website.
(g) Subject to the terms of this Agreement, the Company hereby
consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in
connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving of any notice
pursuant to Section 3(d).
(h) [Reserved].
(i) Prior to any resale of Registrable Securities by a Holder, use
its commercially reasonable efforts to register or qualify or
cooperate with the selling Holders in connection with the
registration or qualification (or exemption from the
Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky
laws of such jurisdictions within the United States as any
Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and
all other acts or things reasonably necessary to enable the
disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided,
that the Company shall not be required to qualify generally to
do business in any jurisdiction where it is not then so
qualified, subject the Company to any material tax in any such
jurisdiction where it is not then so subject or file a general
consent to service of process in any such jurisdiction.
(j) If requested by the Holders, cooperate with the Holders to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a
transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the
Purchase Agreement, of all restrictive legends, and to enable
such Registrable Securities to be in such denominations and
registered in such names as any such Holders may request.
(k) Upon the occurrence of any event contemplated by this Section
3, as promptly as reasonably possible under the circumstances
taking into account the Company's good faith assessment of any
adverse consequences to the Company and its stockholders of
the premature disclosure of such event, prepare a supplement
or amendment, including a post-effective amendment, to a
Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither a
Registration Statement nor such Prospectus will contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Company
notifies the Holders in accordance with clauses (iii) through
(vi) of Section 3(d) above to suspend the use of any
Prospectus until the requisite changes to such Prospectus have
been made, then the Holders shall suspend use of such
Prospectus. The Company will use its best efforts to
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ensure that the use of the Prospectus may be resumed as
promptly as is practicable. The Company shall be entitled to
exercise its right under this Section 3(k) to suspend the
availability of a Registration Statement and Prospectus,
subject to the payment of partial liquidated damages pursuant
to Section 2(b), for a period not to exceed 60 calendar days
(which need not be consecutive days) in any 12 month period.
(l) Comply with all applicable rules and regulations of the
Commission.
(m) The Company may require each selling Holder to furnish to the
Company a certified statement as to the number of shares of
Common Stock beneficially owned by such Holder and, if
required by the Commission, the natural persons thereof that
have voting and dispositive control over the Shares. During
any periods that the Company is unable to meet its obligations
hereunder with respect to the registration of the Registrable
Securities solely because any Holder fails to furnish such
information within three Trading Days of the Company's
request, any liquidated damages that are accruing at such time
as to such Holder only shall be tolled and any Event that may
otherwise occur solely because of such delay shall be
suspended as to such Holder only, until such information is
delivered to the Company.
4. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses) (A) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions of the Registrable Securities) and (C)
with respect to any filing that may be required to be made by any broker through
which a Holder intends to make sales of Registrable Securities with NASD
Regulation, Inc. pursuant to the NASD Rule 2710 (not to exceed $10,000), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities and of printing prospectuses if the
printing of prospectuses is reasonably requested by the holders of a majority of
the Registrable Securities included in a Registration Statement), (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions of any Holder or, except to
the extent provided for in the Transaction Documents, any legal fees or other
costs of the Holders.
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5. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall,
notwithstanding any termination of this Agreement, indemnify
and hold harmless each Holder, the officers, directors,
members, partners, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result
of a pledge or any failure to perform under a margin call of
Common Stock), investment advisors and employees (and any
other Persons with a functionally equivalent role of a Person
holding such titles, notwithstanding a lack of such title or
any other title) of each of them, each Person who controls any
such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the
officers, directors, members, shareholders, partners, agents
and employees (and any other Persons with a functionally
equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of
each such controlling Person, to the fullest extent permitted
by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without
limitation, reasonable attorneys' fees) and expenses
(collectively, "LOSSES"), as incurred, arising out of or
relating to (1) any untrue or alleged untrue statement of a
material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus
or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, or
(2) any violation or alleged violation by the Company of the
Securities Act, Exchange Act or any state securities law, or
any rule or regulation thereunder, in connection with the
performance of its obligations under this Agreement, except to
the extent, but only to the extent, that (i) such untrue
statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by
such Holder expressly for use therein, or to the extent that
such information relates to such Holder or such Holder's
proposed method of distribution of Registrable Securities and
was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement, such Prospectus
or such form of Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved
Annex A hereto for this purpose) or (ii) in the case of an
occurrence of an event of the type specified in Section
3(d)(iii)-(vi), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of the Advice
contemplated in Section 6(d). The Company shall notify the
Holders promptly of the institution, threat or assertion of
any Proceeding arising from or in connection with the
transactions contemplated by this Agreement of which the
Company is aware.
(b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally and
not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who
controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling
Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, to the extent
arising out of or based solely upon:
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(x) such Holder's failure to comply with the prospectus
delivery requirements of the Securities Act or (y) any untrue
or alleged untrue statement of a material fact contained in
any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto or in
any preliminary prospectus, or arising out of or relating to
any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements
therein not misleading (i) to the extent, but only to the
extent, that such untrue statement or omission is contained in
any information so furnished in writing by such Holder to the
Company specifically for inclusion in such Registration
Statement or such Prospectus or (ii) to the extent that such
information relates to such Holder's proposed method of
distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use
in a Registration Statement (it being understood that the
Holder has approved Annex A hereto for this purpose), such
Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (z) in the case of an occurrence of an
event of the type specified in Section 3(d)(iii)-(vi), the use
by such Holder of an outdated or defective Prospectus after
the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt
by such Holder of the Advice contemplated in Section 6(d). In
no event shall the liability of any selling Holder hereunder
be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification
obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to
indemnity hereunder (an "INDEMNIFIED PARTY"), such Indemnified
Party shall promptly notify the Person from whom indemnity is
sought (the "INDEMNIFYING PARTY") in writing, and the
Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except
(and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure
shall have prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless: (1) the
Indemnifying Party has agreed in writing to pay such fees and expenses;
(2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded
parties) include both such Indemnified Party and the Indemnifying
Party, and counsel to the Indemnified Party shall reasonably believe
that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel
at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense
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thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying Party).
The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent
shall not be unreasonably withheld or delayed. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party,
effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on
claims that are the subject matter of such Proceeding.
Subject to the terms of this Agreement, all reasonable fees
and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with
this Section) shall be paid to the Indemnified Party, as incurred,
within ten Trading Days of written notice thereof to the Indemnifying
Party; provided, that the Indemnified Party shall promptly reimburse
the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is
judicially determined to be not entitled to indemnification hereunder.
(d) CONTRIBUTION. If the indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party or insufficient to
hold an Indemnified Party harmless for any Losses, then each
Indemnifying Party shall contribute to the amount paid or
payable by such Indemnified Party, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses 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 any
action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission
of a material fact, has been taken or made by, or 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 action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed
to include, subject to the limitations set forth in this
Agreement, any reasonable attorneys' or other fees or expenses
incurred by such party in connection with any Proceeding to
the extent such party would have been indemnified for such
fees or expenses if the indemnification provided for in this
Section was available to such party in accordance with its
terms.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined
by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 5(d), no Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the net proceeds
actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages
that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
11
The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties
may have to the Indemnified Parties.
6. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company or by a
Holder, of any of their respective obligations under this
Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under
this Agreement. The Company and each Holder agree that
monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that,
in the event of any action for specific performance in respect
of such breach, it shall not assert or shall waive the defense
that a remedy at law would be adequate.
(b) NO PIGGYBACK ON REGISTRATIONS. Except as set forth on SCHEDULE
6(B) attached hereto, neither the Company nor any of its
security holders (other than the Holders in such capacity
pursuant hereto) may include securities of the Company in the
initial Registration Statement other than the Registrable
Securities. The Company shall not file any other registration
statements until the initial Registration Statement required
hereunder is declared effective by the Commission, provided
that this Section 6(b) shall not prohibit the Company from
filing amendments to registration statements already filed.
(c) COMPLIANCE. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the
Securities Act as applicable to it in connection with sales of
Registrable Securities pursuant to a Registration Statement.
(d) DISCONTINUED DISPOSITION. The Company acknowledges that the
Registrable Securities are not subject to any lock-up
agreement in favor of the Company. Notwithstanding the
foregoing, each Holder agrees by its acquisition of
Registrable Securities that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described
in Section 3(d)(iii) through (vi), such Holder will forthwith
discontinue disposition of such Registrable Securities under a
Registration Statement until it is advised in writing (the
"ADVICE") by the Company that the use of the applicable
Prospectus (as it may have been supplemented or amended) may
be resumed. The Company will use its best efforts to ensure
that the use of the Prospectus may be resumed as promptly as
it practicable. The Company agrees and acknowledges that any
periods during which the Holder is required to discontinue the
disposition of the Registrable Securities hereunder shall be
subject to the provisions of Section 2(b).
(e) PIGGY-BACK REGISTRATIONS. If at any time during the
Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the
Company shall determine to prepare and file with the
Commission a registration
12
statement relating to an offering for its own account or the
account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business
or equity securities issuable in connection with the stock
option or other employee benefit plans, then the Company shall
send to each Holder a written notice of such determination
and, if within fifteen days after the date of such notice, any
such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered
subject to customary underwriter cutbacks applicable to all
holders of registration rights on a pro rata basis; PROVIDED,
that if at any time after giving written notice of its
intention to register any securities and prior to the
effective date of the registration statement filed in
connection with such registration, the Company shall determine
for any reason not to register or to delay registration of
such securities, the Company may, at its election, give
written notice of such determination to such Holder and,
thereupon, (i) in the case of a determination not to register,
shall be relieved of its obligation to register any
Registrable Securities pursuant to this Section 6(e) in
connection with such registration (but not from its obligation
to pay expenses in accordance with Section 4 hereof), and (ii)
in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities
being registered pursuant to this Section 6(e) for the same
period as the delay in registering such other securities. The
provisions of Section 2(b) shall not apply to a Registration
Statement filed pursuant to this Section 6(e).
(f) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless
the same shall be in writing and signed by the Company and the
Holders of a majority of the then outstanding Registrable
Securities. If a Registration Statement does not register all
of the Registrable Securities pursuant to a waiver or
amendment done in compliance with the previous sentence, then
the number of Registrable Securities to be registered for each
Holder shall be reduced pro rata among all Holders and each
Holder shall have the right to designate which of its
Registrable Securities shall be omitted from such Registration
Statement. Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders and that
does not directly or indirectly affect the rights of other
Holders may be given by Holders of all of the Registrable
Securities to which such waiver or consent relates; PROVIDED,
HOWEVER, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(g) NOTICES. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder
shall be delivered as set forth in the Purchase Agreement.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall
13
inure to the benefit of each Holder. The Company may not
assign (except by merger) its rights or obligations hereunder
without the prior written consent of all of the Holders of the
then-outstanding Registrable Securities. Each Holder may
assign their respective rights hereunder in the manner and to
the Persons as permitted under the Purchase Agreement.
(i) NO INCONSISTENT AGREEMENTS. Except for the agreements listed
on SCHEDULE 6(B), neither the Company nor any of its
Subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its Subsidiaries, on or after the date of
this Agreement, enter into any agreement with respect to its
securities, that would have the effect of impairing the rights
granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. Except for the
securities and agreements listed on SCHEDULE 6(B), neither the
Company nor any of its subsidiaries has previously entered
into any agreement granting any registration rights with
respect to any of its securities to any Person that have not
been satisfied in full.
(j) EXECUTION AND COUNTERPARTS. This Agreement may be executed in
two or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each
party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile
transmission or by e-mail delivery of a ".pdf" format data
file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if
such facsimile or ".pdf" signature page were an original
thereof.
(k) GOVERNING LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement
shall be determined in accordance with the provisions of the
Purchase Agreement.
(l) CUMULATIVE REMEDIES. The remedies provided herein are
cumulative and not exclusive of any other remedies provided by
law.
(m) SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no
way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find
and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or
unenforceable.
14
(n) HEADINGS. The headings in this Agreement are for convenience
only, do not constitute a part of this Agreement and shall not
be deemed to limit or affect any of the provisions hereof.
(o) ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject
matter hereof and supersedes all prior registration rights
agreements, including the registration rights agreement
entered into in connection with the sale of the Company's
Series B Convertible Preferred Stock, and similar agreements
and understandings between the parties, oral or written, with
respect to subject matter hereof, which the parties
acknowledge have been merged into this Agreement.
(p) INDEPENDENT NATURE OF HOLDERS' OBLIGATIONS AND RIGHTS. The
obligations of each Holder hereunder are several and not joint
with the obligations of any other Holder hereunder, and no
Holder shall be responsible in any way for the performance of
the obligations of any other Holder hereunder. Nothing
contained herein or in any other agreement or document
delivered at any closing, and no action taken by any Holder
pursuant hereto or thereto, shall be deemed to constitute the
Holders as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the
Holders are in any way acting in concert with respect to such
obligations or the transactions contemplated by this
Agreement. Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights
arising out of this Agreement, and it shall not be necessary
for any other Holder to be joined as an additional party in
any proceeding for such purpose.
********************
15
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
MPLC, INC.
By: /s/ Xxxxxxx Xxxxx
------------------------
Name: Xxxxxxx Xxxxx
Title: President
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
16
[SIGNATURE PAGE OF HOLDERS TO MPLC RRA]
Name of Holder: __________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF HOLDER: __________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
[SIGNATURE PAGES CONTINUE]
17
ANNEX A
PLAN OF DISTRIBUTION
Each Selling Stockholder (the "SELLING STOCKHOLDERS") of the common
stock and any of their pledgees, assignees and successors-in-interest may, from
time to time, sell any or all of their shares of common stock on the OTC
Bulletin Board or any other stock exchange, market or trading facility on which
the shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. A Selling Stockholder may use any one or more of the
following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o settlement of short sales entered into after the effective
date of the registration statement of which this prospectus is
a part;
o broker-dealers may agree with the Selling Stockholders to sell
a specified number of such shares at a stipulated price per
share;
o through the writing or settlement of options or other hedging
transactions, whether through an options exchange or
otherwise;
o a combination of any such methods of sale; or
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), if available, rather
than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.
18
In connection with the sale of the common stock or interests therein,
the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
Common Stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each Selling Stockholder has
informed the Company that it does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the Common
Stock. In no event shall any broker-dealer receive fees, commissions and markups
which, in the aggregate, would exceed eight percent (8%).
The Company is required to pay certain fees and expenses incurred by
the Company incident to the registration of the shares. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.
Because Selling Stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act including Rule 172 thereunder. In
addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than under this prospectus. There is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the Selling
Stockholders.
We agreed to keep this prospectus effective until the earlier of (i)
the date on which the shares may be resold by non-affiliate stockholders without
registration and without regard to any volume limitations by reason of Rule
144(k) under the Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold pursuant to this prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be
sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the resale shares may not simultaneously
engage in market making activities with respect to the common stock for the
applicable restricted period, as defined in Regulation
19
M, prior to the commencement of the distribution. In addition, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including Regulation M, which may limit
the timing of purchases and sales of shares of the common stock by the Selling
Stockholders or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to
deliver a copy of this prospectus to each purchaser at or prior to the time of
the sale (including by compliance with Rule 172 under the Securities Act).
20
ANNEX B
MPLC, INC.
SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial owner of common stock, par value $0.01 per
share (the "COMMON STOCK"), of MPLC, Inc., a Delaware corporation (the
"COMPANY"), understands that the Company has filed or intends to file with the
Securities and Exchange Commission (the "COMMISSION") a registration statement
on Form S-3 (the "REGISTRATION STATEMENT") for the registration and resale under
Rule 415 of the Securities Act of 1933, as amended (the "SECURITIES ACT"), of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of February __, 2007 (the "REGISTRATION RIGHTS
AGREEMENT"), among the Company and the Purchasers named therein. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling
securityholder in the Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Registration
Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the "SELLING SECURITYHOLDER") of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise specified under such Item 3)
in the Registration Statement.
21
The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. NAME.
(a) Full Legal Name of Selling Securityholder
--------------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as (a)
above) through which Registrable Securities Listed in Item 3
below are held:
--------------------------------------------------------------
(c) Full Legal Name of Natural Control Person (which means a
natural person who directly or indirectly alone or with others
has power to vote or dispose of the securities covered by the
questionnaire):
--------------------------------------------------------------
2. ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Telephone:
----------------------------------------------------------------------
Fax:
---------------------------------------------------------------------------
Contact Person:
----------------------------------------------------------------
E-mail address of Contact Person:
----------------------------------------------
3. BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:
(a) Type and Number of Registrable Securities beneficially owned:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
22
4. BROKER-DEALER STATUS:
(a) Are you a broker-dealer?
Yes [_] No [_]
(b) If "yes" to Section 4(a), did you receive your Registrable
Securities as compensation for investment banking services to
the Company.
Yes [_] No [_]
Note: If yes, the Commission's staff has indicated that you should
be identified as an underwriter in the Registration Statement.
(c) Are you an affiliate of a broker-dealer?
Yes [_] No [_]
Note: If yes, provide a narrative explanation below:
--------------------------------------------------------------
--------------------------------------------------------------
(d) If you are an affiliate of a broker-dealer, do you certify
that you bought the Registrable Securities in the ordinary
course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to
distribute the Registrable Securities?
Yes [_] No [_]
Note: If no, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.
5. BENEFICIAL OWNERSHIP OF OTHER SECURITIES OF THE COMPANY OWNED BY THE
SELLING SECURITYHOLDER.
EXCEPT AS SET FORTH BELOW IN THIS ITEM 5, THE UNDERSIGNED IS NOT THE
BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OTHER
THAN THE REGISTRABLE SECURITIES LISTED ABOVE IN ITEM 3.
(a) As of ___________, 2007, the Selling Securityholder owned
outright (including shares registered in Selling
Securityholder's name individually or jointly with others,
shares held in the name of a bank, broker, nominee, depository
or in "street name" for its account), _________ shares of the
Company's capital stock (excluding the Registrable
Securities). If "zero," please so state.
23
(b) In addition to the number of shares Selling Securityholder
owned outright as indicated in Item 5(a) above, as of
________________, 2007, the Selling Securityholder had or
shared voting power or investment power, directly or
indirectly, through a contract, arrangement, understanding,
relationship or otherwise, with respect to ______________
shares of the Company's capital stock (excluding the
Registrable Securities). If "zero," please so state.
If the answer to Item 7(b) is not "zero," please complete the
following tables:
SOLE VOTING POWER:
NUMBER OF SHARES NATURE OF RELATIONSHIP RESULTING IN
SOLE VOTING POWER
---------------- ---------------------------------------
---------------- ---------------------------------------
---------------- ---------------------------------------
SHARED VOTING POWER:
NUMBER OF SHARES WITH WHOM SHARED NATURE OF
RELATIONSHIP
---------------- ---------------------------------------
---------------- ---------------------------------------
---------------- ---------------------------------------
SOLE INVESTMENT POWER:
NUMBER OF SHARES NATURE OF RELATIONSHIP RESULTING IN
SOLE INVESTMENT POWER
---------------- ---------------------------------------
---------------- ---------------------------------------
---------------- ---------------------------------------
SHARED INVESTMENT POWER:
NUMBER OF SHARES WITH WHOM SHARED NATURE OF
RELATIONSHIP
---------------- ---------------------------------------
---------------- ---------------------------------------
---------------- ---------------------------------------
24
(c) As of _____________, 2007, the Selling Securityholder had the
right to acquire the following shares of the Company's common
stock pursuant to the exercise of outstanding stock options,
warrants or other rights (excluding the Registrable
Securities). Please describe the number, type and terms of the
securities, the method of ownership, and whether the
undersigned holds sole or shared voting and investment power.
If "none", please so state.
--------------------------------------------------------------
--------------------------------------------------------------
6. RELATIONSHIPS WITH THE COMPANY:
EXCEPT AS SET FORTH BELOW, NEITHER THE UNDERSIGNED NOR ANY OF ITS
AFFILIATES, OFFICERS, DIRECTORS OR PRINCIPAL EQUITY HOLDERS (OWNERS OF
5% OF MORE OF THE EQUITY SECURITIES OF THE UNDERSIGNED) HAS HELD ANY
POSITION OR OFFICE OR HAS HAD ANY OTHER MATERIAL RELATIONSHIP WITH THE
COMPANY (OR ITS PREDECESSORS OR AFFILIATES) DURING THE PAST THREE
YEARS.
State any exceptions here:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
The undersigned agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Registration Statement
remains effective.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items 1 through 6 and the
inclusion of such information in the Registration Statement and the related
prospectus and any amendments or supplements thereto. The undersigned
understands that such information will be relied upon by the Company in
connection with the preparation or amendment of the Registration Statement and
the related prospectus.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
Dated: Beneficial Owner:
--------------------- ----------------------------
By:
-----------------------------------------
Name:
Title:
25
PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
26
SCHEDULE 6(B)
The following securities will be included in the initial Registration Statement
on a pari passu basis with the Registrable Securities:
1. All registrable securities under that certain registration rights
agreement entered into in connection with the sale of the Company's
Series B Convertible Preferred Stock; and
2. All securities issuable upon conversion of the convertible promissory
note issued to Index Visual & Games Ltd.
27
