REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of __________________, 2007, among Onstream Media
Corporation, a Florida corporation (“Onstream”),
and
Xxxxx Xxxxxx, as the representative of the Principal Members, as hereinafter
defined.
This
Agreement is made pursuant to the Agreement and Plan of Merger, as amended
by
and among Infinite Conferencing, LLC (the "Company"),
Xxxxx
Xxxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxx, the Principal Members of Company
("Principal
Members"),
and
the other Members of the Company named therein, and Onstream dated as of March
__, 2007 (the “Merger
Agreement”).
Onstream
and the Principal Members Representative hereby agree for the benefit of the
Holders as follows:
1. Definitions
Capitalized
terms used and not otherwise defined herein that are defined in the Merger
Agreement shall have the meanings given such terms in the Merger
Agreement.
As used
in this Agreement, the following terms shall have the following
meanings:
“Effectiveness
Date”
means,
with respect to the initial Registration Statement required to be filed
hereunder, the 90th calendar day following the date hereof (the 120th calendar
day in the case of a review by the Commission) and, with respect to any
additional Registration Statements which may be required pursuant to Section
3(c), the 90th calendar day following the date on which Onstream first knows,
or
reasonably should have known, that such additional Registration Statement is
required hereunder; provided, however, in the event Onstream is notified by
the
Commission that one of the above Registration Statements will not be reviewed
or
is no longer subject to further review and comments, the Effectiveness Date
as
to such Registration Statement shall be the fifth Trading Day following the
date
on which Onstream is so notified if such date precedes the dates required
above.
“Effectiveness
Period”
shall
have the meaning set forth in Section 2(a).
"Effective
Time"
shall
have the meaning set forth in the Merger Agreement.
“Filing
Date”
means,
with respect to the initial Registration Statement required hereunder, the
30th
calendar day following the date hereof or any date sooner that, after the date
hereof, Onstream files a registration for Common Stock and, with respect to
any
additional Registration Statements which may be required pursuant to Section
3(c), the 30th day following the date on which Onstream 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. The initial Holders are Principal Members of Infinite Conferencing,
LLC immediately prior to the Effective Time of the merger under the Merger
Agreement.
“Indemnified
Party”
shall
have the meaning set forth in Section 5(c) hereof.
“Indemnifying
Party”
shall
have the meaning set forth in Section 5(c) hereof.
“Losses”
shall
have the meaning set forth in Section 5(a).
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“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 shares of Common Stock of Onstream issued
or
issuable in connection with the Merger whether at the Effective Time or after
the Effective Time and (ii) any securities issued or issuable upon any stock
split, dividend or other distribution recapitalization or similar event with
respect to the foregoing.
“Registration
Statement”
means
the registration statements required to be filed hereunder and any additional
registration statements contemplated by Section 3(c), 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.
2
2. Registration
On
or
prior to each Filing Date, Onstream shall prepare and file with the Commission
a
Registration Statement covering the resale of 100% 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 (unless Onstream
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 the
Principal Members Representative) substantially the “Plan
of Distribution”
attached hereto as Annex
A.
Subject
to the terms of this Agreement, Onstream shall use its reasonable best efforts
to cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, but in any
event prior to the applicable Effectiveness Date, and shall use its reasonable
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 without volume restrictions pursuant
to
Rule 144(k) as determined by the counsel to Onstream (the “Effectiveness
Period”).
Onstream shall immediately notify the counsel for the Principal Members
Representative of the effectiveness of the Registration Statement within three
(3) Trading Days that Onstream receives notification of the effectiveness from
the Commission.
3. Registration
Procedures
In
connection with Onstream's registration obligations hereunder, Onstream
shall:
(a) Not
less
than five Trading Days prior to the filing of each Registration Statement or
any
related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), Onstream shall, (i) furnish to counsel for the Principal Members
Representative 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 counsel, 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 conduct a reasonable investigation within the meaning
of
the Securities Act. Onstream shall not file the Registration Statement or any
such Prospectus or any amendments or supplements thereto to which the Principal
Members Representative shall reasonably and in good faith object, provided,
Onstream is notified of such objection in writing no later than 3 Trading Days
after the counsel has been so furnished copies of such documents. As a condition
to including in the Registration Statement the Registrable Shares of a Holder,
the Holder must furnish to Onstream a completed Questionnaire in the form
attached to this Agreement as Annex B (a “Selling
Holder Questionnaire”)
not
less than two Trading Days prior to the Filing Date or by the end of the fourth
Trading Day following the date on which the counsel for the Principal Members
Representative receives draft materials in accordance with this
Section.
3
(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 Principal Members
Representative true and complete copies of all correspondence from and to the
Commission relating to a Registration Statement; 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) Intentionally
left blank.
(d) Notify
the counsel for the Principal Members Representative, or at such counsel’s
request, Holders of Registrable Securities to be sold (which notice shall,
pursuant to clauses (ii) 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 reasonably possible (and, in the case of (i)(A) below, not less
than five Trading Days 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 Onstream whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (Onstream shall provide true and complete copies thereof
and all written responses thereto to the Principal Members Representative);
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 Onstream 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 Onstream that Onstream believes may be material and that, in the
determination of Onstream, makes it not in the best interest of Onstream to
allow continued availability of the 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.
4
(e) Use
its
reasonable 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) Furnish
to each 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 Commission.
(g) Promptly
deliver to each Holder, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request in connection with
resales by the Holder of Registrable Securities. Subject to the terms of this
Agreement, Onstream 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
on
any notice pursuant to Section 3(d).
(h) 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 Onstream
shall
not be required to qualify generally to do business in any jurisdiction where
it
is not then so qualified, subject Onstream 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.
5
(i) 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, 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 reasonably
request.
(j) Upon
the
occurrence of any event contemplated by this Section 3, as promptly as
reasonably possible under the circumstances taking into account Onstream’s good
faith assessment of any adverse consequences to Onstream and its Principal
Members 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 Onstream notifies the Holders in accordance with clauses
(ii)
through (v) 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. Onstream will use its reasonable best efforts
to
ensure that the use of the Prospectus may be resumed as promptly as is
practicable.
(k) Comply
with all applicable rules and regulations of the Commission.
(l) Onstream
may require each selling Holder to furnish to Onstream a certified statement
as
to the number of shares of Common Stock beneficially owned by such Holder and,
if required by the Commission, the person thereof that has voting and
dispositive control over the Shares. During any periods that Onstream 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 Onstream’s request, any failure by
Onstream to comply hereunder that may occur solely because of such delay shall
be excused as to such Holder only, until such information is delivered to
Onstream.
6
4. Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Agreement by Onstream shall be borne by Onstream whether or not any Registrable
Securities are sold pursuant to the 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 the
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 Onstream in writing (including, without limitation, fees and disbursements
of counsel for Onstream in connection with Blue Sky qualifications or exemptions
of the Registrable Securities and determination of the eligibility of the
Registrable Securities for investment under the laws of such jurisdictions
as
requested by the Holders), (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 Onstream, (v) Securities Act liability
insurance, if Onstream so desires such insurance, and (vi) fees and expenses
of
all other Persons retained by Onstream in connection with the consummation
of
the transactions contemplated by this Agreement. In addition, Onstream 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
Onstream be responsible for any broker or similar commissions or, except to
the
extent provided for in the Transaction Documents, any legal fees or other costs
of the Holders.
5. Indemnification
(a) Indemnification
by Onstream.
Onstream shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Holder, the officers, directors, agents and employees 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, agents and employees 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 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 (unless corrected in the final prospectus which was
timely provided hereunder), 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, 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 Onstream 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)(ii)-(vi), the use by such
Holder of an outdated or defective Prospectus after Onstream 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(e). Onstream
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 Onstream is aware.
7
(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless Onstream,
its directors, officers, agents and employees, each Person who controls Onstream
(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: (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 Onstream specifically for inclusion
in
such Registration Statement or such Prospectus or (ii) to the extent that (1)
such untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to Onstream 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
the 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 (2) in the case of an occurrence
of an
event of the type specified in Section 3(d)(ii)-(vi), the use by such Holder
of
an outdated or defective Prospectus after Onstream 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(e). 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.
8
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 such Indemnified Party shall have been advised
by counsel in writing 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 thereof and the reasonable fees and expenses of 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. 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 fifteen 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 not entitled
to
indemnification hereunder, determined based upon the relative faults of the
parties.
(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, 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 Section 5(c), any reasonable attorneys' or other reasonable 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.
9
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
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.
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 Onstream or by a Holder, of any of their obligations under
this Agreement, each Holder or Onstream, 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. Onstream 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 waive the defense that a remedy at law would
be
adequate.
(b) Intentionally
left blank.
(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 the Registration Statement.
(d) Discontinued
Disposition.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from Onstream of the occurrence of any event of the kind
described in Section 3(d), such Holder will forthwith discontinue disposition
of
such Registrable Securities under a Registration Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement, or until it is advised in writing (the “Advice”)
by
Onstream that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings
that
are incorporated or deemed to be incorporated by reference in such Prospectus
or
Registration Statement. Onstream will use its reasonable best efforts to ensure
that the use of the Prospectus may be resumed as promptly as it
practicable.
10
(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 Onstream shall
determine to prepare and file with the Commission a registration 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 any registration
statements that are on file with the Commission at the date hereof or 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 Onstream
shall send to each Holder a written notice of such determination and, if within
ten days after the date of such notice, any such Holder shall so request in
writing, Onstream shall include in such registration statement all or any part
of such Registrable Securities such holder requests to be registered; provided,
that, Onstream shall not be required to register any Registrable Securities
pursuant to this Section 6(e) that are eligible for resale pursuant to Rule
144(k) promulgated under the Securities Act, that are the subject of a then
effective Registration Statement, or that which an underwriter of Onstream's
securities so objects. [DISCUSS]
(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 Onstream and the Principal Members Representative.
(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 Merger Agreement
or,
in the case of the Holders, as otherwise directed by the Principal Members
Representative.
(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 inure to the benefit of
each
Holder. Onstream may not assign 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.
11
(i) No
Inconsistent Agreements.
Neither
Onstream nor any of its subsidiaries has entered, as of the date hereof, nor
shall Onstream 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.
(j) Execution
and Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
(k) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined with the provisions of the Merger
Agreement.
(l) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any 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.
(n) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(o) 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.
(p) Lock-Up
and Legend.
Notwithstanding anything to the contrary contained herein, the Holders shall
agree to the placement of a legend on their Registrable Securities and shall
as
a condition to executing this Agreement execute a Lock-Up Agreement in the
form
attached as Exhibit __ hereto.
********************
12
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
ONSTREAM
MEDIA CORPORATION
|
|
|
By:
______________________________________
|
|
|
Name:
|
|
|
Title:
|
|
|
By:
______________________________________
|
|
|
Xxxxx
Xxxxxx, as representative of the
Holders
|
13
ANNEX
A
Plan
of Distribution
Each
Selling Stockholder (the “Selling
Principal Members”)
of the
common stock (“Common
Stock”)
of
Onstream 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
Trading Market 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:
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
| · |
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;
|
| · |
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| · |
privately
negotiated transactions;
|
| · |
broker-dealers
may agree with the Selling Principal Members to sell a specified number
of
such shares at a stipulated price per
share;
|
| · |
a
combination of any such methods of sale;
|
| · |
any
other method permitted pursuant to applicable
law.
|
The
Selling Principal Members 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 Principal Members may arrange for other brokers-dealers
to participate in sales. Broker-dealers may receive commissions or discounts
from the Selling Principal Members (or, if any broker-dealer acts as agent
for
the purchaser of shares, from the purchaser) in amounts to be negotiated. Each
Selling Stockholder does not expect these commissions and discounts relating
to
its sales of shares to exceed what is customary in the types of transactions
involved.
The
Selling Principal Members 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
Onstream that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.
Annex
A-1
Onstream
is required to pay certain fees and expenses incurred by Onstream incident
to
the registration of the shares. Onstream has agreed to indemnify the Selling
Principal Members against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.
Because
Selling Principal Members 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. 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. Each Selling
Stockholder has advised us that they have not entered into any agreements,
understandings or arrangements with any underwriter or broker-dealer regarding
the sale of the resale shares. There is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the Selling
Principal Members.
We
agreed
to use our commercially reasonable efforts to keep this prospectus effective
until the earlier of (i) the date on which the shares may be resold by the
Selling Principal Members 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 the
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 our common stock for a period of two business
days prior to the commencement of the distribution. In addition, the Selling
Principal Members 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 our common stock by the
Selling Principal Members or any other person. We will make copies of this
prospectus available to the Selling Principal Members 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.
Annex
A-2
ANNEX B
ONSTREAM
MEDIA CORPORATION
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common stock $____ par value per share (the
“Common
Stock”),
of
Onstream Media Corporation, a Florida corporation (the “Onstream”),
(the
“Registrable
Securities”)
understands that Onstream 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 ____________, 2007
(the
“Registration
Rights Agreement”),
among
Onstream and the Purchasers named therein. A copy of the Registration Rights
Agreement is available from Onstream 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.
Annex
B-1
The
undersigned hereby provides the following information to Onstream 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 you 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:
|
________________________________________________________ | |||
|
3.
|
Beneficial
Ownership of Registrable Securities:
|
|||
|
(a)
|
Type
and Principal Amount of Registrable Securities beneficially
owned:
|
|||
| ________________________________________________________________________ | ||||
| ________________________________________________________________________ | ||||
| ________________________________________________________________________ | ||||
|
4.
|
Broker-Dealer
Status:
|
|||
|
(a)
|
Are
you a broker-dealer?
|
|||
|
Yes
o
|
No
o
|
|||
|
Note:
|
If
yes, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
|||
|
(b)
|
Are
you an affiliate of a broker-dealer?
|
|||
|
Yes
o
|
No
o
|
|||
|
(c)
|
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
o
|
No
o
|
|||
|
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 Onstream 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 Onstream other than the
Registrable Securities listed above in Item 3.
|
||||
|
(a)
|
Type
and amount of Other Securities beneficially owned by the Selling
Securityholder:
|
|||
| ________________________________________________________________________ | ||||
| ________________________________________________________________________ | ||||
|
6.
|
Relationships
with Onstream:
|
|||
|
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 Onstream (or its
predecessors or affiliates) during the past three
years.
|
||||
|
State
any exceptions here:
|
||||
| ___________________________________________________________________________________ | ||||
| ___________________________________________________________________________________ | ||||
|
7.
|
Custody:
|
|||
|
Where
is stock to be held (i.e., name of brokerage or
custodian):
|
||||
| ___________________________________________________________________________________ | ||||
| ___________________________________________________________________________________ | ||||
The
undersigned agrees to promptly notify Onstream in writing 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.
2
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. The
undersigned understands that such information will be relied upon by Onstream
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:
|
PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
3
