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EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") dated as
of October 30, 1998, is made by and between iMall, Inc., a Nevada corporation
(the "Corporation"), and First Data Merchant Services Corporation, a Florida
corporation (the "Investor").
RECITALS
WHEREAS, the Investor is acquiring, on the date hereof from
the Corporation 1,540,000 shares of the authorized but unissued shares of Common
Stock, $.008 par value per share, of the Corporation (the "Common Stock"), has
agreed to acquire an additional 460,000 shares of Common Stock (the "Second
Closing Shares") and may in the future be issued a warrant (the "Warrant") to
acquire 5,000,000 shares of the Common Stock (subject to adjustment under
certain circumstances), in each case as contemplated by that certain Investment
Agreement dated as of October 30, 1998 (the "Investment Agreement"), between the
Corporation and the Investor, provided that certain registration rights are
granted to the Investor; and
WHEREAS, the Corporation deems it desirable for the
Corporation to grant certain registration rights to the Investor in order to
induce the Investor to consummate the transactions contemplated by the
Investment Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. As used in this Agreement:
(a) "Commission" means the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) "Exchange Registrable Securities" means the
securities of the Corporation that are covered by the Exchange Registration
Agreements.
(c) "Exchange Registration Agreements" means the
agreement of the Corporation to register under the Securities Act under certain
limited circumstances the Common Stock of the Corporation contained in the Share
Exchange Agreement between the Corporation and Madison York Associates dated
January 15, 1996, the Share Exchange Agreement between the Corporation and
Cabot, Xxxxxxxx & Xxxx, Inc. dated January 15, 1996, the Share Exchange
Agreement between the Corporation and R&R Advertising, Inc. dated January 15,
1996, the Share Exchange Agreement between the Corporation and Physicomp
Corporation dated April 26, 1996 (including the Registration Rights Agreement
attached thereto) and the Share Exchange Agreement between the Corporation and
Interactive Marketing Group, Inc. dated March 5, 1996.
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(d) "Other Registrable Securities" means the securities
of the Corporation that are covered by the Other Registration Agreements and any
securities of the Corporation that the Corporation grants "piggyback
registration" rights in the future that have a priority in primary and secondary
registrations comparable to those of the Registrable Shares.
(e) "Other Registration Agreements" means the agreements
of the Corporation to register under the Securities Act certain securities of
the Corporation contained in the Common Stock Purchase Agreements (the "Common
Stock Purchase Agreement"), dated August/September 1997, among the Corporation
and various parties, the Warrants to purchase shares of Common Stock of the
Corporation issued in connection with the Subscription Agreement (as defined
below) and/or related bridge loan as part of the December 1997 private
placement, the Warrants issued in connection with the Common Stock Purchase
Agreement as part of the October 1997 private placement, the Warrant Agreement,
dated December 5, 1997, among the Corporation, Signature Stock Transfer, Inc.
and Commonwealth Associates and the Subscription Agreements (the "Subscription
Agreement") by and among the Corporation and the subscribers identified therein
pursuant to which the Corporation issued Series A 9% Convertible Preferred Stock
and the Warrants issued in December 1997.
(f) "Person" means an individual, partnership,
corporation, limited liability company, trust, joint stock company, association,
joint venture, or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
(g) "Registrable Shares" means at any time (i) the
shares of the Common Stock being acquired by the Investor on the date hereof
from the Corporation; (ii) the Second Closing Shares; (iii) any shares of the
Common Stock then issued or issuable upon exercise of the Warrant; (iv) any
shares of the Common Stock then outstanding which were issued as, or were issued
directly or indirectly upon the conversion or exercise of other securities
issued as, a dividend or other distribution with respect to or in replacement of
other Registrable Shares; and (v) any shares of the Common Stock then issuable
directly or indirectly upon the conversion or exercise of other securities which
were issued as a dividend or other distribution with respect to or in
replacement of other Registrable Shares; provided, however, that Registrable
Shares shall not include any shares (i) the sale of which has been registered
pursuant to the Securities Act and which shares have been sold pursuant to such
registration or (ii) which have been sold to the public pursuant to Rule 144 of
the Commission under the Securities Act. For purposes of this Agreement, a
Person will be deemed to be a holder of Registrable Shares whenever such Person
has the then existing right to acquire such Registrable Shares (by exercise,
conversion or otherwise), whether or not such acquisition has actually been
effected.
(h) "Registration Expenses" has the meaning ascribed to
it in Section 6 of this Agreement.
(i) "Securities Act" means the Securities Act of 1933,
as amended.
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(j) "Securities Exchange Act" means the Securities
Exchange Act of 1934, as amended.
(k) "Stockholders Agreement" means the Stockholders
Agreement dated as of the date hereof relating to the Corporation and among
Investor and the other parties named therein as such agreement may be amended
from time to time.
2. Demand Registrations.
(a) Requests for Registration. Investor or the holders of at
least 50% of the then outstanding Registrable Shares at any time may request
registration under the Securities Act of all or part of their Registrable Shares
for sale in the manner specified in such request. Within ten days after receipt
of any request pursuant to this paragraph 2(a), the Corporation will give
written notice of such request to all other holders of Registrable Shares and
will include in such registration all Registrable Shares with respect to which
the Corporation has received written requests for inclusion therein within 15
days after the receipt of the Corporation's notice. All registrations requested
pursuant to this paragraph 2(a) are referred to herein as "Demand
Registrations."
(b) Number of Demand Registrations. The Corporation shall be
obligated to register Registrable Shares pursuant to a Demand Registration on
two occasions only; provided, however, that a registration will not count as a
Demand Registration until it has become effective and unless the holders of
Registrable Shares requesting such Registration are able to register and sell at
least 90% of the Registrable Shares requested to be included in such
registration; provided, further, that a registration that is withdrawn at the
request of the holders of Registrable Shares who demanded such Demand
Registration will count as a Demand Registration unless the Company is
reimbursed by holders of Registrable Shares for all reasonable out-of-pocket
expenses incurred by the Company in connection with such registration.
(c) Priority on Demand Registrations. If a Demand Registration
is an underwritten public offering, the holders of a majority of the Registrable
Shares to be sold pursuant to such offering may designate the managing
underwriter(s) for such offering, subject to the approval of the Corporation,
which approval may not be unreasonably withheld. If in such an underwritten
public offering the managing underwriter(s) advise the Corporation in writing
that in their opinion the number of Registrable Shares and other securities
requested to be included (x) creates a substantial risk that the price per share
in such registration will be materially and adversely affected or (y) exceeds
the number of Registrable Shares and other securities which can be sold in such
offering, except to the extent the Other Registration Agreements provide
otherwise, the Corporation will include in such registration, prior to the
inclusion of any securities which are not Registrable Shares, the number of
Registrable Shares requested to be included which in the opinion of such
underwriters can be sold, pro rata among the respective holders on the basis of
the number of Registrable Shares owned by such holders, with further successive
pro rata allocations among the holders of Registrable Shares if any such holder
of
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Registrable Shares has requested the registration of less than all such
Registrable Shares it is entitled to register.
(d) Restrictions on Registrations. The Corporation may
postpone for up to three months the filing or the effectiveness of a
registration statement for a Demand Registration (but no more than once in any
twelve-month period or twice in total) if the Corporation's board of directors
determines in good faith that such Demand Registration is reasonably likely to
have a material adverse effect on any proposal or plan by the Corporation or any
of its subsidiaries to engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer,
material financing or similar transaction. In the event of any such
postponement, the holders of Registrable Shares requesting such Demand
Registration will be entitled to withdraw such request and, if such request is
so withdrawn, such Demand Registration will not count as a Demand Registration.
3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Corporation proposes to
register any of its securities under the Securities Act (other than a Demand
Registration) and the registration form to be used may be used for the
registration of Registrable Shares (a "Piggyback Registration"), the Corporation
will give prompt written notice to all holders of Registrable Shares of its
intention to effect such a registration (which notice shall be given not less
than 30 days prior to the date the registration statement is to be filed) and
subject to the terms hereof will include in such registration all Registrable
Shares with respect to which the Corporation has received written requests for
inclusion therein within 15 days after the receipt of the Corporation's notice.
Notwithstanding the pendency of any Piggyback Registration, the Corporation
shall have the right in its sole discretion to terminate such registration and
any related offering at any time without any liability to any person pursuant to
this Agreement, it being understood that any Registrable Shares previously
included in such withdrawn registration statement shall not cease to be
Registrable Shares by reason of such inclusion or withdrawals; provided,
however, that if such registration is withdrawn, the Corporation will reimburse
the holders of Registrable Shares requesting inclusion in such registration
statement for all reasonable out-of-pocket expenses incurred by the Company in
connection with such registration.
(b) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Corporation, and the managing underwriter(s) advise the Corporation in writing
that in their opinion the number of securities requested to be included in such
registration (i) creates a substantial risk that the price per share in such
registration will be materially and adversely affected, or (ii) exceeds the
number which can be reasonably sold in such offering, except to the extent the
Other Registration Agreements provide otherwise, the Corporation will include in
such registration (x) first, the securities the Corporation proposes to sell,
(y) second, the Registrable Shares, Other Registrable Securities and Exchange
Registrable Securities requested to be included in such registration which in
such opinion of such underwriter(s) can be sold, pro rata among the holders of
such Registrable
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Shares, Other Registrable Securities and Exchange Registrable Securities on the
basis of the number of Registrable Shares, Registrable Securities and Exchange
Registrable Securities owned by such holders, with further successive pro rata
allocations among the holders of Registrable Shares, Other Registrable
Securities if any such holder of Registrable Shares, Other Registrable
Securities or Exchange Registrable Securities had requested the registration of
less than all such Registrable Shares, Other Registrable Securities or Exchange
Registrable Securities it is entitled to register, and (z) third, other
securities requested to be included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Corporation's securities, and the managing underwriter(s) advise the
Corporation in writing that in their opinion the number of securities requested
to be included in such registration (i) creates a substantial risk that the
price per share in such registration will be materially and adversely affected,
or (ii) exceeds the number which can reasonably be sold in such offering, except
to the extent the Other Registration Agreements provide otherwise, the
Corporation will include in such registration (x) first, the securities
requested to be included therein by the holders requesting such registration,
(y) second, the Registrable Shares and Other Registrable Securities requested to
be included in such registration which in such opinion of such underwriter(s)
can be sold, pro rata among the holders of such Registrable Shares and Other
Registrable Securities on the basis of the number of Registrable Shares and
Other Registrable Securities owned or deemed to be owned by such holders, with
further successive pro rata allocations among the holders of Registrable Shares
and Other Registrable Securities if any such holder of Registrable Shares or
Other Registrable Securities has requested the registration of less than all
such Registrable Shares or Other Registrable Securities it is entitled to
register, and (z) third, other securities requested to be included in such
registration.
(d) Other Registrations. Except to the extent the Other
Registration Agreements provide otherwise, if the Corporation has previously
received a request for a Demand Registration pursuant to paragraph 2 or has
previously filed a registration statement with respect to Registrable Securities
pursuant to this paragraph 3, and if such previous request or registration has
not been withdrawn or abandoned, the Corporation will not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-8 or any successor form), whether on its
own behalf or at the request of any holder or holders of such securities, until
a period of 90 days has elapsed from the effective date of such Demand
Registration or previous registration, as the case may be.
4. Holdback Agreements.
(a) Each of the holders of Registrable Shares agrees not to
effect any public sale or distribution of equity securities of the Corporation,
or any securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and the 90-day period beginning on
the effective date of any underwritten registration (except as part of such
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underwritten registration), unless the underwriter(s) managing the registered
public offering otherwise agree.
(b) The Corporation agrees (i) not to effect any public sale
or distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 90-day period beginning on the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration (except as part
of such underwritten registration or pursuant to registrations on Form S-4 or
S-8 or any successor form), unless the underwriters managing the registered
public offering otherwise agree, and (ii) to use its reasonable best efforts to
cause each holder of at least 5% (on a fully-diluted basis) of its equity
securities (other than equity securities acquired in a public trading market),
or any securities convertible into or exchangeable or exercisable for such
securities, purchased from the Corporation at any time after the date of this
Agreement (other than in a registered public offering) to agree not to effect
any public sale or distribution of any such securities during such period
(except as part of such underwritten registration, if otherwise permitted),
unless the underwriters managing the registered public offering otherwise agree.
5. Registration Procedures.
(a) Whenever the holders of Registrable Shares have requested
that any Registrable Shares be registered pursuant to this Agreement, the
Corporation will use its reasonable best efforts to effect the registration and
the sale of such Registrable Shares in accordance with the intended method of
disposition thereof, and pursuant thereto the Corporation will as expeditiously
as possible:
(i) prepare and file with the Commission a
registration statement with respect to such Registrable Shares
and use its reasonable best efforts to cause such registration
statement to become effective;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a
period of, in the case of any registration not constituting a
shelf registration, not less than nine months (or such longer
period as is necessary for the underwriters in an underwritten
offering to sell unsold allotments), or, in the case of a
shelf registration, two years (or, in the case of any
registration statement, such shorter period which will
terminate when all Registrable shares covered by such
registration statement have been sold or withdrawn, but not
prior to the expiration of any applicable period referred to
in Section 4(3) of the Securities Act or Rule 174 thereunder)
and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement during such period in accordance with
the intended methods of disposition by the sellers thereof set
forth in such registration statement;
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(iii) furnish to each seller of Registrable Shares
and the underwriters of the securities being registered such
number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary
prospectus) and such other documents as such seller or
underwriters may reasonably request in order to facilitate the
disposition of the Registrable Shares owned by such seller or
the sale of such securities by such underwriters;
(iv) use its reasonable best efforts to register or
qualify such Registrable Shares under such other securities or
blue sky laws of such jurisdictions as any seller reasonably
requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the
Registrable Shares owned by such seller; provided, however,
that the Corporation will not be required to (A) qualify
generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this subparagraph
or (B) consent to general service of process in any such
jurisdiction;
(v) cause all such Registrable Shares to be listed or
authorized for quotation on each securities exchange or
automated quotation system on which similar securities issued
by the Corporation are then listed or quoted;
(vi) provide a transfer agent and registrar for all
such Registrable Shares not later than the effective date of
such registration statement;
(vii) enter into such customary agreements (including
underwriting agreements in customary form) and take all such
other actions as the holders of a majority of the Registrable
Shares being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of
such Registrable Shares (including, without limitation, making
members of the Corporation's management available for
customary participation in any "road show" in connection with
an underwritten public offering);
(viii) make available for inspection by the seller of
Registrable Shares, any underwriter participating in any
disposition pursuant to such registration statement, and any
attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the
Corporation, and cause the Corporation's officers, directors,
employees and independent accountants to supply all
information reasonably requested by any such seller,
underwriter, attorney, accountant or agent, in each case for
the sole purpose of establishing a "due diligence" defense in
connection with such registration statement;
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(ix) notify each seller of such Registrable Shares,
promptly after it shall receive notice thereof, of the time
when such registration statement has become effective or a
supplement to any prospectus forming a part of such
registration statement has been filed;
(x) notify each seller of such Registrable Shares of
any request by the Commission for the amending or
supplementing of such registration statement or prospectus or
for additional information;
(xi) prepare and file with the Commission, promptly
upon the request of any seller of such Registrable Shares, any
amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel selected by the
holders of a majority of the Registrable Shares being
registered, is required under the Securities Act or the rules
and regulations thereunder in connection with the distribution
of Registrable Shares by such seller;
(xii) prepare and promptly file with the Commission
and promptly notify each seller of such Registrable Shares of
the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be
delivered under the Securities Act, any event shall have
occurred as the result of which any such prospectus or any
other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(xiii) advise each seller of such Registrable Shares,
promptly after it shall receive notice or obtain knowledge
thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for such
purpose and promptly use its reasonable best efforts to
prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
(xiv) at least forty-eight hours prior to the filing
of any registration statement or prospectus or any amendment
or supplement to such registration statement or prospectus,
furnish a copy thereof to each seller of such Registrable
Shares and refrain from filing any such registration
statement, prospectus, amendment or supplement to which
counsel selected by the holders of a majority of the
Registrable Shares being registered shall have objected on the
grounds that such amendment or supplement does not comply in
all material respects with the requirements of the Securities
Act or the rules and regulations thereunder, unless, in the
case of an amendment or supplement, in the opinion of counsel
for the Corporation, the filing of such amendment or
supplement is reasonably necessary
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to protect the Corporation from any liabilities under any
applicable federal or state law and such filing will not
violate applicable laws;
(xv) at the request of any seller of such Registrable
Shares in connection with an underwritten offering, furnish on
the date or dates provided for in the underwriting agreement:
(i) an opinion of counsel, addressed to the underwriters and
the sellers of Registrable Shares, covering such matters as
such underwriters and sellers may reasonably request and as
are customarily covered by the issuer's counsel in an
underwritten offering; and (ii) a letter or letters from the
independent certified public accountants of the Corporation
addressed to the underwriters and the sellers of Registrable
Shares, covering such matters as such underwriters and sellers
may reasonably request and as are customarily covered in
accountant's letters in connection with an underwritten
offering; and
(xvi) otherwise use its reasonable best efforts to
comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such
registration statement in accordance with the intended method
of disposition and to make generally available to its security
holders, as soon as reasonably practicable, an earnings
statement satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.
(b) Each holder of Registrable Shares that sells Registrable
Shares pursuant to a registration under this Agreement agrees that in connection
with registration as follows:
(i) Such seller shall cooperate as reasonably
requested by the Corporation with the Corporation in
connection with the preparation of the registration statement,
and for so long as the Corporation is obligated to file and
keep effective the registration statement, shall provide to
the Corporation, in writing, for use in the registration
statement, all such information regarding such seller and its
plan of distribution of the Registrable Shares as may be
reasonably necessary to enable the Corporation to prepare the
registration statement and prospectus covering the Registrable
Shares, to maintain the currency and effectiveness thereof and
otherwise to comply with all applicable requirements of law in
connection therewith.
(ii) During such time as such seller may be engaged
in a distribution of the Registrable Shares, such seller shall
comply with Regulation M promulgated under the Securities
Exchange Act and pursuant thereto it shall, among other
things: (x) not engage in any stabilization activity in
connection with the securities of the Corporation in
contravention of such regulation; (y) distribute the
Registrable Shares under the registration statement solely in
the manner described in the registration statement; (z) cease
distribution of such Registrable Shares pursuant to such
registration statement upon receipt of written notice from the
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Corporation that the prospectus covering the Registrable
Shares contains any untrue statement of a material fact or
omits a material fact required to be stated therein or
necessary to make the statements therein not misleading.
6. Registration Expenses.
All expenses incident to the Corporation's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees of transfer agents and registrars, fees and expenses of
compliance with securities or blue sky laws, fees of the National Association of
Securities Dealers, Inc., printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for the Corporation and its independent
certified public accountants, underwriters (excluding discounts and commissions
attributable to the Registrable Shares included in such registration) and other
Persons retained by the Corporation (all such expenses being herein called
"Registration Expenses"), will be borne by the Corporation. In addition, the
Corporation will pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance obtained by the Corporation and the expenses
and fees for listing or authorizing for quotation the securities to be
registered on each securities exchange on which any shares of common stock are
then listed or quoted.
7. Indemnification.
(a) The Corporation agrees to indemnify, to the fullest extent
permitted by law, each seller of Registrable Shares, its officers and directors
and each Person who controls such seller (within the meaning of the Securities
Act or the Exchange Act) against all losses, claims, damages, liabilities and
expenses (including, without limitation, attorneys' fees except as limited by
paragraph 7(c)) caused by any untrue or alleged untrue statement of a material
fact contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the
Corporation by such seller expressly for use therein or by such seller's failure
to deliver a copy of the most recently dated version of such registration
statement or prospectus or any amendments or supplements thereto after the
Corporation has furnished such seller with at least the number of copies of the
same reasonably requested by such seller. In connection with an underwritten
offering, the Corporation will indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning of
the Securities Act or the Exchange Act) to the same extent as provided above
with respect to the indemnification of the sellers of Registrable Shares and in
connection therewith the Corporation shall enter into an underwriting agreement
in customary form containing such provisions for indemnification and
contribution as shall be reasonably requested by the underwriters. The
reimbursements required by this
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paragraph 7(a) will be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
(b) In connection with any registration statement in which a
seller of Registrable Shares is participating, each such seller will furnish to
the Corporation in writing such information and affidavits as the Corporation
reasonably requests for use in connection with any such registration statement
or prospectus and, to the fullest extent permitted by law, will indemnify the
Corporation, its directors and officers and each Person who controls the
Corporation (within the meaning of the Securities Act) against any losses,
claims, damages, liabilities and expenses (including, without limitation,
attorneys' fees except as limited by paragraph 7(c)) resulting from any untrue
statement of a material fact contained in the registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by such seller; provided, however, that the obligation to indemnify
will be several, not joint and several, among such sellers of Registrable
Shares, and the liability of each such seller of Registrable Shares will be in
proportion to, and provided further that such liability will be limited to, the
net amount received by such seller from the sale of Registrable Shares pursuant
to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give such notice
shall not limit the rights of such Person except to the extent such failure to
give notice shall materially prejudice the rights of the indemnifying party) and
(ii) unless in such indemnified party's reasonable judgment (with written advice
of counsel) a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim.
(d) Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 7(a) or Section 7(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
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party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the holders or any underwriters or all of them were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 7(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or, except as provided in Section 7(c), defending any such action
or claim. Notwithstanding the provisions of this Section 7(d), no holder shall
be required to contribute an amount greater than the dollar amount of the
proceeds received by such holder with respect to the sale of any Registrable
Shares. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The holders'
obligations in this Section 7(d) to contribute shall be several in proportion to
the amount of Registrable Shares registered by them and not joint.
(e) The indemnification and contribution provided for under
this Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and will survive for
such indemnified party and such officers, directors or controlling Persons of
such indemnified party the transfer of securities.
8. Compliance with Rule 144. The Corporation shall (i) make
and keep public information available, as those terms are understood and defined
in Rule 144 of the Commission, (ii) file with the Commission in a timely manner
all reports and other documents required of the Corporation under the Securities
Act and the Exchange Act and (iii) at the request of any holder who proposes to
sell securities in compliance with Rule 144, forthwith furnish to such holder a
written statement of compliance with the reporting requirements of the
Commission as set forth in Rule 144 as such rule may be amended from time to
time and make available to the public and such holders such information as will
enable the holders to make sales pursuant to Rule 144.
9. Other Securities. In the event the Registrable Shares shall
be changed into any other securities of the Corporation or any other Person or
other securities of the Corporation or any other Person are issued in lieu of or
in connection with Registrable Shares, then the holders of such other securities
shall be entitled, pursuant to this Agreement, to registration rights with
respect to such other securities that are substantially identical to those
expressly provided herein with respect to the Registrable Shares.
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10. No Inconsistent Agreements. The Corporation will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the holders of the Registrable Shares in
this Agreement.
11. Adjustments Affecting Registrable Shares. The Corporation
will not take any action, or permit any change to occur, with respect to its
securities which would adversely affect the ability of the holders of
Registrable Shares to include such Registrable Shares in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Shares in any such registration (including,
without limitation, effecting a stock split or a combination of shares).
12. Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
13. Amendments and Waivers. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or waived at
any time only by the written agreement of the Corporation and the holders of a
majority of the Registrable Shares provided that any such amendment or waiver
shall apply equally to all holders of Registrable Shares except to the extent a
holder of Registrable Shares adversely affected by unequal treatment otherwise
consents. Any waiver, permit, consent or approval of any kind or character on
the part of any such holders of any provision or condition of this Agreement
must be made in writing and shall be effective only to the extent specifically
set forth in writing.
14. Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto (other than an assign to
which assignment would violate the terms of the Stockholders Agreement if such
agreement shall remain in effect), whether so expressed or not. In addition and
whether or not any express assignment has been made, the provisions of this
Agreement which are for the benefit of purchasers or holders of Registrable
Shares are also for the benefit of, and enforceable by, any subsequent holder of
Registrable Shares who consents in writing to be bound by this Agreement.
15. Final Agreement. This Agreement constitutes the final
agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.
16. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will
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be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
17. Descriptive Heading. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.
18. Notices. Any notice, demand or delivery required or
permitted by this Agreement shall be in writing and shall be given to the
specified party at its address (or facsimile number) set forth below, or such
other address (or facsimile number) as shall have been furnished to the party
giving or making such notice, demand or delivery:
If to the Corporation: iMall, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Investor: First Data Merchant Services Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
-and-
First Data Merchant Services Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to: Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
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If to any other holder of
Registrable Shares: Address set forth on the stock record
books of the Corporation.
Each such notice, demand or delivery shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the intended recipient confirms the receipt of such telecopy, or (ii)
if given by any other means, when received at the address specified herein.
19. GOVERNING LAW. THE VALIDITY, MEANING AND EFFECT OF THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.
20. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument. Each
party shall receive a duplicate original of the counterpart copy or copies
executed by it and the Corporation.
21. Attorneys Fees. In the event of any action or suit based
upon or arising out of any actual or alleged breach by any party of any
representation, warranty or agreement in this Agreement, the prevailing party
shall be entitled to recover its reasonable attorneys' fees and expenses of such
action or suit from the other party, in addition to any other relief ordered by
the court.
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This Registration Agreement was executed on the date first set
forth above.
iMALL, INC.
By:_____________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chairman and Chief Executive
Officer
FIRST DATA MERCHANT SERVICES CORPORATION
By:_____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
