REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of January 3, 2005, by and among Zone4Play, Inc., a Nevada
corporation (the "Company"), and each of the purchasers signatory hereto (each
such purchaser, a "Purchaser" and collectively, the "Purchasers").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof, by and among the Company and the
Purchasers (the "Purchase Agreement").
The Company and the Purchasers intending to be legally bound, hereby
agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"Advice" shall have the meaning set forth in Section 6(c).
"Effectiveness Date" means, with respect to the Registration
Statements required to be filed hereunder, the earlier of (a) the day one
hundred twenty (120) calendar days following the date of the Purchase
Agreement and (b) the Trading Day following the date, on which the Company
is notified by the Commission that such Registration Statement will not be
reviewed or is no longer subject to further review and comments; provided,
however, that if a Holder fails to comply with the provisions of Section
3(k), then, as to such Holder only, the Effectiveness Date with respect to
such Holder's Registrable Securities only shall be extended until ninety
(90) days following the date of receipt by the Company of such required
information.
"Effectiveness Period" shall have the meaning set forth in Section
2(a).
"Event" shall have the meaning set forth in Section 2(b).
"Event Date" shall have the meaning set forth in Section 2(b).
"Filing Date" means, with respect to the Registration Statements
required to be filed hereunder, the day forty five (45) calendar days
following the date of the Purchase Agreement.
"Holder" or "Holders" means the holder or holders, as the case may
be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section
5(c).
"Indemnifying Party" shall have the meaning set forth in Section
5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition).
"Prospectus" means the prospectus included in the applicable
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 such Registration
Statement, and all other amendments and supplements to such Prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means all shares of Common Stock issued to
the Purchasers with respect to the Common Stock purchased pursuant to the
Purchase Agreement or which may be issuable upon any adjustment pursuant
to any stock split, dividend or other distribution, recapitalization or
similar event with respect to the foregoing.
"Registration Statement" means a registration statement required to
be filed hereunder, including (in each case) the Prospectus, amendments
and supplements to such registration statement or Prospectus, including
pre- and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in
such registration statement.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
"Shares" means the shares of Common Stock to be issued pursuant to
the Purchase Agreement.
2. Registration.
a. On or prior to the applicable Filing Date, the Company shall
prepare and file with the Commission a Registration Statement covering the
resale of all of the Registrable Securities not yet registered that are
held by Holders that have complied with the provisions of Section 3(k)
prior to such date for an offering to be made on a continuous basis
pursuant to Rule 415. Such Registration Statement required hereunder shall
be on Form SB-2 (except if the Company is not then eligible to register
for resale the Registrable Securities on Form SB-2, in which case such
Registration Statement shall be on another appropriate form herewith).
Subject to the terms of this Agreement, the Company shall use its best
efforts to cause such Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof,
but in any event not later than the applicable Effectiveness Date, and
shall use its best efforts to keep such Registration Statement
continuously effective under the Securities Act until the date when 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 the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company's transfer
agent and the affected Holders, to the extent that a Holder still holds
Registrable Securities (the "Effectiveness Period"). Each Holder
acknowledges and -------------------- agrees that the Company shall be
permitted to exclude such Holder's Registrable Securities from a
Registration Statement if such Holder fails to timely comply with the
Company's request for information pursuant to Section 3(k); provided if
such Holder provides such information prior to the filing of such
Registration Statement the Company shall use commercially reasonable
efforts to include such Registrable Securities on such Registration
Statement; provided further that this provision does not otherwise waive
the Company's obligation to register such Registrable Securities pursuant
to the terms hereunder upon such Holder providing the Company with the
required information.
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b. If: (i) a Registration Statement is not filed on or prior to the
applicable Filing Date (For the avoidance of doubt, if the Company files a
Registration Statement without affording the Holder or Holders referenced
in such Registration Statement the opportunity to review and comment on
the same as required by Section 3(a), the Company shall not be deemed to
have satisfied this clause (i)), or (ii) the Company fails to file with
the Commission a request for acceleration in accordance with Rule 461
promulgated under the Securities Act, within no more than five (5) Trading
Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will
not be "reviewed," or is not subject to further review, or (iii) prior to
the date when a Registration Statement is first declared effective by the
Commission, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the Commission in respect
of such Registration Statement within thirty (30) calendar days after the
receipt of comments by or notice from the Commission that such amendment
is required in order for such Registration Statement to be declared
effective, or (iv) a Registration Statement filed or required to be filed
hereunder is not declared effective by the Commission on or before the
applicable Effectiveness Date, or (v) after a Registration Statement is
first declared effective by the Commission, it ceases for any reason to
remain continuously effective as to all Shares for which it is required to
be effective, or the Holders are not permitted to utilize a Prospectus
therein to resell such Shares, for in any such case fifteen (15)
consecutive Trading Days but no more than an aggregate of twenty-five (25)
Trading Days during any twelve (12) month period (which need not be
consecutive Trading Days) provided that any days during which a
Registration Statement ceases to be effective due to the filing of a
post-effective amendment thereto by the Company at the request of the
Holders in order to amend the Plan of Distribution (as provided for in
Section 2(a)) shall not be counted towards such fifteen (15) or
twenty-five (25) Trading Day periods provided the Company uses
commercially reasonable efforts to cause such post-effective amendment to
be declared effective (any such failure or breach being referred to as an
"Event," and for ----- purposes of clause (i) or (iv) the date on which
such Event occurs, or for purposes of clause (ii) the date on which such
five (5) Trading Day period is exceeded, or for purposes of clause (iii)
the date which such thirty (30) calendar days is exceeded, or for purposes
of clause (v) the date on which such fifteen (15) or twenty-five (25)
Trading Day period, as applicable, is exceeded being referred to as "Event
Date"), then in addition to any other rights the Holders may have
hereunder or under applicable ----------- law: (x) on each such Event Date
the Company shall pay to each Holder an amount in cash, as partial
liquidated damages and not as a penalty, equal to 1.5% of the aggregate
purchase price paid by such Holder pursuant to the Purchase Agreement for
any Shares then held by such Holder. If the Company fails to pay any
liquidated damages pursuant to this Section 2(b) in full within seven (7)
business days after the date payable, the Company will pay interest
thereon at a rate of 12% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from
the date such liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The liquidated damages pursuant to the
terms hereof shall apply on a daily pro-rata basis for any portion of a
month prior to the cure of an Event. Notwithstanding anything herein to
the contrary, the Company agrees and acknowledges that any extensions to
the Filing Date or Effectiveness Date on account of a Holder failing to
timely comply with Section 3(k) relate solely to that Holder and in no way
effect the Filing Date and Effectiveness Date under this Agreement as they
relate to any other Holder.
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3. Registration Procedures
In connection with the Company's registration obligations hereunder, the
Company shall:
a. Not less than five (5) Trading Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or
supplement thereto, the Company shall, (i) furnish to the Holders owning
Registrable Securities registered under such Registration Statement copies
of all such documents proposed to be filed (including documents
incorporated or deemed incorporated by reference to the extent requested
by such Person) which documents will be subject to the review of such
Holders, and (ii) cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as
shall be necessary, in the reasonable opinion of respective counsel to
conduct a reasonable investigation within the meaning of the Securities
Act. The Company shall not file any such Registration Statement or any
such Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities registered thereunder
shall reasonably object in good faith, provided that the Company is
notified of such objection in writing no later than five (5) Trading Days
after such Holders have been so furnished copies of such documents.
b. (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to a Registration Statement and a
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable
Registrable Securities for the applicable 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, 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 such Registration Statement or any amendment thereto and, as
promptly as reasonably possible, upon request, provide the Holders true
and complete copies of all correspondence from and to the Commission
relating to such Registration Statement; and (iv) comply in all material
respects during the applicable Effectiveness Period with the provisions of
the Securities Act and the Exchange Act with respect to the disposition of
all Registrable Securities covered by such Registration Statement during
the applicable period in accordance with the Holders' intended methods of
disposition set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.
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c. Notify the Holders of Registrable Securities to be sold as
promptly as reasonably possible (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is
proposed to be filed; (B) when the Commission notifies the Company whether
there will be a "review" of a Registration Statement and whenever the
Commission comments in writing on a Registration Statement (the Company
shall upon request provide true and complete copies thereof and all
written responses thereto to each of the Holders); 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 during the period of effectiveness
of a Registration Statement for amendments or supplements to such
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 such Registrable Securities
or the initiation of any Proceedings for that purpose; (iv) of the receipt
by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening
of any Proceeding for such purpose; and (v) of the occurrence of any event
of which the Company has knowledge as a result of which a Prospectus, as
then in effect, contains any untrue statement of a material fact or omits
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.
d. Use commercially reasonable 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, as promptly as reasonably
practicable.
e. Furnish to each Holder, without charge, at least one (1)
conformed copy of each Registration Statement registering Registrable
Securities held by such Holder and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed
to be incorporated therein by reference to the extent requested in writing
by such Person, and all exhibits to the extent requested by such Person in
writing (including those previously furnished or incorporated by
reference) promptly after the filing of such documents with the
Commission.
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f. 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, the Company hereby
consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto, except after the giving of any notice
pursuant to Section 3(c).
g. 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 such
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 the applicable Registration
Statement; provided, that the Company shall not be -------- required to
qualify generally to do business in any jurisdiction where it is not then
so qualified, subject the Company to any material tax in any such
jurisdiction where it is not then so subject or file a general consent to
service of process in any such jurisdiction.
h. If requested in writing 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 the applicable Registration Statement, which certificates
shall be free, to the extent permitted by the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in
such denominations and registered in such names as any such Holders may
request.
i. Upon the occurrence of any event contemplated by Section 3(c)(v),
as promptly as reasonably possible, prepare a supplement or amendment,
including a post-effective amendment, to the applicable 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 such
Registration Statement nor the Prospectus included therein will contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
If the Company notifies the Holders in accordance with clauses (ii)
through (v) of Section 3(c) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the
Holders shall suspend use of such Prospectus. The Company will use its
commercially reasonable efforts to ensure that the use of a Prospectus may
be resumed as promptly as is practicable. The Company shall be entitled to
exercise its right under this Section 3(i) to suspend the availability of
a Registration Statement and the applicable Prospectus, subject to the
payment of liquidated damages pursuant to Section 2(b), for a period not
to exceed sixty (60) Trading Days (which need not be consecutive days) in
any twelve (12) month period.
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j. Comply in all material respects with all applicable rules and
regulations of the Commission.
k. The Company may require each Holder, upon three (3) Trading Days'
notice, to furnish to the Company a certified statement as to, among other
things, the number of shares of Common Stock beneficially owned by such
Holder and the person that has voting and dispositive control over such
Shares.
4. Registration Expenses. Except as otherwise provided for herein, all
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with 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), (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) reasonable fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions 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 the Company. The Company 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)
and expenses (collectively, "Losses"), as incurred, arising out of or
relating to any untrue statement of a material fact contained in a
Registration Statement (at the time of its effectiveness), any Prospectus
or any form of prospectus or in any amendment or supplement thereto or in
any preliminary prospectus (each as of its date), or arising out of or
relating to any omission of 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, except to the extent, but only
to the extent, that (i) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by or on behalf of 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 such
Registration Statement, such Prospectus or such form of Prospectus or in
any amendment or supplement thereto or (ii) in the case of an occurrence
of an event of the type specified in Section 3(c)(ii)-(v), the use by such
Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that such Prospectus is outdated or
defective and prior to the receipt by such Holder of the Advice
contemplated in Section 6(d).
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b. Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, within ten (10) Trading Days of written
notice thereof to the Indemnifying Party, 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 statement of
a material fact contained in a Registration Statement, any Prospectus, or
any form of prospectus, or in any amendment or supplement thereto or in
any preliminary prospectus, or arising out of or relating to any omission
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 or on behalf of such Holder to the
Company 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 the Company by or on behalf of 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 such Registration Statement, 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(c)(ii)-(v), the use by such Holder of an outdated
or defective Prospectus after the Company has notified such Holder in
writing that such Prospectus is outdated or defective and prior to the
receipt by such Holder of the Advice contemplated in Section 6(c).
Notwithstanding anything to the contrary contained herein or in the
Purchase Agreement, 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.
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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 such failure shall have
materially prejudiced the Indemnifying Party's ability to defend such
action.
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 reasonably
believe that a material conflict of interest is likely to exist if the
same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying
Party in writing that it elects to employ separate counsel at the expense
of the Indemnifying Party, the Indemnifying Party shall not have the right
to assume the defense thereof and the reasonable fees and expenses of one
(1) 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 affected without its written consent, which consent shall not
be unreasonably withheld. 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.
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 each of the Indemnifying
Party and the 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 statement of
a material fact omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by a party as a result of any Losses shall be
deemed to include, subject to the limitations set forth in this Agreement,
any reasonable attorneys' or other 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.
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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 which are the 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, except in the case of fraud by
such Holder.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties.
6. Miscellaneous
a. Remedies. In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would
not provide adequate compensation for any losses incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law
would be adequate.
b. Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities
pursuant to a Registration Statement.
c. Discontinued Disposition. Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Section
3(c), such Holder will forthwith discontinue disposition of such
Registrable Securities under any 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 the Company 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. The Company will
use its commercially reasonable efforts to ensure that the use of such
Prospectus may be resumed as promptly as it practicable. The Company
agrees and acknowledges that any periods during which the Holder is
required to discontinue the disposition of the Registrable Securities
hereunder shall be subject to the provisions of Section 2(b).
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d. Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of
the Registrable Securities and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering
for its own account or the account of others under the Securities Act of
any of its equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then equivalents relating
to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination
and, if within fifteen (15) days after the date of such notice, any such
Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered, subject to customary underwriter
cutbacks applicable to all holders of registration rights.
e. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the same shall be in writing and signed by
the Company and each Holder of the then outstanding Registrable
Securities.
f. Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be made in
accordance with the provisions of the Purchase Agreement.
g. 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. Each Holder may
assign their respective rights hereunder in the manner and to the Persons
as permitted under the Purchase Agreement.
h. 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.
i. Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
determined with the provisions of the Purchase Agreement.
11
j. Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
k. 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.
l. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
m. Independent Nature of Purchasers' Obligations and Rights. Except
as otherwise provided for herein, 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.
n. Notice of Disposition of Registrable Securities. Upon the request
of the Company, each Holder shall promptly provide the Company written
notice at such time as it no longer holds, directly or indirectly, any
Registrable Securities.
o. Fees and Expenses. Each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement, except
that the Company shall pay up to an aggregate of $2,000 for the fees and
expenses of TRP incurred in connection with the review of the registration
statement and information submitted by the Purchasers. In addition, the
Company shall pay all stamp and other taxes and duties levied in
connection with the sale of the Shares.
*************************
12
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
ZONE4PLAY, INC.
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
13
[PURCHASER'S SIGNATURE PAGE TO RRA]
Name of Investing Entity: Ivy MA Holdings
----------------
Signature of Authorized Signatory of Investing Entity: /s/ Xxxxxxx Topky
------------------
Name of Authorized Signatory: Xxxxxxx Topky
--------------
Title of Authorized Signatory: Portfolio Manager
-----------------
[SIGNATURE PAGES CONTINUE]
[PURCHASER'S SIGNATURE PAGE TO RRA]
Name of Investing Entity: Haystack Capital LP
--------------------
Signature of Authorized Signatory of Investing Entity: /s/ Xxxxxxx Topky
------------------
Name of Authorized Signatory: Xxxxxxx Topky
--------------
Title of Authorized Signatory: Managing Member
---------------
[SIGNATURE PAGES CONTINUE]
[PURCHASER'S SIGNATURE PAGE TO [ ] RRA]
Name of Investing Entity: First New York Securities LLC
------------------------------
Signature of Authorized Signatory of Investing Entity: /s/ Xxxxxx Xxxxxxxx
--------------------
Name of Authorized Signatory: Xxxxxx Xxxxxxxx
----------------
Title of Authorized Signatory: Managing Member
---------------
[SIGNATURE PAGES CONTINUE]
[PURCHASER'S SIGNATURE PAGE TO RRA]
Name of Investing Entity: Xxxxxxx Xxxxxx
---------------
Signature of Authorized Signatory of Investing Entity: /s/ Xxxxxxx Xxxxxx
-------------------
Name of Authorized Signatory: Xxxxxxx Xxxxxx
---------------
Title of Authorized Signatory: Partner
----------------
[SIGNATURE PAGES CONTINUE]
[PURCHASER'S SIGNATURE PAGE TO RRA]
Name of Investing Entity: Xxxxxx X. Xxxxxxxx
-------------------
Signature of Authorized Signatory of Investing Entity: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name of Authorized Signatory: Xxxxxx X. Xxxxxxxx
-------------------
Title of Authorized Signatory: /s/ Xxxxxx X. Xxxxxxxx
----------------------
[SIGNATURE PAGES CONTINUE]
[PURCHASER'S SIGNATURE PAGE TO RRA]
Name of Investing Entity: Xxxxx Xxxxxx
-------------
Signature of Authorized Signatory of Investing Entity: /s/ Xxxxx Xxxxxx
-----------------
Name of Authorized Signatory: Xxxxx Xxxxxx
-------------
Title of Authorized Signatory: NA
------
[SIGNATURE PAGES CONTINUE]
[PURCHASER'S SIGNATURE PAGE TO RRA]
Name of Investing Entity: Xxxxxx Partners, LP
--------------------
Signature of Authorized Signatory of Investing Entity: /s/ Xxxxxx Xxxxx
-----------------
Name of Authorized Signatory: Xxxxxx Xxxxx
-------------
Title of Authorized Signatory: Portfolio Manager
-----------------
[SIGNATURE PAGES CONTINUE]
[PURCHASER'S SIGNATURE PAGE TO RRA]
Name of Investing Entity: WPG Software Fund, LP
----------------------
Signature of Authorized Signatory of Investing Entity:
/s/ Xxxxxx Xxxx / /s/ Xxx Xxxxxx
--------------------------------
Name of Authorized Signatory: Xxxxxx Xxxx / Xxx Xxxxxx
-------------------------
Title of Authorized Signatory: Head of Equity / Managing Director
----------------------------------
[PURCHASER'S SIGNATURE PAGE TO RRA]
Name of Investing Entity: Erinch X. Xxxxx
----------------
Signature of Authorized Signatory of Investing Entity: /s/ Erinch X. Xxxxx
--------------------
Name of Authorized Signatory: Erinch X. Xxxxx
----------------
Title of Authorized Signatory:
