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EXHIBIT D
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered
into effective as of May 20, 1999 by and between BIG ENTERTAINMENT, INC., a
Florida corporation ("Big"), and THE TIMES MIRROR COMPANY, a Delaware
corporation (the "Shareholder").
WHEREAS, Big and the Shareholder are parties to that certain
Agreement and Plan of Merger dated as of January 10, 1999, as modified as of May
14, 1999 (the "Merger Agreement"), providing for the acquisition by Big of
XXXXXXXXX.XXX, INC., a California corporation ("Hollywood"), from the
Shareholder pursuant to a merger of BIG ACQUISITION CORP., a Delaware
corporation and wholly owned subsidiary of Big, with and into Hollywood (the
"Merger");
WHEREAS, as consideration for the Merger, the Shareholder will
receive 2,300,075 shares of Big's Common Stock, par value $.01 per share (the
"Big Common Stock");
WHEREAS, Big and the Shareholder wish to provide for and
acknowledge certain arrangements and understandings following the Merger; and
WHEREAS, the consummation of the Merger is conditioned upon the
execution of this Agreement.
NOW THEREFORE, in consideration of the foregoing, the parties
agree as follows:
1. DEFINITIONS. Capitalized terms used but not defined in this Agreement
shall have the meaning ascribed to such terms in the Merger Agreement.
2. REGISTRATION RIGHTS.
(a) Registration Upon Request. At any time, and from time to
time, commencing on the Effective Date, upon the written request (the "Notice")
of any Qualified Holder(s) (as hereinafter defined) requesting that Big effect
the registration under the Securities Act of 1933, as amended (the "Securities
Act") of Registrable Securities (as hereinafter defined) to be sold in a firm
commitment underwritten public offering for cash, which, in the aggregate,
constitute at least 20% of the shares of Registrable Securities issued to the
Shareholder pursuant to the Merger for each registration hereunder, Big shall
(within forty-five (45) days of the receipt of such Notice) file with the
Commission a registration statement to register under the Securities Act (a
"Demand Registration") the Registrable Securities which Big has been requested
to register and use its best efforts to, as expeditiously as may be practicable,
have such registration statement declared effective by the Commission, provided
that no Qualified
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Holder(s) shall be permitted to request a Demand Registration within three (3)
months of the effective date of any registration statement for equity securities
of Big (other than on Form S-4 or Form S-8 or any successor or similar form). A
request for a Demand Registration will not count as the use of such right unless
the registration statement to which it relates is declared effective under the
Securities Act and remains effective for a period (not less than three (3)
months sufficient to allow for the orderly sale of the Registrable Securities
covered thereby, except that such exercise shall count if such registration
statement is withdrawn because the Qualified Holders, for any reason whatsoever,
determine not to proceed with such registration; provided, however, if any
Qualified Holder should elect to withdraw its Registrable Securities from the
registration as a result of the proration provisions of Section 3(a) or 3(b) in
which such Qualified Holder is not permitted to register at least fifty percent
(50%) of the number of shares requested by such Qualified Holder to be
registered in such registration (a "50% Withdrawal"), then such request for
registration shall not be considered a Demand Registration for purposes of
Section 2(a)(iii)(B).
(i) Within ten (10) Business Days of receipt of the Notice by
Big, Big shall provide notice (the "Holder Notice") to all Qualified Holders of
such demand. The Holder Notice shall set forth, at a minimum, the number and
class of Registrable Securities to be registered, the proposed date of filing of
the related registration statement, and the proposed means of distribution of
such Registrable Securities, and the proposed managing underwriter or
underwriters of such Registrable Securities. Upon the written request of any
Qualified Holder delivered to Big within five (5) days after its receipt of such
Holder Notice (which request shall specify the number of Registrable Securities
intended to be disposed of by such Qualified Holder and the intended method of
disposition thereof), such Registrable Securities of such Qualified Holder shall
be included in such registration statement as if such Qualified Holder had
joined in such demand.
(ii) It is hereby agreed that (A) if Big shall have previously
effected a Demand Registration pursuant to this Section 2(a), it shall not be
required to effect a subsequent Demand Registration until a period of at least
one hundred twenty (120) days shall have elapsed from the effective date of the
registration statement used in connection with such previous Demand Registration
and (B) Big shall not be required to effect more than four (4) Demand
Registrations pursuant to this Section 2(a).
(iii) If any Demand Registration pursuant to this Section 2(a) is
proposed to be effected by means of the use of Form S-3 (or any similar
short-form registration statement which is a successor to Form S-3) and the
managing underwriter shall advise Big in writing that in its opinion the use of
another permitted form is of material importance to the success of the offering,
then such registration shall be effected by the use of such other permitted
form.
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(iv) As used in this Agreement, the term "Registrable
Securities" means any and all (A) shares of Big Common Stock received by the
Qualified Holders in the Merger in exchange for the shares of common stock of
Hollywood beneficially owned by them on the date hereof, and (B) any other of
Big Common Stock issued or issuable with respect to any shares of Big Common
Stock described in clause (A) above by way of a stock dividend or stock split or
in connection with a combination, exchange, reorganization, recapitalization or
reclassification of Big securities, or pursuant to a merger, consolidation or
other similar business combination transaction involving Big. Reference in this
Section 2(a) to specified numbers of shares shall be equitably adjusted to
reflect any such occurrences referred to in the preceding sentence.
(v) As to any particular Registrable Securities, such
securities shall cease to constitute Registrable Securities when (A) a
registration statement with respect to the sale of such securities shall have
been declared effective under the Securities Act and such securities shall have
been disposed of in accordance with the methods contemplated by the registration
statement, (B) such securities shall have been sold in satisfaction of all
applicable conditions to the resale provisions of Rule 144 under the Securities
Act (or any successor provision thereto), (C) such securities shall have been
transferred, new certificates evidencing such securities without legends
restricting further transfer shall have been delivered by Big, and subsequent
public distribution of such securities shall neither require registration under
the Securities Act nor qualification (or any similar filing) under any state
securities or "blue sky" law then in effect, or (D) such securities shall have
ceased to be issued and outstanding.
(vi) The term "Qualified Holder(s)" means the Shareholder
and any Permitted Transferee as such term is defined in that certain Shareholder
Agreement, by and between Big and the Shareholder dated as of a date equal
herewith. The term "Majority Qualified Holders" means a majority in interest of
the Qualified Holders participating in a registration of Registrable Securities
pursuant hereto.
(vii) It is hereby further agreed that with respect to any
Demand Registration requested pursuant to Section 2(a), Big may defer the filing
or effectiveness of any registration statement related thereto for a reasonable
period of time not, to exceed ninety (90) days after a request by any of the
Qualified Holders if (A) Big is, at such time, in the process of preparing,
filing or going effective on an underwritten public offering of Big Common Stock
("Big Common Stock Offering") and is advised in writing by its managing
underwriter(s) that such offering would in its or their opinion be materially
and adversely affected by such filing or (B) the Board of Directors of Big
reasonably determines, in its good faith judgment, that any such filing or the
offering of any Registrable Securities would materially impede, delay or
interfere with any material proposed financing, offer or sale of securities,
acquisition, corporate reorganization or other significant transaction involving
Big; provided that, with respect to clause (B), Big gives the Qualified Holders
written notice of such determination and a copy of the resolution of the Big
Board of Directors with regard thereto; and provided further,
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however, with respect to both clauses (A) and (B), Big shall not be entitled to
postpone such filing or effectiveness if, within the preceding twelve (12)
months, it had effected one (1) postponement pursuant to this paragraph (viii)
and, following such postponements, the Registrable Securities to be sold
pursuant to the postponed registration statements were not sold (for any
reason); provided further, however, that, during the period commencing ninety
(90) days after the Effective Date and ending one hundred and twenty (120) days
thereafter, Big shall not so postpone the filing or effectiveness of the first
Demand Registration requested pursuant to this Section 2(a) for more than thirty
(30) days.
(b) Piggyback Registration. If at any time Big proposes to
register shares of Big Common Stock under the Securities Act; whether proposed
to be offered for sale by Big or any other person (other than a registration on
Form S-4 or Form S-8, or any successor or similar forms), in a manner that would
permit registration of Registrable Securities for sale to the public under the
Securities Act, it will each such time promptly give written notice to all
Qualified Holders of its intention to do so, of the registration form of the
Commission that has been selected by Big, the number and class of securities so
proposed to be registered, the proposed date of filing of such registration
statement, any proposed means of distribution of such securities, any proposed
managing underwriter or underwriters of such securities and, if applicable, a
good faith estimate by Big of the proposed maximum offering price thereof, as
such price is proposed to appear on the facing page of such registration
statement (the "Section 2(b) Notice"). Big will use its best efforts to include
in the proposed registration all Registrable Securities that Big is requested in
writing, within fifteen (15) days after the Section 2(b) Notice is given, to
register by the Qualified Holders thereof; provided, however, that (A) if, at
any time after giving written notice of its intention to register shares of Big
Common Stock and prior to the effective date of the registration statement filed
in connection with such registration, Big shall determine for any reason not to
register such equity securities, Big may, at its election, give written notice
of such determination to all Qualified Holders and, thereupon, shall be relieved
of its obligation to register any Registrable Securities in connection with such
abandoned registration (but not from its obligation to pay any Registration
Expenses to the extent incurred in connection therewith), without prejudice,
however, to the rights of Qualified Holders under Section 2(a) hereof and (B) in
case of such a determination by Big to delay registration of Big Common Stock
pursuant to clause (A) of this Section 2(b), Big shall be permitted to delay the
registration of such Registrable Securities for the same period as the delay in
registering such Big Common Stock. No registration effected under this Section
2(b) shall relieve Big of its obligations to effect Demand Registrations under
Section 2(a) and, notwithstanding anything to the contrary in Section 2(a), no
Qualified Holder shall have the right to require Big to register any Registrable
Securities pursuant to Section 2(a) until the later of (A) the completion of the
distribution of the securities offered and registered pursuant to the Section
2(b) Notice and (B) ninety (90) days after the date a registration statement
effected under this Section 2(b) is declared effective.
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(c) Registration and Qualification.
In connection with Big's registration obligations under Sections
2(a) and 2(b) hereof, Big shall effect such registrations on the appropriate
form available for the sale of the Registrable Securities to permit the sale of
Registrable Securities in accordance with the method or methods of disposition
thereof specified by the Qualified Holders of such Registrable Securities, and
pursuant thereto Big shall:
(i) No fewer than ten (10) Business Days prior to the
initial filing of a registration statement or prospectus and no fewer than four
(4) Business Days prior to the filing of any amendment or supplement thereto
(including any document that would be incorporated or deemed to be incorporated
therein by reference), furnish to the Qualified Holders of Registrable
Securities, their counsel and the managing underwriters, if any, 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 Qualified Holders, their counsel and such underwriters, if any,
and cause the officers and directors of Big, counsel to Big and independent
certified public accountants to Big to respond to such inquiries as shall be
necessary, in the opinion of respective counsel to such Qualified Holders and
such underwriters, to conduct a reasonable investigation within the meaning of
the Securities Act with respect thereto. Big shall not file any such
registration statement or prospectus or any amendments or supplements thereto to
which the Qualified Holders of a majority of outstanding Registrable Securities,
their counsel, or the managing underwriters, if any, shall reasonably object on
a timely basis (within five (5) and three (3) Business Days of receipt thereof,
in the case of the filing and amendment or supplement, respectively);
(ii) Prepare and file with the Commission such amendments,
including post-effective amendments, to each registration statement as may be
necessary to keep such registration statement continuously effective for the
applicable time period; cause the related prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act and the Exchange 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 as
so amended or in such prospectus as so supplemented;
(iii) Notify the Qualified Holders of Registrable
Securities to be sold, their counsel and the managing underwriters, if any,
promptly, (and, in the case of clause (A) (1) below, in no event less than five
(5) Business Days prior to such filing) and (if requested by any such Person),
confirm such notice in writing, (A) (1) when a prospectus or any prospectus
supplement or post-effective amendment is being filed, and, (2) with respect to
a registration statement or any post-effective amendment, when the same has
become effective, (B) of any request by the Commission or any other federal or
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state governmental authority for amendments or supplements to a registration
statement or related prospectus or for additional information, (C) of the
issuance by the Commission, any state securities commission, any other
governmental agency or any court of any stop order, order or injunction
suspending or enjoining the use or the effectiveness of a registration statement
or the initiation of any proceedings for that purpose, (D) if at any time any of
the representations and warranties of Big contained in any agreement (including
any underwriting agreement) contemplated hereby cease to be true and correct in
all material respects, (E) of the receipt by Big 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 (F) of the
happening of any event that makes any statement made in such registration
statement or related prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in such registration statement, prospectus or
documents so that, in the case of the registration statement, 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,
not misleading, and so that, in the case of the prospectus, 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;
(iv) Use its reasonable best efforts to avoid the issuance
of, or, if issued, obtain the withdrawal of any order enjoining or suspending
the use or effectiveness of a registration statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any United States jurisdiction, at the
earliest practicable moment;
(v) If requested by the managing underwriters, if any, or
the Qualified Holders of a majority of outstanding Registrable Securities being
sold in connection with such offering, (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriters, if any, and a majority of the Qualified Holders agree and
reasonably propose should be included therein, and (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after Big has received notification of the matters reasonably
proposed to be incorporated in such prospectus supplement or post-effective
amendment; provided, however, that Big shall not be required to take any action
pursuant to this Section 2(d) that would, in the opinion of outside counsel for
Big, violate applicable law;
(vi) Furnish to each Qualified Holder, their counsel and
each managing underwriter, if any, without charge, at least one conformed copy
of each registration statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference,
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and all exhibits to the extent requested by any such Person (including those
previously furnished or incorporated by reference) as soon as practicable after
the filing of such documents with the Commission;
(vii) Deliver to each Qualified Holder, their counsel, and
the underwriters, if any, without charge, as many copies of the prospectus or
prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons reasonably request; and Big hereby consent to
the use of such prospectus and each amendment or supplement thereto by each of
the selling Qualified Holders of Registrable Securities and the underwriters, if
any, in connection with the offering and sale of the Registrable Securities
covered by such prospectus and any amendment or supplement thereto, as
contemplated thereby;
(viii) Prior to any public offering of Registrable
Securities, use its reasonable best efforts: (i) to register or qualify or
cooperate with the Qualified Holders of Registrable Securities to be sold, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue sky laws of such jurisdictions within the United States as
any Qualified Holder or underwriter reasonably requests in writing; and (ii) to
keep each such registration or qualification (or exemption therefrom) effective
during the period such registration statement is required to be kept effective
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by such
registration statement; provided, however, that Big shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or subject Big
to any tax in any such jurisdiction where it is not then so subject;
(ix) Use its reasonable best efforts to cause the
Registrable Securities covered by the registration statement, and the offering
thereof, to be registered with or approved by such other governmental agencies
or authorities within the United States, except as may be required solely as a
consequence of the nature of such selling Qualified Holder's business, in which
case Big will cooperate in all reasonable respects with the filing of such
registration statement and the granting of such approvals as may be necessary to
enable the seller or sellers thereof or the underwriters, if any, to consummate
the disposition of such Registrable Securities; provided, however, that Big
shall not be required to register the Registrable Securities in any jurisdiction
that would subject it to general service of process in any such jurisdiction
where it is not then so subject or subject Big to any tax in any such
jurisdiction where it is not then so subject or to require Big to qualify to do
business in any jurisdiction where it is not then so qualified;
(x) Upon the occurrence of any event contemplated by
Section 2(c)(iii)(D), as promptly as practicable, prepare a supplement or
amendment, including a
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post-effective amendment, to each 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, such prospectus will not 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;
(xi) To the extent not previously so listed, use its
reasonable best efforts to list prior to the effective date of such registration
statement, subject to notice of issuance, the Registrable Securities covered by
such registration statement on any securities exchange on which securities of
the same class are then listed or, if such class is not then so listed, to have
the Registrable Securities accepted for quotation for trading on the NASDAQ
National Market System (or a comparable interdealer quotation system then in
effect);
(xii) Enter into such agreements (including an
underwriting agreement in form, scope and substance as is customary in
underwritten offerings containing indemnification provisions and procedures no
less favorable to the selling Qualified Holders and the underwriters, if any,
than those set forth in Section 2(e) hereof (or such other provisions and
procedures acceptable to Qualified Holders of a majority of outstanding
Registrable Securities covered by such registration statement and the managing
underwriters) and take all such other reasonable actions in connection therewith
(including those reasonably requested by the managing underwriters, if any, or
the Qualified Holders of a majority of outstanding Registrable Securities being
sold) in order to expedite or facilitate the disposition of such Registrable
Securities, and in such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration: (A) make such representations and warranties to the Qualified
Holders of such Registrable Securities and the underwriters, if any, with
respect to the business of Big and its subsidiaries, and the registration
statement, prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance and scope as
are customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when requested; (B) obtain opinions of counsel to Big
and updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if any, and
counsel to the Qualified Holders of the Registrable Securities being sold),
addressed to each selling Qualified Holder of Registrable Securities and each of
the underwriters, if any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such counsel and underwriters; (C) unless not permitted to be
issued under an applicable Statement of Accounting Standards, obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of Big (and, if necessary, any other independent certified public
accountants of any subsidiary of Big or of any business acquired by Big for
which financial statements and financial data is, or is required to be, included
in the registration statement), addressed to each selling Qualified
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Holder of Registrable Securities and each of the underwriters, if any, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten offerings; and
(D) deliver such documents and certificates as may be reasonably requested by
the Qualified Holders of a majority of outstanding Registrable Securities being
sold, their counsel or the managing underwriters, if any, to evidence the
continued validity of the representations and warranties made pursuant to
Section 2(c)(xii)(A) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement entered
into by Big;
(xiii) Make available for inspection by a representative
of the Qualified Holders of a majority of outstanding Registrable Securities
being sold, any underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney, consultant or accountant retained by such
selling Qualified Holders or underwriter, at the offices where normally kept,
during reasonable business hours, all financial and other records, pertinent
corporate documents and properties of Big and its subsidiaries, and cause the
officers, directors, agents and employees of Big and its subsidiaries to supply
all information in each case reasonably requested by any such representative,
underwriter, attorney, consultant or accountant in connection with a
registration; provided, that any records, documents and other information
designated by Big as confidential shall be kept confidential by such Persons
unless disclosure of any such record, document or other information is required
by law or by a court or administrative order, in which case such record,
document or information shall be disclosed only to the extent required to comply
with such law or order;
(xiv) Use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission and make generally available
to its securityholders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act), no later than forty-five (45) days after
the end of any 12-month period (or ninety (90) days after the end of any
12-month period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or reasonable efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the first
fiscal quarter of Big after the effective date of a registration statement,
which statement shall cover said period, consistent with the requirements of
Rule 158; and
(xv) If so requested by the Majority Qualified Holders of
the Securities being sold in connection with such offering, promptly amend the
relevant registration statement, by post-effective amendment or otherwise, to
reflect any change in the plan or method of distribution of the Registrable
Securities being sold in connection with such registration.
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Big may require any Qualified Holder to furnish Big such
information regarding such Qualified Holder and the distribution of Registrable
Securities by such Qualified Holder as Big may from time to time reasonably
request in writing and as shall be required by law or by the Commission in
connection with any registration.
If any such registration statement refers to any Qualified Holder
by name or otherwise as the Qualified Holder of any securities of Big, then such
Qualified Holder shall have the right to require (A) the insertion therein of
language, in form and substance reasonably satisfactory to such Qualified
Holder, to the effect that the holding by such Qualified Holder of such
securities is not to be construed as a recommendation by such Qualified Holder
of the investment quality of Big's securities covered thereby and that such
holding does not imply that such Qualified Holder will assist in meeting any
future financial requirements of Big, or (B) in the event that such reference to
such Qualified Holder by name or otherwise is not required by the Securities Act
or any similar federal statute then in force, the deletion of the reference to
such Qualified Holder in any amendment or supplement to the registration
statement filed or prepared subsequent to the time that such reference ceases to
be required.
(d) Registration Expenses. Whether or not any registration
statement prepared and filed pursuant to this Section 2 is declared effective by
the Commission (except where a Demand Registration is terminated, withdrawn or
abandoned at the written request (other than pursuant to a 50% Withdrawal) of
the Majority Qualified Holders), Big shall pay all expenses incident to Big's
performance of or compliance with the registration requirements of this
Agreement, including, without limitation, the following: (A) all Commission and
any NASDAQ registration and filing fees and expenses; (B) any and all expenses
incident to its performance of, or compliance with, this Agreement, including,
without limitation, any allocation of salaries and expenses of Big personnel or
other general overhead expenses of Big, or other expenses for the preparation of
historical and pro forma financial statements or other data normally prepared by
Big in the ordinary course of its business; (C) all listing, transfer and/or
exchange agent and registrar fees; (D) fees and expenses in connection with the
qualification of the Registrable Securities under securities or "blue sky" laws
including reasonable fees and disbursements of counsel for the underwriters in
connection therewith; (E) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriters, if any, or by the Qualified Holders of a majority of outstanding
Registrable Securities included in any registration statement) (F) messenger,
telephone and delivery expenses; and (G) fees and out-of-pocket expenses of
counsel for Big and its independent certified public accountants (including the
expenses of any audit, review and/or "cold comfort" letters) and other persons,
including special experts, retained by Big (collectively, clause (A) through
(G), "Registration Expenses"); provided, however, that Big shall not be required
to pay, and the Qualified Holders shall pay, all fees and out-of-pocket expenses
of more than one counsel selected by the Qualified Holders or any discounts,
commissions or fees of
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underwriters, selling brokers and dealers relating to the distribution of the
Registrable Securities.
(e) Indemnification; Contribution.
(i) Big shall, notwithstanding termination of this
Agreement and without limitation as to time, indemnify and hold harmless, each
Qualified Holder of Registrable Securities, the officers, directors, partners,
agents, investment advisors and employees of each of them, each Person who
controls any such Qualified Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors,
partners, agents and employees of each such controlling Person, to the fullest
extent lawful, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, legal or other expenses
reasonably incurred in connection with investigating or preparing to defend or
defending against or appearing as a third party witness in connection therewith)
and expenses, including expenses of investigation (collectively, "Losses"), as
incurred, arising out of or based upon any untrue or alleged untrue statement of
a material fact contained in any registration statement, prospectus or form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein 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 that (a) the untrue statement or omission
in the form of a preliminary prospectus was corrected in the final prospectus or
(b) such are based upon information regarding such Qualified Holder furnished in
writing to Big by or on behalf of such Qualified Holder expressly for use
therein to the extent that such information was reasonably relied on by Big in
the preparation thereof. The obligations of Big to each Indemnified Party shall
be separate obligations, and the liability of Big to any Indemnified Party
hereunder shall not be extinguished solely because any other Indemnified Party
is not entitled to indemnity hereunder.
(ii) In connection with any registration statement in
which a Qualified Holder of Registrable Securities is participating, such
Qualified Holder of Registrable Securities shall furnish to Big in writing such
information as Big reasonably requests for use in connection with any
registration statement or prospectus and each Qualified Holder agrees, severally
and not jointly, to indemnify and hold harmless Big, its directors, officers,
agents and employees, each Person who controls Big (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act), and the
directors, officers, agents or employees of each such controlling Person, to the
fullest extent lawful, from and against all Losses (as determined by a court of
competent jurisdiction in a final judgment not subject to appeal or review)
arising out of or based upon any untrue statement of a material fact contained
in any registration statement, prospectus, or form of prospectus, or arising out
of or based upon any omission of a material fact required to be stated therein
or necessary to make the statements therein not
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misleading 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
Qualified Holder to Big expressly for use in such registration statement or
prospectus and that such information was reasonably relied upon by Big in
preparation of such registration statement, prospectus or form of prospectus. In
no event shall the liability of any selling Qualified Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the proceeds
received by such Qualified Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(iii) If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an "Indemnified Party"),
such Indemnified Party promptly shall so notify the Person from whom indemnity
is sought (the "Indemnifying Party") in writing, and the Indemnifying Party
shall 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 therewith; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations pursuant to this Section 2(e), except to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to review or appeal) that such failure shall have materially
prejudiced the Indemnifying Party, and provided further, that such failure to
give notice shall not relieve the Indemnifying Party from any liability which it
may have otherwise than under this Section 2(e).
Any such Indemnified Party shall have the right to employ
separate counsel in any such action, claim or 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: (i) the Indemnifying Party
has agreed to pay such fees and expenses; or (ii) the Indemnifying Parties shall
have failed promptly to assume the defense of such action, claim or proceeding
and to employ counsel reasonably satisfactory to such Indemnified Party or
Parties in any such action, claim or proceeding; or (iii) the named parties to
any such action, claim or proceeding (including any impleaded parties) include
both such Indemnified Party or Parties and one or more of the Indemnifying
Parties, and such Indemnified Parties shall have been advised in writing by
counsel to the Indemnifying Party or Parties that a conflict of interest may
exist if such counsel represents such Indemnified Party or Parties and one or
more of the Indemnifying Parties (in which case, if any such Indemnified Party
notifies the Indemnifying Parties in writing that it elects to employ separate
counsel at the expense of the Indemnifying Parties, the Indemnifying Parties
shall not have the right to assume the defense thereof and such counsel shall be
at the expense of the Indemnifying Parties), it being understood, however, that,
the Indemnifying Parties shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties,
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which firm shall be designated in writing by the Indemnified Parties. No
Indemnifying Party shall be liable for any settlement of any such Proceeding
made without its written consent. No Indemnifying Party shall, without the prior
written consent of each Indemnified Party, effect any settlement of any
proceeding unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are or may be the subject
matter of such proceeding.
All fees and expenses of each Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such action or proceeding in a manner not
inconsistent with this Section 2(e) shall be paid to such Indemnified Party, as
incurred, upon written notice thereof to the Indemnifying Parties (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder).
(iv) If a claim by an Indemnified Party for
indemnification under Section 2(e)(i) or 2(e)(ii) hereof is found unenforceable
in a final judgment by a court of competent jurisdiction (not subject to further
appeal or review) even though the express provisions hereof provide for
indemnification in such case, then each applicable Indemnifying Party, in lieu
of this Section 2(e) 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
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 each such Indemnifying
Party and the 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 2(e)(iii) hereof, any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or Proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 2(e)(iv) 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 2(e)(iv), an
Indemnifying Party that is a Qualified Holder of Registrable Securities shall
not be required to contribute any amount in excess of the amount by which the
total price at which the securities sold by such Indemnifying Party and
distributed to the public were offered to the public exceeds the amount of any
damages that such Indemnifying Party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person
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guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) Selection of Underwriters. If any of the Registrable
Securities covered by any registration statement filed pursuant to Sections 2(a)
or 2(b), are to be sold pursuant to an underwritten offering, the managing
underwriter or underwriters thereof shall be selected by (i) in the case of any
registration statement filed pursuant to Section 2(a) hereof, the Qualified
Holders of a majority of outstanding Registrable Securities included in such
offering, subject to the consent of Big (which shall not be unreasonably
withheld or delayed) and (ii) in the case of any registration statement pursuant
to Section 2(b) hereof, by Big or in such other manner as Big may agree. No
Person may participate in any underwritten registration hereunder unless such
Person (i) agrees to sell such Person's Registrable Securities on the basis
reasonably provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
3. CERTAIN REQUIREMENTS IN CONNECTION WITH REGISTRATION RIGHTS.
(a) If the managing underwriter for a registration pursuant to
Section 2(a) that involves an underwritten offering shall advise Big in writing
that, in its opinion, the inclusion of some or all of the Registrable Securities
to be sold for the account of Qualified Holders would adversely affect the price
per unit to be derived from the offering or otherwise materially and adversely
affect the success of the offering, then the number of Registrable Securities to
be sold for the account of such Qualified Holders shall be reduced (and may be
reduced to zero) in accordance with the managing underwriter's written opinion
to the minimum extent necessary to eliminate any such adverse effects. If the
number of securities to be included in any registration is reduced (but not to
zero), the number of such securities (including the Registrable Securities)
excluded from such registration shall be allocated, first, on a pro rata basis
to the securities requested to be registered for the account of any Person (as
defined in Section 2 of the Securities Act) (including Big), other than the
Person who made the original demand request pursuant to Section 2(a)(i) and
other than the holders of Priority Registrable Securities (as hereinafter
defined), on the basis of the relative number of shares of such securities such
person has requested to be included in such registration, second, to the Person
who made the original demand request pursuant to Section 2(a)(i), other than the
holders of Priority Registrable Securities and, last, on a pro rata basis among
all other holders of Big securities who may hold senior registration rights
("Other Qualified Holders") with respect to shares of Big Common Stock
("Priority Registrable Securities"), on the basis of the relative number of
shares of such Priority Registrable Securities such Other Qualified Holder has
requested to be included in such registration,
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if any. If, as a result of the proration provisions of this Section 3(a), any
Qualified Holder shall not be entitled to include all Registrable Securities in
a registration pursuant to Section 2(a) that such Qualified Holder has requested
be included, such Qualified Holder may elect to withdraw its Registrable
Securities from the registration; provided, however, that such withdrawal
election shall be irrevocable and, after making a withdrawal election, a
Qualified Holder shall no longer have any right to include Registrable
Securities in the registration as to which such withdrawal election was made.
(b) If the managing underwriter for a registration pursuant to
Section 2(b) that involves an underwritten offering shall advise Big in writing
that, in its opinion, the inclusion of some or all of the Registrable Securities
to be sold for the account of Qualified Holders would adversely affect the price
per unit Big or the holders of Big's securities who initiated such offering, if
any, will derive from the offering or otherwise materially and adversely affect
the success of the offering, then the number of Registrable Securities to be
sold for the account of such Qualified Holders shall be reduced (and may be
reduced to zero) in accordance with the managing underwriter's written opinion
to the minimum extent necessary to eliminate any such adverse effects. If the
number of securities to be included in any registration is reduced (but not to
zero), the number of such securities (including the Registrable Securities)
excluded from such registration shall be allocated, first, on a pro rata basis
to the securities requested to be registered for the account of any Person
(including Big), other than the holders of Priority Registrable Securities, on
the basis of the relative number of shares of such securities such person has
requested to be included in such registration and second, on a pro rata basis
among all Other Qualified Holders with respect to Priority Registrable
Securities, on the basis of the relative number of shares of such Priority
Registrable Securities such Other Qualified Holder has requested to be included
in such registration. If, as a result of the proration provisions of this
Section 3(b), any Qualified Holder shall not be entitled to include all
Registrable Securities in a registration pursuant to Section 2(b) that such
Qualified Holder has requested be included, such Qualified Holder may elect to
withdraw its Registrable Securities from the registration; provided, however,
that such withdrawal election shall be irrevocable and, after making a
withdrawal election, a Qualified Holder shall no longer have any right to
include Registrable Securities in the registration as to which such withdrawal
election was made.
(c) Notwithstanding anything in Section 2(b) to the contrary,
Qualified Holders shall not have any right to include their Registrable
Securities in any distribution or registration of Big Common Stock by Big, which
is a result of a merger, consolidation, acquisition, exchange offer (or other
offering of securities solely to Big's existing stockholders), recapitalization,
other reorganization, dividend reinvestment plan, stock option plan or other
employee benefit plan, or any similar transaction having the same effect.
(d) So long as the Shareholder maintains registration rights
pursuant to this Agreement, subject to existing registration rights granted by
Big prior to the date
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hereof, without the written consent of the Qualified Holders of a majority of
outstanding Registrable Securities, Big shall not grant to any Person the right
to request Big to register any equity securities of Big under the Securities Act
unless the rights so granted are subject in all respects to the prior rights of
the Qualified Holders of Registrable Securities set forth herein, and are not
otherwise in conflict or inconsistent with the provisions of this Agreement.
(e) Subject to the existing registration rights granted by Big
prior to the date hereof, unless the Qualified Holders of a majority of the
Registrable Securities otherwise consent, neither Big nor any of its
securityholders (other than the Qualified Holders of Registrable Securities in
such capacity) shall have the right to include any securities of Big in any
registration effected under Section 2(a) hereof other than Registrable
Securities.
(f) So long as the Shareholder maintains any registration rights
pursuant to this Agreement, Big will not hereafter enter into any agreement or
arrangement with respect to its securities which is inconsistent in any material
respect with the rights granted to the holders of Registrable Securities in this
Agreement.
(g) Big shall use its best efforts to file the reports required
to be filed by it under the Securities Act and the Exchange Act in a timely
manner and, if at any time Big is not required to file such reports, it will,
upon the request of any Qualified Holder of Registrable Securities, make
publicly available other information so long as necessary to permit sales of
their securities pursuant to Rule 144. Big further covenants that it will take
such further action as any Qualified Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Qualified Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.
Upon the request of any Qualified Holder of Registrable Securities, Big shall
deliver to such Qualified Holder a written statement as to whether it has
complied with such requirements.
4. NOTICES.
Except as otherwise provided below, whenever it is provided in
this Agreement that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties hereto, or whenever any of the parties hereto, desires to provide to or
serve upon any person any other communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person with
receipt acknowledged or sent by registered or certified mail (return receipt
requested, postage prepaid), or by overnight mail, courier, or delivery service
or by telecopy and confirmed by telecopy addressed as follows:
(a) If to Big, to:
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Big Entertainment, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000 Xxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxxxxxxx
Facsimile: (000) 000-0000
- With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to the Shareholder, to:
The Times Mirror Company
000 Xxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
- With a copy to:
The Times Mirror Company
000 Xxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
or at such other address as may be substituted by notice delivered as provided
herein. The furnishing of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly furnished or served on (i) the date on which personally
delivered, with receipt acknowledged, (ii) the date on which telecopied and
confirmed by telecopy answerback, (iii) the next business day if delivered by
overnight or express mail, courier or delivery service, or (iv) three (3)
business days after the same shall have been deposited in the United States
mail, as the case may be. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to the
persons designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
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5. ENTIRE AGREEMENT.
This Agreement and the other agreements entered into in
connection with the Merger Agreement (including, but not limited to, the
Shareholder Agreement) represent the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersede any
and all prior oral and written agreements, arrangements and understandings among
the parties hereto with respect to such subject matter; and can be amended,
supplemented or changed, and any provision hereof can be waived, only by a
written instrument making specific reference to this Agreement signed by Big on
the one hand, and the holders of a majority of the Registrable Securities on the
other hand.
6. SUCCESSORS.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
7. PARAGRAPH HEADINGS.
The paragraph headings contained in this Agreement are for
general reference purposes only and shall not affect in any manner the meaning,
interpretation or construction of the terms or other provisions of this
Agreement.
8. APPLICABLE LAW.
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of New York, applicable to contracts to be
made, executed, delivered and performed wholly within such state and, in any
case, without regard to the conflicts of law principles of such state.
9. SEVERABILITY.
If at any time subsequent to the date hereof, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon and shall not impair the enforceability of any other provision of this
Agreement.
10. SPECIFIC PERFORMANCE.
Big acknowledges that it would be impossible to determine the
amount of damages that would result from any breach by it of any of the
provisions of this Agreement and that the remedy at law for any breach, or
threatened breach, of any of such provisions would likely be inadequate and,
accordingly, agrees that each of the Shareholders shall, in addition to any
other rights or remedies which it may have, be
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entitled to seek such equitable and injunctive relief as may be available from
any court of competent jurisdiction to compel specific performance of, or
restrain Big from violating any of, such provisions. In connection with any
action or proceeding for injunctive relief, Big hereby waives the claim or
defense that a remedy at law alone is adequate and agrees, to the maximum extent
permitted by law, to have such provision of this Agreement specifically enforced
against it, without the necessity of posting bond or other security against it,
and consents to the entry of injunctive relief against it enjoining or
restraining any breach or threatened breach of this Agreement.
11. ARBITRATION.
Any controversy, dispute or claim arising under this Agreement
which cannot be settled by mutual agreement shall be finally settled by
arbitration as follows: any party who is aggrieved shall deliver a notice to
other party setting forth the specific points in dispute. Any points remaining
in dispute twenty (20) days after the giving of such notice shall be submitted
to arbitration in New York, New York to Endispute, before a single arbitrator
appointed in accordance with Endispute's Arbitration Rules, modified only as
herein expressly provided. The arbitrator may enter a default decision against
any party who fails to participate in the arbitration proceedings. The decision
of the arbitrator on the points in dispute will be final, unappealable and
binding and judgment on the award may be entered in any court having
jurisdiction thereof. The parties agree that this clause has been included to
rapidly and inexpensively resolve any disputes between them with respect to this
Agreement, and that this clause shall be grounds for dismissal of any court
action commenced by either party with respect to this Agreement, other than
post-arbitration actions seeking to enforce an arbitration award. The parties
shall keep confidential, and shall not disclose to any person, except as may be
required by law, the existence of any controversy hereunder, the referral of any
such controversy to arbitration or the status of resolution thereof.
12. NO WAIVER.
The failure of any party at any time or times to require
performance of any provision hereof shall not affect the right at a later time
to enforce the same. No waiver by any party of any condition, and no breach of
any provision, term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
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13. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, any
of which may be by facsimile, each of which shall be deemed an original, but all
of which together shall constitute but one and the same original instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
BIG ENTERTAINMENT, INC.
By: /s/ Xxxxxxxx Xxxxxxxxxx
-----------------------------------
Xxxxxxxx Xxxxxxxxxx
Chief Executive Officer
THE TIMES MIRROR COMPANY
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
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