EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of May
3, 2005, is by and between TAG ENTERTAINMENT CORP., a Delaware corporation (the
"Company"), and each of the entities whose names appear on the signature pages
hereof. Such entities are each referred to herein as an "Investor" and,
collectively, as the "Investors".
A. The Company has agreed, on the terms and subject to the conditions
set forth in the Securities Purchase Agreement, dated as of May 3, 2005 (the
"Securities Purchase Agreement"), to issue and sell to each Investor named
therein shares of Series A Convertible Preferred Stock (the "Preferred Stock")
and a Warrant (as defined in the Securities Purchase Agreement).
B. The shares of Preferred Stock are convertible into shares (the
"Conversion Shares") of the Company's common stock, par value $0.001 per share
(the "Common Stock"). The Warrants are exercisable into shares of Common Stock
(the "Warrant Shares") in accordance with their terms.
C. In order to induce each Investor to enter into the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended (the "Securities Act"), and
under applicable state securities laws.
In consideration of each Investor entering into the Securities Purchase
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings specified:
"Business Day" means any day other than a Saturday, a Sunday or a day
on which the Commission or commercial banks located in New York City are
authorized or permitted by law to close.
"Commission" means the Securities and Exchange Commission.
"Effective Date" means the date on which the Registration Statement is
declared effective by the Commission.
"Filing Deadline" means the forty-fifth (45th) calendar day following
the Closing Date.
"Holder" means any person owning or having the right to acquire,
through conversion of the Preferred Stock or exercise of the Warrants or
otherwise, Registrable Securities, including initially each Investor and
thereafter any permitted assignee thereof.
"Registrable Securities" means the Conversion Shares and the Warrant
Shares and any other shares of Common Stock issuable pursuant to the terms
of the Preferred Stock or the Warrants, and any shares of capital stock
issued or issuable from time to time (with any adjustments) in replacement
of, in exchange for or otherwise in respect of the Conversion Shares or the
Warrant Shares.
"Registration Deadline" means the ninetieth (90th) calendar day
following the Closing Date; provided, however, that if the staff of the
Commission undertakes a review of the Registration Statement that results
in substantial comments by such staff to the Registration Statement, then
the Registration Deadline shall be the one hundred twentieth (120th)
calendar day following the Closing Date.
"Registration Period" has the meaning set forth in paragraph 2(b)
below.
"Registration Statement" means a registration statement or statements
prepared in compliance with the Securities Act and pursuant to Rule 415
under the Securities Act ("Rule 415") or any successor rule providing for
the offering of securities on a continuous or delayed basis.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Securities Purchase Agreement.
2. REGISTRATION.
(a) Registration Statement. On or before the Filing Deadline, the
Company shall prepare and file with the Commission a Registration Statement on
Form S-3 pursuant to Rule 415 under the Securities Act covering the resale of a
number of shares of Registrable Securities equal to the sum of (A) one hundred
percent (100%) of the number of Conversion Shares issuable upon conversion of
all of the Preferred Shares issuable at the Closing (based on an assumed
Conversion Price of $1.00 or, if lower, the Conversion Price in effect on the
date of such filing), plus (B) one hundred twenty five percent (125%) the number
of Warrant Shares issuable upon exercise of all of the Warrants issuable at the
Closing (based on the Exercise Price in effect on the date of such filing), in
each case without regard to any restriction on the ability of any Holder to
convert such Holder's Preferred Stock or exercise such Holder's Warrant as of
such date. Such Registration Statement shall state, to the extent permitted by
Rule 416 under the Securities Act, that it also covers such indeterminate number
of additional shares of Common Stock as may become issuable upon the conversion
of the Preferred Stock and exercise of the Warrants in order to prevent dilution
resulting from stock splits, stock dividends or similar events. Notwithstanding
the foregoing, if the Company does not meet the eligibility requirements for
filing a Registration Statement on Form S-3, then the Company shall instead
prepare and file with the Commission a Registration Statement meeting the
foregoing requirements of Form X-0, Xxxx X-0 or Form SB-2, and in such event,
the Company shall re-file such Registration Statement, or file a new
Registration Statement covering at least the number of shares then registered on
the existing Registration Statement (and not previously sold pursuant to the
existing Registration Statement or pursuant to Rule 144 under the Securities Act
("Rule 144")), on Form S-3 as promptly as practicable (but in no event later
than thirty (30) days)
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after the Company meets the eligibility requirements to use Form S-3 for the
resale of Registrable Securities by each Investor.
(b) Effectiveness. The Company shall use its best efforts to cause the
Registration Statement to become effective as soon as practicable following the
filing thereof, but in no event later than the Registration Deadline. The
Company shall respond promptly to any and all comments made by the staff of the
Commission on the Registration Statement, and shall submit to the Commission,
within two (2) Business Days after the Company learns that no review of the
Registration Statement will be made by the staff of the Commission or that the
staff of the Commission has no further comments on the Registration Statement,
as the case may be, a request for acceleration of the effectiveness of the
Registration Statement to a time and date not later than two (2) Business Days
after the submission of such request. The Company will maintain the
effectiveness of the Registration Statement until the earlier to occur of (i)
the date on which all of the Registrable Securities eligible for resale
thereunder have been publicly sold pursuant to either the Registration Statement
or Rule 144 and (ii) the date on which all of the Registrable Securities
remaining to be sold under the Registration Statement (in the reasonable opinion
of counsel to the Company) may be immediately sold to the public under Rule
144(k) under the Securities Act ("Rule 144(k)") or any successor provision (the
period beginning on the Closing Date and ending on the earlier to occur of (i)
or (ii) above being referred to herein as the "Registration Period").
(c) Registration Default. If (i) the Registration Statement is not
filed on or before the Filing Deadline or declared effective by the Commission
on or before the Registration Deadline, (ii) an acceleration request is not made
within the time frames specified in paragraph 2(b) above, (iii) after the
Registration Statement has been declared effective by the Commission, sales of
Registrable Securities cannot be made by a Holder under the Registration
Statement for any reason not within the exclusive control of such Holder (other
than such Registrable Securities as are then freely saleable pursuant to Rule
144(k)), (iv) the Common Stock ceases to be quoted on the Nasdaq OTC Bulletin
Board unless such Common Stock is listed on the Nasdaq National Market, the
Nasdaq SmallCap Market or the New York Stock Exchange, or (v) an amendment or
supplement to the Registration Statement, or a new registration statement,
required to be filed pursuant to the terms of paragraph 4(k) below is not filed
on or before the date required by such paragraph (each of the foregoing clauses
(i), (ii), (iii), (iv) and (v) being referred to herein as a "Registration
Default"), the Company shall make cash payments to each Holder equal to such
Holder's pro rata share (based on the aggregate number of Registrable Securities
held by or issuable to such Holder as of the Registration Deadline) of $75,000
for each thirty (30) day period or part thereof in which a Registration Default
exists. Each such payment shall be made within five (5) Business Days following
the last day of each calendar month in which a Registration Default existed. Any
such payment shall be in addition to any other remedies available to each Holder
at law or in equity, whether pursuant to the terms hereof, the Securities
Purchase Agreement, the Certificate of Designation, or otherwise.
(d) Allocation of Conversion Shares and Warrant Shares. The initial
number of Conversion Shares and Warrant Shares included in any Registration
Statement and each increase in the number thereof included therein shall be
allocated pro rata among the Holders based on the aggregate number of
Registrable Securities issuable to each Holder at the time the Registration
Statement covering such initial number of Registrable Securities or increase
thereof is declared
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effective by the Commission (such number to be determined using the Conversion
Price or Exercise Price, as applicable, in effect at such time and without
regard to any restriction on the ability of a Holder to convert such Holder's
Preferred Stock or exercise such Holder's Warrant as of such date). In the event
that a Holder sells or otherwise transfers any of such Holder's Registrable
Securities, each transferee shall be allocated the portion of the then remaining
number of Registrable Securities included in such Registration Statement
allocable to the transferor.
(e) Registration of Other Securities. During the period beginning on
the date hereof and ending on the Effective Date, the Company shall, except as
described in Schedule 3.12 to the Securities Purchase Agreement, refrain from
filing any registration statement (other than (i) a Registration Statement filed
hereunder, (ii) a registration statement on Form S-8 with respect to stock
option plans and agreements and stock plans currently in effect and disclosed in
the Securities Purchase Agreement or the schedules thereto) or (iii) a shelf
registration statement filed under Rule 415 for future primary issuances. In no
event shall the Company include any securities other than the Registrable
Securities on any Registration Statement filed by the Company on behalf of the
Holders pursuant to the terms hereof, except that the Company may include
securities on such Registration Statements to the extent that the Company is
required to do so pursuant to registration rights that are outstanding on date
hereof and disclosed on Schedule 3.12 to the Securities Purchase Agreement.
3. PIGGYBACK REGISTRATION.
If at any time prior to the expiration of the Registration Period, (i)
the Company proposes to register shares of Common Stock under the Securities Act
in connection with the public offering of such shares for cash (a "Proposed
Registration") other than a registration statement on Form S-8 or Form S-4 or
any successor or other forms promulgated for similar purposes and (ii) a
Registration Statement covering the sale of all of the Registrable Securities is
not then effective and available for sales thereof by the Holders, the Company
shall, at such time, promptly give each Holder written notice of such Proposed
Registration. Each Holder shall have ten (10) Business Days from its receipt of
such notice to deliver to the Company a written request specifying the amount of
Registrable Securities that such Holder intends to sell and such Holder's
intended method of distribution. Upon receipt of such request, the Company shall
use its best efforts to cause all Registrable Securities which the Company has
been requested to register to be registered under the Securities Act to the
extent necessary to permit their sale or other disposition in accordance with
the intended methods of distribution specified in the request of such Holder;
provided, however, that the Company shall have the right to postpone or withdraw
any registration effected pursuant to this Section 3 without obligation to the
Holders. If, in connection with any underwritten public offering for the account
of the Company or for stockholders of the Company that have contractual rights
to require the Company to register shares of Common Stock, the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in a registration statement because, in the
judgment of such underwriter(s), marketing or other factors dictate such
limitation is necessary to facilitate such offering, then the Company shall be
obligated to include in the registration statement only such limited portion of
the Registrable Securities with respect to which each Holder has requested
inclusion hereunder as such underwriter(s) shall permit. Any exclusion of
Registrable Securities shall be made pro rata among the Holders seeking to
include Registrable Securities in a registration statement, in proportion to the
number of Registrable
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Securities sought to be included by such Holders; provided, however, that the
Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
to inclusion of such securities in the registration statement or are not
entitled to pro rata inclusion with the Registrable Securities; and provided,
further, that, after giving effect to the immediately preceding proviso, any
exclusion of Registrable Securities shall be made pro rata with holders of other
securities having the right to include such securities in the registration
statement.
4. OBLIGATIONS OF THE COMPANY.
In addition to performing its obligations hereunder, including without
limitation those pursuant to Section 2 above, the Company shall, with respect to
the Registration Statement:
(a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to comply with the
provisions of the Securities Act or to maintain the effectiveness of the
Registration Statement during the Registration Period, or as may be reasonably
requested by a Holder in order to incorporate information concerning such Holder
or such Holder's intended method of distribution;
(b) promptly following the Closing, cause the Registrable Securities to
be eligible for quotation on the Nasdaq OTC Bulletin Board and provide each
Holder with reasonable evidence thereof, and use all reasonable efforts to
secure the listing of the Common Stock, including all Registrable Securities, on
the Nasdaq National Market System or the Nasdaq SmallCap Market promptly
following the Company's eligibility to list the Common Stock on such market or
markets;
(c) furnish to each Holder such number of copies of the prospectus
included in the Registration Statement, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such Holder may reasonably request in order to facilitate the disposition of
such Holder's Registrable Securities;
(d) use commercially reasonable efforts to register or qualify the
Registrable Securities under the securities or "blue sky" laws of such
jurisdictions within the United States as shall be reasonably requested from
time to time by a Holder, and do any and all other acts or things which may be
necessary or advisable to enable such Holder to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions; provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such jurisdiction;
(e) in the event of an underwritten public offering of the Registrable
Securities, enter into (together with all Holders proposing to distribute
Registrable Securities through such underwriting) and perform its obligations
under an underwriting agreement, in usual and customary form reasonably
acceptable to the Company, with the managing underwriter of such offering;
(f) notify each Holder immediately after becoming aware of the
occurrence of any event (but shall not, without the prior written consent of
such Holder, disclose to such Holder any facts or circumstances constituting
material non-public information) as a result of which the
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prospectus included in the Registration Statement, as then in effect, contains
an untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and as promptly as practicable
prepare and file with the Commission and furnish to each Holder a reasonable
number of copies of a supplement or an amendment to such prospectus as may be
necessary so that such prospectus does not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;
(g) use all commercially reasonable efforts to prevent the issuance of
any stop order or other order suspending the effectiveness of the Registration
Statement and, if such an order is issued, to obtain the withdrawal thereof at
the earliest possible time and to notify each Holder of the issuance of such
order and the resolution thereof;
(h) furnish to each Holder, on the date that the Registration
Statement, or any successor registration statement, becomes effective, (x) a
letter, dated such date, of outside counsel representing the Company (which
counsel shall be either the counsel identified in Section 8(c) hereof or such
other outside counsel that is reasonably acceptable to such Holder) addressed to
such Holder, confirming such effectiveness and, to the knowledge of such
counsel, the absence of any stop order, and (y) in the case of an underwriting,
(A) a copy of an opinion, dated such date, of such outside counsel, in such form
and substance as is required to be given to the underwriters, and (B) a letter
addressed to such Holder, dated such date, from the Company's independent
certified public accountants, in such form and substance as is required to be
given by the Company's independent certified public accountants to such
underwriters;
(i) provide to each Holder and its representatives the reasonable
opportunity to conduct a reasonable inquiry of the Company's financial and other
records during normal business hours and make available its officers, directors
and employees for questions regarding information which such Holder may
reasonably request in order to fulfill any due diligence obligation on its part;
(j) permit counsel for each Holder to review the Registration Statement
and all amendments and supplements thereto, and any comments made by the staff
of the Commission concerning such Holder and/or the transactions contemplated by
the Transaction Documents and the Company's responses thereto, within a
reasonable period of time prior to the filing thereof with the Commission (or,
in the case of comments made by the staff of the Commission, within a reasonable
period of time following the receipt thereof by the Company); provided, however,
that if copies of the foregoing are provided to the Investors on a timely basis,
then to the extent that any delays in filing the Registration Statement or in
the effectiveness thereof are caused by the failure of an Investor to comment
thereon in a timely manner, such delay shall not be deemed to be a Registration
Default; and
(k) in the event that, at any time, the number of shares available
under the Registration Statement is insufficient to cover the sum of (A) one
hundred percent (100%) of the number of Conversion Shares issuable upon
conversion of all of the then outstanding Preferred Shares (based on an assumed
Conversion Price of $1.00 or, if lower, the Conversion Price then in
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effect), plus (B) one hundred ten percent (110%) the number of Warrant Shares
issuable upon exercise of all of the then outstanding Warrants (based on the
Exercise Price in effect on the date of such filing), in each case without
regard to any restriction on the ability of any Holder to convert such Holder's
Preferred Stock or exercise such Holder's Warrant as of such date, plus (C) one
hundred percent (100%) of the Conversion Shares and Warrant Shares then
outstanding, the Company shall promptly amend the Registration Statement or file
a new registration statement, in any event as soon as practicable, but not later
than the tenth (10th) day following notice from a Holder of the occurrence of
such event, so that the Registration Statement or such new registration
statement, or both, covers no less than the sum of (A) one hundred percent
(100%) of the number of Conversion Shares issuable upon conversion of all of the
then outstanding Preferred Shares (based on an assumed Conversion Price of $1.00
or, if lower, the Conversion Price then in effect), plus (B) one hundred
twenty-five percent (125%) the number of Warrant Shares issuable upon exercise
of all of the then outstanding Warrants (based on the Exercise Price in effect
on the date of such filing), in each case without regard to any restriction on
the ability of any Holder to convert such Holder's Preferred Stock or exercise
such Holder's Warrant as of such date, plus (C) one hundred percent (100%) of
the Conversion Shares and Warrant Shares then outstanding. The Company shall use
its best efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing thereof. Any
Registration Statement filed pursuant to this paragraph 4(k) shall state that,
to the extent permitted by Rule 416 under the Securities Act, such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon conversion of the Preferred Stock and exercise
of the Warrants in order to prevent dilution resulting from stock splits, stock
dividends or similar events. Unless and until such amendment or new Registration
Statement becomes effective, each Holder shall have the rights described in
paragraph 2(c) above.
5. OBLIGATIONS OF EACH HOLDER.
In connection with the registration of Registrable Securities pursuant to a
Registration Statement, each Holder shall:
(a) timely furnish to the Company in writing such information regarding
itself and the intended method of disposition of such Registrable Securities as
the Company shall reasonably request in order to effect the registration
thereof;
(b) upon receipt of any notice from the Company of the happening of any
event of the kind described in paragraphs 4(f) or 4(g), immediately discontinue
any sale or other disposition of such Registrable Securities pursuant to such
Registration Statement until the filing of an amendment or supplement as
described in paragraph 4(f) or withdrawal of the stop order referred to in
paragraph 4(g), and use commercially reasonable efforts to maintain the
confidentiality of such notice and its contents;
(c) in the event of an underwritten offering of such Registrable
Securities in which such Holder participates, enter into a customary and
reasonable underwriting agreement and execute such other documents as the
Company and the managing underwriter for such offering may reasonably request;
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(d) to the extent required by applicable law, deliver a prospectus to
the purchaser of such Registrable Securities;
(e) notify the Company when it has sold all of the Registrable
Securities held by it; and
(f) notify the Company in the event that any information supplied by
such Holder in writing for inclusion in such Registration Statement or related
prospectus is untrue or omits to state a material fact required to be stated
therein or necessary to make such information not misleading in light of the
circumstances then existing; immediately discontinue any sale or other
disposition of such Registrable Securities pursuant to such Registration
Statement until the filing of an amendment or supplement to such prospectus as
may be necessary so that such prospectus does not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and use commercially reasonable efforts to assist
the Company as may be appropriate to make such amendment or supplement effective
for such purpose.
6. INDEMNIFICATION.
In the event that any Registrable Securities are included in a
Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company shall indemnify and
hold harmless each Holder, the officers, directors, employees, agents and
representatives of such Holder, and each person, if any, who controls such
Holder within the meaning of the Securities Act or the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), against any losses, claims, damages,
liabilities or reasonable out-of-pocket expenses (whether joint or several)
(collectively, including legal or other expenses reasonably incurred in
connection with investigating or defending same, "Losses"), insofar as any such
Losses arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or (ii) the omission or alleged omission to
state therein 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. Subject to the provisions of paragraph 6(c) below, the
Company will reimburse such Holder, and each such officer, director, employee,
agent, representative or controlling person, for any legal or other
out-of-pocket expenses as reasonably incurred by any such entity or person in
connection with investigating or defending any Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any Loss if
such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be obligated to
indemnify any person for any Loss to the extent that such Loss is (i) based upon
and is in conformity with written information furnished by such person expressly
for use in such Registration Statement or (ii) based on a failure of such person
to deliver or cause to be delivered the final prospectus contained in the
Registration Statement and made available by the Company, if such delivery is
required by applicable law. Other than with the consent of the Holder (which
consent may be granted or withheld at such Holder's sole discretion), the
Company shall not enter into any settlement of a Loss that does not provide for
the unconditional release of such Holder from all liabilities and obligations
relating to such Loss.
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(b) To the extent permitted by law, each Holder who is named in such
Registration Statement as a selling stockholder, acting severally and not
jointly, shall indemnify and hold harmless the Company, the officers, directors,
employees, agents and representatives of the Company, and each person, if any,
who controls the Company within the meaning of the Securities Act or the
Exchange Act, against any Losses to the extent (and only to the extent) that any
such Losses are based upon and in conformity with written information furnished
by such Holder expressly for use in such Registration Statement. Subject to the
provisions of paragraph 6(c) below, such Holder will reimburse any legal or
other expenses as reasonably incurred by the Company and any such officer,
director, employee, agent, representative, or controlling person, in connection
with investigating or defending any such Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of such Holder (which
consent shall not be unreasonably withheld); and provided, further, that, in no
event shall any indemnity under this paragraph 6(b) exceed the net proceeds
resulting from the sale of the Registrable Securities sold by such Holder under
such Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in and to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the reasonably
incurred fees and expenses of one such counsel for all indemnified parties to be
paid by the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate under
applicable standards of professional conduct due to actual or potential
conflicting interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, to the extent prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under this Section 6 with respect to such action, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 6 or
with respect to any other action unless the indemnifying party is materially
prejudiced as a result of not receiving such notice.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 6 is unavailable or insufficient to hold harmless an indemnified
party for any reason, the Company and each Holder agree, severally and not
jointly, to contribute to the aggregate Losses to which the Company or such
Holder may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and such Holder in connection with the statements
or omissions which resulted in such Losses; provided, however, that in no case
shall such Holder be responsible for any amount in excess of the net proceeds
resulting from the sale of the Registrable Securities sold by it under the
Registration Statement. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or by such Holder. The Company and each Holder agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
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account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. For purposes of this Section 6, each person who
controls a Holder within the meaning of either the Securities Act or the
Exchange Act and each officer, director, employee, agent or representative of
such Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company within the meaning of either the Securities Act
or the Exchange Act and each officer, director, employee, agent or
representative of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
(e) The obligations of the Company and each Holder under this Section 6
shall survive the conversion of the Preferred Stock and exercise of the Warrants
in full, the completion of any offering or sale of Registrable Securities
pursuant to a Registration Statement under this Agreement, or otherwise.
7. REPORTS.
With a view to making available to each Holder the benefits of Rule 144
and any other similar rule or regulation of the Commission that may at any time
permit such Holder to sell securities of the Company to the public without
registration, the Company agrees (until all of the Registrable Securities have
been sold under a Registration Statement or pursuant to Rule 144) to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to such Holder, so long as such Holder owns any Registrable
Securities, promptly upon written request (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of Rule
144, the Securities Act and the Exchange Act, (ii) to the extent not publicly
available through the Commission's XXXXX database, a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably
requested by such Holder in connection with such Holder's compliance with any
rule or regulation of the Commission which permits the selling of any such
securities without registration.
8. MISCELLANEOUS.
(a) Expenses of Registration. Except as otherwise provided in the
Securities Purchase Agreement, all reasonable expenses, other than underwriting
discounts and commissions and fees and expenses of counsel and other advisors to
each Holder, incurred in connection with the registrations, filings or
qualifications described herein, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, the
fees and disbursements of counsel for
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the Company, and the fees and disbursements incurred in connection with the
opinion and letter described in paragraph 4(h) hereof, shall be borne by the
Company.
(b) Amendment; Waiver. Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended or waived except pursuant to a
written instrument executed by the Company and the Holders of at least
two-thirds (2/3) of the Registrable Securities into which all of the Preferred
Stock and Warrants then outstanding are convertible or exercisable (without
regard to any limitation on such conversion or exercise). Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
Holder, each future Holder and the Company. The failure of any party to exercise
any right or remedy under this Agreement or otherwise, or the delay by any party
in exercising such right or remedy, shall not operate as a waiver thereof.
(c) Notices. Any notice, demand or request required or permitted to be
given by the Company or a Holder pursuant to the terms of this Agreement shall
be in writing and shall be deemed delivered (i) when delivered personally or by
verifiable facsimile transmission (immediately followed by written confirmation
delivered according to another mechanism provided by this section), unless such
delivery is made on a day that is not a Business Day, in which case such
delivery will be deemed to be made on the next succeeding Business Day, (ii) on
the next Business Day after timely delivery to a reputable overnight courier and
(iii) on the Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage prepaid),
addressed as follows:
If to the Company:
TAG Entertainment Corp.
0000 Xxxxx Xxxxx Xxxxxx Xxxx., 0xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxxx & XxXxxxx, LLP
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
and if to a Holder, to such address as shall be designated by such Holder in
writing to the Company.
(d) Assignment. Upon the transfer of any Preferred Stock, Warrants or
Registrable Securities by a Holder, the rights of such Holder hereunder with
respect to such securities so transferred shall be assigned automatically to the
transferee thereof, and such transferee
11
shall thereupon be deemed to be a "Holder" for purposes of this Agreement, as
long as: (i) the Company is, within a reasonable period of time following such
transfer, furnished with written notice of the name and address of such
transferee, (ii) the transferee agrees in writing with the Company to be bound
by all of the provisions hereof, and (iii) such transfer is made in accordance
with the applicable requirements of the Securities Purchase Agreement; provided,
however, that the registration rights granted under this Agreement shall not be
assigned to any person or entity that receives any Preferred Stock, Warrants or
Registrable Securities in a public transaction pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144.
(e) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and all of which together shall be deemed
one and the same instrument. This Agreement, once executed by a party, may be
delivered to any other party hereto by facsimile transmission.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within the State of New York.
(g) Holder of Record. A person is deemed to be a Holder whenever such
person owns or is deemed to own of record Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more persons
with respect to the same Registrable Securities, the Company shall act upon the
basis of instructions, notice or election received from the record owner of such
Registrable Securities.
(h) Entire Agreement. This Agreement, the Securities Purchase
Agreement, the Certificate of Designation, the Warrants, and the other
Transaction Documents constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement, the Securities Purchase
Agreement, the Certificate of Designation, the Warrants, and the other
Transaction Documents supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
[Signature Pages to Follow]
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
TAG ENTERTAINMENT CORP.
By:
------------------------------
Name:
Title:
SATELLITE STRATEGIC FINANCE ASSOCIATES, LLC
By: Satellite Asset Management, L.P., its Manager
By:
------------------------------
Name:
Title:
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
TAG ENTERTAINMENT CORP.
By:
------------------------------
Name:
Title:
SATELLITE STRATEGIC FINANCE PARTNERS, LTD.
By: Satellite Asset Management, L.P., its Manager
By:
---------------------------
Name:
Title:
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
TAG ENTERTAINMENT CORP.
By:
--------------------------------
Name:
Title:
-------------------------------------
Investor Name
By: __________________________, its Manager
By:
----------------------------
Name:
Title:
