REGISTRATION RIGHTS AGREEMENT
Among
SPORT SUPPLY GROUP, INC.
XXXXXXX RADIO CORP.
and
XXXXXXX RADIO (HONG KONG) LIMITED
Dated as of December ____, 1996
336302-6
TABLE OF CONTENTS
PAGE
SECTION 1. CERTAIN DEFINITIONS AND TERMS .................... 1
1.1 Definitions ................................... 1
1.2 Number and Gender of Words; Other References .. 2
SECTION 2. REGISTRATION RIGHTS .............................. 2
2.1 Required Registration and Notice;
Transfer of Registrable Securities............. 2
2.2 Conditions to Required Registration ........... 3
2.3 Incidental Registration ....................... 4
2.4 Registration Procedures ....................... 5
2.5 Furnish Information ........................... 9
2.6 Expenses of Registration ...................... 10
2.7 Indemnification ............................... 10
2.8 Reports Under the Exchange Act ................ 12
2.9 Lockup Agreement .............................. 13
2.10 Preparation; Investigation .................. 13
SECTION 3. MISCELLANEOUS .................................... 13
3.1 Relationships and Rights of the Holders ....... 13
3.2 Headings ...................................... 14
3.3 Communications ................................ 14
3.4 Governing Law ................................. 14
3.5 Invalid Provisions ............................ 14
3.6 Successors and Assigns ........................ 15
3.7 Amendments .................................... 15
3.8 Multiple Counterparts ......................... 15
336302-6
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of December ___,
1996 between Sport Supply Group, Inc., a Delaware corporation (the
"Company"), Xxxxxxx Radio Corp., a Delaware corporation ("Xxxxxxx"), and
Xxxxxxx Radio (Hong Kong) Limited, an entity organized under the laws of
Hong Kong ("Xxxxxxx (HK)").
WHEREAS, Xxxxxxx and Xxxxxxx (HK) own common stock of the Company and
warrants to purchase common stock of the Company; and
WHEREAS, such holders desire that the limitations on further
distributions of such securities be reduced and the Company is willing to
offer certain registration rights to such holders to reduce such
limitations, all as more specifically set forth herein;
NOW, THEREFORE, for and in consideration of the foregoing and the
mutual covenants herein contained, the parties hereto agree as follows:
SECTION 1. CERTAIN DEFINITIONS AND TERMS.
1.1 DEFINITIONS. As used herein, the following terms have the
meanings indicated:
"COMMON STOCK" means the Common Stock, par value $0.01 per share, of
the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"HOLDER" or "HOLDER" means the holder of any Registrable Securities as
shown on the stock ownership and transfer records maintained by or on
behalf of the Company.
"PERSON" means any individual, firm, corporation, trust, association,
partnership, joint venture or other entity.
"REGISTER," "REGISTERED, " and "REGISTRATION" refer to a registration
of securities effected by preparing and filing a registration statement in
compliance with the Securities Act and/or state securities laws and the
declaration or ordering of effectiveness of such registration statement.
"REGISTRABLE SECURITIES" means (a) any of the shares of Common Stock
outstanding on the date hereof which are held by Xxxxxxx and Xxxxxxx (HK),
(b) any share or shares of Common Stock issued upon exercise of any
Warrants outstanding on the date hereof, and (c) any share or shares of
Common Stock issued hereafter in respect of either of the foregoing, in
each case to the extent that such shares are, at the time in question,
"restricted securities" or shares held by an "affiliate" as such terms are
defined in Rule 144 promulgated under the Securities Act.
"RIGHTS" means rights, remedies, powers, benefits, and privileges.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"WARRANTS" means the warrants to purchase up to an aggregate of
1,000,000 shares of Common Stock at an initial exercise price of $7.50 per
share, subject to adjustment, represented by a Warrant Agreement dated as
of even date herewith, which are owned and held by Xxxxxxx.
1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Whenever in this
Agreement the singular is used, the same shall include the plural where
appropriate, and vice versa; and words of any gender herein shall include
each other gender where appropriate. References herein to "sections" are,
unless specified otherwise, references to sections of this Agreement. The
words "herein," "hereof," and "hereunder," and other words of similar
import refer to this Agreement as a whole and not to any particular part or
subdivision hereof.
SECTION 2. REGISTRATION RIGHTS.
2.1 REQUIRED REGISTRATION AND NOTICE; TRANSFER OF REGISTRABLE
SECURITIES. (a) At the request of any holders of Registrable Securities,
setting forth such holders' intent to transfer not less than 200,000 shares
of Registrable Securities describing briefly the manner and circumstances
of such transfer, and requesting that the Company effect the registration
or qualification or filing for exemption under applicable Federal or State
law of such Registrable Securities, the Company shall promptly give written
notice to all holders of Registrable Securities of a proposed registration
or qualification or filing for exemption and shall, subject to the
conditions of Section 2.2, as expeditiously as practicable, use its best
efforts to effect any such registration or qualification or filing for
exemption of:
(i) such Registrable Securities specified by the holder or holders
giving the initial notice, and
(ii) any other Registrable Securities the holders of which (or
prospective holders thereof upon exercise) shall have requested the
Company in writing, within 20 days after the giving of such written
notice by the Company, to register or qualify or file for exemption,
with any governmental authority under any Federal or State law, and any
listing with any securities exchange, which may be required to permit the
offering and sale or other disposition of any such Registrable Securities
which the holders (or prospective holders thereof upon exercise) propose to
make upon the effectiveness of such registration, qualification, or filing
for exemption, and the Company shall keep effective such registration,
qualification, or exemption for at least 150 days; PROVIDED, that the
Company shall only be required initially to file a registration statement
or qualification application no later than 145 days after any final year
end of the Company and at such reasonable time as it has available for
utilization therein the audited consolidated financial statements of the
Company as of the preceding fiscal year end.
(b) The managing underwriter or underwriters, if any, for any
offering of Registrable Securities to be registered pursuant to this
Section shall be selected by the holders of a majority of the shares of
Registrable Securities being registered and must be acceptable to the
Company in its reasonable judgment. If requested by the underwriters for
any underwritten offering of Registrable Securities registered pursuant to
a registration requested under Section 2.1, the Company shall enter into an
underwriting agreement with such underwriters for such offering, such
agreement to contain such representations and warranties by the Company and
such other terms and provisions as are customarily contained in agreements
with respect to secondary distributions, including, without limitation,
indemnity and contribution as described in Section 2.7. The Holders of
Registrable Securities who have requested that Registrable Securities held
by them be distributed by such underwriters shall be parties to such
underwriting agreement and the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Holders of
Registrable Securities and the conditions precedent to the obligations of
such Holders of Registrable Securities under such underwriting agreement
shall be satisfactory to such Holders of Registrable Securities.
(c) A registration requested pursuant to this Section 2.1 will not be
deemed to have been effected unless it has become effective and does not
become subject to any stop order.
2.2 CONDITIONS TO REQUIRED REGISTRATION. (a) The Company's
obligation to make any filing under Section 2.1 may be deferred by the
Company for an appropriate period (not to exceed 90 days) if the Company
shall in good faith determine that the registration, qualification, or
filing for exemption would have a material adverse affect on an offering or
contemplated offering or a material acquisition, merger, or other corporate
transaction to which the Company or any of its subsidiaries is, or is
expected to be, a party or any other pending material corporate
development. The Company shall have no obligation to register, qualify, or
file for exemption with respect to shares of Registrable Securities in
accordance with this Section 2 if counsel to the Company provides a written
opinion to the Company and the requesting holders that the shares of
Registrable Securities requested to be registered may be sold in one or
more public transactions within a period of 90 days pursuant to Rule 144
under the Securities Act, or any successor rule thereto.
(b) In addition, the Company shall not be required to take any action
under Section 2.1:
(i) more than once during any period of 12 consecutive calendar
months;
(ii) for any holder of Registrable Securities, within 90 days
after the effective date of a registration referred to in
Section 2.1 or Section 2.3 pursuant to which such holder was
afforded the opportunity to register Registrable Securities
under the Securities Act but declined so to do;
(iii) within 90 days following the execution of an underwriting
agreement with respect to any underwritten public offering
of securities by the Company if the managing underwriter
with respect to such proposed public offering by the Company
advises the Company and the holder or holders requesting
registration in writing that such proposed public offering
by such holder or holders would impair the public offering
by the Company; PROVIDED THAT if such managing underwriter
shall have advised the Company that a portion of the
Registrable Securities as to which registration shall have
been requested could be registered, then such shares shall
be registered in proportion to the total number of shares of
Registrable Securities which each holder shall have
requested to have registered hereunder;
(iv) if such action would require the Company to qualify as a
foreign corporation to do business or file a general consent
to service of process in any state or jurisdiction in which
it is not then qualified or as to which it has not
previously filed a general consent to service of process; or
(v) if filing the registration statement would require
a special audit.
2.3 INCIDENTAL REGISTRATION. The Company agrees that at any time it
proposes to register any of its securities, whether held by third parties
or to be issued by the Company, under the Securities Act on Form S-1 or any
other form of registration statement then available for the registration
under the Securities Act of securities of the Company (other than a
registration statement on Form S-4 or Form S-8 or any form of registration
statement not available for general registration of securities) it shall
give written notice to all holders of outstanding shares of Registrable
Securities of its intention so to do, and upon the written request of the
holder of any such shares of Registrable Securities, given within 20 days
after receipt of any such notice from the Company, the Company shall in
each instance use its best efforts, subject to the next sentence, to cause
all Registrable Securities held by any such requesting holder of
Registrable Securities to be registered under the Securities Act and
registered or qualified under any State securities law, all to the extent
necessary to permit the offering and sale or other disposition thereof in
the manner stated in such request by the prospective seller of the
securities so registered. If the managing underwriter of a proposed public
offering by the Company shall advise the Company in writing that, in its
opinion, the distribution of some or all of the shares of Registrable
Securities requested to be included in the registration concurrently with
the securities to be offered by the Company would materially impair the
distribution of securities by the Company, then the Company need not
include in such registration any shares which such underwriter believes
would cause such impairment and each holder of Registrable Securities
requesting registration shall reduce, on a pro rata basis (or such other
basis as shall be agreed upon by the holders requesting registration), the
amount of securities as to which such holder requested registration in such
manner that the aggregate number of shares being registered for holders
does not exceed that number recommended by such underwriter. Any holder of
shares of Registrable Securities requesting registration of such
Registrable Securities shall in its request describe briefly the manner of
any proposed transfer of such Registrable Securities. Nothing in this
Section 2.3 shall be deemed to require the Company to proceed with any
registration of its securities after giving the notice herein provided.
2.4 REGISTRATION PROCEDURES. In connection with the obligations of
the Company with respect to the Registration Statements contemplated by
Sections 2.1 and 2.3, the Company shall use its best efforts to effect each
such registration to permit the sale of the Registrable Securities covered
thereby in accordance with the intended method or methods of disposition
thereof, and pursuant thereto it will, as expeditiously as possible:
(i) at least five days prior to filing a Registration Statement
or any amendments or supplements thereto, furnish to the Holders of
the Registrable Securities covered by such Registration Statement and
the underwriter(s), if any, copies of all such documents proposed to
be filed, and the Company will consider any comments thereon by any of
the foregoing and will not file any Registration Statement or
amendment thereto to which any of the Holders of the Registrable
Securities covered by such Registration Statement or the managing
underwriter(s), if any, shall reasonably object in writing;
(ii) in accordance with (i) above, promptly thereafter prepare
and file with the SEC, any such Registration Statement, which
Registration Statement (a) shall be available for the sale of the
Registrable Securities covered thereby in accordance with the intended
method or methods of distribution by the selling Holders thereof and
(b) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith;
(iii) (a) prepare and file with the SEC such amendments to such
Registration Statement as may be reasonably requested by any Holder of
Registrable Securities or the managing underwriter(s), if any, or as
may be required by the Securities Act, the Exchange Act, or by the
rules, regulations, or instructions applicable to the registration
form utilized by the Company or as may otherwise be necessary to keep
such Registration Statement effective; (b) cause the prospectus
contained in any such Registration Statement to be amended or
supplemented as may be reasonably requested by any of the Holders or
the managing underwriter(s), if any, or as may be required by the
Securities Act, the Exchange Act, or by the rules, regulations, or
instructions applicable to the registration form utilized by the
Company or as may otherwise be necessary to keep such Registration
Statement effective; (c) cause such prospectus as so amended or
supplemented to be filed pursuant to Rule 424 (or any successor rule)
under the Securities Act; (d) respond as promptly as practicable to
any comments received from the SEC with respect to the Registration
Statement or any amendment thereto; and (e) comply with the provisions
of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof;
(iv) promptly notify the selling Holders of Registrable
Securities and the managing underwriter(s), if any, and if requested
by any such Person, confirm such advice in writing:
(a) of the filing of a prospectus or any supplement to such
prospectus and of the effectiveness of the Registration Statement
and/or any post-effective amendment,
(b) of any request by the SEC for amendments or supplements
to the Registration Statement or such prospectus or for additional
information,
(c) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, and
(d) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threat of
any proceeding for such purpose.
(v) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of any Registration Statement or any
qualification referred to in paragraph (iv)(d) at the earliest
possible moment;
(vi) if requested by the managing underwriter(s) or any of the
Holders of Registrable Securities being sold in connection with an
underwritten offering, promptly incorporate in a supplement to a
prospectus or post-effective amendment to the Registration Statement
such information as the managing underwriter(s) or any such Holder of
the Registrable Securities being sold reasonably request to have
included therein relating to the plan of distribution with respect to
such Registrable Securities, including, without limitation,
information with respect to the amount of Registrable Securities being
sold to such underwriters, the purchase price being paid therefor by
such underwriters, and any other terms of the underwritten (or best-
efforts underwritten) offering of the Registrable Securities to be
sold in such offering; and make all required filings of such
supplement to such prospectus or post-effective amendment to the
Registration Statement promptly after being notified of the matters to
be incorporated in such supplement to such prospectus or post-
effective amendment to the Registration Statement;
(vii) promptly furnish to each selling Holder of Registrable
Securities and each managing underwriter, if any, at least one signed
copy of the Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those
incorporated by reference);
(viii) promptly deliver to each Holder of Registrable Securities
and the managing underwriter(s), if any, as many copies of the
Registration Statement, each prospectus, and any amendment or
supplement thereto (in each case including all exhibits), as such
Persons may reasonably request, and such other documents as such
selling Holder may reasonably request to facilitate the disposition of
its Registrable Securities; and, in connection therewith, the Company
confirms that it consents to the use of such prospectus and any
amendment or supplement thereto by each such Holder of Registrable
Securities and the underwriter(s), if any, in connection with the
offering and sale of the Registrable Securities covered by such
prospectus or amendment or supplement thereto;
(ix) prior to the time the Registration Statement is declared
effective by the SEC, register or qualify the Registrable Securities
covered thereby or cooperate with the selling Holders, the
underwriter(s), if any, and their respective counsel in connection
with the registration or qualification of such Registrable Securities
for offer and sale under the securities or blue sky laws of such
jurisdictions as any selling Holder or managing underwriter(s), if
any, reasonably request(s), keep each such registration or
qualification effective during the period such Registration Statement
is required to be kept effective, and do any and all other acts or
things necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Registration Statement;
(x) cooperate with the selling Holders of Registrable Securities
and the managing underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any legends restricting the
transfer thereof; and enable such Registrable Securities to be in such
denominations and registered in such names as the selling Holders or
the managing underwriters may reasonably request at least two business
days prior to any sale of Registrable Securities;
(xi) upon execution and delivery of such mutually acceptable
confidentiality agreements as the Company may reasonably request, make
available to any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant
retained by such underwriter, all financial and other records,
pertinent corporate documents, and properties of the Company, and
cause the Company's officers, directors, and employees to supply all
information requested by any such underwriter, attorney, or accountant
in connection with the registration, at such time or times as the
Person requesting such information shall determine;
(xii) otherwise use its best efforts to comply with the Securities
Act, the Exchange Act, all applicable rules and regulations of the SEC
and all applicable state blue sky and other securities laws, rules,
and regulations, and make generally available to its security holders,
as soon as practicable after the end of its first fiscal quarter in
which the first anniversary of the effective date of such Registration
Statement occurs, an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act;
(xiii) cooperate and assist in any filings required to be made with
the National Association of Securities Dealers, Inc.; and
(xiv) enter into such customary agreements (including, if such
Registration Statement relates to an underwritten offering, an
underwriting agreement) and take all such other customary actions in
connection therewith to expedite or facilitate the disposition of such
Registrable Securities and, in such connection, if the registration is
in connection with an underwritten offering, (a) make such
representations and warranties to the underwriters in such 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 the Company and
updates thereof (which counsel and opinions in form, scope, and
substance shall be satisfactory to the underwriters) addressed to the
underwriters covering the matters of the type customarily covered in
opinions requested in underwritten offerings and such other matters as
may be requested by such underwriters; (c) obtain "comfort" letters
and updates thereof from the Company's accountants addressed to the
underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "comfort" letters by
underwriters in connection with underwritten offerings; (d) set forth
in full in any underwriting agreement entered into the indemnification
provisions and procedures of Section 2.7 hereof with respect to all
parties to be indemnified pursuant to said Section; and (e) deliver
such documents and certificates as may be requested by the
underwriters to evidence compliance with clause (a) above and with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company; the above shall be done at each
closing under such underwriting or similar agreement or as and to the
extent required hereunder.
2.5 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 2
that the holders of Registrable Securities shall furnish to the Company
such information regarding them, the Registrable Securities held by them,
and the intended method of disposition of such securities as the Company
shall reasonably request and as shall reasonably be required in connection
with the action to be taken by the Company. If a holder of Registrable
Securities refuses to provide the Company with any of such information on
the grounds that it is not necessary to include such information in the
registration statement, the Company may exclude such holder's Registrable
Securities from the registration statement, unless such holder provides the
Company with an opinion of counsel, such opinion to be reasonably
satisfactory to the Company, to the effect that such information need not
be included in the registration statement. The exclusion of such holder's
Registrable Securities from a registration shall not affect the
registration of the other Registrable Securities to be included in such
registration, except that each other holder proposing to include
Registrable Securities in such registration may, if Registrable Securities
have been excluded from such registration on the advice of a managing
underwriter as provided in Section 2.2(d) or Section 2.3, increase the
number of shares of such holder's Registrable Securities being registered
by his or its pro rata (or such other proportion as shall be agreed upon by
holders wishing to increase their number of shares being registered) amount
of such excluded Registrable Securities.
2.6 EXPENSES OF REGISTRATION. All expenses incurred in connection
with all registrations pursuant to Section 2.1 or Section 2.3 (in each case
excluding underwriters' discounts and commissions applicable to the shares
of Registrable Securities being registered), including without limitation
all registration, filing, and qualification fees (except that the Company
shall not be obligated to pay any registration, filing, or qualification
fees payable by any holder to the extent that such payment is prohibited by
the laws or regulations of any state), printers' and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the
Company. Each holder of Registrable Securities shall pay the underwriters'
discounts and commissions applicable to the securities sold by such holder
and fees and disbursements of such holder and fees and disbursements of
such holder's counsel, if any. No holder of Registrable Securities shall
have the right to cause the Company to employ any expert or professional to
act on behalf of the Company. Notwithstanding the foregoing, if a
registration is withdrawn at the request of the holder requesting such
registration and if such requesting holder elects not have such
registration counted as a registration requested under Section 2.1, then
the requesting holder (the "Withdrawing Holder") shall promptly pay all of
the reasonable registration expenses of such registration; PROVIDED,
HOWEVER, that the Withdrawing Holder shall not be responsible for any such
registration expenses if the Company or any other holder of securities of
the Company do not concurrently withdraw the registration or the transfer
of securities of the Company proposed to be issued or held by them.
2.7 INDEMNIFICATION. (a) In connection with any registration,
qualification, or filing for exemption of Registrable Securities under
Section 2.1 or Section 2.3, the Company will agree to indemnify the holder
of such Registrable Securities, and each underwriter thereof, including
each Person, if any, who controls such holder of Registrable Securities or
such underwriter within the meaning of Section 15 of the Securities Act,
against all losses, claims, damages, and liabilities caused by any untrue,
or alleged untrue, statement of a material fact contained in any
registration statement or prospectus or offering circular (and as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus or caused by any
omission, or alleged omission, to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that the Company shall have no liability
insofar as such losses, claims, damages, or liabilities are caused by any
untrue statement or alleged untrue statement or omission or alleged
omission based upon information furnished in writing to the Company by such
holder, or any such underwriter, expressly for use therein, and the Company
and each officer, director, and controlling Person of the Company shall be
indemnified by such holder of the Registrable Securities, or such
underwriter, for all such losses, claims, damages, and liabilities caused
by any untrue, or alleged untrue, statement or omission, or alleged
omission, based upon information furnished in writing to the Company by
such holder or such underwriter, as the case may be, for any such use;
PROVIDED, FURTHER, that the liability of each such holder shall be limited
to the proceeds net of discounts and commissions received by such holder
from the sale of Registrable Securities covered by such registration
statement.
(b) The indemnification provisions shall provide that, promptly upon
receipt by a party indemnified pursuant to this Section 2.6 of notice of
the commencement of any action against such indemnified party in respect of
which indemnity or reimbursement may be sought against any indemnifying
party pursuant to this Section 2.6, such indemnified party shall notify the
indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying the party shall not relieve it of any
liability which it may have to any indemnified party otherwise than
pursuant to the indemnification agreement provided for by this Section 2.6.
In case notice of commencement of any such action shall be given to the
indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by such indemnifying party
and satisfactory to such indemnified party in its reasonable judgment. The
indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and
expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party
agrees to pay the same, (ii) the indemnifying party fails to assume the
defense of such action with counsel satisfactory to the indemnified party
in its reasonable judgment, or (iii) the indemnified party has been advised
by counsel that one or more legal defenses may be available to the
indemnified party which are different from those available to the
indemnifying party, in which case the indemnifying party shall not be
entitled to assume the defense of such action on behalf of the indemnified
party notwithstanding its obligation to bear the fees and expenses of such
counsel. No indemnifying party shall be liable for any settlement entered
into without its consent.
(c) (i) If the indemnification provided for in this Section 2.7 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities, or expenses referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities,
or expenses, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified party in connection with
the actions which resulted in such losses, claims, damages, liabilities, or
expenses, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified parties 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, has been made by, or related to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information, and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities, and expenses referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this subsection 2.7(c) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
the immediately preceding paragraph. No person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
2.8 REPORTS UNDER THE EXCHANGE ACT. With a view to making available
to the Holders the benefits of Rule 144 promulgated under the Securities
Act and any other rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without
registration, the Company agrees to:
(a) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(b) furnish to any Holder so long as such Holder owns any of the
Registrable Securities forthwith upon written request a written statement
by the Company to the effect that it has complied with the reporting
requirements of the Securities Act and the Exchange Act, a copy of the most
recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC permitting the
selling of any such securities without registration, PROVIDED THAT nothing
herein shall impose upon the Company any obligation to prepare or file any
reports under the Securities Act, the Exchange Act, or any other federal
securities law or regulation if, by virtue of the number of Persons owning
its outstanding securities or any other applicable circumstances, the
Company is not so required to prepare or file any such reports or other
documents.
2.9 LOCKUP AGREEMENT. In consideration of the performance by the
Company of its obligations under this Section 2, each holder of Registrable
Securities agrees in connection with a registration of the Company's
securities that, upon the written request of the Company or the
underwriters managing any underwritten offering of the Company's
securities, such holder will not sell, make any short sale of, lend, grant
any option for the purchase of, or otherwise dispose of, any Warrants or
shares of Common Stock (other than those included in the registration)
without the prior written consent of the Company or such underwriters, as
the case may be, for such period of time (not to exceed 120 days) from the
effective date of such registration as the Company or the underwriters may
specify.
2.10 PREPARATION; INVESTIGATION. In connection with the preparation
and filing of each registration statement registering Registrable
Securities under the Securities Act, the Company will give the holders of
any such Registrable Securities or to whom any such Registrable Securities
are issuable and their counsel the opportunity to participate in the
preparation of such registration statement, each prospectus contained
therein or filed with the Securities and Exchange Commission, and each
amendment thereof or supplement thereto, and will give each of them
reasonable access to its books and records and the officers of the Company
and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders' counsel,
to conduct an investigation within the meaning of the Securities Act.
SECTION 3. MISCELLANEOUS.
3.1 RELATIONSHIPS AND RIGHTS OF THE HOLDERS. Notwithstanding that
certain Rights of each holder of Registrable Securities herein may be
affected by similar Rights of other holders, the holders shall, in respect
of the ownership of the Registrable Securities, not be related as, or
deemed to be, a partnership, joint venture, or other "group" for the
purpose of acquiring, holding, voting, or disposing of capital stock of the
Company.
3.2 HEADINGS. The headings, captions, and arrangements used herein
are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify, or modify the terms hereof, nor affect the
meaning thereof.
3.3 COMMUNICATIONS. Unless otherwise specifically provided, whenever
this Agreement requires or permits any consent, approval, notice, request,
or demand from one party to another, such communication must be in writing
(which may be tested cable, tested telefacsimile, or tested telex) to be
effective and shall be deemed to have been given on the day actually
delivered, cabled, sent by telefacsimile, or telexed, or, if sent by
nationally recognized delivery service providing for overnight delivery, on
the next commercial banking business day in the State of Texas after it is
delivered to such delivery service with all delivery charges prepaid, or,
if mailed, on the third commercial banking business day in the State of
Texas after it is enclosed in an envelope, addressed to the party to be
notified at the address stated below, properly stamped, sealed, and
deposited in the appropriate official postal service. For purposes hereof,
until changed by written notice pursuant hereto, the Company, Xxxxxxx and
Xxxxxxx (HK) are set forth below:
If to the Company:
Sport Supply Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 00000
Attn: Corporate Secretary
If to Xxxxxxx or Xxxxxxx (HK):
c/x Xxxxxxx Radio Corp.
Nine Xxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
3.4 GOVERNING LAW. This Agreement is being executed and delivered
and is intended to be performed in the State of Texas, and the substantive
laws of such state and of the United States of America shall govern the
rights and duties of the parties hereto and the validity, construction,
enforcement, and interpretation hereof.
3.5 INVALID PROVISIONS. If any provision of this Agreement is deemed
or held to be illegal, invalid, or unenforceable, this Agreement shall be
considered divisible and inoperative as to such provision to the extent it
is deemed to be illegal, invalid, or unenforceable, and in all other
respects this Agreement shall remain in full force and effect; PROVIDED,
HOWEVER, that if any provision of this Agreement is deemed or held to be
illegal, invalid, or unenforceable, there shall be added hereto
automatically a provision as similar as possible to such illegal, invalid,
or unenforceable provision while still being legal, valid, and enforceable.
Further, should any provision contained in this Agreement ever be reformed
or rewritten by any judicial body of competent jurisdiction, such provision
as so reformed or rewritten shall be binding upon all parties hereto.
3.6 SUCCESSORS AND ASSIGNS. All of the terms and provisions of this
Agreement shall inure to the benefit of an be binding upon the parties
hereto and their respective successors and assigns.
3.7 AMENDMENTS. This Agreement may be amended only by an instrument
in writing executed by the holders of a majority of then outstanding
Registrable Securities and by the Company (or their respective successors
or assigns); PROVIDED, HOWEVER, that no amendment providing one or more
holders of Registrable Securities with priority over other holders of
Registrable Securities in registering Registrable Securities, or providing
for the elimination of registration rights as to any holders, shall be made
without the consent of all holders adversely affected.
3.8 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or
more identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement; but,
in making proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart. This Agreement shall become
effective when counterparts hereof shall have been executed and delivered
to the Company by all of the holders of Registrable Securities and to all
of the holders of Registrable Securities by the Company.
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EXECUTED as of the day and year first mentioned in this
agreement.
SPORT SUPPLY GROUP, INC.
By:
Name:
Title:
XXXXXXX RADIO CORP.
By:
Name:
Title:
XXXXXXX RADIO (HONG KONG) LIMITED
By:
Name:
Title:
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