REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
REGISTRATION
RIGHTS AGREEMENT (this “Agreement”),
dated
February 6, 2006 between IMPART MEDIA GROUP, INC. (formerly known as Limelight
Media Group, Inc.), a Nevada corporation (the “Company”),
and
XXXXXX CAPITAL PARTNERS II, LLC, a Florida limited liability company (doing
business as “InTransit Media”) (“Xxxxxx
Capital Partners II”).
WHEREAS,
pursuant to the terms of an Asset Purchase Agreement dated as of
February 6, 2006 (the “Purchase
Agreement”)
between the Company and Xxxxxx Capital Partners II, on the date hereof, the
Company has agreed to issue to Xxxxxx Capital Partners II such number of shares
of common stock, $.001 par value, of the Company (the “Common
Stock”)
as
determined pursuant to the Purchase Agreement; and
WHEREAS,
as a
condition precedent to the consummation of the transactions contemplated by
the
Purchase Agreement, the Company has agreed to provide certain registration
rights pursuant to the terms of this Agreement;
NOW,
THEREFORE,
in
consideration of the mutual covenants and obligations hereinafter set forth,
the
parties hereto, intending to be legally bound, hereby agree as
follows:
1. Definitions.
For
purposes of this Agreement, capitalized terms used herein shall have the
meanings set forth in the preambles hereto and in this Section 1.
1.1
“Additional
Shares”
shall
have the meaning assigned in Section 2.2.
1.2
“Commission”
shall
mean the Securities and Exchange Commission or any other federal agency at
the
time administering the Securities Act.
1.3
“Common
Stock”
shall
mean the common stock, par value $.001 per share, of the Company or, in the
case
of a conversion, reclassification or exchange of such shares of such Common
Stock, shares of the stock issued or issuable in respect of such shares of
Common Stock, and all provisions of this Agreement shall be applied
appropriately thereto and to any stock resulting therefrom.
1.4
“Demand
Date”
shall
have the meaning assigned in Section 2.1 and shall include the First Demand
Date
or a Subsequent Demand Date, as the context may require.
1.5
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended, or any similar federal
statute enacted hereafter, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
1.6
“First
Demand Date”
shall
have the meaning assigned in Section 2.1.
1.7
“First
Registrable Securities”
shall
mean the Registrable Securities being delivered to Xxxxxx Capital Partners
II on
the date hereof.
1.8
“Form
S-3”
shall
mean such form under the Securities Act as in effect on the date hereof or
any
registration form under the Securities Act subsequently adopted by the
Commission which permits inclusion or incorporation of substantial information
by reference to other documents filed by the Company with the
Commission.
1.9
“Form
S-3 Initiating Holders”
shall
have the meaning assigned in Section 4.1.
1.10 “Holder”
shall
mean any holder of Registrable Securities.
1.11 “Indemnified
Party”
shall
have the meaning assigned in Section 7.3.
1.12 “Indemnifying
Party”
shall
have the meaning assigned in Section 7.3.
1.13 “Initiating
Holders”
shall
mean Holders representing (on a fully diluted basis) at least fifty-one percent
(51%) of the total number of First Registrable Securities or Subsequent
Registrable Securities, as the case may be.
1.14 “Person”
shall
mean any individual, firm, corporation, partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company, government
(or
an agency or political subdivision thereof) or other entity of any
kind.
1.15 “Other
Stockholders”
shall
have the meaning assigned in Section 2.2.
1.16 “Register”,
“registered”
and
“registration”
shall
refer to a registration effected by preparing and filing a registration
statement with the Commission in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration or ordering
of
the effectiveness of such registration statement by the Commission.
1.17 “Registrable
Securities”
shall
mean (A) the shares of Common Stock issued to Xxxxxx Capital Partners II
pursuant to the Purchase Agreement, including the First Registrable Securities
and the Subsequent Registrable Securities, and (B) any stock of the Company
issued as a dividend or other distribution with respect to, or in exchange
for
or in replacement of, the shares of Common Stock referred to in clause (A);
provided,
however,
that
such shares of Common Stock shall only be treated as Registrable Securities
hereunder if and so long as they have not been sold in a registered public
offering or have not been sold to the public pursuant to Rule 144 under the
Securities Act or any similar or successor rule.
1.18 “Registration
Expenses”
shall
mean all expenses incurred by the Company in compliance herewith, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, blue sky fees and expenses, the
reasonable fees and expenses (subject to documentation thereof) of one counsel
for all Holders and Other Stockholders, and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company).
1.19 “Securities
Act”
shall
mean the Securities Act of 1933, as amended, or any similar federal statute
enacted hereafter, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect from time to time.
1.20 “Selling
Expenses”
shall
mean all underwriting discounts and commissions applicable to the sale of
Registrable Securities.
1.21 “Subsequent
Demand Date”
shall
have the meaning assigned in Section 2.1.
1.22 “Subsequent
Registrable Securities”
shall
mean Registrable Securities delivered to Xxxxxx Capital Partners II on any
date
subsequent to the date hereof.
2.1
Request
for Registration.
If, at
any time after February 5, 2007 (such date being hereinafter referred to as
the
“First
Demand Date”),
the
Company shall receive from Initiating Holders holding First Registrable
Securities a written request that the Company effect any registration with
respect to the First Registrable Securities, the provisions set forth below
shall be applicable. In addition, in the event that Subsequent Registrable
Securities are issued by the Company and on a date that is not less than one
year after such issuance (a “Subsequent Demand Date” and together with the First
Demand Date, a “Demand Date”), the Company shall receive from Initiating Holders
holding Subsequent Registrable Securities a written request that the Company
effect any registration with respect to Subsequent Registrable Securities,
then
the provisions set forth below shall also be applicable. In each of the
foregoing events, the Company will:
(a) promptly
give written notice of the proposed registration to all other Holders of the
First Registrable Securities or Subsequent Registrable Securities, as the case
may be; and
(b) as
soon
as practicable, use all reasonable efforts to effect such registration
(including, without limitation, the execution of an undertaking to file post
effective amendments, appropriate qualification under the blue sky or other
state securities laws requested by such Initiating Holders and appropriate
compliance with applicable regulations issued under the Securities Act) as
may
be so requested and as would permit or facilitate the sale and distribution
of
all or such portion of such Registrable Securities as are specified in such
request, together with all or such portion of such Registrable Securities of
any
Holder or Holders joining in such request as are specified in a written request
given within thirty (30) days after receipt of such written notice from the
Company; provided that
the
Company shall not be obligated to effect, or to take any action to effect,
any
such registration pursuant to this Section 2:
(i)
in
any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to service
in
such jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder;
(ii)
less
than
ninety (90) calendar days after the effective date of any registration declared
or ordered effective other than a registration on Form S-3 or Form S 8;
(iii) if,
while
a registration request is pending pursuant to this Section 2, the Company
determines, in the good faith judgment of the Board of Directors of the Company,
with the advice of counsel, that the filing of a registration statement would
require the disclosure of non-public material information the disclosure of
which would have a material adverse effect on the Company or would otherwise
materially adversely affect a financing, acquisition, disposition, merger or
other significant transaction, in which event the Company shall deliver a
certificate to such effect signed by its President to the proposed selling
Holders and the Company shall not be required to effect a registration pursuant
to this Section 2 until the earlier of (A) three (3) days after the date upon
which such material information is disclosed to the public or ceases to be
material, or (B) ninety (90) days after the Company makes such good faith
determination; provided, however, that the Company shall not utilize the right
under this Section 2.1(a)(iii) more than once in any twelve (12) month period;
or
(iv) except
as
set forth in Section 2.5, after the second registration of such Registrable
Securities pursuant to this Section 2.1 has been declared or ordered
effective.
Subject
to the foregoing clauses (i), (ii), (iii) and (iv), the Company shall file
a
registration statement covering such Registrable Securities so requested to
be
registered as soon as practicable after receipt of the request or requests
of
such Initiating Holders.
(a) The
registration statement filed pursuant to the request of the Initiating Holders
may, subject to the provisions of Sections 2.4 and 3.3 below, include (i) other
securities of the Company (the "Additional
Shares")
which
are held by (x) officers or directors of the Company who, by virtue of
agreements with the Company, are entitled to include their securities in any
such registration, or (y) other persons who, by virtue of agreements with the
Company, are entitled to include their securities in any such registration
(the
"Other
Stockholders"),
and
(ii) securities of the Company being sold for the account of the
Company.
(b) If
at any
time when Initiating Holders holding First Registrable Securities or Subsequent
Registrable Securities are entitled to make a request for registration under
Section 2.1, additional Registrable Securities shall have been issued but the
one-year period provided in Section 2.1 shall not yet have elapsed with respect
thereto, the Holders of such additional Registrable Securities shall
nevertheless have the right to have such additional Registrable Securities
included in the registration being requested by such Initiating Holders and
the
Company shall take all appropriate actions to that end.
2.3 Underwriting.
(a) If
the
Initiating Holders intend to distribute the Registrable Securities covered
by
their request by means of an underwriting, they shall so advise the Company
as a
part of their request made pursuant to this Section 2 and the Company shall
include such information in the written notice to other Holders referred to
in
Section 2.1 above. The right of any Holder to registration pursuant to this
Section 2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein and subject to the limitations
provided herein. A Holder may elect to include in such underwriting all or
a
part of the Registrable Securities he holds.
(b) The
Company shall (together with all Holders, officers, directors and Other
Stockholders proposing to distribute their securities through such underwriting)
negotiate and enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for such underwriting
by a majority in interest of the Initiating Holders, which underwriter(s) shall
be reasonably acceptable to the Company.
2.4 Limitations
on Shares to be Included.
Notwithstanding any other provision of this Section 2, if the representative
of
the underwriters advises the Initiating Holders in writing that marketing
factors require a limitation on the number of shares to be underwritten, first
the Additional Shares and any securities being sold for the account of the
Company shall be excluded from such registration pursuant to the priorities
set
forth in Section 3.3 of this Agreement and, if a limitation on the number of
shares is still required, the number of shares that may be included in the
registration and underwriting shall be allocated among all Holders, including
Initiating Holders, in proportion, as nearly practicable, to the respective
amounts of Registrable Securities which they have requested to be included
in
such registration statement. If the Company or any Holder, officer, director
or
Other Stockholder who has requested inclusion in such registration as provided
above disapproves of the terms of any such underwriting, such Person may elect
to withdraw such Person's Registrable Securities or Additional Shares therefrom
by written notice to the Company and the underwriter and the Initiating Holders.
Any Registrable Securities or other securities excluded shall also be withdrawn
from such registration. No Registrable Securities or Additional Shares excluded
from such registration by reason of such underwriters’ marketing limitation
shall be included in such registration. To facilitate the allocation of shares
in accordance with this Section 2.4, the Company or underwriter or underwriters
selected as provided above may round the number of Registrable Securities of
any
Holder which may be included in such registration to the nearest 100
shares.
2.5 Additional
Demand Registration.
If with
respect to the last registration permitted to be exercised by the Holders of
Registrable Securities under Section 2.1, the Holders are unable to register
all
of their Registrable Securities because of the operation of Section 2.4 hereof,
such Holders shall be entitled to require the Company to effect one additional
registration to afford the Holders an opportunity to register all such
Registrable Securities. Such additional registration shall again be subject
to
the provisions of this Section 2.
3.1 If
the
Company shall determine to register under the Securities Act any of its equity
securities or securities convertible into equity securities either for its
own
account or the account of a security holder or holders exercising any demand
registration rights, other than a registration relating solely to employee
benefit plans, or a registration relating solely to a Commission Rule 145
transaction, or a registration on Form S-4 or S-8 (or any successor forms
thereto), the Company will:
(a) promptly
give to each Holder, including any Holders of additional Registrable Securities
referenced in Section 2.2(b), written notice thereof (which shall include a
list
of the jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities laws);
and
(b) include
in such registration (and, subject to Section 2.1(b)(i), any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or request, made by any Holder within thirty (30) days after receipt of the
written notice from the Company described in clause (a) above, except as set
forth in Section 3.3 below. Such written request may specify all or a part
of a
Holder’s Registrable Securities.
3.2 Underwriting.
If the
registration of which the Company gives notice is for a registered public
offering involving an underwriting, the Company shall so advise the Holders
as a
part of the written notice given pursuant to Section 3.1(a). The right of any
Holder to registration pursuant to this Section 3 shall be conditioned upon
such
Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall
(together with the Company and any officers, directors or Other Stockholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
3.3 Limitations
on Shares to be Included.
Notwithstanding any other provision of this Section 3, if the representative
of
the underwriters advises the Company in writing that marketing factors require
a
limitation or elimination on the number of shares to be underwritten, the
representative may (subject to the allocation priority set forth below) limit
the number of or eliminate the Registrable Securities to be included in the
registration and underwriting. The Company shall so advise all holders of
securities requesting registration, and the number of shares of securities
that
are entitled to be included in the registration and underwriting shall be
allocated as follows: first, if such underwritten offering shall have been
initiated by the Company for the sale of securities for its own account, to
the
Company for securities being sold for its own account; second, among the Holders
and the Other Stockholders, in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities which they requested to be included
in such registration; and thereafter, the number of shares that may be included
in the registration statement and underwriting shall be allocated among all
officers or directors, in each case in proportion, as nearly as practicable,
to
the respective amounts of Additional Shares which they requested to be included
in such registration at the time of filing the registration statement. If any
Holder of Registrable Securities or any officer, director or Other Stockholder
disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall also be withdrawn from such registration. The Company shall have the
right
to terminate or withdraw any registration initiated by it under this Section
3
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration.
4.1 Anything
contained in Section 2 to the contrary notwithstanding, at any time after the
Demand Date and if the Company is then qualified for the use of Form S-3, the
Holders, including any Holder of additional Registrable Securities referenced
in
Section 2.2(b), representing (on a fully diluted basis) at least twenty percent
(20%) of the total number of Registrable Securities (the “Form
S-3 Initiating Holders”)
shall
have the right to request in writing unlimited registrations of Registrable
Securities on Form S-3, which request or requests shall (i) specify the number
of Registrable Securities intended to be sold or disposed of and the holders
thereof and (ii) state the intended method of disposition of such Registrable
Securities, and upon receipt of any such request, the Company shall use all
reasonable efforts promptly to effect the registration under the Securities
Act
of the Registrable Securities so requested to be registered. A requested
registration on Form S-3 in compliance with this Section 4 shall not count
as a
registration statement initiated pursuant to Section 2 for purposes of
determining the number of registrations which may be requested by the Initiating
Holders under such Section, but shall otherwise be treated as a registration
initiated pursuant to, and shall be subject to, the provisions of Section
2.
4.2 Anything
contained in Section 4.1 to the contrary notwithstanding, the Company shall
not
be obligated to effect, or take any action to effect, any registration under
the
Securities Act pursuant to Section 4.1:
(a) Unless
the Form S-3 Initiating Holders propose to dispose of shares of Registrable
Securities having an aggregate price to the public (before deduction of Selling
Expenses) of more than $7,500,000;
(b) Within
one hundred eighty (180) days of the effective date of the most recent
registration pursuant to this Section 4 in which securities held by the
requesting Holder could have been included for sale or
distribution;
(c) In
any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to service
in
such jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder;
(d) If
the
Company shall furnish to the Form S-3 Initiating Holders a certificate signed
by
the President of the Company stating that the Company intends in good faith
to
file within ninety (90) days after the date of such notice a registration
statement pertaining to securities of the Company and in which the Form S-3
Initiating Holders may request inclusion of Registrable Securities pursuant
to
Section 3, then, during the period starting with the date of such notice and
ending on the date six (6) months immediately following the effective date
of
such registration statement, provided that
the
Company actively employs in good faith all reasonable efforts to cause such
registration statement to become effective; provided,
however,
that
the Company may only delay an offering pursuant to this Section 4.2(d) for
a
period of not more than ninety (90) days, if a filing of any other registration
statement is not made within that period and the Company may only exercise
the
right specified in this clause (d) once in any twelve (12) month period;
or
(e) If
the
Company determines, in the good faith judgment of the Board of Directors of
the
Company, with the advice of counsel, that the filing of a registration statement
would require the disclosure of non-public material information the disclosure
of which would have a material adverse effect on the Company or would otherwise
materially adversely affect a financing, acquisition, disposition, merger or
other significant transaction, in which event the Company shall deliver a
certificate to such effect signed by its President to the Form S-3 Initiating
Holders and the Company shall not be required to effect a registration under
this Section 4 until the earlier of (A) three (3) days after the date upon
which
such material information is disclosed to the public or ceases to be material,
or (B) ninety (90) days after the Company makes such good faith determination;
provided,
however,
that
the Company shall not utilize the right under this Section 4.2(e) more than
once
in any twelve (12) month period.
4.3 Notwithstanding
the registration rights granted to Holders in Sections 2, 3, and 4 hereof,
a
Holder shall not be entitled to include its Registrable Securities in any
registration statement to be filed with respect to the resale of Common Stock
issuable upon exercise of the Common Stock Purchase Warrant issued by the
Company to Laurus Master Funds, Ltd. on January 27, 2006.
5. Expenses
of Registration.
All
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Sections 2, 3 or 4 of this Agreement
shall be borne by the Company, except that Selling Expenses shall be borne
pro
rata by each Holder in accordance with the number of shares sold.
6.1 In
the
case of each registration effected by the Company pursuant to this Agreement,
the Company will keep each Holder advised in writing as to the initiation of
each registration and as to the completion thereof and will, at its
expense:
(a) Use
all
reasonable efforts to keep such registration effective for a period of one
hundred eighty (180) days or until the Holder or Holders have completed the
distribution described in the registration statement relating thereto, whichever
first occurs; provided,
however,
that
the Company will keep such registration effective for longer than one hundred
eighty (180) days if the costs and expenses associated with such extended
registration are borne by the selling Holders; and provided,
further,
that in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such one hundred eighty
(180) day period shall, at the cost and expense of the Company, be extended,
if
necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that
Rule
415, or any successor rule under the Securities Act, permits an offering on
a
continuous or delayed basis, and provided,
further,
that
applicable rules and regulations under the Securities Act governing the
obligation to file a post effective amendment permit, in lieu of filing a post
effective amendment which (y) includes any prospectus required by Section
10(a)(3) of the Securities Act, or (z) reflects facts or events representing
a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information otherwise required
to
be included in such post effective amendment covered by (y) and (z) above to
be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Exchange Act in the registration statement;
(b) Prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the
Securities Act with respect to the disposition of all securities covered by
such
registration statement;
(c) Furnish
such number of prospectuses and other documents incident thereto, including
any
amendment of or supplement to the prospectus, as a Holder from time to time
may
reasonably request;
(d) Notify
each seller of Registrable Securities covered by such registration statement
at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or incomplete in the light of the circumstances then existing, and
at
the request of any such seller, prepare and furnish to such seller a reasonable
number of copies of a supplement to or an amendment of such prospectus as may
be
necessary so that, as thereafter delivered to the purchasers of such shares,
such prospectus shall not include 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 not misleading or incomplete in the light of the
circumstances then existing;
(e) List
all
such Registrable Securities registered in such registration on each securities
exchange or automated quotation system on which the Common Stock of the Company
is then listed;
(f)
Provide
a
transfer agent and registrar for all Registrable Securities and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration;
(g) Make
available for inspection by any seller of Registrable Securities, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney or accountant retained by any such seller or
underwriter, all financial and other records, pertinent corporate documents
and
properties of the Company, and cause the Company's officers and directors to
supply all information reasonably requested by any such seller, underwriter,
attorney or accountant in connection with such registration
statement;
(h) Furnish
to each selling Holder upon request a signed counterpart, addressed to each
such
selling Holder, of:
(i)
an
opinion
of counsel for the Company, dated the effective date of the registration
statement in form reasonably acceptable to the Company and such counsel,
and
(ii)
“comfort”
letters signed by the Company’s independent public accountants who have examined
and reported on the Company’s financial statements included in the registration
statement, to the extent permitted by the standards of the American Institute
of
Certified Public Accountants, covering such matters as are customarily covered
in opinions of issuer's counsel and accountants’ “comfort” letters delivered to
underwriters in underwritten public offerings of securities;
(i)
Furnish
to each selling Holder upon request a copy of all documents filed with and
all
correspondence from or to the Commission in connection with any such offering;
and
(j)
Make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve (12) months, but
not
more than eighteen (18) months, beginning with the first month after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
6.2 It
shall
be a condition precedent to the obligations of the Company to take any action
pursuant to this Agreement that the Holders proposing to register Registrable
Securities shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them, and their intended method of
distribution of such Registrable Securities as the Company shall reasonably
request and as shall be required in connection with the action to be taken
by
the Company.
6.3 In
connection with the preparation and filing of each registration statement under
this Agreement, the Company will give the Holders on whose behalf such
Registrable Securities are to be registered and their underwriters, if any,
and
their respective counsel and accountants, the opportunity to review such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give
each
such Holder such access to the Company's books and records and such
opportunities to discuss the business of the Company with its officers, its
counsel and the independent public accountants who have certified the Company's
financial statements, as shall be necessary, in the opinion of such Holders
or
such underwriters or their respective counsel, in order to conduct a reasonable
and diligent investigation within the meaning of the Securities
Act.
7. Indemnification.
7.1 Indemnification
by the Company.
The
Company will indemnify each Holder, each of its officers, employees, agents,
directors and partners (including partners of partners and shareholders of
such
partners), and each person controlling (within the meaning of the Securities
Act) such Holder, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each Person who controls any underwriter, against all claims,
losses, damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification
or
compliance, or based on 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, or any violation by the Company of the Securities Act
or
any rule or regulation thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each such Holder,
each of its officers, employees, agents, directors and partners (including
partners of partners and shareholders of such partners), and each person
controlling (within the meaning of the Securities Act) such Holder, each such
underwriter and each Person who controls any such underwriter, for any legal
and
any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability or action as
the
same are incurred, provided that
the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission made in reliance upon and based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein.
7.2 Indemnification
by the Holders.
Each
Holder will, if Registrable Securities held by him are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, each of its directors and officers and each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company (other than such Holder) or
such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each other such Holder and each of their officers,
directors and partners, and each Person controlling such Holder or other
stockholder, against all claims, losses, damages, expenses and liabilities
(or
actions in respect thereof) arising out of or based on any untrue statement
(or
alleged untrue statement) of a material fact contained, on the effective date
thereof, in any such registration statement, prospectus, offering circular
or
other document, or 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, and will reimburse the Company, each of its directors
and officers, each underwriter or control Person, each other Holder and each
of
their officers, directors and partners and each Person controlling such Holder
or other stockholder for any legal or any other expenses reasonably incurred
in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein; provided,
however,
that in
no event shall the liability of any Holder for indemnification under this
Section 8 in its capacity as a seller of Registrable Securities exceed the
amount equal to the proceeds to such Holder of the securities sold in any such
registration; and provided further,
however, that no selling Holder shall be required to indemnify any Person
against any liability arising from any untrue or misleading statement or
omission contained in any preliminary prospectus if such deficiency is corrected
in the final prospectus or for any liability which arises out of the failure
of
any Person to deliver a prospectus as required by the Securities
Act.
7.3 Notices
of Claims, Procedures, etc.
Each
party entitled to indemnification under this Section 8 (the “Indemnified
Party”)
shall
give notice to the party required to provide indemnification (the “Indemnifying
Party”)
promptly after such Indemnified Party has actual knowledge of any claim as
to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom,
provided that
counsel
for the Indemnifying Party, who shall conduct the defense of such claim or
any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at the Indemnified Party's sole expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 8 unless such failure is prejudicial to the ability of
Indemnifying Party to defend such claim or action. Notwithstanding the
foregoing, such Indemnified Party shall have the right to employ its own counsel
in any such litigation, proceeding or other action if (i) the employment of
such
counsel has been authorized by the Indemnifying Party, in its sole and absolute
discretion, or (ii) the named parties in any such claims (including any
impleaded parties) include any such Indemnified Party and the Indemnified Party
and the Indemnifying Party shall have been advised in writing (in suitable
detail) by counsel to the Indemnified Party either (A) that there may be one
or
more legal defenses available to such Indemnified Party which are different
from
or additional to those available to the Indemnifying Party, or (B) that there
is
a conflict of interest by virtue of the Indemnified Party and the Indemnifying
Parties having common counsel, in any of which events, the legal fees and
expenses of a single counsel for all Indemnified Parties with respect to each
such claim, defense thereof, or counterclaims thereto shall be borne by
Indemnifying Party. No Indemnifying Party, in the defense of any such claim
or
litigation, shall, except with the consent of each Indemnified Party, consent
to
entry of any judgment or enter into any settlement which does not include as
an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim
or
litigation. Each Indemnified Party shall cooperate to the extent reasonably
required and furnish such information regarding itself or the claim in question
as an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim and litigation
resulting therefrom.
8. Information
by Holder.
Each
Holder of Registrable Securities shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably required
in
connection with any registration, qualification or compliance referred to in
this Agreement.
9. Transfer
or Assignment of Registration Rights.
The
rights to cause the Company to register securities granted by the Company under
this Agreement may be transferred or assigned by a Holder to a transferee or
assignee of any Registrable Securities; provided that the Company is given
written notice at or prior to the time of said transfer or assignment, stating
the name and address of said transferee or assignee and identifying the
securities with respect to which such registration rights are being transferred
or assigned; and provided further that the transferee or assignee of such rights
assumes in writing the obligations of a Holder under this Agreement to the
Company and other Holders in effect at the time of transfer under all effective
agreements.
(a) The
Company acknowledges that on the date hereof, the First Registrable Securities
have been transferred by Xxxxxx Capital Partners II to the
following:
Xxxxxxx
and Xxxxxx Xxxxxxx TBE
Xxxxxxx
Xxxxx
Xxxxx
Xxxxxxx
Xxxx
Xxxxxxxxx
(b) The
Company acknowledges and agrees that such transferees have succeeded to all
of
the rights of the Company as to the First Registrable Securities.
10. Exchange
Act Compliance.
So long
as the Company remains subject to the reporting requirements of the Exchange
Act, the Company shall file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by
the
Commission thereunder, and will take all actions reasonably necessary to enable
holders of Registrable Securities to sell such securities without registration
under the Securities Act within the limitation of the provisions of (a) Rule
144
under the Securities Act, as such Rule may be amended from time to time, (b)
Rule 144A under the Securities Act, as such Rule may be amended from time to
time, if applicable, or (c) any similar rules or regulations hereunder adopted
by the Commission. Upon the request of any Holder of Registrable Securities,
the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
11. No
Conflict of Rights.
Except
as otherwise provided in this Section 12, without the consent of holders of
51%
of the Registrable Securities (including for this purpose additional Registrable
Securities referenced in Section 2.2(b)), the Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with
the
rights granted to the Holders in this Agreement. Without limiting the generality
of the foregoing, the Company will not hereafter enter into or modify any
agreement with respect to its securities which grants, or modifies any existing
agreement with respect to its securities to grant, to a holder of its securities
in connection with an incidental registration of such securities equal or higher
priority to the rights granted to the Holders under Sections 2, 3 and 4 of
this
Agreement. Notwithstanding anything to the contrary contained herein, the
Company may, without the consent of the Holders, enter into agreements with
the
holders (beneficial or of record) of its Common Stock issued in connection
with
(a) its proposed acquisitions of the outstanding shares of each of World
Narrowcasting Corporation, a South Carolina corporation, and IMPART, Inc.,
a
Washington Corporation, (b) any financing obtained by the Company in connection
with such proposed acquisitions or (c) the financing obtained by the Company
in
connection with its acquisition of the Assets (as defined in the Purchase
Agreement), so long as the rights related to the Company’s securities granted
therein to such holders are pari passu with the rights of the Holders granted
in
this Agreement. The Company hereby represents and warrants to each Holder that
the execution, delivery or performance of this Agreement does not (including
with the passage of time) (i) constitute a breach or an event of default under
any other agreement between the Company and any Other Stockholder, or (ii)
cause
or trigger a right of termination or right of acceleration under any such
agreement.
12. Benefits
of Agreement; Successors and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns, legal representatives and
heirs. Except as provided in Section 9 above, this Agreement does not create,
and shall not be construed as creating, any rights enforceable by any other
Person.
13. Complete
Agreement.
This
Agreement constitutes the complete understanding among the parties with respect
to its subject matter and supersedes all existing agreements and understandings,
whether oral or written, among them. No alteration or modification of any
provisions of this Agreement shall be valid unless made in writing and signed,
on the one hand, by the Holders of a majority of the Registrable Securities
then
outstanding and, on the other, by the Company.
14. Section
Headings.
The
section headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
15. Notices.
All
notices, offers, acceptances and other communications required or permitted
to
be given or to otherwise be made to any party to this Agreement shall be deemed
to be sufficient if contained in a written instrument delivered by hand, first
class mail (registered or certified, return receipt requested), telecopier
or
overnight air courier guaranteeing next day delivery, if to the Company, at
0000
Xxxxx Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx,
with a copy to Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxx, Esq., and if to any Holder, to
Xxxxxx Capital Partners II, LLC, 0000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxx
00000 or at such other address as may have been furnished the Company in
writing.
All
such
notices and communications shall be deemed to have been duly given: at the
time
delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged,
if
telecopied; and the next business day after timely delivery to the courier,
if
sent by overnight air courier guaranteeing next day delivery. Any party may
change the address to which each such notice or communication shall be sent
by
giving written notice to the other parties of such new address in the manner
provided herein for giving notice.
16. Governing
Law.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York without giving effect to the provisions,
policies or principles thereof respecting conflict or choice of
laws.
17. Counterparts.
This
Agreement may be executed in one or more counterparts each of which shall be
deemed an original but all of which taken together shall constitute one and
the
same agreement.
18. Severability.
Any
provision of this Agreement which is determined to be illegal, prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such illegality, prohibition or unenforceability without
invalidating the remaining provisions hereof which shall be severable and
enforceable according to their terms and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
[remainder
of page left intentionally blank]
IN
WITNESS WHEREOF, the parties have signed this Registration Rights Agreement
as
of the date first set forth above.
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IMPART
MEDIA GROUP, INC.
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By:
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/s/Xxxxxx
X. Xxxxxxxx
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|
Name: Xxxxxx
X. Xxxxxxxx
|
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|
Title: Chairman
of the Board and
|
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|
Chief
Financial Officer
|
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|
XXXXXX
CAPITAL PARTNERS II, LLC D/B/A INTRANSIT MEDIA
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By:
|
/s/Xxxxxxx
Xxxxxxx
|
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Name: Xxxxxxx
Xxxxxxx
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Title: Manager
|
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