EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
dated as of August 26, 1997 between The Marquee Group, Inc., a Delaware
corporation (the "Company") and The Xxxx Alternative Income Fund, L.P., a
Delaware limited partnership (the "Fund").
RECITALS:
A. This Agreement is entered into in connection with the
Option Agreement, dated of even date herewith, between the Company and the
Fund (the "Option Agreement"), which provides that the Fund has the option to
acquire from the Company one hundred thousand (100,000) shares, subject
to adjustment, of the Company's common stock, par value $.01 per share, at an
exercise price of $2.25 per share (the "Initial Option").
B. The Company has agreed to issue to the Fund under certain
circumstances an additional option to purchase up to 15,000 shares of Common
Stock at an exercise price of $2.25 per share (the "Additional Option" and,
together with the Initial Option, the "Options") pursuant to the terms of an
Additional Option Agreement (the "Additional Option Agreement") in the form of
Exhibit B-2 to the Bridge Financing Agreement, dated of even date herewith,
among the Company, the Subsidiary Guarantors identified therein, and the Fund
(the "Bridge Financing Agreement").
C. The Options granted to the Fund constitute a portion of
the Fees owed by the Company to the Fund pursuant to Section 2.2 of the Bridge
Financing Agreement. In order to induce the Fund to accept the Options as a
portion of the Fee, the Company has agreed to provide the registration rights
set forth in this Agreement for the benefit of the Fund and their direct and
indirect transferees and assigns.
NOW, THEREFORE, in consideration of the foregoing, the
parties agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Common Stock" means shares of common stock of
the Company.
(b) "Exchange Act" means the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the SEC promulgated
thereunder.
(c) "Exercise Date" means the first date on which
the Options are exercised.
(d) "Holder" means the Fund, or any assignee
thereof in accordance with Section 9(e).
(e) "Options" means the options issued by the
Company pursuant to the Option Agreement and the Additional Option Agreement.
(f) "Person" means any individual, partnership,
joint venture, corporation, association, trust or any other entity or
organization.
(g) "Prospectus" means the prospectus included in
any Registration Statement (including, without limitation, any prospectus
subject to completion and a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, and
all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.
(h) "Registration Statement" means any registration
statement of the Company filed with the SEC pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
(i) "Registrable Securities" means (1) any Common
Stock issued upon exercise of the Option, (2) any Common Stock issuable or
issued upon conversion or exercise of any warrant, right or other security now
or hereafter owned by the Fund, and (3) any Common Stock issued as (or
issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, or upon conversion of, such Common
Stock, warrants, rights or other securities; provided, however, that any
Common Stock sold by a Person in a transaction in which such Person's rights
under this Agreement are not assigned pursuant to Section 9(e) below shall
cease to be Registrable Securities from and after the time of such sale.
(j) "Rule 144" means Rule 144 promulgated under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule (other than Rule 144A) or regulation hereafter adopted by the SEC
providing for offers and sales of securities made in compliance therewith
resulting in offers and sales by subsequent holders that are not affiliates of
an issuer of such securities being free of the registration and prospectus
delivery requirements of the Securities Act.
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(k) "Rule 144A" means Rule 144A promulgated under
the Securities Act, as such Rule may be amended from time to time, or any
similar rule (other than Rule 144) or regulation hereafter adopted by the SEC.
(l) "Rule 415" means Rule 415 promulgated under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC.
(m) "SEC" means the Securities and Exchange
Commission.
(n) "Securities Act" means the Securities Act of
1933, as amended, and the rules and regulations of the SEC promulgated
thereunder.
(o) "Underwritten Offering" means a registration in
which securities of the Company are sold to an underwriter for reoffering to
the public.
2. Demand Registration Rights
(a) At any time prior to the one-year anniversary
of the expiration date of the Option, Holders holding at least a majority of
the Registrable Securities shall have the right on one occasion, by written
request to the Company (the "Registration Notice"), to require the Company to
effect a registration under the Securities Act of the Registrable Securities
and the Company shall cause, as expeditiously as practicable, the registration
under the Securities Act of all of the Registrable Securities. In connection
therewith, the Company shall be obligated to prepare and file a registration
statement (the "Demand Registration Statement") promptly upon receipt of any
such Registration Notice and shall be further obligated to use its best
efforts to cause such Demand Registration Statement to be declared effective
under the Securities Act and the rules and regulations promulgated thereunder
as soon as practicable after the filing date thereof. The Company shall be
required to effect only one such registration of Registrable Securities owned
by the Holders, and such obligation shall be deemed satisfied when one Demand
Registration Statement shall become effective pursuant to the request of the
Holders made pursuant to this Section 2, provided that the Company shall not
be deemed to have complied with its obligations under this Section 2 if the
registration statement does not remain effective for a period of at least 45
days (or such shorter period ending on the date the Holders whose Registrable
Securities are included in the registration statement complete their
distribution of Registrable Securities as contemplated by such registration
statement) or if within 45 days after such registration becomes effective (or
such shorter period referred to above) such registration is interfered with by
any stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason and any of the Registrable
Securities registered in connection therewith were not sold.
(b) Within ten days after receipt of any request by
the Holders holding at least a majority of the Registrable Securities pursuant
to Section 2 (a), the Company
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will give written notice to all other Holders, if any, and shall include in
the Demand Registration Statement all Registrable Securities with respect to
which the Company has received written requests for inclusion therein from the
Holders thereof with twenty days after the giving of such notice by the
Company.
(c) Supplements and Amendments. The Company shall
use its best efforts to supplement and amend the Demand Registration Statement
if required by the rules, regulations or instructions applicable to the
registration form used for such Demand Registration Statement, if required by
the Securities Act, or if reasonably requested by the Holders of a majority of
the shares of the Registrable Securities covered by such Registration
Statement or if reasonably requested by an underwriter, if any, of such
Registrable Securities.
(d) Suspension of Registration. The Company's
obligation to file and keep the Demand Registration Statement effective and
usable for offers and sales of the Common Stock may be suspended for up to
ninety days by the Company in good faith for valid business reasons,
including, without limitation, a pending acquisition or divestiture of assets.
Any such period during which the Company fails to keep the Demand Registration
Statement effective and usable for offers and sales of Common Stock is
referred to as a "Suspension Period." A Suspension Period shall commence on
and include the date of the Registration Notice (if no Demand Registration
Statement has been filed) or the date that the Company gives notice that the
Demand Registration Statement is no longer usable for offers and sales of
Common Stock and shall end on the date when each Holder of Common Stock
covered by such registration statement either receives notice that the Demand
Registration Statement has become effective or receives the copies of the
supplemented or amended prospectus contemplated by Section 2(c) hereof or is
advised in writing by the Company that use of the prospectus may be resumed.
During the pendency of any Suspension Period, the Company may not issue any
securities, whether or not in a public offering, except for issuances of
Common Stock pursuant to an acquisition or other business combination
transaction or upon exercise of options or warrants outstanding prior to such
Suspension Period.
3. Company Registration.
If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Holders) any of its
stock or other securities under the Securities Act in connection with the
public offering of such securities solely for cash (other than a registration
on Form S-8 relating solely to the sale of securities to participants in a
Company stock plan or to other compensatory arrangements to the extent
includable on Form S-8, or a registration on Form S- 4), the Company shall, at
such time, promptly give the Holders written notice of such registration. Upon
the written request of Holders holding two-thirds of the Registrable
Securities given within twenty (20) days after mailing of such notice by the
Company in accordance with Section 9(d), the Company shall use its best
efforts to cause to be registered under the Securities Act all of the
Registrable Securities that the Holders have requested to be registered. The
Company shall have no obligation under this Section 3 to make any offering of
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its securities, or to complete an offering of its securities that it proposes
to make, and shall incur no liability to the Holders for its failure to do so.
4. Registration Procedures
In connection with the filing of any Registration
Statement pursuant to Section 2 or 3 hereof, the Company shall effect such
registrations to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by
the Company hereunder the Company shall:
(a) Prepare and file with the SEC prior to the
Filing Date, a Registration Statement, and use its best efforts to cause such
Registration Statement to become effective and remain effective as provided
herein; provided, however, that, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Company shall furnish
to and afford the Holders of the Registrable Securities covered by such
Registration Statement, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including, if
requested in writing, copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed (in each case at least
five business days prior to such filing). The Company shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto
if the Holders of a majority of shares of Registrable Securities covered by
such Registration Statement, their counsel, or the managing underwriters, if
any, shall reasonably object within two business days after the receipt
thereof. Notwithstanding anything to the contrary contained in this Agreement,
the Company shall not be required to engage in more than one Underwritten
Offering, if any, pursuant to this Agreement.
(b) Prepare and file with the SEC such amendments
and post-effective amendments to each Demand Registration Statement, as may
be necessary to keep such Registration Statement continuously effective for
the Effectiveness Period; cause the related Prospectus to be supplemented by
any Prospectus supplement required by applicable law, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented.
(c) Notify the selling Holders of Registrable
Securities, their counsel and the managing underwriters, if any, reasonably
promptly (but in any event within five business days), and confirm such notice
in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective
under the Securities Act, (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of
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a Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus or the initiation of any proceedings for that
purpose, (iii) if at any time when a prospectus is required by the Securities
Act to be delivered in connection with sales of the Registrable Securities the
representations and warranties of the Company contained in any agreement
(including an underwriting agreement, if any), contemplated by Section 4(l)
hereof cease to be true and correct, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of a Registration Statement or any of the Registrable
Securities for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (v) of the happening of any
event, the existence of any condition or any information becoming known that
makes any statement made in such Registration Statement or related Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in
or amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading and
(vi) of the Company's determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) Use its best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, and, if any such order is issued, to
use its best efforts to obtain the withdrawal of any such order at the
earliest possible moment.
(e) If requested by the managing underwriter or
underwriters (if any), or the Holders of a majority of shares of Registrable
Securities being sold in connection with an Underwritten Offering, if any, (i)
promptly incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters (if any), such
Holders, or its counsel determine is reasonably necessary to be included
therein and (ii) make all required filings of such prospectus supplement or
such post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment.
(f) Furnish to each selling Holder of Registrable
Securities who so requests in writing and to counsel and each managing
underwriter, if any, at the sole expense of the Company one conformed copy of
the Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested in writing, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.
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(g) Deliver to each selling Holder of Registrable
Securities, its respective counsel, and the underwriters, if any, at the sole
expense of the Company, as many copies of the Prospectus (including each form
of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request in writing; and, subject to the last paragraph of this Section 4, the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of Registrable Securities
and the underwriters or agents, if any, and dealers (if any), in connection
with the offering and sale of the Registrable Securities covered by, such
Prospectus and any amendment or supplement thereto.
(h) To the extent required by law, prior to any
public offering of Registrable Securities, to use its best efforts to register
or qualify, and to cooperate with the selling Holders of Registrable
Securities, the managing underwriter or underwriters, if any, and their
respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling Holder, or the managing
underwriter or underwriters, if any, or their respective counsel may
reasonably request; provided, however, that where Registrable Securities are
offered other than through an Underwritten Offering, the Company agrees to
cause the Company's counsel to perform Blue Sky investigations, if necessary,
and file registrations and qualifications required to be filed pursuant to
this Section 4(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statement; provided,
however, that the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or be subject to taxation in any jurisdiction in which it is not
so subject.
(i) Cooperate with the selling Holders of
Registrable Securities and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates shall not bear any
restrictive legends and shall be in a form eligible for deposit with The
Depository Trust Company; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or Holders may reasonably request.
(j) Use its best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Securities except as may be required solely as a consequence of the nature of
such selling Holder's business, in which case the Company will cooperate in
all reasonable respects with the filing of such Registration Statement and the
granting of such approvals.
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(k) Upon the occurrence of any event contemplated
by Section 4(c)(v) or 4(c)(vi) hereof, as promptly as practicable prepare and
(subject to Sections 3(d) and 4(a) hereof) file with the SEC, at the sole
expense of the Company, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder, any such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(l) In connection with an Underwritten Offering, if
any, of Registrable Securities pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in Underwritten Offerings of securities
similar to the Common Stock and take all such other actions as are reasonably
requested by the managing underwriter or underwriters in order to expedite or
facilitate the registration or the disposition of such Registrable Securities
and, in such connection, (i) make such representations and warranties to, and
covenants with, the underwriters with respect to the business of the Company
and its subsidiaries (including any acquired business, properties or entity,
if applicable) and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each
case, as are customarily made by issuers to underwriters in Underwritten
Offerings of securities similar to the Common Stock, and confirm the same in
writing if and when requested; (ii) obtain the written opinion of counsel to
the Company and written updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters, addressed
to the underwriters covering the matters customarily covered in opinions
requested in Underwritten Offerings of securities similar to the Common Stock
and such other matters as may be reasonably requested by the managing
underwriter or underwriters; (iii) if entitled, obtain "cold comfort" letters
and updates thereof in form, scope and substance reasonably satisfactory to
the managing underwriter or underwriters from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements and financial data are,
or are required to be, included or incorporated by reference in the
Registration Statement), addressed to each of the underwriters, such letters
to be in customary form and covering matters of the type customarily covered
in "cold comfort" letters in connection with Underwritten Offerings of
securities similar to the Common Stock and such other matters as reasonably
requested by the managing underwriter or underwriters; and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures in customary form and covering matters customarily
covered in connection with Underwritten Offerings of securities similar to the
Common Stock (or such other provisions and procedures acceptable to Holders of
a majority of shares of Registrable Securities covered by such Registration
Statement and the managing underwriter or underwriters or agents) with respect
to all parties to be indemnified pursuant to said Section. The above shall be
done at each closing under such underwriting agreement, or as and to the
extent required thereunder.
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(m) Make available for inspection by any selling
Holder of such Registrable Securities being sold, an underwriter, if any,
participating in any such disposition of Registrable Securities, and any
attorney, accountant or other agent retained by any such selling Holder or
underwriter (collectively, the "Inspectors"), at the offices where normally
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and instruments of the Company and its
subsidiaries (collectively, the "Records") as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities, and
cause the officers, directors and employees of the Company and its
subsidiaries to supply all information reasonably requested by any such
Inspector in connection with such Registration Statement. Records that the
Company determines, in good faith, to be confidential and any Records that it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless upon five business days prior written notice and (i) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, (iii) disclosure of such information is, in the reasonable
opinion of counsel for any Inspector, necessary or advisable in connection
with any action, claim, suit or proceeding, directly or indirectly, involving
or potentially involving such Inspector and arising out of, based upon,
relating to, or involving this Agreement or any transactions contemplated
hereby or arising hereunder or (iv) the information in such Records has been
made generally available to the public (other than as a result of an
impermissible disclosure or failure to safeguard by the Inspectors) . Each
selling holder of such Registrable Securities will be required to agree that
information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such
information is generally available to the public (other than as a result of an
impermissible disclosure or failure to safeguard by such person). Each selling
Holder of such Registrable Securities will be required to further agree that
it will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company to
undertake appropriate action to prevent disclosure of the Records deemed
confidential at the Company's sole expense.
(n) Comply with all applicable rules and
regulations of the SEC and make generally available to its security holders
earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements shall
cover said 12-month periods.
(o) Cooperate with each seller of Registrable
Securities covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with the filings, if any, required to be made
with the National Association of Securities Dealers, Inc. (the "NASD").
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(p) Use its best efforts to take all other steps
necessary or advisable to effect the registration of the Registrable
Securities covered by a Registration Statement contemplated hereby.
The Company may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Company such seller's name, number of shares and plan of distribution. The
Company may exclude from such registration the Registrable Securities of any
seller who fails to furnish such information within a reasonable time (but in
no event later than 20 business days) after receiving such request. Each
seller as to which any Shelf Registration is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such seller not
materially misleading.
Each Holder of Registrable Securities agrees by
acquisition of such Registrable Securities, that, upon actual receipt of any
notice from the Company of the happening of any event of the kind described in
Section 4(c)(ii), 4(c)(iv), 4(c)(v) or 4(c)(vi) hereof, such Holder will
forthwith discontinue disposition of such Registrable Securities covered by
such Registration Statement or Prospectus to be sold by such Holder until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(k) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and has received copies of any amendments or supplements thereto.
5. Registration Expenses
(a) All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not a Registration Statement is filed or becomes
effective. Notwithstanding the foregoing, the Holders of any shares of Common
Stock being registered shall pay all underwriting discounts, commissions and
placement agent fees attributable to the sale of such securities.
(b) The Company shall reimburse the Holders of the
Registrable Securities being registered on a Registration Statement for the
reasonable fees and disbursements of not more than one counsel to the Holders;
provided that such fees and expenses shall not exceed $15,000.
6. Indemnification
(a) The Company agrees to indemnify and hold
harmless each Holder of shares of Registrable Securities, the officers and
directors of each such Person, and each Person, if any, who controls any such
Person within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a "Participant"), from and against any
and all losses, claims, damages and liabilities (including, without
limitation, the reasonable legal fees and other expenses actually incurred in
connection with any suit, action or
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proceeding or any claim asserted)(all of which expenses shall be advanced to
the Participant at such times as the Participant is presented with such
expenses) caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) or Prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) or
any preliminary prospectus, or caused by, arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Participant furnished
to the Company in writing by such Participant expressly for use therein;
provided, however, that the Company will not be required to indemnify a
Participant if such untrue statement or omission or alleged untrue statement
or omission was contained or made in any preliminary prospectus and corrected
in the Prospectus or any amendment or supplement thereto and it is established
in the related proceeding that such Participant failed to deliver or provide a
copy of the Prospectus (as amended or supplemented) to such Person with or
prior to the confirmation of the sale of such Registrable Securities sold to
such Person if required by applicable law, unless such failure to deliver or
provide a copy of the Prospectus (as amended or supplemented) shall have been
determined by a court of competent jurisdiction by final and non-appealable
judgment (or stipulated in a settlement agreement reached by all parties
involved in any action or proceeding related to such claim) to have been the
result of noncompliance by the Company with Section 4 of this Agreement.
(b) Each Participant agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors and
officers who sign the Registration Statement and each Person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Company to each Participant, but only (i) with reference to information
relating to such Participant furnished to the Company in writing by such
Participant expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary prospectus or (ii) with
respect to any untrue statement or representation made by such Participant in
writing to the Company. The liability of any Participant under this paragraph
shall in no event exceed the proceeds received by such Participant from sales
of Registrable Securities giving rise to such obligations.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such Person (the
"Indemnified Person") shall promptly notify the Person against whom such
indemnity may be sought (the "Indemnifying Person") in writing, and the
Indemnifying Person, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may reasonably
designate in such proceeding and shall pay the reasonable fees and
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expenses actually incurred by such counsel related to such proceeding;
provided, however, that the failure to so notify the Indemnifying Person shall
not relieve it of any obligation or liability which it may have hereunder or
otherwise (unless and to the extent such Indemnifying Person has been
materially prejudiced by such failure, including, without limitation, that
such failure results in the forfeiture by the Indemnifying Person of
substantial rights and defenses). In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying Person has
failed to retain counsel reasonably satisfactory to the Indemnified Person or
(iii) the named parties in any such proceeding (including any impleaded
parties) include both the Indemnifying Person and the Indemnified Person and
the Indemnified Person shall have been advised by counsel that representation
of both parties by the same counsel would be inappropriate under applicable
standards of professional conduct due to differing interests between them. It
is understood that, unless there exists a conflict among Indemnified Persons,
the Indemnifying Person shall not, in connection with any one such proceeding
or separate but substantially similar related proceeding in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed promptly as they are incurred. Any such separate
firm for the Participants and such control Persons of Participants shall be
designated in writing by Participants who sold a majority of shares of
Registrable Securities sold by all such Participants and any such separate
firm for the Company, its directors, its officers and such control Persons of
the Company shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected
without its prior written consent (which consent shall not be unreasonably
withheld or delayed), but if settled with such consent or if there be a final
non-appealable judgment for the plaintiff for which the Indemnified Person is
entitled to indemnification pursuant to this Agreement, the Indemnifying
Person agrees to indemnify and hold harmless each Indemnified Person from and
against any loss or liability by reason of such settlement or judgment. No
Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party, or indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional
written release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement
as to an admission of fault, culpability or failure to act by or on behalf of
any Indemnified Person.
(d) If the indemnification provided for in the
first and second paragraphs of this Section 6 is for any reason unavailable
to, or insufficient to hold harmless, an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraphs, in lieu of indemnifying such
Indemnified Person thereunder and in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses,
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claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person or Persons on
the one hand and the Indemnified Person or Persons on the other from the
offering of the Common Stock or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the Indemnifying Person or
Persons on the one hand and the Indemnified Person or Persons on the other in
connection with the statements or omissions or alleged statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable considerations. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Participant or
such other Indemnified Person, as the case may be, on the other, the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances.
(e) The parties agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, in no event
shall a Participant be required to contribute any amount in excess of the
amount by which proceeds received by such Participant from sales of
Registrable Securities exceeds the amount of any damages that such Participant
has otherwise been required to pay or has paid by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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 was not
guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements
contained in this Section 6 will be in addition to any liability that the
Indemnifying Persons may otherwise have to the Indemnified Persons referred to
above.
7. Rules 144 and 144A
So long as any shares of Registrable Securities are
outstanding, the Company will provide to holders of the Registrable Securities
and file with the Commission copies of the annual reports and any of the
information, documents and other reports that the Company would have been
required to file with the Commission pursuant to Sections 13 or 15(d) of the
Exchange Act regardless of whether the Company is obligated to file such
reports. The Company further covenants for so long as any Registrable
Securities remains outstanding
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and in the event that the Company is not subject to the reporting requirements
of Section 13 or Section 15(d) of the Exchange Act, to make available to any
Holder or beneficial owner of Registrable Securities in connection with any
sale thereof and any prospective purchaser of such Registrable Securities from
such Holder or beneficial owner, the information required by Rule 144A(d)(4)
under the Securities Act in order to permit resales of such Registrable
Securities pursuant to Rule 144A.
8. Representations and Warranties; Covenants. The representations and
warranties set forth in Article IV of the Bridge Financing Agreement are
hereby incorporated herein by reference. Such representations and warranties,
and the representations, warranties, covenants and agreements contained
herein, shall, for purposes of this Registration Rights Agreement, survive the
sale or other disposition of the Registrable Securities.
9. Miscellaneous
(a) No Inconsistent Agreements. The Company shall
not, after the date of this Agreement, enter into any agreement with respect
to any of its securities that conflicts with the provisions hereof. The
Company has not granted more favorable registration rights to any party.
(b) Adjustments Affecting Registrable Securities.
The Company shall not, directly or indirectly, take any action with respect to
the Registrable Securities as a class that would adversely affect the ability
of the Holders of Registrable Securities to include such Registrable
Securities in a registration undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, otherwise
than with the prior written consent of the Holders of not less than a majority
of the then outstanding shares of Registrable Securities; provided, however,
that Section 9 and this Section 9(c) may not be amended, modified or
supplemented without the prior written consent of each Holder (including any
person who was a Holder of Registrable Securities disposed of pursuant to any
Registration Statement). Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect, impair, limit or compromise the rights of
other Holders of Registrable Securities may be given by Holders of at least a
majority of shares of the Registrable Securities being sold by such Holders
pursuant to such Registration Statement; provided, however, that the
provisions of this sentence may not be amended, modified or supplemented
except in accordance with the provisions of the immediately preceding
sentence.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail,
14
next-day air courier or facsimile to the addresses set forth on the signature
page hereof, or to any substitute address hereafter furnished by notice to the
other party.
All such notices and communications shall be deemed
to have been duly given: when delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
one business day after being timely delivered to a next-day air courier; and
when receipt is acknowledged by the addressee, if sent by facsimile.
(e) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto, including the Holders; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign holds
Registrable Securities.
(f) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable best efforts to find and employ
an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(j) Securities Held by the Company. Whenever the
consent or approval of Holders of a specified percentage of shares of
Registrable Securities is required
15
hereunder, Registrable Securities held by the Company or its subsidiaries
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
(k) Third Party Beneficiaries. Holders of
Registrable Securities and Participants are intended third party beneficiaries
of this Agreement and this Agreement may be enforced by such Persons.
(l) Entire Agreement. This Agreement, together with
the Option Agreement and the Bridge Financing Agreement, is intended by the
parties as a final and exclusive statement of the agreement and understanding
of the parties hereto in respect of the subject matter contained herein and
therein and any and all prior oral or written agreements, representations, or
warranties, contracts, understandings, correspondence, conversations and
memoranda between the Fund on the one hand and the Company on the other, or
between or among any agents, representatives, parents, subsidiaries,
affiliates, predecessors in interest or successors in interest with respect to
the subject matter hereof and thereof are merged herein and replaced hereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
Address: "COMPANY"
000 Xxxxxxx Xxxxxx
40th Floor THE MARQUEE GROUP, INC.
Xxx Xxxx, XX 00000
By: /s/ Xxx X. Xxxxxx
-------------------------------
Name: Xxx X. Xxxxxx
Title: Chief Financial Officer
and Treasurer
Address: "FUND"
1776 On the Green
00 Xxxx Xxxxx THE XXXX ALTERNATIVE INCOME FUND,L.P.
Xxxxxxxxxx, XX 00000
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Attorney in Fact
17
