Exhibit 4.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of February 3, 2000 (this
"Agreement"), is made by and between INTERACTIVE XXXXXXXXXXXX.XXX, LTD., a
Delaware corporation, with headquarters located at 000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxx 00000 (the "Company"), and each entity named on
the signature page hereto (each, an "Initial Investor") (each agreement with an
initial Investor being deemed a separate and independent agreement between the
Company and such Initial Investor, except that each Initial Investor
acknowledges and consents to the rights granted to each other Initial Investor
under such agreement)
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the Common Stock
Purchase Agreement, dated as of February 3, 2000, between Investor and the
Company (the "Common Stock Purchase Agreement;" terms not otherwise defined
herein shall have the meanings ascribed to them in the Common Stock Purchase
Agreement), the Company has agreed to issue and sell to Investor the Initial
Shares, together with the Repriced Shares (collectively, the "Shares");
WHEREAS, the Company has agreed to issue the Warrant to Investor in
connection with the issuance of the Shares; and
WHEREAS, to induce Investor to execute and deliver the Common Stock
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Shares and the Warrant Shares (as defined
below).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Investor hereby
agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
(a) "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
Registration Statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such information in
the Registration Statement would be detrimental to the business and affairs of
the Company; or (ii) any material engagement or activity by the Company which
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in a Registration Statement at such time,
which determination shall be accompanied by a good faith determination by the
Board of Directors of the Company that the Registration Statement would be
materially misleading absent the inclusion of such information;
(b) "Register," "Registered," and "Registration" refer to a Registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a continuous
basis, and the declaration or ordering of effectiveness of such Registration
Statement by the United States Securities and Exchange Commission (the "SEC");
(c) "Registrable Securities" mean the Shares and the Warrant Shares; and
(d) "Registration Statement" means a registration statement of the Company
under the Securities Act, or an amendment to an existing registration statement.
2. Registration.
(a) Mandatory Registration.
(i) The Company shall prepare and file with the SEC, as soon as possible
after the Initial Closing and no later than a date (the "Required Filing Date"),
which is thirty (30) days following the Initial Closing, either a Registration
Statement on Form S-1 (or other applicable registration statement form), or an
amendment to an existing Registration Statement, in either event Registering for
resale by Investor a sufficient number of shares of Common Stock for Investor to
sell the Registrable Securities (or such lesser number as may be required by the
SEC, but in no event less than two hundred percent (200%) of the aggregate
number of Initial Shares and the number of shares of Common Stock that would be
issued upon exercise of the Warrant (the "Warrant Shares") at the time of filing
of the Registration Statement (assuming for such purposes that the Warrant had
been eligible to be exercised and had been exercised in accordance with its
terms, whether or not such eligibility or exercise had in fact occurred as of
such date). The Registration Statement (W) shall include only the Registrable
Securities, and (X) shall state that, in accordance with Rule 416 and 457 under
the Securities Act, it covers such indeterminate number of additional shares of
Common Stock as may become issuable upon repricing of the Initial Shares and the
exercise of the Warrant to prevent dilution resulting from stock splits or stock
dividends. The Company will use its reasonable best efforts to cause such
Registration Statement to be declared effective on a date (a "Required Effective
Date"), which is no later than the earlier of (y) five (5) Business Days after
notice by the SEC that it may be declared effective or (z) ninety (90) days
after the date of the Initial Closing.
(ii) If at any time (an "Increased Registered Shares Date"), the number of
shares of Common Stock represented by the Registrable Securities, issued or to
be issued as contemplated
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by the Transaction Documents, exceeds the aggregate number of shares of Common
Stock then Registered, the Company shall, within ten (10) Business Days after
receipt of a written notice from Investor, either: (x) amend the Registration
Statement filed by the Company pursuant to the preceding provisions of this
Section 2, if such Registration Statement has not been declared effective by the
SEC at that time, to Register two hundred percent (200%) of such Registrable
Shares, computed as contemplated by the immediately preceding subparagraph (i);
or (y) if such Registration Statement has been declared effective by the SEC at
that time, file with the SEC an additional Registration Statement (an
"Additional Registration Statement") to Register two hundred percent (200%) of
the shares of Common Stock represented by the Registrable Shares, computed as
contemplated by the immediately preceding subparagraph (i), that exceed the
aggregate number of shares of Common Stock already Registered. The Company will
use its reasonable best efforts to cause such Registration Statement to be
declared effective on a date (a "Required Effective Date") which is no later
than (q) with respect to a Registration Statement under clause (x) of this
subparagraph (ii), the Required Effective Date contemplated by the immediately
preceding subparagraph (i) and (r) with respect to an Additional Registration
Statement, the earlier of (i) five (5) Business Days after notice by the SEC
that it may be declared effective or (ii) sixty (60) days after the Increased
Registered Shares Date.
(b) Payments by the Company.
(i) If the Registration Statement covering the Registrable
Securities is not filed in proper form with the SEC by the Required Filing Date,
the Company will make payment to Investor in such amounts and at such times as
shall be determined pursuant to this Section 2(b);
(ii) If the Registration Statement covering the Registrable
Securities is not effective by the relevant Required Effective Date or if
Investor is restricted from making sales of Registrable Securities covered by a
previously effective Registration Statement at any time (the date such
restriction commences, a "Restricted Sale Date") after the Effective Date other
than during a Suspension Period (as defined below), then the Company will make
payments to Investor in such amounts and at such times as shall be determined
pursuant to this Section 2(b);
(iii) The amount (each a "Periodic Amount") to be paid by the
Company to Investor shall be determined as of each Computation Date (as defined
below) and the Periodic Amount shall be equal to the Periodic Amount Percentage
(as defined below) of the Purchase Price for all of the Initial Shares for the
period from the date following the relevant Required Filing Date, Required
Effective Date or Restricted Sale Date, as the case may be, to the first
relevant Computation Date, and thereafter to each subsequent Computation Date.
The "Periodic Amount Percentage" means (A) two percent (2%) of the Purchase
Price for the period from the date following the relevant Required Filing Date,
Required Effective Date or Restricted Sale Date, as the case may be, to the
first relevant Computation Date (prorated on a daily basis if such period is
less than thirty (30) days), and (B) two percent (2%) of the Purchase Price to
each Computation Date thereafter (prorated on a daily basis if such period is
less than thirty (30) days). By way of
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illustration and not in limitation of the foregoing, if the Registration
Statement for the Registrable Securities relating to the Common Stock and
Warrants issued on the Initial Closing Date is timely filed but is not declared
effective until one hundred sixty-five (165) days after the date of the Initial
Closing, the Periodic Amount will aggregate five percent (5%) of the Purchase
Price (2% for days 90-120, plus 2% for days 121-150, and 1% for days 151-165);
(iv) Each Periodic Amount will be payable by the Company in cash or
other immediately available funds to Investor at the end of each Computation
Period, without requiring demand therefor by Investor;
(v) The parties acknowledge that the damages which may be incurred
by Investor if the Registration Statement is not filed by the Required Filing
Date or if the Registration Statement has not been declared effective by a
Required Effective Date, including if the right to sell Registrable Securities
under a previously effective Registration Statement is suspended, may be
difficult to ascertain. The parties agree that the Periodic Amount represents a
reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of such damages;
(vi) Notwithstanding the foregoing, the amounts payable by the
Company pursuant to this Section 2(b) shall not be payable to the extent any
delay in the effectiveness of the Registration Statement occurs because of an
act of, or a failure to act or to act timely by Investor or its counsel, or in
the event all of the Registrable Securities may be sold pursuant to Rule 144 or
another available exemption under the Securities Act; and
(vii) "Computation Date" means (A) the date which is the earlier of
(1) thirty (30) days after the Required Filing Date, any relevant Required
Effective Date or a Restricted Sale Date, as the case may be, or (2) the date
after the Required Filing Date, such Required Effective Date or Restricted Sale
Date on which the Registration Statement is filed (with respect to payments due
as contemplated by Section 2(b)(i) hereof) or is declared effective or has its
restrictions removed (with respect to payments due as contemplated by Section
2(b)(ii) hereof), as the case may be, and (B) each date which is the earlier of
(1) thirty (30) days after the previous Computation Date or (2) the date after
the previous Computation Date on which the Registration Statement is filed (with
respect to payments due as contemplated by Section 2(b)(i) hereof) or is
declared effective or has its restrictions removed (with respect to payments due
as contemplated by Section 2(b)(ii) hereof), as the case may be.
3. Obligations of the Company. In connection with the Registration of the
Registrable Securities, the Company shall do each of the following:
(a) Prepare promptly, and file with the SEC by the Required Filing Date, a
Registration Statement with respect to not less than the number of Registrable
Securities provided in Section 2(a) above, and thereafter use its reasonable
best efforts to cause such Registration Statement relating to Registrable
Securities to become effective by the Required Effective Date and
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keep the Registration Statement effective at all times during the period (the
"Registration Period") continuing until the earliest of: (i) the date that is
two (2) years after the last day of the calendar month following the month in
which the Final Repricing Period ends; (ii) the date when Investor may sell all
Registrable Securities under Rule 144; or (iii) the date when Investor no longer
owns any of the Registrable Securities, which Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) The Company shall permit a single firm of counsel designated by all of
the Investors (which, until further notice, shall be deemed to be Xxxxxxx &
Xxxxxx, LLP ATTN: Xxxxxx Xxxxxxx, Esq.; "Investor's Counsel") to review the
Registration Statement and all amendments and supplements thereto a reasonable
period of time (but not less than three (3) Business Days) prior to their filing
with the SEC, and not file any document in a form to which such counsel
reasonably objects;
(d) Notify Investor and Investor's legal counsel identified to the Company
(which, until further notice, shall be deemed to be Xxxxxxx & Xxxxxx, ATTN:
Xxxxxx Xxxxxxx, Esq.; "Investor's Counsel") (and, in the case of (i)(A) below,
not less than five (5) Business Days prior to such filing) and (if requested by
any such person) confirm such notice in writing no later than one (1) Business
Day following the day (i): (A) when a prospectus or any prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) whenever the SEC notifies the Company whether there will be a "review" of
such Registration Statement; (C) whenever the Company receives (or a
representative of the Company receives on its behalf) any oral or written
comments from the SEC respect of a Registration Statement (copies or, in the
case of oral comments, summaries of such comments shall be promptly furnished by
the Company to Investor); and (D) with respect to the Registration Statement or
any post-effective amendment, when the same has become effective; (ii) of any
request by the SEC or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or prospectus or for
additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any proceedings for that
purpose; (iv) if at any time any of the representations or warranties of the
Company contained in any agreement (including any underwriting agreement)
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contemplated hereby ceases to be true and correct in all material respects; (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (vi) of the occurrence of any event that to the
best knowledge of the Company makes any statement made in the Registration
Statement or prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, prospectus or other
documents so that, in the case of the Registration Statement or the prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. In addition, the Company shall furnish Investor with
copies of all intended written responses to the comments contemplated in clause
(C) of this Section 3(d) not later than one (1) Business Day in advance of the
filing of such responses with the SEC so that Investor shall have the
opportunity to comment thereon;
(e) Furnish to Investor and Investor's Counsel: (i) promptly after the
same is prepared and publicly distributed, filed with the SEC, or received by
the Company, two (2) copies of the Registration Statement, each preliminary
prospectus and prospectus, and each amendment or supplement thereto; and (ii)
such number of copies of a prospectus, and all amendments and supplements
thereto and such other documents, as Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by Investor;
(f) As promptly as practicable after becoming aware thereof, notify
Investor of the happening of any event of which the Company has knowledge, as a
result of which the prospectus included in the 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, in light of the circumstances under which they were made, not
misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement or other appropriate filing with the SEC
to correct such untrue statement or omission, and deliver a number of copies of
such supplement or amendment to Investor as Investor may reasonably request;
(g) As promptly as reasonably practicable after becoming aware thereof,
notify Investor of the issuance by the SEC any notice of effectiveness or any
stop order or other suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(h) Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies Investor in writing of the existence of a Potential Material Event,
Investor shall not offer or sell any Registrable Securities, or engage in any
other transaction involving or relating to the Registrable Securities, from the
time of the giving of notice with respect to a Potential Material Event until
Investor receives written notice from the Company that such Potential Material
Event either has been disclosed to the public
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or no longer constitutes a Potential Material Event; provided, however, that the
Company may not so suspend the right to such holders of Registrable Securities
for more than two twenty (20) day periods in the aggregate during any 12-month
period ("Suspension Period") with at least a ten (10) Business Day interval
between such periods, during the periods the Registration Statement is required
to be in effect;
(i) Use its reasonable efforts to secure and maintain the designation of
all the Registrable Securities covered by the Registration Statement on the "OTC
Bulletin Board" or National Market or Small Cap Market of the National
Association of Securities Dealers, and the quotation of the Registrable
Securities on the OTC Bulletin Board;
(j) Provide a transfer agent for the Registrable Securities not later than
the effective date of the Registration Statement;
(k) Cooperate with Investor to facilitate the timely preparation and
delivery of certificates for the Registrable Securities to be offered pursuant
to the Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts as the case may be, as
Investor may reasonably request, and, within three (3) Business Days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to Investor) an appropriate instruction and opinion of
such counsel substantially in the form of Exhibit 3(k) annexed; and
(l) Take all other reasonable actions necessary to expedite and facilitate
disposition by Investor of the Registrable Securities pursuant to the
Registration Statement.
4. Obligations of Investor. In connection with the Registration of the
Registrable Securities, Investor shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the Company to
complete the Registration pursuant to this Agreement with respect to the
Registrable Securities of Investor, that Investor shall furnish to the Company
such information regarding itself, the Registrable Securities held by it, and
the intended method of disposition of the Registrable Securities held by it, as
shall be reasonably required to effect the Registration of such Registrable
Securities and shall execute such documents in connection with such Registration
as the Company may reasonably request. At least ten (10) days prior to the first
anticipated filing date of the Registration Statement, the Company shall notify
Investor of the information the Company requires from Investor (the "Requested
Information") if Investor elects to have any of the Registrable Securities
included in the Registration Statement. If at least two (2) Business Days prior
to the filing date the Company has not received the Requested Information from
Investor, then the Company need not file the Registration Statement until
receiving the response of Investor;
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(b) Investor, by accepting the Registrable Securities, agrees to cooperate
with the Company as reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder, unless Investor
has notified the Company in writing of its election to exclude all of the
Registrable Securities from the Registration Statement; and
(c) Investor agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3(f) or 3(g), above,
Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until Investor receives the copies of the supplemented or amended prospectus
contemplated by Section 3(f) or 3(g).
5. Expenses of Registration. (a) All reasonable expenses incurred in
connection with Registrations, filings or qualifications pursuant to Section 3,
including, without limitation, all Registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company and a fee for a single counsel for Investor, not exceeding $3,500
for the Registration Statement covering the Registrable Securities shall be
borne by the Company; and
(b) Except as otherwise provided for in Schedule 5(b) attached hereto,
neither the Company nor any of its subsidiaries has, as of the date hereof, and
the Company shall not on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to Investor in this Agreement or otherwise conflicts with the provisions
hereof. Except as otherwise provided for in Schedule 5(b), the Company has not
previously entered into any agreement granting any registration rights with
respect to any of its securities to any person. Except as otherwise provided for
in this Section 5, and without limiting the generality of the foregoing, without
the written consent of Investor, the Company shall not grant to any person the
right to request the Company to Register any securities of the Company under the
Securities Act unless the rights so granted are subject in all respects to the
prior rights in full of Investor set forth herein, and are not otherwise in
conflict or inconsistent with the provisions of this Agreement and the other
Transaction Documents.
6. Indemnification. In the event any Registrable Securities are included
in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless Investor, the directors, if any, of Investor, the officers, if any, of
Investor, each person, if any, who controls Investor within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (each, an "Indemnified Party"), against any losses, claims, damages,
liabilities or expenses (joint or several) incurred (collectively, "Claims") to
which any Investor may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations in the
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Registration Statement, or any post-effective amendment thereof, or any
prospectus included therein: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) any untrue statement or alleged untrue
statement of a material fact contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading; or
(iii) any material violation or alleged material violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation under the Securities Act, the Exchange Act or any state securities
law (the matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to Section 6(b), the Company shall reimburse Investor,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a) shall not: (I) apply to a Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Indemnified Party
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, if such
prospectus was timely made available by the Company pursuant to Section 3(c)
hereof; (II) be available to the extent such Claim is based on a failure of
Investor to deliver or cause to be delivered the prospectus made available by
the Company; or (III) apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Investor will indemnify the Company
and its officers, directors and agents (each, an "Indemnified Party") against
any claims arising out of or based upon a Violation which occurs in reliance
upon and in conformity with information furnished in writing to the Company, by
or on behalf of Investor, expressly for use in connection with the preparation
of the Registration Statement, subject to such limitations and conditions as are
applicable to the Indemnification provided by the Company to this Section 6.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Party.
(b) Promptly after receipt by an Indemnified Party under this Section 6 of
notice of the commencement of any action (including any governmental action),
such Indemnified Party shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Party, as the case may be. In case
any such action is brought against any Indemnified Party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying
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party similarly notified, assume the defense thereof, subject to the provisions
herein stated and after notice from the indemnifying party to such Indemnified
Party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such Indemnified Party under this Section 6 for any legal
or other reasonable out-of-pocket expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation, unless the indemnifying party shall not pursue the
action of its final conclusion. The Indemnified Party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and reasonable out-of-pocket expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying party
has assumed the defense of the action with counsel reasonably satisfactory to
the Indemnified Party. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Party under
this Section 6, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7. Contribution. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that: (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation; and (c)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities.
8. Reports under Securities Act and Exchange Act. With a view to making
available to Investor the benefits of Rule 144 promulgated under the Securities
Act or any other similar rule or regulation of the SEC that may at any time
permit Investor to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(c) furnish to Investor so long as Investor owns Registrable Securities,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting
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requirements of the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company and (iii) such other information as may be
reasonably requested to permit Investor to sell such securities pursuant to Rule
144 without Registration.
(d) The Company will, at the request of any Holder of Registrable
Securities, upon receipt from such Holder of a certificate certifying (i) that
if the securities had been held for at least two (2) years, such Holder has not
been an affiliate (as defined in Rule 144) of the company for more than the
ninety (90) preceding days, and (ii) as to such other matters as may be
appropriate in accordance with such Rule, remove from the stock certificate
representing such Registrable Securities that portion of any restrictive legend
which relates to the registration provisions of the Securities Act, provided,
however, the Company will advise the Transfer Agent that counsel to Investor may
provide such instructions and opinion to the transfer agent regarding the
removal of the restrictive legend.
9. Assignment of the Registration Rights. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any permitted transferee of the
Registrable Securities pursuant to the Common Stock Purchase Agreement.
10. Amendment of Registration Rights. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investor. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon Investor and the Company.
11. Miscellaneous.
(a) Notices required or permitted to be given hereunder shall be given in
the manner contemplated by the Common Stock Purchase Agreement, if to the
Company or to Investor, to their respective addresses contemplated by this
Agreement, or at such other address as each such party furnishes by notice given
in accordance with this Section 11(a).
(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(c) This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. Each of the parties consents to the jurisdiction of the federal courts
whose districts encompass any part of the City of Wilmington or the state courts
of the State of Delaware sitting in the County of Wilmington in connection with
any
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dispute arising under this Agreement and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on forum non
coveniens, to the bringing of any such proceeding in such jurisdictions. In the
event of any dispute, the prevailing party shall be entitled to recover its
reasonable attorneys' fees.
(d) If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
(e) This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
(f) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(g) The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning thereof.
(h) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
(i) The Company acknowledges that any failure by the Company to perform
its obligations under Section 3(a) hereof, or any delay in such performance,
could result in loss to Investor, and the Company agrees that, in addition to
any other liability the Company may have by reason of such failure or delay, the
Company shall be liable for all direct damages caused by any such failure or
delay, offset by any Periodic Amount paid to Investor pursuant to Sections
2(b)(i)- (ii), unless the same is the result of force majeure. Neither party
shall be liable for consequential damages.
(j) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
COMPANY:
INTERACTIVE XXXXXXXXXXXX.XXX, LTD.
By:______________________________________________________
Xxxxxxx X. Xxxxxx, Chief Executive Officer
INVESTOR:
YOUNG LLC
By:______________________________________________________
Name:
Title:
SCHEDULE 5(b)
OTHER REGISTRABLE SECURITIES
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