REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of January 15, 1997, by and
between SPICE ENTERTAINMENT COMPANIES, INC. a Delaware corporation (the
"Company") and PNC BANK, N.A., a national banking association, as successor in
interest to MIDLANTIC BANK, N.A., ("Warrantholder").
R E C I T A L:
This Agreement is made concurrently with the delivery of and as
contemplated by that certain Warrant to Purchase Shares of Common Stock dated as
of the date hereof (the "Warrant') issued by the Company to the Warrantholder.
The Company has agreed to provide the registration rights set forth in this
Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
set forth below:
1.1 "Agreement" shall mean this Registration Rights Agreement,
including all amendments, modifications, supplements, exhibits and schedules
hereto, as the same may be in effect at the time such reference becomes
operative, which replaces that Registration Rights Agreement dated as of
December 9, 1994 by and between the Company and the Warrantholder.
1.2 "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the federal securities laws.
1.3 "Demand Registration Request" shall have the meaning assigned
to it in subparagraph 2(a) hereof.
1.4 "Exchange Act" shall mean the federal Securities Exchange Act of
1934, as amended from time to time and the rules, regulations, decisions and
interpretations promulgated thereunder.
1.5 "Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, bank, institution, government entity or government or any group
comprised of one or more of the foregoing.
1.6 "Prospectus" shall mean any preliminary prospectus and any final
prospectus (as such may be amended or supplemented) which constitutes Part I of
the Registration Statement filed with the Commission.
1.7 "Registration Statement" shall mean the form and documents required
to be filed by an issuer in connection with the registration and sale of
securities of such issuer under the Securities Act.
1.8 "Securities Act" shall mean the federal Securities Act of 1933, as
amended from time to time and the rules, regulations, decisions and
interpretations promulgated thereunder.
1.9 "Seller" shall mean each holder of Shares for whom Shares are
included or proposed to be included in a Registration Statement filed or
proposed to be filed by the Company.
1.10 "Shares" shall mean the voting common stock of the Company and
such other securities or rights in the Company or its successor as may be held
by a Warrantholder upon exercise of the Warrant.
1.11 "Warrantholder" shall mean the Person identified as the
Warrantholder in the first paragraph of this Agreement and any successor in
interest or assign of such Warrantholder's interest in any or all of the
Warrantholder Securities.
1.12 "Warrantholder Securities" means the Warrant or Shares held
by a Warrantholder.
2. DEMAND REGISTRATION
(a) Demand Registration Request. Prior to December 31, 2004,
the Warrantholder may deliver to the Company a notice to the effect that the
Warrantholder desires to have all, but not less than all, of the Shares issuable
upon exercise of the Warrant registered under the Securities Act (a "Demand
Registration Request"). Warrantholder shall only have the right to demand two
registrations hereunder.
(b) Registration. Upon receipt of a Demand Registration
Request, the Company shall thereupon, as expeditiously as is reasonable, effect
the registration under the Securities Act of the Shares which the Company has
been requested to register pursuant to the Demand Registration Request for
transfer by the Warrantholder to the extent required to permit the transfer by
the Warrantholder of the Shares sought to be registered. Notwithstanding the
foregoing, (i) the right of the Warrantholder to require registration under this
Paragraph 2 shall not be exercisable during the period commencing thirty (30)
days prior to the filing of, and ending six (6) months after the effectiveness
of, a previous Registration Statement issued in respect of an offering of
securities for cash for the account of the Company shall have become effective
and (ii) unless the Warrantholder shall notify the Company that the Shares to be
sold can only be sold in a manner not permitted by Rule 144, the Company shall
not be required to register any Shares on behalf of the Warrantholder to the
extent such Shares may then be sold without restrictive legend in compliance
with all of the terms of Rule 144 under the Securities Act and the Company takes
such steps (including the payment of fees to its legal counsel for the issuance
of all necessary opinions and the delivery of all necessary documentation) as
are necessary or appropriate to permit the transfer of such Shares under such
Rule. Notwithstanding anything to the contrary contained in this subparagraph
2(b), the Company shall be entitled, at its election, to join in any
registration under this paragraph 2 with respect to securities to be offered by
it; provided, however, that a registration shall not be deemed to have been made
pursuant to this Paragraph 2 if 51% or more of the stock included in such
registration is registered for the account of the Company or for the account of
others (other than the Warrantholder) at the Company's request.
(c) The Company shall select the lead underwriter for the
public offering, with the approval of the Warrantholder, such approval not to be
unreasonably withheld or delayed.
3. INCIDENTAL REGISTRATION
(a) Whenever the Company proposes to file a Registration
Statement (other than by a registration on Form S-4 or Form S-8 or pursuant to
Paragraph 2) at any time and from time to time, it will, prior to such filing,
give written notice to the Warrantholder, of its intention to do so and, upon
the written request of the Warrantholder given within 20 business days after the
Company provides such notice, the Company shall use its best efforts to cause
all Shares which the Company has been requested by the Warrantholder to register
to be registered under the Act. Notwithstanding the foregoing, the Company will
have no obligation to include the Shares in a Registration Statement at any time
when the Shares are transferable under a an effective Registration Statement
filed by the Company which includes the Shares.
(b) In connection with any offering under this Paragraph 3
involving an underwriting, the Company shall not be required to include any
Shares in such underwriting unless the Warrantholder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it, and then only in such quantity as will not, in the opinion of the
underwriters, jeopardize the success of the offering by the Company. If in the
opinion of the managing underwriter the registration of all, or part of, the
Shares which the Warrantholder has requested to be included would adversely
affect such public offering, then the Company shall be required to include in
the underwriting only that number of Shares, if any, which the managing
underwriter believes may be sold without causing such adverse effect. If the
number of Shares to be included in the underwriting in accordance with the
foregoing is less than the total number of shares which the Warrantholder has
requested to be included, then the Company may include all securities proposed
to be registered by the Company to be sold for its own account and the holders
of Shares who have requested registration shall participate in the underwriting
pro rata based upon their total ownership of shares of Common Stock of the
Company.
(c) All holders of Shares proposing to distribute their
securities in an offering under this Paragraph 3 involving an underwriting shall
(together with the Company and other shareholders of securities distributing
their shares through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for the
underwriting.
4. GENERAL
If and whenever the Company is required by the provisions of this
Agreement to effect the registration of any of the Shares under the Securities
Act, the Company shall, as expeditiously as reasonably possible:
(a) Filing of Registration Statement. Prepare and file with
the Commission a Registration Statement with respect to the Shares and use its
best efforts to cause such Registration Statement to become and remain effective
and prepare and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective for the shorter of (i)
270 days or (ii) the completion of the distribution, and to comply with the
provisions of the Securities Act with respect to the disposition of all the
Shares covered by such Registration Statement in accordance with the intended
method of disposition of the Shares as set forth in such Registration Statement
for such period;
(b) Copies of Prospectus. Furnish to the Warrantholder such
number of copies of the Prospectus contained in such Registration Statement
(including each preliminary prospectus) in conformity with the requirements of
the Securities Act, and such other documents as the Warrantholder may reasonably
request in order to facilitate the disposition of the Shares;
(c) Blue Sky Registration. (i) Register or qualify the Shares
covered by such Registration Statement under the securities or blue sky laws as
the Warrantholder may reasonably request, and do any and all other acts and
things which may be reasonably necessary or advisable to enable the
Warrantholder to consummate the disposition in such jurisdiction of the Shares
held by the Warrantholder during the period provided in subparagraph 4(a) above
at the Company's sole expense; provided, however, that the Company will not for
any such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not, but for the requirements
of this paragraph, be obligated to be qualified, to subject itself to taxation
in any such jurisdiction, or to execute a general consent to service of process
in any such jurisdiction; and
(d) Information Provided to Warrantholder. Notify the
Warrantholder of the happening of any event as a result of which the Prospectus
contained in such Registration Statement, as then in effect, includes any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, and prepare and furnish to the
Warrantholder a reasonable number of copies of any supplement to or amendment of
such Prospectus that may be necessary so that, as thereafter delivered to the
purchasers of the Shares, such Prospectus shall not include any untrue
statements 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 in the
light of the circumstances then existing (provided that in no event shall the
Company be required to amend, though it shall be required to supplement, any
prospectus if the Warrantholder shall have sold 80% of the Shares offered
thereby by him or it, as the case may be, at the time of such event); and
(e) Opinion of Counsel. Furnish to the Warrantholder an
opinion of Company counsel satisfactory to the Warrantholder to the effect that
a registration statement under the Securities Act, as then in effect with
respect to the Shares and that the Prospectus included therein complies as to
form in all material respects, except as to financial statements, including
schedules, and other accounting and financial data, as to which counsel need
express no opinion, with the requirements of the Securities Act.
(f) Comfort Letter. Obtain a comfort letter from the Company's
independent public accountants who have certified the Company's financial
statements included in such Registration Statement in customary form and
covering such matters of the type customarily covered by comfort letters.
5. FURTHER TERMS AND CONDITIONS
The obligations of the Company and the rights of the Warrantholder
under this Agreement shall be subject to the following additional terms,
conditions and limitations:
(a) Information Provided by Sellers. The Warrantholder shall
be required to furnish to the Company and to its counsel in writing all relevant
information concerning the proposed method of sale or other distribution by the
Warrantholder of the Shares to be sold by the Warrantholder, and such other
information as the Company and its counsel reasonably may require to prepare and
file a Registration Statement in accordance with the applicable provisions of
the Securities Act and the rules and regulations promulgated by the Commission
thereunder.
(b) Suspension of Sales by Sellers. If, at any time when the
Company is required to maintain a Registration Statement effective and current
with respect to the Shares held by the Warrantholder included within the
coverage thereof, any event or events shall occur which would cause the
Prospectus contained therein, as then amended or supplemented, to be other than
in compliance with the requirements of Section 10 of the Securities Act, the
Company promptly will give notice thereof to the Warrantholder and, upon receipt
of such notice, the Warrantholder immediately shall cease and desist from
effecting any sales of the Shares until the Warrantholder shall have received
notice from the Company that such sales again may be effected together with
copies of a Prospectus which has been amended or supplemented so as to conform
to the requirements of said Section 10. Upon the occurrence of any such event,
the Company promptly shall use its best efforts to prepare and file with the
Commission a post-effective amendment to the Registration Statement, or a
post-effective amendment or supplement to the Prospectus, so that the
Prospectus, as so amended or supplemented, will comply with the requirements of
Section 10 of the Act. The time periods during which the Registration Statement
shall remain effective pursuant to the provisions of subparagraph 4(a) of this
Agreement shall be extended by a period of time equal to the period of time
during which the Warrantholder shall have ceased and desisted from selling
Shares in accordance with the terms of this subparagraph.
6. EXPENSES
If and whenever the Company includes the Shares in any offering or
files a Registration Statement on behalf of one or more Sellers, the Company
shall pay all expenses arising out of or related to the preparation, filing,
distribution, printing, amendment and supplementing of a Registration Statement
including, without limitation, all legal and accounting fees, the fees of other
experts. The Warrantholder shall pay its own expenses for its attorneys' and its
other fees and expenses, underwriting discounts, selling commissions and stock
transfer taxes incurred in connection with the sale of its Shares pursuant to a
Registration Statement.
7. INDEMNIFICATION
In the event of the registration of any Shares under the Securities Act
pursuant to this Agreement, the Company agrees to indemnify and hold harmless
the Warrantholder, each underwriter, if any, of the Shares, and each Person who
controls such underwriter or Warrantholder from and against any and all losses,
claims, damages or liabilities, joint or several, to which such indemnitee may
become subject under the Securities Act or the common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement under which the
Shares were registered under the Securities Act, or any Prospectus or
preliminary prospectus contained therein, or any amendment or supplement
thereto, or arise out or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading; and will reimburse each such indemnitee for
any legal or any other expenses reasonably incurred by such indemnitee in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises solely out or is based solely upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement,
such Prospectus or preliminary prospectus or such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by the Warrantholder, underwriter or controlling Person specifically for
use in preparation thereof; and provided further, however, that this
indemnification with respect to any preliminary prospectus shall not inure to
the benefit of any such underwriter (or any person who so controls such
underwriter) for any such loss, claim, damage, liability or action asserted by a
Person who purchased any Shares from such underwriter if a copy of the final
Prospectus was not delivered or given to such Person by such underwriter at or
prior to the written confirmation of the sale to such Person.
In the event of the registration of any Shares under the Securities Act
pursuant to this Agreement, the Warrantholder agrees to indemnify and hold
harmless and to use its best efforts to cause each underwriter, if any, of such
Shares and each Person who controls the Warrantholder or any such underwriter to
indemnify and hold harmless the Company, each Person who controls the Company,
each of its officers who signs the Registration Statement, and each director and
officer of the Company from and against any and all losses, claims, damages,
liabilities, joint or several, to which such indemnitee may become subject under
the Securities Act or the common law or otherwise insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise solely out
of or are based solely upon any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement under which such
Shares were registered under the Securities Act, any Prospectus or preliminary
prospectus contained therein, or amendment or supplement thereto, or arise
solely out of or are based upon 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, which untrue statement or alleged untrue
statement or omission or alleged omission was made therein in reliance upon and
in conformity with, written information furnished to the Company by the
Warrantholder specifically for use in connection with the preparation thereof;
and will reimburse each such indemnitee for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
loss, claim, damage, liability or action. Notwithstanding any provision to the
contrary contained herein, the obligation of the Warrantholder hereunder shall
be limited to an amount equal to the proceeds to the Warrantholder of Shares
sold as contemplated herein.
Promptly after receipt by an indemnitee of notice of the commencement
of any action, such indemnitee will, if a claim in respect thereof is to be made
against an indemnitor, give written notice to such indemnitor of the
commencement thereof, but the omission so to notify the indemnitor will not
relieve such indemnitor from any liability which it may have to any indemnitee
other than pursuant to the provisions of this Paragraph 7. In case any such
action is brought against any indemnitee, and such indemnitee notifies any
indemnitor of the commencement thereof, such indemnitor will be entitled to
participate in, and to the extent that it may wish, jointly with any other
indemnitor similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnitee and after notice from the indemnitor to such
indemnitee of its election so to assume the defense thereof, the indemnitor will
not be liable to such indemnitee for any legal or other expenses subsequently
incurred by such indemnitee in connection with the defense thereof, other than
the reasonable cost of investigation.
The Company and the Warrantholder agree that , and the Warrantholder
agrees to use its best efforts to cause each underwriter, if any, of the Shares
and each Person who controls the Warrantholder or any such underwriter to agree
that if the indemnification to be provided above is unavailable or insufficient
to hold harmless an indemnified party as provided above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to above in
such proportion as is appropriate to reflect the relative fault of the Company,
the Warrantholder and the underwriters, if any, in connection with the
statements or omission which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
fault 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, the Warrantholder or the underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this paragraph shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
paragraph. Notwithstanding the provisions of this paragraph, no underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it exceeds the amount of any
damages which such underwriter has otherwise been required to pay 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.
8. TRANSFEREES
In the event that all or any part of the Warrantholder Securities held
by the Warrantholder shall at any time be transferred by the Warrantholder, in a
transfer permissible under applicable securities laws, other than pursuant to an
effective Registration Statement or Rule 144 promulgated under the Securities
Act, the registration rights hereunder shall extend to the transferee of such
securities. In the even there shall be more than on transferee, the rights under
Paragraph 2 of this Agreement may be exercised by holders of a majority of the
Warrantholder Securities and if the remaining holders do not join in the
exercise of such rights they shall be forfeited.
9. GOVERNING LAW
In all respects, including all matters of construction, validity and
performance, this Agreement and the obligations arising hereunder shall be
governed by, and construed in accordance with, the laws of the State of New York
applicable to contracts made and performed in such state, and any applicable
laws of the United States of America.
10. NOTICES
Except as otherwise provided herein, whenever it is provided herein
that any notice, demand, request, consent, approval or other communication shall
or may be given to or served upon any party by any other, or whenever any party
desires to give or serve upon another party communication with respect to this
Agreement, each such notice, demand, request, consent, approval, or other
communication shall be in writing and either shall be delivered in person with
receipt acknowledged or registered or certified mail, return receipt requested,
postage prepaid, by overnight express mail or by telecopy addressed as follows:
(a) If to the Warrantholder, at the address of such
Warrantholder appearing on the books and records of the Company.
(b) If to the Company, at
Spice Entertainment Companies, Inc.
000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date of delivery in the case of a
notice delivery personally with receipt acknowledged, sent by registered or
certified mail or sent by telecopy, or two (2) days after the same shall have
been deposited in the United States mail for overnight delivery or delivered to
a courier service for overnight delivery. Failure or delay in delivering copies
of any notice, demand, request, consent, approval, declaration or other
communication to the persons designated above to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
11. MISCELLANEOUS
(a) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto, the Warrantholder and its or his respective
successors, assigns, heirs, executors and personal representatives.
(b) None of the terms or provisions for this Agreement may be
waived, altered, modified or amended except in writing duly signed for and on
behalf of the parties hereto.
(c) The paragraph headings contained in this Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.
(d) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extend of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the day and year first above written.
SPICE ENTERTAINMENT
COMPANIES, INC.
By:/s/ J. Xxxxx Xxxxxxx
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J. Xxxxx Xxxxxxx
Chairman and Chief Executive Officer
PNC BANK, N.A., as successor in interest
to MIDLANTIC BANK, N.A.
By: /s/ Xxxxxx X. XxXxxx
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Xxxxxx X. XxXxxx
Xx. Vice President
