REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of April 4, 2000 by and among Xx0.xxx Inc.
(the "Company"), a Colorado corporation having its principal address at 000
Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, and DVD MAGS, Inc. (the
"Seller"), a California corporation, having its principal address at 0000 Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
PREAMBLE
This Agreement is made pursuant to the Asset Purchase Agreement (the
"Purchase Agreement"), dated as of the date of this Agreement, by and among the
Company, Quickband, Inc. (the "Purchaser"), a Delaware corporation having its
principal address at 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
and a wholly owned subsidiary of the Company, and the Seller, as the owner of
the Purchased Assets, as defined in the Asset Purchase Agreement. In order to
induce the Seller to enter into the Purchase Agreement and to sell the Purchased
Assets to the Purchaser, the Company has agreed to provide the registration
rights set forth in this Agreement to the Holders. The execution and delivery of
this Agreement by the Company is a condition to the closing under the Purchase
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, the Company and the Holders agree as follows:
Section 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
(a) "Commission" shall mean the U. S. Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
(b) "Common Stock" shall mean shares of the Company's Common Stock.
(c) "East West" shall mean East-West Capital Associates, Inc.
(d) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar United States statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.
(e) "Holders" shall mean the Seller or any other Person who holds
outstanding Registrable Securities to whom the registration rights conferred by
this Agreement have been Transferred in compliance with this Agreement.
(f) "Major Shareholders" has the meaning given it in the Asset Purchase
Agreement.
13
(g) "Person" means an individual or corporation, partnership, trust
association, joint venture, joint stock company, firm or other enterprise or
government (or a political subdivision or any agency, department or
instrumentality thereof) or other entity of any kind.
(h) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement, and compliance with applicable
state securities laws of such states in which any of the Holders notifies the
Company of its intention to offer Registrable Securities.
(i) "Registrable Securities" shall mean the shares of the Common Stock
issued to the Seller pursuant to the Asset Purchase Agreement, only to the
extent the same have not been sold to the public. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of under such registration statement, (ii) such securities
shall have become eligible for resale pursuant to Rule 144(k) and any
restrictive legend on certificates representing such securities shall have been
removed, (iii) such securities shall have been otherwise transferred or disposed
of, and (x) new certificates therefor not bearing a legend restricting further
transfer shall have been delivered by the Company, and (y) subsequent transfer
or disposition of such securities shall not require their registration or
qualification under the Securities Act or any similar state law then in force or
compliance with Rule 144, or (iv) such securities shall have ceased to be
outstanding. Notwithstanding the foregoing, Registrable Securities shall not
include otherwise Registrable Securities (i) sold by a person in a transaction
in which his rights under this Agreement are not properly assigned; or (ii) (A)
sold to or through a broker or dealer or underwriter in a public distribution or
a public securities transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions, and restrictive legends
with respect thereto, if any, are removed upon the consummation of such sale or
(C) the registration rights associated with such securities have been terminated
pursuant to Section 12 of this Agreement.
(j) "Rule 144" shall mean Rule 144 under the Securities Act or any
successor or similar rule as may be enacted by the Commission from time to time.
(j) "Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar United States statute and the rules and regulations thereunder,
all as the same shall be in effect at the time.
Section 2. RESTRICTIONS ON TRANSFERABILITY. None of the Registrable
Securities may be sold, assigned, transferred or pledged except in compliance
with the terms and conditions of this Agreement. Notwithstanding the foregoing,
the Seller may distribute the Registrable Securities to the Major Shareholders
and the holders of record of its common stock pursuant to a plan of liquidation
if each shareholder has, as a
14
condition to receipt thereof, executed and delivered to the Company the
Investment Letter substantially in the form attached to the Asset Purchase
Agreement, whereupon each distributee shall become a Holder for all purposes of
this Agreement. At such time as the Registrable Securities cease to be
Registrable Securities under the terms of this Agreement, the provisions of this
Agreement shall no longer apply to the shares of Common Stock that therefore
were Registrable Securities.
Section 3. RESTRICTIVE LEGEND. Each certificate representing
Registrable Securities shall (unless otherwise permitted by the provisions of
Section 4) be stamped or otherwise imprinted with a legend substantially in the
following form (in addition to any legend required under applicable state
securities laws or otherwise):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THESE SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENTS
COVERING THE PURCHASE OF THESE SHARES AND RIGHTS TO REGISTER
THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
The Holders consent to the Company making a notation on its records and giving
instructions to any transfer agent of the Registrable Securities in order to
implement the restrictions on transfer established in this Agreement.
Section 4. NOTICE AND OTHER REQUIREMENT OF TRANSFER. No Holder will
make any sale, assignment, transfer, pledge or other disposition of all or any
portion of any Registrable Securities unless:
(a) The intended sale, assignment, transfer, pledge or other
disposition complies with the provisions of Section 2;
(b) There is in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(c) As an alternative to Section 4(b), (i) such Holder has notified the
Company of the proposed disposition and has furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition,
including the name and address of the buyer and identifying the Registrable
Securities with respect to which such rights are being assigned, and (ii) the
buyer, as a condition to the effectiveness of such assignment, has executed a
counterpart of this Agreement agreeing to be treated as a
15
Holder hereunder; and, if the Company reasonably requests, such Holder shall
also furnish the Company with an opinion of counsel, reasonably satisfactory to
the Company, that such disposition does not require registration of such shares
under the Securities Act.
Section 5. PIGGYBACK REGISTRATION.
(a) If at any time, or from time to time, prior to the termination of
this Agreement pursuant to Section 12 hereof, the Company shall determine to
register any shares of Common Stock for its own account or the account of any of
its shareholders, other than: (i) a transaction relating solely to the sale of
convertible debt instruments; (ii) a registration on Form S-4 or S-8 or another
form not available for registering the Registrable Securities for sale to the
public; or (iii) any registration comprised in whole or in substantial part of
shares underlying stock options granted by the Company or its predecessor, the
Company will give to the Holders written notice as soon as practicable prior to
filing the registration statement and include in such registration, and in any
underwriting involved therein, all the Registrable Securities specified in one
or more written requests which have been made within 15 days after receipt of
such written notice from the Company by any of the Holders, except as set forth
in Section 5(b).
(b) If the registration is for a registered public offering involving
an underwriting, the Company shall so advise each Holder as a part of the
written notice given pursuant to Section 5(a). In such event, the right of each
Holder to registration pursuant to this Section 5 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. If any
Holder proposes to distribute his securities through such underwriting, he shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company (provided that the terms of such underwriting agreement must be
consistent with this Agreement). Notwithstanding any other provision of this
Section 5, if the managing underwriter determines that marketing factors require
a limitation of the number of shares to be underwritten, the managing
underwriter may limit the number of Registrable Securities to be included in the
registration and underwriting (provided that no shares held by officers and
directors of the Company, other than Registrable Securities that may be owned by
officers and directors, are included in the registration and underwriting). The
Company shall so advise each of the Holders and the other holders distributing
their securities through such underwriting pursuant to piggyback registration
rights similar to this Section 5, and the number of shares of Registrable
Securities and other securities that may be included in the registration and
underwriting shall be allocated among such Holder and other holders in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by each Holder and other securities held by other holders at the
time of filing the registration statement. If any of the Holders disapproves of
the terms of any such underwriting, he may elect to withdraw therefrom by
written notice to the Company and
16
the managing underwriter. Any Registrable Securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration.
(c) Notwithstanding any other provision of this Agreement, the
Company's obligation to file a registration statement, or cause such
registration statement to become and remain effective, shall be suspended for a
period not to exceed 90 days (and for periods not exceeding, in the aggregate,
180 days in any 12-month period) if there exists at the time material non-public
information relating to the Company which, in the reasonable opinion of the
Company, should not be disclosed.
Section 6. EXPENSES OF REGISTRATION. All expenses incurred in
connection with registrations pursuant to Section 5, including without
limitation all registration, filing and qualification fees, printing expenses,
fees and disbursements of counsel for the Company and independent accounts for
the Company and expenses of any special audits of the Company's financial
statements incidental to or required by such registration, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
and registrars' fees shall be borne by the Company, except that the Company
shall not be required to pay underwriters' fees, discounts or commissions
relating to Registrable Securities or fees of one separate legal counsel for all
of the Holders.
Section 7. REGISTRATION PROCEDURES. In the case of each registration
effected by the Company pursuant to this Agreement, the Company will keep the
Holders participating therein advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company will:
(a) file and keep such registration pursuant to Section 5 continuously
effective for periods of 180 days or, in each case, such reasonable period
necessary to permit the Holders to complete the distribution described in the
registration statement relating thereto;
(b) promptly 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 comply with the provisions of the Securities
Act, and to keep such registration statement effective for that period of time
specified in Section 7(a);
(c) furnish such number of the registration statement and the
prospectus included therein, including preliminary prospectuses and other
documents incident thereto as the Holders from time to time may reasonably
request;
(d) use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of any
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction, at the earliest possible moment;
17
(e) register or qualify such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Holders or
underwriter reasonably requests and keep such registration or qualification
effective during the period set forth in Section 7(a), and do all other such
things that may be necessary or desirable to enable the Holders to consummate
the public sale or other disposition in such jurisdiction of the Registrable
Securities;
(f) cause all Registrable Securities covered by such registrations to
be listed on each securities exchange, including the American Stock Exchange, on
which similar securities issued by the Company are then listed or, if no such
listing exists, use reasonable best efforts to list all Registrable Securities
on one of the New York Stock Exchange, the American Stock Exchange or NASDAQ;
(g) cause its accountants to issue to the underwriter, if any, or the
Holders, if there is no underwriter, comfort letters and updates thereof in
customary form and covering matters of the type customarily covered in such
letters with respect to underwritten offerings;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Holders or
the underwriters, if any, reasonably, request in order to expedite or facilitate
the disposition of such Registrable Securities (including, without limitation,
effecting a stock split or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement and afford
such entities the reasonable opportunity to review and comment thereon and
participate in the preparation of such registration statement;
(j) if the offering is underwritten, at the request of the Holders of
Registrable Securities to furnish on the date that Registrable Securities are
delivered to the underwriters for sale pursuant to such registration: (i) an
opinion dated such date of counsel representing the Company for the purposes of
such registration, addressed to the underwriters and to the Holders, stating
that such registration statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities Act, (B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the Securities and
Exchange Commission thereunder (except that such counsel need not express any
opinion as to
18
financial statements or other financial data contained therein) and (C) to such
other effects as reasonably may be requested by counsel for the underwriters or
by the Holders or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
(k) notify the Holders, at any time a prospectus covered by such
registration statement is required to be delivered under the Securities Act, of
the happening of any event of which it has knowledge as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(1) take such other actions as shall be reasonably requested by the
Holders.
Section 8. INDEMNIFICATION.
(a) If the Company registers any of the Registrable Securities under
the Securities Act pursuant to Section 5, the Company will indemnify and hold
harmless the Holders of such Registrable Securities thereunder, each underwriter
of such Registrable Securities thereunder and each other person, if any, who
controls any Holder or underwriter within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Holders, underwriter or controlling persons may become subject under the
Securities Act 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 such Registrable Securities were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
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, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state securities law
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, and will reimburse the
Holders, each of their respective officers, directors and partners, and each
person controlling any of the Holders, each such underwriter and each person who
controls any such underwriter, for any reasonable legal and any other expenses
incurred in connection with investigating,
19
defending or settling any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage or liability arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Company by an instrument duly executed by any of the Holders or underwriter
specifically for use therein.
(b) Each Holder will, if Registrable Securities held by or issuable to
such Holder are included in the securities as to which such registration is
being effected, severally and not jointly, indemnify and hold harmless the
Company, each of its directors, each officer who signs the registration
statement, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company and each
underwriter within the meaning of the Securities Act, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement, prospectus,
offering circular or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Company, such
directors, officers, partners, persons or underwriters for any reasonable legal
or any other expenses incurred by them in connection with investigating,
defending or settling any such claim, loss, damage, liability or action, in each
case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder specifically for use
therein; PROVIDED, that the total amount for which any Holder, its officers,
directors and partners, and any person controlling such Holder, shall be liable
under this Section 8(b) shall not in any event exceed the proceeds (net of
underwriting discounts and commissions) received by such Holder from the sale of
Registrable Securities sold by such Holder in such registration.
(c) Each party entitled to indemnification under this Section 8 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claims as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in actual detriment to
the Indemnifying Party. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation.
20
(d) Notwithstanding the foregoing, to the extent that the provisions on
indemnification contained in the underwriting agreements entered into among the
selling Holders, the Company and the underwriters in connection with the
underwritten public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall be controlling as to the
Registrable Securities included in the public offering; PROVIDED, that if, as a
result of this Section 8(d), the Holders, and any persons controlling such
Holders is held liable for an amount which exceeds the aggregate proceeds
received by such Holders from the sale of Registrable Securities included in a
registration, as provided in Section 8(b), pursuant to such underwriting
agreement (the "Excess Liability"), the Company shall reimburse any such Holders
for such Excess Liability.
(e) If the indemnification provided for in this Section 8 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such `indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other hand in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount that any Holder shall be obligated to
contribute pursuant to this Section 8(e) shall be limited to an amount equal to
the proceeds to such Holder of the Registrable Securities sold pursuant to the
registration statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which such Holder has otherwise been
required to pay in respect of such loss, claim, damage, liability or action or
any substantially similar loss, claim, damage, liability or action arising from
the sale of such Restricted Securities).
(f) The indemnification provided by this Section 8 shall be a
continuing right to indemnification and shall survive the registration and sale
of any securities by any person entitled to indemnification hereunder and the
expiration or termination of this Agreement.
Section 9. LOCKUP AGREEMENT. In consideration for the Company agreeing
to its obligations under this Agreement, and subject to the provisions of
Section 2, each of the Holders agrees in connection with any registration of any
Registrable Securities in an underwritten offering, at the request of the
Company or the underwriters managing any underwritten offering of the Company's
securities, not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any Registrable Securities (other than
those included in the registration) without the prior
21
written consent of the Company or such underwriters, as the case may be, for
such period of time from the effective date of such registration as the Company
and the underwriters may specify, so long as all stockholders of the Company
holding more than one percent (1 %) of the outstanding common stock and all
officers and directors of the Company are bound by a comparable obligation.
Section 10. HOLDER'S COOPERATION .
(a) Each Holder shall promptly furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may request in writing and as shall be required in connection with any
registration referred to herein.
(b) Each Holder holding shares included in the registration will not
(until further notice by the Company) effect sales thereof (or deliver a
prospectus to any purchaser) after receipt of telegraphic or written notice from
the Company to suspend sales to permit the Company to correct or update a
registration statement or prospectus. At the end of the period during which the
Company is obligated to keep the registration statement current and effective as
described in Section 7(a), each of the Holders holding shares of Registrable
Securities included in the registration shall discontinue sales of shares
pursuant to such registration statement upon receipt of notice from the Company
of its intention to remove from registration the shares of Registrable
Securities covered by such registration statement that remain unsold, and each
of the Holders shall notify the Company of the number of such shares registered
that remain unsold immediately upon receipt of such notice from the Company.
Section 11. RULE 144. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144; and
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act.
Section 12. TERMINATION OF RIGHTS.
(a) The rights of any Holder to cause the Company to register
securities under Section 5 shall terminate at such time as such Holder is able
to dispose of all of the Registrable Securities owned by him at such time in one
three-month period pursuant to the provisions of Rule 144.
(b) Notwithstanding the provisions of Section 12(a), all rights of the
Holders under Section 5 of this Agreement shall terminate at 5:00 P.M. Eastern
time on the date three years after the date of this Agreement.
22
Section 13. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Holders as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Articles of Organization or Bylaws of the Company or any
provision of any indenture, agreement or other instrument to which it or any of
its properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium laws and other
laws of general application affecting enforcement of creditors' rights generally
and (ii) the availability of equitable remedies as such remedies may be limited
by equitable principles of general applicability (regardless of whether
enforcement is sought in a proceeding in equity or at law).
Section 14. MISCELLANEOUS.
(a) AMENDMENTS. This Agreement may be amended only by a writing signed
by East-West and the Company and any amendment so made shall bind all other
Holders.
(b) EAST-WEST AS REPRESENTATIVE. From and after any distribution of the
Registerable Securities to the shareholders of the Seller pursuant to a plan of
liquidation of the Seller, East-West shall be the duly authorized agent and
attorney-in-fact of each Holder for all purposes of this Agreement and all
actions by East-West shall bind all other Holders and the Company is hereby
authorized to act, take instructions from and direct all notices to East-West
without any need to receive any further authority from any other Holder.
(c) ASSIGNMENT. The Seller may not assign its rights under this
Agreement without the prior written consent of the Company except as part of a
plan of liquidation if and to the extent that any such assignment complies with
the provisions of Section 2. Holders may assign their respective rights
hereunder to any Person to whom they transfer any Registrable Securities in
accordance with the terms of this Agreement.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute a single instrument.
23
(e) NOTICES, ETC. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be given personally, sent by facsimile transmission or sent by prepaid
air courier or certified or express mail, postage prepaid. Any such notice shall
be deemed to have been given (a) when received, if delivered in person, sent by
facsimile transmission and confirmed in writing within three business days
thereafter or sent by prepaid air courier or (b) three business days following
the mailing thereof, if mailed by certified first class mail, postage prepaid,
in any such case to the respective addresses set forth below (or to such other
address or addresses as a party may have advised the other in the manner
provided in this Section 14):
If to the Purchaser:
Xx0.xxx Inc.
000 Xxxxxxxxx Xxxxxx, 0xxXxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
with a copy to:
McGuire, Woods, Battle & Xxxxxx, LLP
0 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to the Seller or any Holder:
c/o East-West Capital Associates, Inc.
00000 Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention:
(f) SEVERABILITY. If any provision of this Agreement shall be held to
be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
(g) GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York without regard to principles of conflict
of law.
(h) JURISDICTION. Each of the Holders and the Company hereby
irrevocably and unconditionally consents and submits to the exclusive
jurisdiction of any state or federal court located within the County of New
York, State of New York, in connection with any, actions, suits or proceedings
arising out of or relating to this
24
Agreement or any of the agreements delivered in connection herewith or the
transactions contemplated hereby or thereby. Each of the Company and Holders
hereby waives any objection to venue in such jurisdiction, and agrees that
service of any summons, complaint, notice or other process relating to such
proceeding may be effected (x) as provided by Section 14(c), or (y) to their
respective attorneys at their respective addresses set forth in Section 14(c) by
internationally regarded overnight express service such as Federal Express.
25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PARENT:
XX0.XXX INC.
By: /s/
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
SELLER:
DVD MAGS, INC.
By: /s/
---------------------------------
Name: Xxxxx Xxx
Title: Vice President
26
