REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of August 29, 1996, between
XXXXXX XXXXX, with an address c/o Xxxxxxx Xxxxxx, Xxxxx Xxxxxx, 0000 Xxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx (the "Holder") and FAMILY GOLF CENTERS, INC., with
an address at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company").
WITNESSETH:
WHEREAS, the Holder is the beneficial owner of 1,649 shares (the
"Shares") of the common stock, par value $.01 per share, of the Company
("Common Stock");
WHEREAS, the Holder desires to have certain registration rights under
the securities laws, and the Company desires that the Holder have such
registration rights;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, the parties hereby agree as
follows:
1. If, at any time during the period commencing six (6) months from
the date hereof and terminating on the date on which the Shares become
saleable under Rule 144 promulgated under the Act (as defined below), the
Company shall determine to file any registration statement, or any
post-effective amendment to a registration statement, under the Securities Act
of 1933, as amended (the "Act"), covering equity securities of the Company
(other than registration statements on Form S-8 or S-4 or any other form not
generally available for the registration of securities for sale to the public)
for its own account or for the account of others, the Company shall advise the
Holder, by written notice at least ten (10) business days prior to any filing,
and shall, upon the request of the Holder, and at the expense of the Company,
include in any such registration statement, or any such post-effective
amendment to a registration statement, all of the Registrable
Securities (as hereinafter defined) that the Holder has requested
in writing to be registered, provided that such written request is delivered
to the Company within seven (7) business days of the Holder's receipt of
notice from the Company. As used in this Agreement, "Registrable Securities"
shall mean (i) the Shares, and (ii) any Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any convertible security,
option, warrant right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange for or in replacement of
the Shares. All costs and expenses of such registration statement shall be
borne by the Company, except underwriting discounts or commissions applicable
to any of the Registrable Securities sold by the Holder and any counsel to the
Holder. The Company shall not be required to register securities of the Holder
on more than one occasion; provided that if the Holder has been prevented from
selling all of the Registrable Securities Holder wished to sell because of
limitations imposed under paragraph (c) of this Section 1, then the Holder
shall be entitled to include the Registrable Securities in one or more
additional registration statements under the terms of this Section 1 until the
Holder has been able to sell all of the Registrable Securities the Holder
wishes to sell.
(a) The Company shall supply prospectuses and such other
documents as the Holder may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities, use its
reasonable best efforts to register and qualify any of the Registrable
Securities for sale in a reasonable number of states and do any and all other
acts and things which may be necessary or desirable to enable the
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the Holder to consummate the public sale or other disposition of the Registrable
Securities subject to the rights of others with similar rights.
(b) The Company shall also furnish indemnification in the
manner provided in Section 3 hereof, except that the maximum amount of such
indemnification shall be limited to the amount of proceeds received by the
Holder from the sale of the Registrable Securities. The Holder shall furnish
information and indemnification as set forth in Section 3 hereof, except that
the maximum amount which may be recovered from the Holder shall be limited to
the amount of proceeds received by the Holder from the sale of the Registrable
Securities.
(c) In connection with any offering involving an
underwriting of shares of the Company's Common Stock, the Company shall not be
required under this Section 1 to include any of the Holder's Registrable
Securities in such underwriting unless the Holder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by it (or by other persons entitled to select the underwriters), and then only
in such quantity as the underwriters determine in their sole discretion will
not jeopardize or limit the success of the offering by the Company. If the
total amount of securities, including Registrable Securities, requested by
selling stockholders to be included in such offering exceeds the amount of
securities that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities,
including Registrable Securities, which the underwriters determine in their
sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro
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rata (subject to the registration rights set forth on Schedule I attached
hereto and made a part hereof) among the selling stockholders (whether such
selling stockholders acquire or have acquired such Common Stock before, on or
after the date hereof) according to the total amount of securities entitled to
be included therein owned by each selling stockholder or in such other
proportions as shall mutually be agreed to by such selling stockholders).
(d) The Holder acknowledges and agrees that any Shares which
are held in escrow pursuant to that certain Escrow Agreement, dated as of even
date herewith, among the Company, the Holder and the Escrow Agent (as therein
defined) (the "Escrow Agreement") may not be sold while so held in escrow,
notwithstanding any registration of such Shares pursuant to this Agreement.
2. Representations by the Holder. The Holder understands that the
Registrable Securities are and will be deemed to be "restricted securities" as
such term is defined in Rule 144 and can only be sold (a) in accordance with
the provisions of the Rule or such other duly available exemption from the
registration requirements of the Act or (b) pursuant to an effective
registration statement as set forth in this Agreement. The Holder is acquiring
the Shares for its own account (and not for the account of others) and not
with a view to the distribution or resale thereof. Upon any subsequent
transfer or disposition of any Registrable Securities made in reliance on an
exemption from the registration provisions of the Act, the Holder agrees to
deliver to the Company either an opinion of counsel satisfactory to the
Company to the effect that such transfer or
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disposition may be made without registration of such Registragble Securities
under the Act and/or such other documents or certificates as the Company may
require.
3. (a) Whenever pursuant to Section 1 hereof, a registration
statement relating to any of the Registrable Securities is filed under the
Act, amended or supplemented, the Company shall, to the extent permitted by
law, indemnify and hold harmless Holder, and each person, if any, who controls
(within the meaning of the Act) Holder, and each underwriter (within the
meaning of the Act) of such securities and each person, if any, who controls
(within the meaning of the Act) any such underwriter, against such losses,
claims, damages, liabilities or actions, joint or several, to which Holder,
any such controlling person or any such underwriter may become subject, under
the Act or otherwise, insofar as such losses, claims, damages, 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
such registration statement or any preliminary prospectus or final prospectus
constituting a part thereof or any amendment or supplement thereto, or arise
out of or are based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse Holder and each such controlling person and
underwriter for any legal or other expenses reasonably incurred by Holder or
such controlling person or underwriter in connection with investigating or
defending any such losses, claims, damages, liabilities or actions; provided,
however, that the Company will not be liable in any such case to the extent
that any such losses, claims, damages, liabilities or actions arise out of or
are based upon an untrue statement or alleged untrue
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statement or omission or alleged omission made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information
furnished by Holder or any other underwriter, for use in the preparation
thereof.
(b) The Holder shall indemnify and hold harmless the
Company, each of its directors, each of its officers and each person, if any,
who controls the Company within the meaning of the Act against any losses,
claims, damages, liabilities or actions, to which the Company or any such
director, officer or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue or alleged untrue statement of any
preliminary prospectus, said final prospectus, or said amendment or
supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in said registration
statement, said preliminary prospectus, said final prospectus or said
amendment or supplement in reliance upon and in conformity with written
information furnished by such Holder for use in the preparation thereof; and
shall reimburse the Company or any such director, officer or controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such losses, claims, damages,
liabilities or actions.
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(c) Promptly after receipt by an indemnified party under
this Section 3 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party notice of the commencement
thereof; but the omission to so notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 3.
(d) In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in, and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party, the indemnifying party shall not be liable to
such indemnified party under this Section 3 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation.
(e) 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 this Section 2 to the extent permitted by law,
provided that (i) no contribution shall be made under circumstances where the
indemnifying party would not have been liable for indemnification under the
fault standards set forth in this Section 3, (ii) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of
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Section 11(f) of the Act) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of such fraudulent misrepresentation
and (iii) contribution by the Holder shall be limited in amount to the net
amount of proceeds received by him from the sale of the Registrable Securities
pursuant to such Registration Statement or prospectus.
4. All notices, requests, consents or other communications ("Notices")
which either party may desire or be required to give to the other hereunder
shall be in writing and shall be delivered by hand, overnight express carrier,
or sent by registered or certified mail, return receipt requested, postage
prepaid, in any event, addressed to the parties at their respective addresses
first above set forth. A copy of any Notice given by the Holder to the Company
shall simultaneously be given in any manner provided above to Squadron,
Ellenoff, Plesent & Xxxxxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxx, Esq. Notices given in the manner aforesaid shall be
deemed to have been given three (3) business days after the day so mailed, the
following business day after delivery to any overnight express carrier and on
the day so delivered by hand (if delivered on a business day prior to 5 p.m., or
if not, then on the next business day). Either party shall have the right to
change its address(es) for the receipt of Notices by giving Notice to the other
party in either manner aforesaid. Any Notice required or permitted to be given
by either party may be given by that party's attorney.
5. (a) This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors.
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(b) This Agreement shall be governed by, interpreted under
and construed and enforced in accordance with, the laws of the State of New
York.
(c) This Agreement has been fully negotiated by the parties
and rules of construction construing ambiguities against the party responsible
for drafting agreements shall not apply.
(d) This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
understandings, if any, with respect thereto.
(e) This Agreement may not be modified, changed,
supplemented or terminated, nor may any obligations hereunder be waived,
except by written instrument signed by the party to be charged or by its agent
duly authorized in writing or as otherwise expressly permitted herein.
(f) 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, will not operate as a waiver thereof. No waiver will be
effective unless and until it is in writing and signed by the party giving the
waiver.
(g) This Agreement may be executed in one or more
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which taken together shall constitute but one and the
same original.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
FAMILY GOLF CENTERS, INC.
By: ____________________
Name: Xxxxxx Xxxxxx
Title: Vice President
________________________
XXXXXX XXXXX
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Schedule I
1. The registration rights attaching to the 300,000 shares to be
issued upon exercise of the Warrants for such shares (not yet exercised)
issued in connection with a public offering in December 1995, (See Exhibit
10.28 of the Registration Statement dated October 3, 1995 (Registration Number
33-97686)).
2. Any registration rights in respect of the Common Stock or any
other class of capital stock of the Company, except those registration rights
in respect of shares of Common Stock issued in connection with the acquisition
by the Company of a golf center.
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