REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of August 29, 1996, between
XXXXXX X. XXXXXX, with an address at 00 Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000
(the "Holder") and FAMILY GOLF CENTERS, INC., with an address at 000
Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company").
W I T N E S S E T H :
WHEREAS, the Holder is the beneficial owner of 1,832 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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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 X. XXXXXX
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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.
