EXHIBIT 10.2
PIGGYBACK REGISTRATION RIGHTS AGREEMENT
THIS PIGGYBACK REGISTRATION RIGHTS AGREEMENT, dated as of _________ _____,
2004 (this "AGREEMENT"), is entered into by and made between NATIONAL LAMPOON,
INC., a Delaware corporation ("COMPANY"), and the investors set forth on the
Schedule of Investors attached hereto (collectively, the "INVESTORS").
In consideration of the promises made herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1. DEFINITIONS.
As used in this Article 1 and elsewhere in this Agreement, the following
terms shall have the following respective meanings:
"AGREEMENT" shall have the meaning set forth in the preamble.
"COMMISSION" means the Securities and Exchange Commission or any other
federal agency administering the Securities Act.
"COMMON STOCK" means Company's Common Stock, par value $0.0001 per share.
"COMPANY" shall have the meaning set forth in the preamble.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any similar successor federal law then in force.
"EXISTING REGISTRATION RIGHTS AGREEMENT" means any agreement to provide
registration rights with respect to the securities of Company, which is
effective prior to the date of this Agreement, including, without limitation,
the Jimirro Registration Rights Agreement, the NLAG Registration Rights
Agreement, the Piggyback Registration Rights Agreement dated as of September 3,
2002, in favor of Constellation Venture Capital, L.P. and certain other persons
and the Warrant for the Purchase of 50,000 Shares of Common Stock, Without Par
Value, dated December 28, 2001, issued by the Company to Xxxxxx Xxxxxxxx.
"INVESTORS" shall have the meaning set forth in the preamble.
"JIMIRRO REGISTRABLE SECURITIES" means all securities of Company with
respect to which registration rights have been granted under the Jimirro
Registration Rights Agreement.
"JIMIRRO REGISTRATION RIGHTS AGREEMENT" means the Jimirro Registration
Rights Agreement dated as of May 17, 2002, by and among Company and Xxxxx X.
Xxxxxxx, as such agreement may be amended from time to time.
"NLAG REGISTRABLE SECURITIES" means all securities of Company with respect
to which registration rights have been granted under the NLAG Registration
Rights Agreement.
"NLAG REGISTRATION RIGHTS AGREEMENT" means the NLAG Registration Rights
Agreement dated as of May 17, 2002, by and among Company and applicable parties
thereto, as such agreement may be amended from time to time.
"PARI PASSU REGISTRABLE SECURITIES" means all securities of Company, the
holders of which have been, or are in the future, granted registration rights
with respect thereto to the extent the agreement providing the registration
rights provides, expressly or by implication, that such registration rights are
"pari passu" or in parity in an underwritten registration or distribution by
prospectus with the registration rights granted under this Agreement to holders
of Registrable Securities.
"PERSON" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization, a government or any department or agency thereof or any other
entity.
"PIGGYBACK REGISTRATION" shall have the meaning set forth in Section 2.1.
"PURCHASE AGREEMENT" means that certain Preferred Stock and Warrant
Purchase Agreement of even date herewith by and among Investors and Company.
"REGISTRABLE SECURITIES" means any (i) Common Stock issued or issuable
upon conversion of the Series C Preferred, (ii) Common Stock issued or issuable
upon exercise of the Warrants, and (iii) Common Stock issued in respect of the
securities referred to in clauses (i) and (ii) of this definition in connection
with any stock split, stock dividend, recapitalization or similar event.
"REGISTRATION EXPENSES" shall have the meaning set forth in Section 4.1.
"REGISTRATION STATEMENT" means the prospectus and other documents filed
with the Commission to affect a registration under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"SELLING EXPENSES" means all underwriting discounts, selling commissions
and transfer taxes incurred pursuant to the sale of Registrable Securities.
"SENIOR REGISTRABLE SECURITIES" means all securities of Company, the
holders of which have been, or are in the future, granted registration rights
with respect thereto to the extent the agreement providing the registration
rights provides, expressly or by implication, that such registration rights are
senior in priority in an underwritten registration or distribution by prospectus
to the registration rights granted under this Agreement to holders of
Registrable Securities, including the Jimirro Registrable Securities and the
NLAG Registrable Securities.
"SERIES C PREFERRED" means the shares of Series C Convertible Preferred
Stock of the Company, par value $0.0001 per share.
"SUBORDINATE REGISTRABLE SECURITIES" means all securities of Company, the
holders of which have been, or are in the future, granted registration rights
with respect thereto to the extent the agreement providing the registration
rights provides, expressly or by implication, that such registration rights are
subordinate in priority in an underwritten registration or distribution by
prospectus to the registration rights granted under this Agreement to holders of
Registrable Securities, including without limitation the securities granted
registration rights under the Subordinate Registration Rights Agreement.
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"SUBORDINATE REGISTRATION RIGHTS AGREEMENT" means such registration rights
agreements as may be entered into from time to time pursuant to which the
holders of such registrable securities are granted piggyback registration rights
where all such piggyback registration rights are subordinate to those piggyback
registration rights granted hereunder, including, without limitation, the
Piggyback Registration Rights Agreement, dated as of September 3, 2002, by and
among Company, Constellation Venture Capital, L.P., and the other parties
thereto, as such agreement may be amended and modified from time to time.
"WARRANTS" means the Common Stock Purchase Warrants issued in connection
with the sale and issuance of Series C Preferred pursuant to the terms of the
Purchase Agreement.
ARTICLE 2. PIGGYBACK REGISTRATIONS.
SECTION 2.1 RIGHT TO PIGGYBACK. Whenever Company proposes to register or
qualify for distribution by prospectus any of its securities ((a) other than
pursuant to a demand registration granted to another shareholder of Company by
an agreement that prohibits piggyback registrations in connection with such
demand registration or (b) a registration under the Securities Act on Form S-4
or S-8 or any successor or similar forms) and the registration form or
prospectus to be filed may be used for the registration or qualification for
distribution of Registrable Securities (a "PIGGYBACK REGISTRATION"), whether or
not for sale for its own account, Company will give prompt written notice to all
holders of Registrable Securities of its intention to effect the registration or
file the prospectus and, subject to the limitations contained in this Article 2,
will include in the registration or qualification all Registrable Securities
with respect to which Company has received written requests for inclusion
therein within fifteen (15) days after the receipt of Company's notice. Any
holder of Registrable Securities that has given a written request may withdraw
its Registrable Securities from the related Piggyback Registration by giving
written notice to Company and the managing underwriter, if any, on or before the
thirtieth (30th) day prior to the planned effective date of the related
Piggyback Registration.
SECTION 2.2 PIGGYBACK EXPENSES. The Registration Expenses of the holders
of Registrable Securities will be paid by Company in all Piggyback Registrations
whether or not any registration or prospectus has become effective or final.
SECTION 2.3 PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration
is an underwritten primary registration or distribution by prospectus on behalf
of Company, and the managing underwriters advise Company in writing (with a copy
to each party hereto requesting registration or qualification for distribution
by prospectus of Registrable Securities) that in their opinion the number of
securities requested to be included in the registration or prospectus exceeds
the number which can be sold in an offering without adversely affecting the
marketability of the offering, Company will include in the registration or
prospectus (i) first, the securities Company proposes to sell, (ii) second, the
Senior Registrable Securities requested to be included in the registration in
the manner provided for by the applicable registration rights agreements with
the Company, (iii) third, the Registrable Securities and the Pari Passu
Registrable Securities requested to be included in the registration pursuant to
applicable registration rights agreements with the Company, pro rata among the
holders of the securities on the basis of the number of securities so requested
to be included therein owned by each holder, and (iv) fourth, other securities
requested to be included in the registration, including any Subordinate
Registrable Securities. Company shall have the right to terminate or withdraw
any registration initiated by it under this Section prior to the effectiveness
of such registration, whether or not any holder of Registrable Securities has
elected to include securities in the registration and Company shall have no
liability to any of the holders of Registrable Securities in connection with
such termination or withdrawal.
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SECTION 2.4 PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration or distribution by
prospectus on behalf of holders of Company's securities, and the managing
underwriters advise Company in writing that in their opinion the number of
securities requested to be included in the registration or qualification for
distribution by prospectus exceeds the number which can be sold in an offering
without adversely affecting the marketability of the offering, Company will
include in the registration or prospectus (i) first, the securities requested to
be included therein by the holders requesting the registration, (ii) second, the
Senior Registrable Securities requested to be included in the registration in
the manner provided for by the applicable registration rights agreements with
the Company, (iii) third, the Registrable Securities and the Pari Passu
Registrable Securities requested to be included in the registration pursuant to
applicable registration rights agreements with the Company, pro rata among the
holders of all such securities on the basis of the number of securities so
requested to be included therein owned by each holder, and (iv) fourth, other
securities requested to be included in the registration, including any
Subordinate Registrable Securities.
SECTION 2.5 OTHER REGISTRATIONS. If Company has previously filed a
Registration Statement with respect to Registrable Securities pursuant to this
Article 2, and if such previous registration or offering by prospectus has not
been withdrawn or abandoned, Company will not file and shall not be required to
file or cause to be effected any other registration of any of its equity
securities or securities convertible or exchangeable into or exercisable for its
equity securities under the Securities Act (except under the Securities Act on
Form S-4 or S-8 or any successor or similar forms), whether on its own behalf or
at the request of any holder or holders of such securities, until a period of at
least ninety (90) days have elapsed from the effective date of such previous
registration.
ARTICLE 3. REGISTRATION PROCEDURES.
SECTION 3.1 REGISTRATION PROCEDURES. Subject to Sections 2.5, whenever the
holders of Registrable Securities have requested that any Registrable Securities
be registered pursuant to this Agreement and such Registrable Securities are in
fact included in the Registration Statement, Company will use its best efforts
to effect the registration and sale of those Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant thereto
Company will as expeditiously as possible:
(a) prepare and, within sixty (60) days after the end of the period
within which requests for registration may be given to Company, unless the
failure to file within such sixty (60) day period occurs due to matters
outside Company's control, in which case as soon as practicable, file with
the Commission a Registration Statement with respect to the Registrable
Securities and thereafter use its best efforts to cause the Registration
Statement to become effective;
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(b) prepare and file with the Commission any amendments and
supplements to the Registration Statement as may be necessary to keep the
Registration Statement effective for a period of either (i) not less than
ninety (90) days (subject to extension pursuant to Section 6.2) or, if the
Registration Statement relates to an underwritten offering, such longer
period as in the opinion of counsel for the underwriters a prospectus is
required by law to be delivered in connection with sales of Registrable
Securities by an underwriter or dealer or (ii) a shorter period as will
terminate when all of the securities covered by the Registration Statement
have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in the Registration
Statement (but in any event not before the expiration of any longer period
required under the Securities Act), and to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by the Registration Statement until such time as all of the
securities have been disposed of in accordance with the intended methods
of disposition by the seller or sellers thereof set forth in the
Registration Statement;
(c) furnish to each seller of Registrable Securities the number of
copies of the Registration Statement, each amendment and supplement
thereto, including each preliminary prospectus, final prospectus and other
documents as the seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by the seller;
(d) use its best efforts to register or qualify the Registrable
Securities under any other securities or blue sky laws of any
jurisdictions as any seller reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable
the seller to consummate the disposition in those jurisdictions of the
Registrable Securities owned by the seller (provided that Company will not
be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
subparagraph, (ii) subject itself to a form of taxation in any
jurisdiction where it would not otherwise be subject to such form of
taxation but for this subparagraph or (iii) consent to general service of
process in any jurisdiction where it would not otherwise be subject to
general service of process but for this subparagraph);
(e) promptly notify each seller of the Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the discovery of
the happening of any event as a result of which, the prospectus contains
an untrue statement of a material fact or omits to state any fact
necessary to make the statements therein not misleading in the light of
the circumstances under which they were made, and, at the request of any
such seller, Company will prepare and furnish to seller a reasonable
number of copies of a supplement or amendment to the prospectus so that,
as thereafter delivered to the purchasers of Registrable Securities, the
prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading
in the light of the circumstances under which they were made;
(f) use its best efforts to cause all the Registrable Securities to
be listed on each securities exchange on which similar securities issued
by Company are then listed;
(g) provide a transfer agent and registrar for all the Registrable
Securities not later than the effective date of, or date of final receipt
for, the Registration Statement;
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(h) enter into any customary agreements (including underwriting
agreements with customary provisions) and take all other actions as the
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of the Registrable Securities (including,
without limitation, effecting a share split or a combination of shares);
(i) make available for inspection, subject to reasonable
confidentiality restrictions on use, by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to
the Registration Statement and any attorney, accountant or other agent
retained by any seller or underwriter, all financial and other records,
pertinent corporate documents and documents relating to the business of
Company, and cause Company's officers, directors, employees and
independent accountants to supply all information reasonably requested by
any seller, underwriter, attorney, accountant or agent in connection with
the Registration Statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve (12) months beginning with the
first day of Company's first full calendar quarter after the effective
date of the Registration Statement, which earnings statement shall
satisfy, in the case of a registration in the United States, the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related prospectus or ordering the cessation of
trading or suspending the qualification of any securities included in the
Registration Statement for sale in any jurisdiction, Company will use its
best efforts promptly to obtain the withdrawal of the order;
(l) in connection with any underwritten offering, to the extent
Company obtains one or more comfort letters from Company's independent
public accountants, obtain comfort letters, addressed to the holders of
the Registrable Securities being sold, dated the effective date of such
Registration Statement (and, if the registration includes an underwritten
public offering, dated the date of the closing under the underwriting
agreement) signed by Company's independent public accountants in customary
form and covering matters of the type customarily covered by comfort
letters; and
(m) in connection with any underwritten offering provide legal
opinions of Company's outside counsel, addressed to the holders of the
Registrable Securities being sold, dated the effective date of the
Registration Statement (and, if the registration includes an underwritten
public offering, dated the date of the closing under the underwriting
agreement), with respect to the Registration Statement, each amendment and
supplement thereto (including the preliminary prospectus) and all other
documents relating thereto in customary form and covering matters of the
type customarily covered by legal opinions of such nature.
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Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish Company with information regarding the
seller and the intended and actual distribution of the securities as Company may
from time to time reasonably request.
ARTICLE 4. REGISTRATION EXPENSES.
Except as otherwise expressly provided herein, all expenses incidental to
Company's performance of or compliance with this Agreement, including, without
limitation, all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, word processing, duplicating and printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for Company and all independent certified public accountants, underwriters and
other Persons retained by Company (all expenses being herein called
"REGISTRATION EXPENSES"), will be borne by Company. Company will, in any event,
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit or quarterly review, the expense of any
liability insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which similar securities issued by
Company are then listed. Notwithstanding the foregoing, all Selling Expenses
shall be borne by the holders of the securities so registered pro rata on the
basis of the number of their shares so registered.
ARTICLE 5. INDEMNIFICATION.
SECTION 5.1 INDEMNIFICATION. Company agrees to indemnify and hold
harmless, and hereby does indemnify and hold harmless, each holder of
Registrable Securities, its affiliates and their respective officers, directors
and partners and each Person who controls the holder (within the meaning of the
Securities Act) against, and pay and reimburse the holder, affiliate, director,
officer or partner or controlling person for any losses, claims, damages and
liabilities, joint or several, to which the holder or any such affiliate,
director, officer or partner or controlling person may become subject under the
Securities Act or otherwise, insofar as the losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon (i) any untrue or alleged untrue
statement of material fact contained in any Registration Statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or,
(ii) any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, and Company
will pay and reimburse holder and each affiliate, director, officer, partner and
controlling person for any legal or any other expenses actually and reasonably
incurred by them in connection with investigating or defending any loss, claim,
liability, action or proceeding; provided, however, that Company shall not be
liable in any case to the extent that any loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement, or omission or alleged
omission, made in the Registration Statement, any prospectus or preliminary
prospectus or any amendment or supplement thereto, or in any application, in
reliance upon, and in conformity with, written information prepared and
furnished to Company by the holder expressly for use therein or by the holder's
failure to deliver a copy of the Registration Statement or prospectus or any
amendments or supplements thereto after Company has furnished the holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, Company, if requested, will indemnify the underwriters, their officers
and directors and each Person who controls the underwriters (within the meaning
of the Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
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SECTION 5.2 COOPERATION. In connection with any Registration Statement in
which a holder of Registrable Securities is participating, each holder will
furnish to Company in writing the information and affidavits as Company
reasonably requests for use in connection with any Registration Statement or
prospectus and will indemnify and hold harmless Company, its directors and
officers, each underwriter and each other Person who controls Company (within
the meaning of the Securities Act) against any losses, claims, damages and
liabilities, joint or several, to which Company or any director or officer, any
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as the losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon (i) any untrue or alleged untrue statement of material fact
contained in the Registration Statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or in any application or (ii) any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that the untrue statement or omission is made in the Registration Statement, any
prospectus or preliminary prospectus or any amendment or supplement thereto, or
in any application, in reliance upon and in conformity with written information
prepared and furnished to Company by the holder expressly for use therein, and
such holder will reimburse Company and each director, officer, underwriter and
controlling Person for any legal or any other expenses actually and reasonably
incurred by them in connection with investigating or defending any loss, claim,
liability, action or proceeding; provided, however, that the obligation to
indemnify and hold harmless will be individual and several to each holder and
will be limited to the net amount of proceeds received by the holder from the
sale of Registrable Securities pursuant to the Registration Statement.
SECTION 5.3 CONTRIBUTION. If the indemnification provided for in Sections
5.1 or 5.2 is unavailable to an indemnified party under such Sections (other
than by reason of exceptions provided in those Sections) in respect of any
claims referred to in such Sections, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such claims in such
proportion as is appropriate to reflect the relative fault of Company on the one
hand and of the holder of Registrable Securities on the other in connection with
the statements or omissions which resulted in such claims. The amount paid or
payable by a party as a result of the claims referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim. The relative
fault of Company on the one hand and of the holder of Registrable Securities on
the other shall be determined by reference to, among other things, whether the
applicable misstatement or alleged misstatement relates to information supplied
by Company or by the holder of Registrable Securities and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such misstatement or alleged misstatement. Company and each Investor agree that
it would not be just and equitable if contribution pursuant to this Section 5.3
were determine by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 5.3, the holder of Registrable
Securities shall not be required to contribute any amount pursuant hereto in
excess of the net proceeds (after deducting any discounts or commissions
received by an underwriter in connection with such registration) from the
offering received by the holder of Registrable Securities. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution hereunder from any person who
was not guilty of such fraudulent misrepresentation.
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SECTION 5.4 NOTICE. Any Person entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) unless in the indemnified
party's reasonable judgment a conflict of interest between the indemnified and
indemnifying parties may exist with respect to the claim, permit the
indemnifying party to assume the defense of the claim with counsel reasonably
satisfactory to the indemnified party. If the defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without the indemnifying party's prior written consent
(but its consent will not be unreasonably withheld). An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by the indemnifying party with respect to the claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between the indemnified party and any other of the indemnified parties with
respect to the claim.
SECTION 5.5 SURVIVAL. The indemnification provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling Person of the indemnified party and will survive the transfer of
securities. Each party hereto also agrees to make any provisions, as are
reasonably requested by any indemnified party, for contribution to the party in
the event that indemnification from the party hereto is unavailable for any
reason.
ARTICLE 6. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
SECTION 6.1 PARTICIPATION. No Person may participate in any registration
hereunder which is underwritten unless that Person (i) agrees to sell the
Person's securities on the basis provided in any underwriting arrangements
approved by Company (including, without limitation, pursuant to the terms of any
over-allotment or "green shoe" option requested by the managing underwriter(s),
provided that no holder of Registrable Securities will be required to sell more
than the number of Registrable Securities that the holder has requested Company
to include in any registration), (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of the underwriting arrangements, and (iii)
cooperates with Company's reasonable requests in connection with the
registration or qualification (it being understood that Company's failure to
perform its obligations hereunder, which failure is caused by the Person's
failure to cooperate, will not constitute a breach by Company of this
Agreement).
SECTION 6.2 NOTICE. Each holder of Registrable Securities who is
participating in any registration hereunder agrees that, upon receipt of any
notice from Company of the happening of any event of the kind described in
Section 3.1(e), such holder will forthwith discontinue the disposition of its
Registrable Securities pursuant to the Registration Statement until such
holder's receipt of the copies of a supplemented or amended prospectus as
contemplated by Section 3.1(e). In the event Company shall give any such notice,
the applicable time period mentioned in Section 3.1(b) during which a
Registration Statement is to remain effective shall be extended by the number of
days during the period from and including the date of the giving of the notice
pursuant to this Section to and including the date when each seller of a
Registrable Security covered by the Registration Statement shall have received
the copies of the supplemented or amended prospectus contemplated by Section
3.1(e).
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SECTION 6.3 HOLDBACK AGREEMENTS BY HOLDERS OF REGISTRABLE SECURITIES. Each
holder of Registrable Securities agrees not to effect any public sale or
distribution of equity securities of Company, or any securities convertible into
or exchangeable or exercisable for such securities, including any sale pursuant
to Rule 144 (except as part of the underwritten registration, if permitted)
during the seven (7) days prior to, and the ninety (90) days following, the
effective date of any underwritten public offering (unless the managing
underwriter agrees otherwise). Each holder of Registrable Securities agrees to
enter into customary lock-up agreements consistent with the foregoing if
requested by any underwriter of any such public offering. In order to enforce
the foregoing covenant, Company may impose stop-transfer instructions with
respect to the securities of Company held by each holder (and the shares or
securities of every other Person subject to the foregoing restriction) until the
end of that period.
ARTICLE 7. REPORTING
SECTION 7.1 RULE 144. Company shall timely file the reports required to be
filed by it under the Securities Act and the Exchange Act (including but not
limited to the reports under Sections 13 and 15(d) of the Exchange Act referred
to in subparagraph (c) of Rule 144 adopted by the Commission under the
Securities Act) and the rules and regulations adopted by the Commission
thereunder (or, if Company is not required to file such reports, will, upon the
request of any holder of Registrable Securities, make publicly available other
information) and will take such further action as any holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (a) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of Registrable Securities, Company will deliver to such
holder a written statement as to whether it has complied with the requirements
of this Section 7.1.
ARTICLE 8. MISCELLANEOUS.
SECTION 8.1 SUBORDINATION.
(a) To the extent any provision of this Agreement could be deemed
inconsistent with or violative of the rights granted to holders of
"registrable securities" under any Existing Registration Rights Agreement,
this Agreement shall be interpreted and/or, without further action on the
part of the parties hereto, deemed modified to the extent necessary to
remove such inconsistency or violation.
(b) Nothing in this Agreement (and only this Agreement) shall limit
or restrict the rights of Company to grant registration rights with
respect to the securities of Company which are senior, pari passu or
subordinate to the rights granted hereunder.
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SECTION 8.2 REMEDIES. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party hereto shall have the right to injunctive relief,
in addition to all of its other rights and remedies at law or in equity, to
enforce the provisions of this Agreement; provided, however, that Investors
shall have no right to an injunction to prevent the filing or effectiveness of
any Registration Statement of Company.
SECTION 8.3 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may be amended or waived only upon the prior
written consent of Company and the holders of a majority of the Registrable
Securities.
SECTION 8.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns. In addition, and whether or not any
express assignment shall have been made, the provisions of this Agreement which
are for the benefit of the holders of the Registrable Securities (or any portion
thereof) as such shall be for the benefit of and enforceable by any subsequent
holder of any Registrable Securities (or of such portion thereof).
SECTION 8.5 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in the manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement shall be reformed, construed and enforced
in the jurisdiction as if the invalid, illegal or unenforceable provision had
never been contained herein.
SECTION 8.6 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all counterparts taken together will constitute one and
the same Agreement.
SECTION 8.7 DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
SECTION 8.8 GOVERNING LAW. The corporate law of the State of Delaware
shall govern all issues and questions concerning the relative rights and
obligations of the Company and its stockholders. All other issues and questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware, without giving effect to any choice of law or conflict of
law rules or provisions (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.
SECTION 8.9 ARBITRATION. Any controversy, dispute or claim of any nature
whatsoever arising out of, in connection with or in relation to this Agreement,
including the issue of arbitrability of any such disputes, must be settled by
final binding arbitration before a retired judge at JAMS in Santa Monica,
California. The prevailing party in any dispute will be entitled to recover all
attorney fees, costs, and expenses in addition to other allowable costs.
PAGE 11
SECTION 8.10 NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed effectively given: (i) upon personal delivery
to the party to be notified, (ii) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All notices shall be
addressed to Company at its principal office, to each Investor at the address
for such Investor set forth on the Schedule of Investors attached hereto or to
such other address as Company or an Investor shall have furnished to the other
in writing.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
above date.
NATIONAL LAMPOON, INC.
By:___________________________________
Xxxxxxx X. Xxxxxxx
Executive Vice President
By:
By:___________________________________
______________________________________
[NAME]
______________________________________
[NAME]
______________________________________
[NAME]
______________________________________
[NAME]
PAGE 12
SCHEDULE OF INVESTORS
SERIES C CONVERTIBLE PREFERRED STOCK
NATIONAL LAMPOON, INC.
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
_________________________________
_________________________________
_________________________________
_________________________________
PAGE 13
