REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 18, 2004, by and among RMS Titanic, Inc., a Florida
corporation (the "Company"), the purchasers signatory hereto (each such
purchaser, a "Purchaser" and collectively, the "Purchasers"), and Sands Brothers
International Limited (the "Holder Agent").
WHEREAS, in connection with certain Subscription Agreements among the
Purchasers and the Company (the "Subscription Agreement") which have been
executed in connection with the consummation of the transactions contemplated in
that certain Confidential Private Placement Memorandum dated July 23, 2004 (the
"Memorandum"), the Company has agreed, upon the terms and subject to the
conditions of the Subscription Agreement and the Memorandum to issue and sell to
the Purchasers up to an aggregate of up to $2,760,000 of units (each, a "Unit"
and collectively, the "Units"), each Unit consisting of shares of the Company's
Common Stock, and warrants (each, a "Warrant" and collectively, the "Warrants")
to purchase shares of the Common Stock as described in the Memorandum;
WHEREAS, to induce the Purchasers to execute and deliver the
Subscription Agreement, the Company has agreed to provide certain registration
rights with respect to the Common Stock and the shares of Common Stock issuable
upon exercise of the Warrants (the "Warrant Shares") and the Company has also
agreed to provide certain registration rights with respect to the shares of
Common Stock issuable upon exercise of the warrants ("Selected Dealer
Warrants"), issued to Holder Agent and its permitted transferees, in its
capacity as Selected Dealer (the "Selected Dealer Warrant Shares") both on the
terms and conditions provided herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Memorandum shall have the meanings given such terms in the
Memorandum. As used in this Agreement, the following terms shall have the
following meanings:
"Advice" shall have the meaning set forth in Section 6(d).
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, $.001 par value
per share.
"Effectiveness Date" means, with respect to the initial Registration
Statement required to be filed hereunder, the earlier of (a) 120 days of the
Final Closing; provided, however, that to the extent the Commission fails to
issue a comment letter to the Company within 30 days of the Company's initial
filing of its Registration Statement or 15 days following the Company's filing
of an amendment to its Registration Statement, such 120 day period shall be
increased by each day of such Commission's failure in excess of the requisite
periods, as applicable, and (b) the fifth Trading Day following the date on
which the Company is notified by the Commission that the Registration Statement
will not be reviewed or is no longer subject to further review and comments.
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"Effectiveness Period" shall have the meaning set forth in Section
2(a).
"Event" shall have the meaning set forth in Section 2(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Filing Date" means, with respect to the Registration Statement
required to be filed hereunder, within 45 days of the Final Closing.
"Final Closing" means the later of the last closing held pursuant to
the Memorandum or the date that the offering is terminated in accordance with
the Memorandum.
"Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities.
"Holder Agent" means Sands Brothers International Limited, 00 Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, which shall act as the agent of all
Holders for purposes set forth herein.
"Indemnified Party" shall have the meaning set forth in Section 5(c).
"Indemnifying Party" shall have the meaning set forth in Section 5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Majority Holders" means Holders who have subscribed for at least
$200,000 worth of Units pursuant to the Subscription Agreement, if any.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"Registrable Securities" means all of the Shares, the Warrant Shares
and the Selected Dealer Warrant Shares , together with any shares of Common
Stock issued or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing.
"Registration Statement" means the registration statements required to
be filed hereunder, including (in each case) the Prospectus, amendments and
supplements to the registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in the registration
statement.
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"Rule 144(k)" means Rule 144(k) promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock issued pursuant to the
Subscription Agreement and the Memorandum.
"Trading Day" means a day on which the principal exchange on which the
Common Stock is then listed is open for purposes of trading securities.
2. Registration.
(a) On or prior to the Filing Date, the Company shall prepare and file with the
Commission the Registration Statement covering the resale of all of the
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement required hereunder shall be on Form SB-2
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form SB-2, in which case the Registration Statement
shall be on any other appropriate form (including, without limitation, a "long
form" registration statement). The Registration Statement required hereunder
shall contain (except if otherwise requested by the Holder Agent, and agreed to
by the Company, the agreement of which shall not be withheld unreasonably)
substantially the "Plan of Distribution" substantially in the form attached
hereto as Exhibit A. Subject to the terms of this Agreement, the Company shall
use its commercially reasonable efforts to cause the Registration Statement to
be declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event not later than the Effectiveness Date, and
shall use its commercially reasonable efforts to keep the Registration Statement
continuously effective under the Securities Act until the date when all
Registrable Securities covered by the Registration Statement have been sold or
may be sold without volume restrictions pursuant to Rule 144(k) as determined by
the counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company's transfer agent and the affected
Holders (the "Effectiveness Period").
(b) If: (i) a Registration Statement is not filed on or prior to the Filing Date
(if the Company files a Registration Statement without affording the Majority
Holders the opportunity to review and comment on the same as required by Section
3(a), the Company shall not be deemed to have satisfied this clause (i)), or
(ii) the Company fails to file with the Commission a request for acceleration in
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accordance with Rule 461 promulgated under the Securities Act, within 5 Trading
Days of the date that the Company is notified (orally or in writing, whichever
is earlier) by the Commission that a Registration Statement will not be
"reviewed," or is not subject to further review, or (iii) prior to the date when
such Registration Statement is first declared effective by the Commission, the
Company fails to file a pre-effective amendment and otherwise respond in writing
to comments made by the Commission in respect of such Registration Statement
within 20 Trading Days after the receipt of comments by or notice from the
Commission that such amendment is required in order for a Registration Statement
to be declared effective, or (iv) a Registration Statement filed or required to
be filed hereunder is not declared effective by the Commission on or before the
Effectiveness Date, or (v) after a Registration Statement is first declared
effective by the Commission, it ceases for any reason to remain continuously
effective as to all Registrable Securities for which it is required to be
effective, or the Holders are not permitted to utilize the Prospectus therein to
resell such Registrable Securities, for in any such case 15 consecutive Trading
Days but no more than an aggregate of 25 Trading Days during any 12-month period
(which need not be consecutive Trading Days) (any such failure or breach being
referred to as an "Event," and for purposes of clause (i) or (iv) the date on
which such Event occurs, or for purposes of clause (ii) the date on which such 5
Trading Day period is exceeded, or for purposes of clause (iii) the date which
such 30 Trading Day period is exceeded, or for purposes of clause (v) the date
on which such 15- or 25-day period, as applicable, is exceeded being referred to
as "Event Date"), then in addition to any other rights the Holders may have
hereunder or under applicable law: (x) on each such Event Date the Company shall
pay to each Holder an amount in cash, as liquidated damages and not as a
penalty, equal to 1.0% of the aggregate purchase price paid by such Holder
pursuant to the Subscription Agreement for any Registrable Securities then held
by such Holder; and (y) on each monthly anniversary of each such Event Date (if
the applicable Event shall not have been cured by such date) until the
applicable Event is cured, the Company shall pay to each Holder an amount in
cash, as liquidated damages and not as a penalty, equal to 1.0% of the aggregate
purchase price paid by such Holder pursuant to the Subscription Agreement for
any Registrable Securities then held by such Holder.. If the Company fails to
pay any liquidated damages pursuant to this Section in full within seven Trading
Days after the date payable, the Company will pay interest thereon at a rate of
18% per annum (or such lesser maximum amount that is permitted to be paid by
applicable law) to the Holder, accruing daily from the date such liquidated
damages are due until such amounts, plus all such interest thereon, are paid in
full. The liquidated damages pursuant to the terms hereof shall apply on a daily
pro-rata basis for any portion of a month prior to the cure of an Event.
3. Registration Procedures
In connection with the Company's registration obligations hereunder,
the Company shall:
(a) Not less than five days prior to the filing of the Registration Statement or
any related Prospectus or any amendment or supplement thereto, the Company
shall, (i) furnish to the Holder Agent and any Majority Holders copies of all
such documents proposed to be filed (including documents incorporated or deemed
incorporated by reference to the extent requested by the Holder Agent or any
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such Majority Holders) which documents will be subject to the review of the
Holder Agent and the Majority Holders, if any, and (ii) cause its officers and
directors, counsel and independent certified public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of respective
counsel. The Company shall not file the Registration Statement or any such
Prospectus or any amendments or supplements thereto in the event that an
objection, which shall be reasonable and made in good faith, to such filing is
made by either (x) the holders of a majority of Registrable Securities held by
all Majority Holders as a group, or (y) the Holder Agent, provided that the
Company is notified of such objection in writing no later than three Days after
the Holder Agent and any Majority Holders have been so furnished copies of such
documents.
(b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep the Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; (iii) respond as
promptly as reasonably practicable to any comments received from the Commission
with respect to the Registration Statement or any amendment thereto and, as
promptly as reasonably practicable, upon request, provide the Holder Agent true
and complete copies of all correspondence from and to the Commission relating to
the Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented.
(c) Notify the Holder Agent and any Majority Holders as promptly as reasonably
practicable and (if requested by the Holder Agent or any such Majority Holder)
confirm such notice in writing promptly following the day (i) when a Prospectus
or any Prospectus supplement or post-effective amendment to the Registration
Statement is proposed to be filed; and (ii) when the Commission notifies the
Company whether there will be a "review" of the Registration Statement and
whenever the Commission comments in writing on the Registration Statement (the
Company shall upon request provide true and complete copies thereof and all
written responses thereto to the Holder Agent.
(d) Notify the Holder Agent and the Holders as promptly as reasonably
practicable and (if requested by the Holder Agent or any such Holder) confirm
such notice in writing promptly following the day (i) with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state
governmental authority during the period of effectiveness of the Registration
Statement for amendments or supplements to the Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the
Commission or any other Federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
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the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event or passage of time that makes the financial statements included in the
Registration Statement ineligible for inclusion therein or any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(e) Use commercially reasonable efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as practicable.
(f) Furnish to each Holder, without charge, at least one conformed copy of the
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Holder, and
all exhibits to the extent requested by such Holder (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission.
(g) Subject to the terms of Section 4(ii), promptly deliver to each Holder,
without charge, as many copies of the Prospectus or Prospectuses (including each
form of prospectus) and each amendment or supplement thereto as such Holder may
reasonably request in connection with resales by the Holder of Registrable
Securities. Subject to the terms of this Agreement, the Company hereby consents
to the use of such Prospectus and each amendment or supplement thereto by each
of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving on any applicable notice pursuant to
Section 3(c) and/or 3(d).
(h) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Registration Statement; provided, that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.
(i) If requested by the Holders, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a purchaser pursuant to the Registration
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Statement, which certificates shall be free, to the extent permitted by the
Securities Act and the Subscription Agreement, of all restrictive legends, and
to enable such Registrable Securities to be in such denominations and registered
in such names as any such Holders may request.
(j) Upon the occurrence of any event contemplated by Section 3(d)(v), as
promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. If the
Company notifies the Holder Agent and the Holders in accordance with clauses
(ii) through (v) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall immediately suspend use of such Prospectus. The Company will use its
commercially reasonable best efforts to ensure that the use of the Prospectus
may be resumed as promptly as is practicable. The Company shall be entitled to
exercise its right under this Section 3(j) to suspend the availability of a
Registration Statement and Prospectus, subject to the payment of liquidated
damages pursuant to Section 2(b), for a period not to exceed 60 days (which need
not be consecutive days) in any 12-month period.
(k) Comply with all applicable rules and regulations of the Commission.
(l) The Company may require each Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such
Holder and, if required by the Commission, the person thereof that has voting
and dispositive control over such Common Stock. During any periods that the
Company is unable to meet its obligations hereunder with respect to the
registration of the Registrable Securities solely because any Holder fails to
furnish such information within three Trading Days of the Company's request, any
liquidated damages that are accruing at such time shall be tolled and any Event
that may otherwise occur solely because of such delay shall be suspended, until
such information is delivered to the Company.
4. Registration Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with the Trading Market on which the Common Stock is then listed for
trading, and (B) in compliance with applicable state securities or Blue Sky
laws), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing Prospectuses if
the printing of Prospectuses is reasonably requested by the Holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, (vi) fees and disbursements of counsel for the
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Holders up to $7,500 and (vii) fees and expenses of all other persons retained
by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions or, except to the extent
provided for in this Agreement or the Subscription Agreement, any legal fees or
other costs of the Holders in excess of $7,500.
5. Indemnification
(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents and employees of each of them, each person who
controls any such Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable attorneys' fees)
and expenses (collectively, "Losses"), as determined by a court of competent
jurisdiction in a final judgment not subject to appeal or review arising out of
or relating to any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (i) such
untrue statements or omissions or alleged untrue statements or omissions are
based upon information regarding such Holder furnished in writing to the Company
by such Holder for use therein, or to the extent that such information relates
to such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder for
use in the Registration Statement, such Prospectus or such form of Prospectus or
in any amendment or supplement thereto (it being understood that the Holder has
approved Exhibit A hereto for this purpose) or (ii) in the case of an occurrence
of an event of the type specified in Section 3(d)(ii)-(v), the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the receipt by such Holder of the Advice contemplated in Section 6(d). The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, to the
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extent arising out of or based upon: (x) such Holder's failure to comply with
the Prospectus delivery requirements of the Securities Act or (y) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of Prospectus, or in any amendment or
supplement thereto or in any preliminary Prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading (i) to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the
Company for inclusion in the Registration Statement or such Prospectus or (ii)
to the extent that (1) such untrue statements or omissions are based upon
information regarding such Holder furnished in writing to the Company by such
Holder for use therein, or to the extent that such information relates to such
Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and approved in writing by such Holder for use in
the Registration Statement (it being understood that the Holder has approved
Exhibit A hereto for this purpose), such Prospectus or such form of Prospectus
or in any amendment or supplement thereto or (2) in the case of an occurrence of
an event of the type specified in Section 3(d)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of the Advice contemplated in Section 6(d). In no event
shall the liability of any selling Holder hereunder be greater in amount than
the greater of (i) the dollar amount of the net proceeds received by such Holder
upon the sale of the Registrable Securities giving rise to such indemnification
obligation, or (ii) the dollar amount of the Holder's initial investment in
Units.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any person entitled to indemnity hereunder (an "Indemnified
Party"), such Indemnified Party shall promptly notify the person from whom
indemnity is sought (the "Indemnifying Party") in writing, and the Indemnifying
Party shall have the right to assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have prejudiced the
Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the reasonable fees and expenses of one
separate counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
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withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
Subject to the terms of this Agreement, all reasonable fees and
expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party; provided, that the Indemnified Party shall
promptly reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is not
entitled to indemnification hereunder, determined based upon the relative faults
of the parties.
(d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each 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 Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Agreement, any reasonable attorneys' or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder.
The indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Miscellaneous
10
(a) Remedies. In the event of a breach by the Company or by a Holder, of any of
their obligations under this Agreement, each Holder or the Company, as the case
may be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Piggyback on Registrations. Except as set forth on Schedule 6(b) attached
hereto, or as consented to by the Holder Agent, neither the Company nor any of
its security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in a Registration Statement other than the
Registrable Securities. Except as set forth in the reports filed by the Company
with the Commission, no person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company. The
Company shall not file any other registration statement other than a
registration statement on Form S-8 until after the Effectiveness Date.
(c) Compliance. Each Holder covenants and agrees that it will comply with the
Prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement.
(d) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c) and/or 3(d), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
Section 6(d).
(e) Piggy-Back Registrations. If at any time during the Effectiveness Period
there is not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the stock option or other employee
benefit plans, then the Company shall send to the Holder Agent a written notice
of such determination and, if within 15 days after the date of such notice, any
Holder shall so request in writing delivered to the Company, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered, subject to customary
underwriter cutbacks applicable to all holders of registration rights; provided,
that, the Company shall not be required to register any Registrable Securities
pursuant to this Section 6(e) that are eligible for resale pursuant to Rule
144(k) or that are the subject of a then effective Registration Statement
11
(f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and each Holder of
the then outstanding Registrable Securities (or Holder Agent, as applicable).
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
certain Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of all of the Registrable Securities to
which such waiver or consent relates.
(g) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be made in accordance with the
provisions of the Subscription Agreement.
(h) Successors and Assigns. This Agreement and all covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including without limitation transferees of any Registrable
Securities), whether so expressed or not.
(i) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
(j) Governing Law. This Agreement shall be governed by and construed under the
laws of the State of New York as applied to agreements among New York residents
entered into and to be performed entirely within New York. The Company (1)
agrees that any legal suit, action or proceeding arising out of or relating to
this Agreement shall be instituted exclusively in New York State Supreme Court,
County of New York, or in the United States District Court for the Southern
District of New York, (2) waives any objection which the Company may have now or
hereafter to the venue of any such suit, action or proceeding, and (3)
irrevocably consents to the jurisdiction of the New York State Supreme Court,
County of New York, and the United States District Court for the Southern
District of New York in any such suit, action or proceeding. The Company further
agrees to accept and acknowledge service of any and all process which may be
served in any such suit, action or proceeding in the New York State Supreme
Court, County of New York, or in the United States District Court for the
Southern District of New York and agrees that service of process upon the
Company mailed by certified mail to the Company's address shall be deemed in
every respect effective service of process upon the Company, in any such suit,
action or proceeding. THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
12
(k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(n) Independent Nature of Purchasers' Obligations and Rights. The obligations of
each Purchaser hereunder are several and not joint with the obligations of any
other Purchaser hereunder, and no Purchaser shall be responsible in any way for
the performance of the obligations of any other Purchaser hereunder. Nothing
contained herein or in any other agreement or document delivered at any closing,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are in
any way acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Purchaser shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
13
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
RMS TITANIC, INC.
By: /s/ Xxxxx Xxxxxx
------------------------
Name: Xxxxx Xxxxxx
Title: President and CEO
[SIGNATURE PAGE OF PURCHASERS FOLLOWS]
14
[SIGNATURE PAGE OF PURCHASERS TO RRA]
[PURCHASER]
By:
-------------------------
Name:
Title:
[SIGNATURE PAGE OF PURCHASERS FOLLOWS]
15
[SIGNATURE PAGE OF PURCHASERS TO RRA]
By:
-------------------------
Name:
Title:
16
EXHIBIT A
Plan of Distribution
[to be modified to comply with the Commission's "Plain English" rules]
The Selling Stockholders (the "Selling Stockholders") of the common
stock ("Common Stock") of Company name (the "Company") and any of their
pledgees, assignees and successors-in-interest may, from time to time, sell any
or all of their shares of Common Stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales
may be at fixed or negotiated prices. The Selling Stockholders may use any one
or more of the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o settlement of short sales entered into after the date of this
prospectus;
o broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available, rather
than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for
other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the shares of Common Stock owned by them
EXHIBIT A
(Page 1 of 2)
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of Common Stock from
time to time under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act
amending the list of Selling Stockholders to include the pledgee, transferee or
other successors in interest as Selling Stockholders under this prospectus.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.
The Company is required to pay certain fees and expenses incurred by
the Company incident to the registration of the shares. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.
EXHIBIT A
(Page 2 of 2)
SCHEDULE 6(b)
NONE
