EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March
21 2005, is by and between MEDIABAY, INC., a Florida corporation (the
"Company"), and each of the entities whose names appear on the signature pages
hereof. Such entities are each referred to herein as an "Investor" and,
collectively, as the "Investors".
A. The Company has agreed, on the terms and subject to the conditions set
forth in the Securities Purchase Agreement, dated as of March 21, 2005 (the
"Securities Purchase Agreement"), (i) to issue and sell to each Investor named
therein shares of Series D Convertible Preferred Stock (the "Preferred Stock"),
an Investor Warrant and a Preferred Warrant and (ii) to issue to Satellite
Strategic Finance Associates, LLC the Satellite Consulting Warrant. The Investor
Warrants and the Satellite Consulting Warrant are collectively referred to
herein as the "Warrants". Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Securities Purchase
Agreement.
B. The shares of Preferred Stock are convertible into shares (the
"Conversion Shares") of the Company's common stock, no par value (the "Common
Stock"). The Warrants are exercisable to purchase shares of Common Stock (the
"Warrant Shares"). The Preferred Warrants are exercisable into shares of
Preferred Stock (the "Additional Preferred Stock") and Investor Warrants (the
"Additional Warrants").
C. In order to induce each Investor to enter into the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended (the "Securities Act"), and under
applicable state securities laws.
In consideration of each Investor entering into the Securities Purchase
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings specified:
"Business Day" means any day other than a Saturday, a Sunday or a
day on which the Commission or commercial banks located in New York City
are authorized or permitted by law to close.
"Commission" means the Securities and Exchange Commission.
"Effective Date" means the date on which the Registration Statement
is declared effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Filing Deadline" means May 1, 2005.
"Xxxxxxx Xxxxx Registration Rights Agreement" means that certain
Registration Rights Agreement, dated as of the date hereof, by and between
the Company and Xxxxxxx, Sachs & Co.
"Holder" means any person owning or having the right to acquire,
through conversion of the Preferred Stock or exercise of the Warrants or
otherwise, Registrable Securities, including initially each Investor and
thereafter any permitted assignee thereof; provided, however, that the
term "Holder" shall not include Xxxxxxx, Xxxxx & Co. (or any other Holder
that may be deemed a broker-dealer under the Exchange Act) for purposes of
Section 2 hereof and the definitions of "Common Stock Dividend Condition"
and "Mandatory Commission Conditions" set forth in the Articles of
Amendment (as defined in the Securities Purchase Agreement), unless the
Company (i) meets the eligibility requirements for a primary offering on
Form S-3 as provided in General Instruction I.B.1 of Form S-3 at the time
of filing a Registration Statement on Form S-3 or (ii) shall prepare and
file with the Commission a Registration Statement on Form S-1 or Form S-2
as required by the last sentence of Section 2(a).
"Per Share Default Payment Amount" means $0.0055. The Per Shares
Default Payment Amount shall be proportionately adjusted in the event of a
stock split, reverse stock split or similar event.
"Registrable Securities" means the Conversion Shares, the Warrant
Shares and any other shares of Common Stock issuable pursuant to the terms
of the Preferred Stock, the Additional Preferred Stock, the Warrants or
the Additional Warrants, and any shares of capital stock issued or
issuable from time to time (with any adjustments) in replacement of, in
exchange for, as a distribution on, or otherwise in respect of such
Conversion Shares or the Warrant Shares; provided, however, that any such
shares shall cease to be Registrable Securities at such time as they may
be sold by the Holder without registration under Rule 144(k) without
limitation as to volume; provided further, however, that, for purposes of
Section 2 of this Agreement, the term "Registrable Securities" shall not
include any such shares held by Xxxxxxx, Sachs & Co. (or any other Holder
that may be deemed a broker-dealer under the Exchange Act) unless the
Company (i) meets the eligibility requirements for a primary offering on
Form S-3 as provided in General Instruction I.B.1 of Form S-3 at the time
of filing a Registration Statement on Form S-3 or (ii) shall prepare and
file with the Commission a Registration Statement on Form S-1 or Form S-2
as required by the last sentence of Section 2(a).
"Registration Deadline" means the ninetieth (90th) calendar day
following the Closing Date; provided, however, that if the staff of the
Commission undertakes a full review (or a full accounting review) of the
Registration Statement, or if the Commission takes the position that
offering by the Holders does not meet the eligibility requirements for
filing a Registration Statement on Form S-3, then in either such case the
Registration Deadline shall be the one hundred and twentieth (120th)
calendar day following the Closing Date.
2
"Registration Period" has the meaning set forth in paragraph 2(b)
below.
"Registration Statement" means a registration statement or
statements prepared in compliance with the Securities Act and pursuant to
Rule 415 under the Securities Act ("Rule 415") or any successor rule
providing for the offering of securities on a continuous or delayed basis.
2. REGISTRATION.
(a) Registration Statement. On or before the Filing Deadline, the Company
shall prepare and file with the Commission a Registration Statement on Form S-3
pursuant to Rule 415 under the Securities Act covering the resale of a number of
shares of Registrable Securities equal to one hundred twenty-five percent (125%)
of the aggregate number of shares of Common Stock issuable on the Closing Date
pursuant to (i) the conversion of the Preferred Stock and the Additional
Preferred Stock and (ii) the exercise of the Warrants and the Additional
Warrants (such number to be determined using the Conversion Price or Exercise
Price, as applicable, in effect on such date and without regard to any
restriction on the ability of any Holder to convert such Holder's Preferred
Stock or Additional Preferred Stock or exercise such Holder's Warrant or
Additional Warrant as of such date). Such Registration Statement shall state, to
the extent permitted by Rule 416 under the Securities Act, that it also covers
such indeterminate number of additional shares of Common Stock as may become
issuable upon the conversion of the Preferred Stock or Additional Preferred
Stock and exercise of the Warrants or Additional Warrants in order to (x)
satisfy the Company's obligation to pay dividends on the Preferred Stock, (y)
prevent dilution resulting from stock splits, stock dividends or similar events
and (z) effect required anti-dilution adjustments pursuant to the terms of the
Articles of Amendment, Warrants and Additional Warrants. Notwithstanding the
foregoing, if the Company or the offering by the Holders does not meet the
eligibility requirements for filing a Registration Statement on Form S-3, the
Company shall instead prepare and file with the Commission a Registration
Statement on Form S-1 or Form S-2 and, in such event, the Company shall, as
promptly as practicable (but in no event later than thirty (30) days) after the
Company or the offering by the Holders, as the case may be, meets the
eligibility requirements to use Form S-3 for the resale of Registrable
Securities by each Holder (other than Xxxxxxx, Xxxxx & Co. or any other Holder
that may be deemed to be a broker-dealer under the Exchange Act), re-file such
Registration Statement, or file a new Registration Statement on Form S-3
covering at least the number of shares then registered on the existing
Registration Statement (and not previously sold pursuant to the existing
Registration Statement or pursuant to Rule 144 under the Securities Act ("Rule
144")).
3
(b) Effectiveness. The Company shall use its best efforts to cause the
Registration Statement to become effective as soon as practicable following the
filing thereof, but in no event later than the Registration Deadline. The
Company shall respond promptly to any and all comments made by the staff of the
Commission on the Registration Statement, and shall submit to the Commission,
within three (3) Business Days after the Company learns that no review of the
Registration Statement will be made by the staff of the Commission or that the
staff of the Commission has no further comments on the Registration Statement
(or, if the Company would be required to include financial statements more
current than those included in its filing with the Commission, three (3)
Business Days after the date on which the Company is required to file an annual
report on Form 10-K (or Form 10-KSB) or quarterly report on form 10-Q (or Form
10-QSB), as the case may be, including such updated financial statements, after
permitted extension if a Form 12b-25 is timely filed), as the case may be, a
request for acceleration of the effectiveness of the Registration Statement to a
time and date not later than two (2) Business Days after the submission of such
request. The Company will maintain the effectiveness of the Registration
Statement until the earlier to occur of (i) the date on which all of the
Registrable Securities eligible for resale thereunder have been publicly sold
pursuant to either the Registration Statement or Rule 144 and (ii) the date on
which all of the Registrable Securities remaining to be sold under the
Registration Statement (in the reasonable opinion of counsel to the Company) may
be immediately sold to the public under Rule 144(k) under the Securities Act or
any successor provision ("Rule 144(k)") (the period beginning on the Closing
Date and ending on the earlier to occur of (i) or (ii) above being referred to
herein as the "Registration Period").
(c) Registration Default. If (i) the Registration Statement is not filed
on or before the Filing Deadline or declared effective by the Commission on or
before the Registration Deadline, (ii) after the Registration Statement has been
declared effective by the Commission, sales of Registrable Securities cannot be
made by a Holder under the Registration Statement for any reason not within the
exclusive control of such Holder (other than such Registrable Securities as are
then freely saleable pursuant to Rule 144(k)); provided, that the failure of the
Registration Statement to remain effective after the two (2) year anniversary of
its initial effective date thereof if at such time all of the Conversion Shares
issued or issuable upon conversion of the Preferred Shares are freely saleable
pursuant to Rule 144(k), shall not be a deemed to be a Registration Default
hereunder, (iii) the Common Stock ceases to be listed on the Nasdaq National
Market, the Nasdaq SmallCap Market or the New York Stock Exchange, (iv) the
Company fails to submit a request for acceleration within the time frames
required hereby, or (v) an amendment or supplement to the Registration
Statement, or a new registration statement, required to be filed pursuant to the
terms of paragraph 4(k) below is not filed on or before the date required by
such paragraph (each of the foregoing clauses (i), (ii), (iii), (iv) and (v)
being referred to herein as a "Registration Default"), the Company shall make a
cash payment to each Holder, for each thirty (30) day period or part thereof in
which a Registration Default exists, equal to the product of (A) the Per Share
Default Payment Amount times (B) the sum of (I) the number of Conversion Shares
into which the Preferred Shares then held by such Holder are convertible at the
Conversion Price then in effect plus (II) the number of Warrant Shares for which
the Warrants then held by such Holder are exercisable at the Exercise Price then
in effect, in each case without regard to any limitation on such conversion or
exercise contained in the Articles of Amendment, the Warrants or any other
Transaction Documents. Each such payment shall be made within five (5) Business
Days following the last day of each calendar month in which a Registration
Default existed. Any such payment shall be in addition to any other remedies
available to each Holder at law or in equity, whether pursuant to the terms
hereof, the Securities Purchase Agreement, the Articles of Amendment, or
otherwise. Notwithstanding the foregoing, a Registration Default under clauses
(ii), (iii) or (v) shall not be deemed to be a Fundamental Change (under and as
defined in the Articles of Amendment) giving rise to a Mandatory Redemption
right under the Articles of Amendment provided the Company has used its best
efforts to prevent the occurrence of such Registration Default and continues
after the occurrence thereof to use its best efforts to cure such Registration
Default.
4
(d) Allocation of Conversion Shares and Warrant Shares. The initial number
of Conversion Shares and Warrant Shares included in any Registration Statement
and each increase in the number thereof included therein shall be allocated pro
rata among the Holders based on the aggregate number of Registrable Securities
issuable to each Holder at the time the Registration Statement covering such
initial number of Registrable Securities or increase thereof is declared
effective by the Commission (such number to be determined using the Conversion
Price or Exercise Price, as applicable, in effect at such time and without
regard to any restriction on the ability of a Holder to convert such Holder's
Preferred Stock or exercise such Holder's Warrant as of such date). In the event
that a Holder sells or otherwise transfers any of such Holder's Registrable
Securities, each transferee shall be allocated the portion of the then remaining
number of Registrable Securities included in such Registration Statement
allocable to the transferor.
(e) Registration of Other Securities. During the period beginning on the
date hereof and ending on the Effective Date, the Company shall, except as
described in Schedule 3.12 to the Securities Purchase Agreement, refrain from
filing any registration statement (other than (i) a Registration Statement filed
hereunder, (ii) a registration statement on Form S-8 with respect to stock
option plans and agreements and stock plans currently in effect and disclosed in
the Securities Purchase Agreement or the schedules thereto or (iii) a
Registration Statement filed pursuant to the Xxxxxxx Sachs Registration Rights
Agreement). Other than as specified on such Schedule 3.12, in no event shall the
Company include any securities other than the Registrable Securities on any
Registration Statement filed by the Company on behalf of the Holders pursuant to
the terms of this Section 2.
(f) Other. If, at the time the Registration Statement is filed, the
Company does not meet the eligibility requirements for a primary offering on
Form S-3 as provided in General instruction I.B.1 of Form S-3, the Common Stock
Dividend Condition and Mandatory Conversion Conditions set forth in the Articles
of Incorporation shall be deemed to be satisfied as to Xxxxxxx, Xxxxx & Co. (and
any other Holder that may be deemed to be a broker-dealer under the Exchange
Act) if the Registration Statement is effective and available to each Holder,
even though the Registrable Securities held by Xxxxxxx, Sachs & Co. (or any
other Holder that may be deemed to be a broker-dealer under the Exchange Act)
are not included in the Registration Statement.
3. PIGGYBACK REGISTRATION.
If at any time prior to the expiration of the Registration Period, (i) the
Company proposes to register shares of Common Stock under the Securities Act in
connection with the public offering of such shares for cash (a "Proposed
Registration") other than (x) a registration statement on Form S-8 or Form S-4
or any successor or other forms promulgated for similar purposes or (y) a
Registration Statement on Form S-3 filed pursuant to Section 2 hereof, and (ii)
a Registration Statement covering the sale of all of the Registrable Securities
held by any Holder is not then effective and available for sales thereof by such
Holder (each, an "Unregistered Holder"), the Company shall, at such time,
promptly give each Unregistered Holder written notice of such Proposed
Registration. Each Unregistered Holder shall have ten (10) Business Days from
its receipt of such notice to deliver to the Company a written request
specifying the amount of Registrable Securities that such Holder intends to sell
and such Holder's intended method of distribution. Upon receipt of such request,
the Company shall use its best efforts to cause all Registrable Securities which
the Company has been requested to register to be registered under the Securities
Act to the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the request of
each Unregistered Holder; provided, however, that the Company shall have the
right to postpone or withdraw any registration effected pursuant to this Section
3 without obligation to the Holders. If, in connection with any underwritten
public offering for the account of the Company or for stockholders of the
Company that have contractual rights to require the Company to register shares
of Common Stock, the managing underwriter(s) thereof shall impose a limitation
on the number of shares of Common Stock which may be included in a registration
statement because, in the judgment of such underwriter(s), marketing or other
factors dictate such limitation is necessary to facilitate such offering, then,
after inclusion of shares as to which the Company is as of the date hereof
contractually obligated to register the Company shall be obligated to include in
the registration statement, on a pro rata basis with other holders of
registration rights outstanding prior to the date hereof, only such limited
portion of the Registrable Securities with respect to which each Holder has
requested inclusion hereunder as such underwriter(s) shall permit. Any exclusion
of Registrable Securities shall be made pro rata among the Holders seeking to
include Registrable Securities in a registration statement, in proportion to the
number of Registrable Securities sought to be included by such Holders;
provided, however, that the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities, the holders of
which are not entitled to inclusion of such securities in the registration
statement or are not entitled to pro rata inclusion with the Registrable
Securities; and provided, further, that, after giving effect to the immediately
preceding proviso, any exclusion of Registrable Securities shall be made pro
rata with holders of other securities having the right to include such
securities in the registration statement.
5
4. OBLIGATIONS OF THE COMPANY.
In addition to performing its obligations hereunder, including without
limitation those pursuant to Section 2 above, the Company shall, with respect to
the Registration Statement:
(a) prepare and file with the Commission such amendments and supplements
to the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act or to maintain the effectiveness of the Registration Statement
during the Registration Period, or as may be reasonably requested by a Holder in
order to incorporate information concerning such Holder or such Holder's
intended method of distribution;
(b) promptly following the Closing, secure the listing of all Registrable
Securities on the Nasdaq National Market System or the Nasdaq SmallCap Market
(if that is the Principal Market) and provide each Holder with reasonable
evidence thereof;
(c) furnish to each Holder such number of copies of the prospectus
included in the Registration Statement, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such Holder may reasonably request in order to facilitate the disposition of
such Holder's Registrable Securities;
6
(d) use commercially reasonable efforts to register or qualify the
Registrable Securities under the securities or "blue sky" laws of such
jurisdictions within the United States as shall be reasonably requested from
time to time by a Holder, and do any and all other acts or things which may be
necessary or advisable to enable such Holder to consummate the public sale and
re-sale or other disposition of the Registrable Securities in such
jurisdictions; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such jurisdiction or to subject
itself to taxation in any such jurisdiction;
(e) in the event of an underwritten public offering of the Registrable
Securities, enter into (together with all Holders proposing to distribute
Registrable Securities through such underwriting) and perform its obligations
under an underwriting agreement, in usual and customary form reasonably
acceptable to the Company, with the managing underwriter of such offering;
(f) notify each Holder immediately after becoming aware of the occurrence
of any event (but shall not, without the prior written consent of such Holder,
disclose to such Holder any facts or circumstances constituting material
non-public information) as a result of which the prospectus included in the
Registration Statement, as then in effect, contains an untrue statement of
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and as promptly as practicable prepare and file
with the Commission and furnish to each Holder a reasonable number of copies of
a supplement or an amendment to such prospectus as may be necessary so that such
prospectus does not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
(g) use all commercially reasonable efforts to prevent the issuance of any
stop order or other order suspending the effectiveness of the Registration
Statement and, if such an order is issued, to obtain the withdrawal thereof at
the earliest possible time and to notify each Holder of the issuance of such
order and the resolution thereof;
(h) furnish to each Holder, on the date that the Registration Statement,
or any successor registration statement, becomes effective, a letter, dated such
date, of outside counsel representing the Company (and reasonably acceptable to
such Holder) addressed to such Holder, confirming such effectiveness and, to the
knowledge of such counsel, the absence of any stop order;
(i) provide to each Holder and its representatives the reasonable
opportunity to conduct a reasonable inquiry of the Company's financial and other
records during normal business hours and make available its officers, directors
and employees for questions regarding information which such Holder may
reasonably request in order to fulfill any due diligence obligation on its part,
subject, however, to the execution and delivery to the Company by such Holder of
a customary non-disclosure agreement and provided that the Company shall not
disclose any material non-public information to such Holder absent such Holder's
written request therefor;
7
(j) permit counsel for each Holder, at such Holder's expense, to review
the Registration Statement and all amendments and supplements thereto, and any
comments made by the staff of the Commission concerning such Holder and/or the
transactions contemplated by the Transaction Documents and the Company's
responses thereto, within a reasonable period of time prior to the filing
thereof with the Commission (or, in the case of comments made by the staff of
the Commission, within a reasonable period of time following the receipt thereof
by the Company);
(k) in the event that, at any time, the number of shares available under
the Registration Statement is insufficient to cover one hundred five percent
(105%) of the Registrable Securities issuable under the Preferred Stock,
Additional Preferred Stock, Warrants and Additional Warrants (such number to be
determined using the Conversion Price or Exercise Price, as applicable, in
effect at such time and without regard to any restriction on the ability of any
Holder to convert such Holder's Preferred Stock or exercise such Holder's
Warrant) the Company shall promptly amend the Registration Statement or file a
new registration statement, in any event as soon as practicable, but not later
than the twentieth (20th) day following notice from a Holder of the occurrence
of such event, so that the Registration Statement or such new registration
statement, or both, covers no less than one hundred twenty-five percent (125%)
of the Registrable Securities issuable thereunder. The Company shall use its
best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. Any Registration
Statement filed pursuant to this paragraph 4(k) shall state that, to the extent
permitted by Rule 416 under the Securities Act, such Registration Statement also
covers such indeterminate number of additional shares of Common Stock as may
become issuable upon conversion of the Preferred Stock and Additional Preferred
Stock and exercise of the Warrants and Additional Warrants in order to prevent
dilution resulting from stock splits, stock dividends or similar events. Unless
and until such amendment or new Registration Statement becomes effective, each
Holder shall have the rights described in paragraph 2(c) above;
(l) hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company if at the time such information
is provided the Company is notified of the confidential nature of such
information unless (i) disclosure of such information is necessary to comply
with federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration
Statement that includes such Investor's Registrable Securities, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement, or (v) such Investor
consents to the form and content of any such disclosure. The Company shall, upon
learning that disclosure of any information concerning an Investor is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to such Investor prior to making such disclosure, and
cooperate with the Investor, at the Investor's expense, in taking appropriate
action to prevent disclosure of, or to obtain a protective order for, such
information;
(m) provide a transfer agent and registrar, which may be a single entity,
for the Registrable Securities not later than the effective date of the
Registration Statement; and
8
(n) comply with all applicable laws related to a Registration Statement
and offering and sale of securities and all applicable rules and regulations of
governmental authorities in connection therewith (including, without limitation,
the Securities Act and the Exchange Act and the rules and regulations thereunder
promulgated by the Commission).
5. OBLIGATIONS OF EACH HOLDER.
In connection with the registration of Registrable Securities pursuant to
a Registration Statement, each Holder shall:
(a) timely furnish to the Company in writing such information regarding
itself and the intended method of disposition of such Registrable Securities as
the Company shall reasonably request in order to effect the registration
thereof;
(b) upon receipt of any notice from the Company of the happening of any
event of the kind described in paragraphs 4(f) or 4(g), immediately discontinue
any sale or other disposition of such Registrable Securities pursuant to such
Registration Statement until the filing of an amendment or supplement as
described in paragraph 4(f) or withdrawal of the stop order referred to in
paragraph 4(g), and use commercially reasonable efforts to maintain the
confidentiality of such notice and its contents;
(c) in the event of an underwritten offering of such Registrable
Securities in which such Holder participates, enter into a customary and
reasonable underwriting agreement and execute such other documents as the
Company and/or the managing underwriter for such offering may reasonably
request;
(d) to the extent required by applicable law, deliver a prospectus to the
purchaser of such Registrable Securities;
(e) notify the Company when it has sold all of the Registrable Securities
held by it; and
(f) notify the Company in the event that any information supplied by such
Holder in writing for inclusion in such Registration Statement or related
prospectus is untrue or omits to state a material fact required to be stated
therein or necessary to make such information not misleading in light of the
circumstances then existing; immediately discontinue any sale or other
disposition of such Registrable Securities pursuant to such Registration
Statement until the filing of an amendment or supplement to such prospectus as
may be necessary so that such prospectus does not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and use commercially reasonable efforts to assist
the Company as may be appropriate to make such amendment or supplement effective
for such purpose.
6. INDEMNIFICATION.
In the event that any Registrable Securities are included in a
Registration Statement under this Agreement:
9
(a) To the extent permitted by law, the Company shall indemnify and hold
harmless each Holder, the officers, directors, employees, agents and
representatives of such Holder, and each person, if any, who controls such
Holder within the meaning of the Securities Act or the Securities Exchange Act
of 1934, as amended (the "Exchange Act") (collectively, the "Holder Indemnified
Parties"), including in such Holder Indemnified Parties' capacity as a broker
dealer, against any losses, claims, damages, liabilities or reasonable
out-of-pocket expenses (whether joint or several) (collectively, including legal
or other expenses reasonably incurred in connection with investigating or
defending same, "Losses"), insofar as any such Losses arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in such Registration Statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
or (ii) the omission or alleged omission to state therein 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. Subject
to the provisions of paragraph 6(c) below, the Company will reimburse such
Holder, and each such officer, director, employee, agent, representative or
controlling person, for any legal or other out-of-pocket expenses as reasonably
incurred by any such entity or person in connection with investigating or
defending any Loss; provided, however, that the foregoing indemnity shall not
apply to amounts paid in settlement of any Loss if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be obligated to indemnify any person for any
Loss to the extent that such Loss (i) is based upon and is in conformity with
written information furnished by such person expressly for use in such
Registration Statement, (ii) is based on a failure of such person to deliver or
cause to be delivered the final prospectus contained in the Registration
Statement and made available by the Company, if such delivery is required by
applicable law, or (iii) relates to the sale of shares by such Holder after the
Company has notified such Holder that an event described in Section 4(f) has
occurred and has not yet provided the Holder with a supplemental or new
prospectus for delivery. The Company shall not enter into any settlement of a
Loss that does not provide for the unconditional release of such Holder from all
liabilities and obligations relating to such Loss.
(b) To the extent permitted by law, each Holder who is named in such
Registration Statement as a selling stockholder, acting severally and not
jointly, shall indemnify and hold harmless the Company, the officers, directors,
employees, agents and representatives of the Company, and each person, if any,
who controls the Company within the meaning of the Securities Act or the
Exchange Act, against any Losses to the extent (and only to the extent) that any
such Losses (i) are based upon and in conformity with written information
furnished by such Holder expressly for use in such Registration Statement, (ii)
are based on a failure of such Holder to deliver or cause to be delivered the
final prospectus contained in the Registration Statement and made available by
the Company, if such delivery is required by applicable law, or (iii) relate to
the sale of shares by such Holder after the Company has notified such Holder
that an event described in Section 4(f) has occurred and has not yet provided
the Holder with a supplemental or new prospectus for delivery. Subject to the
provisions of paragraph 6(c) below, such Holder will reimburse any legal or
other expenses as reasonably incurred by the Company and any such officer,
director, employee, agent, representative, or controlling person, in connection
with investigating or defending any such Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of such Holder (which
consent shall not be unreasonably withheld); and provided, further, that, in no
event shall any indemnity under this paragraph 6(b) exceed the net proceeds
resulting from the sale of the Registrable Securities sold by such Holder under
such Registration Statement.
10
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in and to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the reasonably
incurred fees and expenses of one such counsel for all indemnified parties to be
paid by the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate under
applicable standards of professional conduct due to actual or potential
conflicting interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, to the extent prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under this Section 6 with respect to such action, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 6 or
with respect to any other action unless the indemnifying party is materially
prejudiced as a result of not receiving such notice.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 6 is unavailable or insufficient to hold harmless an indemnified
party for any reason, the Company and each Holder agree, severally and not
jointly, to contribute to the aggregate Losses to which the Company or such
Holder may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and such Holder in connection with the statements
or omissions which resulted in such Losses; provided, however, that in no case
shall such Holder be responsible for any amount in excess of the net proceeds
resulting from the sale of the Registrable Securities sold by it under the
Registration Statement. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or by such Holder. The Company and each Holder agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act and
each officer, director, employee, agent or representative of such Holder shall
have the same rights to contribution as such Holder, and each person who
controls the Company within the meaning of either the Securities Act or the
Exchange Act and each officer, director, employee, agent or representative of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
11
(e) The obligations of the Company and each Holder under this Section 6
shall survive the conversion of the Preferred Stock and exercise of the Warrants
in full, the completion of any offering or sale of Registrable Securities
pursuant to a Registration Statement under this Agreement, or otherwise.
7. REPORTS.
With a view to making available to each Holder the benefits of Rule 144
and any other similar rule or regulation of the Commission that may at any time
permit such Holder to sell securities of the Company to the public without
registration, the Company agrees (until all of the Registrable Securities have
been sold under a Registration Statement or pursuant to Rule 144) to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under Section 13 of the Exchange Act; and
(c) furnish to such Holder, so long as such Holder owns any Registrable
Securities, promptly upon written request (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of Rule
144, the Securities Act and the Exchange Act, (ii) to the extent not publicly
available through the Commission's XXXXX database, a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably
requested by such Holder in connection with such Holder's compliance with any
rule or regulation of the Commission which permits the selling of any such
securities without registration.
8. MISCELLANEOUS.
(a) Expenses of Registration. Except as otherwise provided in the
Securities Purchase Agreement, all reasonable expenses, other than underwriting
discounts and commissions and fees and expenses of counsel and other advisors to
each Holder, incurred in connection with the registrations, filings or
qualifications described herein, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, the
fees and disbursements of counsel for the Company, and the fees and
disbursements incurred in connection with the opinion and letter described in
paragraph 4(h) hereof, shall be borne by the Company.
(b) Amendment; Waiver. Except as expressly provided herein, neither this
Agreement nor any term hereof may be amended or waived except pursuant to a
written instrument executed by the Company and the Holders of at least
two-thirds (2/3) of the Registrable Securities into which all of the Preferred
Stock, Additional Preferred Stock, Warrants and Additional Warrants then
outstanding are convertible or exercisable (without regard to any limitation on
such conversion or exercise). Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each Holder, each future Holder and
the Company. The failure of any party to exercise any right or remedy under this
Agreement or otherwise, or the delay by any party in exercising such right or
remedy, shall not operate as a waiver thereof.
12
(c) Notices. Any notice, demand or request required or permitted to be
given by the Company or a Holder pursuant to the terms of this Agreement shall
be in writing and shall be deemed delivered (i) when delivered personally or by
verifiable facsimile transmission, unless such delivery is made on a day that is
not a Business Day, in which case such delivery will be deemed to be made on the
next succeeding Business Day, (ii) on the next Business Day after timely
delivery to a reputable overnight courier and (iii) on the Business Day actually
received if deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid), addressed as follows:
If to the Company:
MediaBay, Inc.
0 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Attn: Chief Executive Officer and
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Blank Rome LLP
The Chrysler Building
000 Xxxxxxxxx Xxx.
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and if to a Holder, to such address as shall be designated by such Holder in
writing to the Company.
(d) Assignment. Upon the transfer of any Preferred Stock, Additional
Preferred Stock, Warrants, Additional Warrants or Registrable Securities by a
Holder, the rights of such Holder hereunder with respect to such securities so
transferred shall be assigned automatically to the transferee thereof, and such
transferee shall thereupon be deemed to be a "Holder" for purposes of this
Agreement, as long as: (i) the Company is, within a reasonable period of time
following such transfer, furnished with written notice of the name and address
of such transferee, (ii) the transferee agrees in writing with the Company to be
bound by all of the provisions hereof, and (iii) such transfer is made in
accordance with the applicable requirements of the Securities Purchase
Agreement; provided, however, that the registration rights granted under this
Agreement shall not be assigned to any person or entity that receives any
Preferred Stock, Additional Preferred Stock, Warrants, Additional Warrants or
Registrable Securities in a public transaction pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144.
(e) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together shall be deemed one
and the same instrument. This Agreement, once executed by a party, may be
delivered to any other party hereto by facsimile transmission.
13
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within the State of New York.
(g) Holder of Record. A person is deemed to be a Holder whenever such
person owns or is deemed to own of record Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more persons
with respect to the same Registrable Securities, the Company shall act upon the
basis of instructions, notice or election received from the record owner of such
Registrable Securities.
(h) Entire Agreement. This Agreement, the Xxxxxxx Xxxxx Registration
Rights Agreement, the Securities Purchase Agreement, the Articles of Amendment,
the Warrants, the Preferred Warrants and the other Transaction Documents
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the Xxxxxxx Sachs Registration Rights Agreement, the
Securities Purchase Agreement, the Articles of Amendment, the Warrants, the
Preferred Warrants and the other Transaction Documents supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof, including, without limitation, any
nondisclosure or similar agreement heretofore entered into between the Company
and any Investor.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.
[Signature Pages to Follow]
14
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
MEDIABAY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
SATELLITE STRATEGIC FINANCE PARTNERS, LTD.
By: Satellite Asset Management, L.P.,
its Manager
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: General Counsel
SATELLITE STRATEGIC FINANCE ASSOCIATES,
LLC
By: Satellite Asset Management, L.P.,
its Manager
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: General Counsel
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
MEDIABAY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
CCM MASTER QUALIFIED FUND, LTD.
By: Xxxxxxx Capital Management, LLC,
its Manager
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President & Chief Investment
Officer
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
MEDIABAY, INC.
By:
------------------------------------
Name:
Title:
XXXXXXX, SACHS & CO.
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
MEDIABAY, INC.
By:
------------------------------------
Name:
Title:
RADCLIFFE SPC, LTD. for and on behalf
of the Class A Convertible Crossover
Segregated Portfolio
By: RG Capital Management, L.P., its
Investment Manager
By: RGC Management Company, LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
MEDIABAY, INC.
By:
------------------------------------
Name:
Title:
FOREST HILL SELECT FUND, L.P.
By: Forest Hill Capital, its Manager
By: /s/ Xxxx Xxx
------------------------------------
Name: Xxxx Xxx
Title: President
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
MEDIABAY, INC.
By:
------------------------------------
Name:
Title:
FOREST HILL SELECT OFFSHORE, LTD.
By: Forest Hill Capital, its Manager
By: /s/ Xxxx Xxx
------------------------------------
Name: Xxxx Xxx
Title: President
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
MEDIABAY, INC.
By:
------------------------------------
Name:
Title:
LONE OAK PARTNERS, L.P.
By: Forest Hill Capital, its Manager
By: /s/ Xxxx Xxx
------------------------------------
Name: Xxxx Xxx
Title: President
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
MEDIABAY, INC.
By:
------------------------------------
Name:
Title:
PALISADES MASTER FUND, L.P.
By: Discovery Management Ltd.,
its Manager
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Authorized Signatory
