Attached files
| file | filename |
|---|---|
| S-1 - IndiePub Entertainment, Inc. | v168622_s1.htm |
| EX-21.1 - IndiePub Entertainment, Inc. | v168622_ex21-1.htm |
| EX-23.1 - IndiePub Entertainment, Inc. | v168622_ex23-1.htm |
| EX-10.91 - IndiePub Entertainment, Inc. | v168622_ex10-91.htm |
| EX-10.90 - IndiePub Entertainment, Inc. | v168622_ex10-90.htm |
| EX-10.94 - IndiePub Entertainment, Inc. | v168622_ex10-94.htm |
| EX-10.93 - IndiePub Entertainment, Inc. | v168622_ex10-93.htm |
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and entered into as of
November 20, 2009, by and between Zoo Entertainment, Inc., a Delaware
corporation (the “Company”), and the persons set forth on the signature page
hereto (collectively, the “Investor”).
WHEREAS,
this Agreement is made in connection with that certain Securities Purchase
Agreement, dated as of even date herewith, by and among the Company and the
investors set forth on the signature pages thereto, pursuant to which the
Company agreed to sell a minimum of $4,000,000 and a maximum of up to $5,000,000
of shares of the Company’s Series A Convertible Preferred Stock, par value
$0.001 per share (the “Preferred Stock”), at a price per share equal to $2.50
(the “Purchase Agreement”). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Purchase
Agreement.
WHEREAS,
pursuant to the Purchase Agreement, the Company issued and sold to the Investor
an aggregate of 290,676 shares of Preferred Stock and Warrants (the “Warrants”)
to purchase an aggregate of 509,324,000 shares of the Company’s Common Stock,
par value $0.001 per share (“Common Stock”).
WHEREAS,
the Company and the Investor desire to enter into this Agreement to set forth
their respective rights and obligations with respect to the registration of the
shares of Common Stock issuable upon conversion of the Preferred Stock and
exercise of the Warrants.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and the Investor hereby agree as
follows:
1.
Definitions. As
used in this Agreement, the following terms shall have the respective meanings
set forth in this Section 1:
“Business Day” means any day
except Saturday, Sunday and any day which shall be a federal legal holiday or a
day on which banking institutions in the State of New York are authorized
or required by law or other governmental action to close.
“Commission” means the United
States Securities and Exchange Commission.
“Common Shares” means the
shares of Common Stock issuable upon conversion of the Preferred Stock or upon
exercise of the Warrants.
“Common Stock” has the meaning
set forth in the Recitals.
“Effective Date” means the date
that the Registration Statement is first declared effective by the
Commission.
“Effectiveness Date” means 60
days from the date hereof.
“Effectiveness Period” shall
have the meaning set forth in Section 2(c).
“Event” shall have the meaning
set forth in Section 2(f).
“Event Payment” shall have the
meaning set forth in Section 2(f).
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Filing Date” means as soon as
practicable and, in any event, no later than 15 days following the final
Closing.
“Holder” or “Holders” means the holder or
holders, as the case may be, from time to time of Registrable Securities,
including the Investor.
“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).
“Proceeding” means any action,
suit, inquiry, notice of violation, proceeding (including, without limitation an
investigation or any partial proceeding such as a deposition) or investigation
pending or threatened in writing against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency, body, official, regulatory
authority (federal, state, county, local or foreign), stock market, stock
exchange or trading facility.
“Prospectus” means the
prospectus included in a 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
the Common Shares and the Warrant Shares (and any additional securities issued
or issuable in connection with a stock dividend or stock split thereof or in
connection with any recapitalization, merger, consolidation, reorganization, or
similar event).
“Registration Statement” means
the initial registration statement required to be filed in accordance with
Section 2(a) and any additional registration
statement(s) required to be filed hereunder, including (in each case) the
Prospectus, amendments and supplements to such registration statements 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 such registration statements.
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“Rule 144” means Rule 144
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, and the rules and regulations promulgated
thereunder.
“Trading Day” means (i) a
day on which the Common Stock is traded on a Trading Market, or (ii) if the
Common Stock is not listed on a Trading Market, a day on which the Common Stock
is traded in the over-the-counter market or is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices); provided, that in the
event that the Common Stock is not listed or quoted as set forth in (i) or
(ii) hereof, then Trading Day shall mean a Business Day.
“Trading Market” means
whichever of the NYSE, the NYSE Amex, the NASDAQ Stock Market or the OTC
Bulletin Board on which the Common Stock is listed or quoted for trading on the
date in question.
“Transaction Documents” means
this Agreement, the Purchase Agreement, the Warrants, all exhibits and schedules
hereto and thereto, and any other documents or agreements executed by the
Investor in connection with the transactions contemplated hereunder and
thereunder.
“Warrant Shares” means the
shares of Common Stock issuable upon exercise of the Warrants.
2.
Registration.
(a) On
or prior to the Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form S-3 (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate
form in accordance with the Securities Act and the Exchange
Act).
-3-
(b) The
Investor agrees to furnish to the Company a completed selling stockholder
questionnaire in standard form (the “Selling Stockholder Questionnaire”) not
more than five (5) Trading Days following the date that the Selling
Stockholder Questionnaire is provided by the Company to the Investor. At least
five (5) Trading Days prior to the first anticipated filing date of a
Registration Statement for any registration under this Agreement, the Company
will notify the Investor of the information the Company reasonably requires from
the Investor other than the information contained in the Selling Stockholder
Questionnaire, if any, which shall be completed and delivered to the Company
promptly upon request and, in any event, within two (2) Trading Days prior
to the applicable anticipated filing date. The Investor shall be
entitled to be named as a selling securityholder in the Registration Statement
and to use the Prospectus for offers and resales of Registrable Securities at
any time, unless such Investor has not timely returned to the Company a
completed and signed Selling Stockholder Questionnaire and a response to any
requests for further information as described in the previous sentence. If the
Investor returns a Selling Stockholder Questionnaire or a request for further
information, in either case, after a reasonable deadline imposed by the Company,
then the Company shall use its commercially reasonable best efforts to take such
actions as are required to name the Investor as a selling security holder in the
Registration Statement or any pre-effective or post-effective amendment thereto
and to include (to the extent not theretofore included) in the Registration
Statement the Registrable Securities identified in such late Selling Stockholder
Questionnaire or request for further information. The Investor acknowledges and
agrees that the information in the Selling Stockholder Questionnaire or request
for further information as described in this Section 2(b) will be used
by the Company in the preparation of the Registration Statement and hereby
consents to the inclusion of such information in the Registration
Statement.
(c) The
Company shall use its commercially reasonable best efforts to cause the
Registration Statement to be declared effective by the Commission as promptly as
possible after the filing thereof, but in any event prior to the Effectiveness
Date, and shall use its commercially reasonable best efforts to keep the
Registration Statement continuously effective under the Securities Act until the
earlier of the date that all Common Shares and Warrant Shares covered by such
Registration Statement have been sold or that all Common Shares and Warrant
Shares that would otherwise be covered by such Registration Statement can be
resold by the Investor without restriction (including volume limitations and
current public information requirements) pursuant to Rule 144 of the Securities
Act (the “Effectiveness Period”). The Company shall file no other
registration statements with respect to any other securities or securityholder
until at least 30 days following the Effective Date.
(d) Notwithstanding
anything in this Agreement to the contrary, after one hundred twenty (120)
consecutive Trading Days of continuous effectiveness of the initial Registration
Statement filed and declared effective pursuant to this Agreement, the Company
may, by written notice to the Investor, suspend sales under a Registration
Statement after the Effective Date thereof and/or require that the Investor
immediately cease the sale of shares of Common Stock pursuant thereto and/or
defer the filing of any subsequent Registration Statement if the Company is
engaged in a material merger, acquisition or sale and its Board of Directors
determines in good faith, by appropriate resolutions, that, as a result of such
activity, (A) it would be materially detrimental to the Company (other than
as relating solely to the price of the Common Stock) to maintain a Registration
Statement at such time or (B) it is in the best interests of the Company to
suspend sales under such registration at such time. Upon receipt of
such notice, the Investor shall immediately discontinue any sales of Registrable
Securities pursuant to such registration until the Investor is advised in
writing by the Company that the current Prospectus or amended or supplemented
Prospectus, as applicable, may be used (and the Company shall promptly provide
Investor with copies of any such supplemented or amended
Prospectus). In no event, however, shall this right be exercised to
suspend sales beyond the period during which (in the good faith determination of
the Company’s Board of Directors) the failure to require such suspension would
be materially detrimental to the Company. The Company’s rights under
this Section 2(d) may be exercised for a period of no more than 20
Trading Days at a time and not more than once in any twelve-month period,
without such suspension being considered as part of an Event Payment
determination. Immediately after the end of any
suspension period under this Section 2(d), the Company shall take all
necessary actions (including filing any required supplemental Prospectus) to
restore the effectiveness of the applicable Registration Statement and the
ability of the Investor to publicly resell the Registrable Securities pursuant
to such effective Registration Statement.
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(e) Piggy-Back Registration; Pro
Rata Cutbacks.
(i) Except
as set forth below or in Section 2(e)(ii) hereof, neither the Company nor any of
its security holders (other than the Investor pursuant hereto) may include
securities of the Company in the Registration Statement. Notwithstanding the
foregoing, the Company may, after the date hereof, enter into an agreement that
provides for piggy-back registration rights to any of its security holders if
(1) such piggy-back registration rights pertain to a registration statement to
be filed following the date on which (A) all Registrable Securities have been
registered pursuant to an effective Registration Statement or (B) the
Registrable Securities may be resold without restriction (including volume
limitations and current public information requirements) pursuant to Rule 144 of
the Securities Act, whichever is earlier, or (2) such piggy-back registration
rights pertain to securities that, pursuant to any cutbacks as set forth in this
Section 2(e), shall be reduced first and prior to any reduction of the
Registrable Securities.
(ii) The
Company and the Investor agree and acknowledge that the following individuals or
entities to whom piggy-back registration rights have been granted by the Company
are entitled to have certain securities be included in any Registration
Statement filed hereunder: (A) 1,854,650 shares of Common Stock issued pursuant
to that certain Mutual Settlement, Release and Waiver Agreement, as amended,
dated as of June 18, 2009, by and among the Company, Zoo Games, Inc., Zoo
Publishing, Inc. and the individual plaintiffs set forth therein, as disclosed
in the Company’s Current Report on Form 8-K filed with the Commission
on June 29, 2009, which piggy-back rights shall not be subject to
any pro rata reduction, and (B) 7,665,731 shares of Common Stock
issuable pursuant to that certain Warrant issued to Solutions 2 Go (as such
number may be adjusted pursuant to any provisions contained therein, including
any antidilution and price protection provisions), as disclosed in the Company’s
Current Report on Form 8-K filed with the Commission on September 4, 2009, which
piggy-back rights shall be subject to pro rata reduction. The
foregoing securities that may be included in the Registration Statement shall be
determined among the Common Shares and Warrant Shares held by the Investor and
the registrable securities issued or issuable in connection with the Solutions 2
Go Warrant, and the number of Common Shares and Warrant Shares which may be
included shall be determined by multiplying the total number of shares available
for inclusion in such Registration Statement by a fraction, the numerator of
which shall be the total number of Common Shares and Warrant Shares held by the
Investor, and the denominator of which shall equal the total number of Common
Shares and Warrant Shares held by the Investor plus the total number of shares
issued or issuable in connection with the Solutions 2 Go Warrant, after giving
effect to such cutbacks. The number of Registrable Securities to be
registered on such Registration Statement will first be reduced by Registrable
Securities represented by Warrant Shares (after giving effect to the cutbacks),
and second by Registrable Securities represented by Common Shares (after giving
effect to such cutbacks). In the event of a cutback hereunder, the
Company shall give the Investor at least five (5) Trading Days prior
written notice along with the calculations as to such Investor’s
allotment.
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(iii) Notwithstanding
any other provision of this Agreement, if any publicly-available written or oral
guidance of the Commission staff, or any comments, requirements or requests of
the Commission staff or any requirements of the Securities Act (the “SEC
Guidance”) sets forth a limitation on the number of Registrable Securities
permitted to be registered on a particular Registration Statement (and
notwithstanding that the Company used diligent efforts to advocate with the
Commission for the registration of all or a greater portion of Registrable
Securities), unless otherwise directed in writing by the Investor as to its
Registrable Securities, the Company will reduce, on a pro rata basis, all
Registrable Securities and any other securities included in the Registration
Statement. If for any reason the Commission does not permit all of
the Registrable Securities to be included in the Registration Statement filed
pursuant to this Section 2, or for any other reason any Registrable
Securities are not permitted by the Commission to be included in a Registration
Statement filed under this Agreement, then the Company shall prepare and file as
soon as possible after the date on which the Commission shall indicate as being
the first date or time that such filing may be made, an additional Registration
Statement covering the resale of all Registrable Securities not already covered
by an existing and effective Registration Statement for an offering to be made
on a continuous basis pursuant to Rule 415. Notwithstanding the
foregoing, the Company shall only have such obligations until the earlier of
(i) all Registrable Securities have been registered pursuant to an
effective Registration Statement, or (ii) the Registrable Securities may be
resold without restriction (including volume limitations and current public
information requirements) pursuant to Rule 144 of the Securities
Act. The Company shall cause each such Registration Statement to be
declared effective under the Securities Act as soon as possible and shall use
its best efforts to keep such Registration Statement effective under the
Securities Act during the entire Effectiveness Period.
(f) Should
an Event (as defined below) occur, then upon the occurrence of such Event, and
on every monthly anniversary thereof until the applicable Event is cured, the
Company shall pay to the Investor an amount in cash, as liquidated damages and
not as a penalty, equal to one percent (1.0%), or such other percentage
specified herein, of (i) the number of Registrable Securities held by the
Investor as of the date of such Event, multiplied by (ii) the purchase price
paid by the Investor for such Registrable Securities then held. The
payments to which the Investor shall be entitled pursuant to this
Section 2(f) are referred to herein as “Event
Payments.” Any Event Payments payable pursuant to the terms
hereof shall apply on a pro rated basis for any portion of a month prior to the
cure of an Event. All pro rated calculations made pursuant to this
Section 2(f) shall be based upon the actual number of days in such pro rated
month. For such purposes, each of the following shall constitute an
“Event”:
(A) the
Registration Statement is not filed on or prior to the Filing Date;
(B) the
Registration Statement is not declared effective within 60 days from the date
hereof;
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(C) the
Registration Statement is not declared effective within 90 days from the date
hereof (and in such case the penalty will increase to two percent (2.0%) for the
following 30 days or until earlier declared effective);
(D) the
Registration Statement is not declared effective within 120 days from the date
hereof (and in such case the penalty will increase to three percent (3.0%) and
will be and remain payable until the Registration Statement is declared
effective);
(E) the
Company fails to file with the Commission a request for acceleration of a
Registration Statement in accordance with Rule 461 promulgated by the Commission
pursuant to the Securities Act, within five Trading Days of the date that the
Company is notified (orally or in writing, whichever is earlier) by the
Commission that such Registration Statement will not be “reviewed” or will not
be subject to further review; or
(F) the
Company does not respond to comments received from the Commission with respect
to the Registration Statement as soon as practicable and, in any event, within
seven Business Days of receipt of such comments (if such comments relate to
accounting issues) and within five Business Days of receipt of such
comments (if such comments relate to any other issue).
Notwithstanding
anything to the contrary, penalties for an Event under subsections (A) and (F)
above shall be half a percent, and all penalties shall not exceed one
and a half percent for each of the first two 30 day periods, one percent for the
next 30 day period, or three percent for each of the next three 30 days
periods.
Notwithstanding
the foregoing, the Company shall not be obligated to make an Event Payment in
connection with an Event based solely upon any 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 based solely upon any
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading to the extent, but only to the extent
that, such untrue statements or omissions are based solely upon information
regarding the Investor furnished to the Company by the Investor in writing
expressly for use therein, or to the extent that such information relates to the
Investor or such Investor’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Investor
expressly for use in the Registration Statement (it being understood that the
information provided by the Investor to the Company in the Selling Stockholder
Questionnaire and other information provided by the Investor to the Company
constitutes information reviewed and expressly approved by such Investor in
writing expressly for use in the Registration Statement), such Prospectus or
such form of Prospectus or in any amendment or supplement thereto.
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3.
Registration
Procedures. In connection with the Company’s registration
obligations hereunder, the Company shall:
(a) Prepare
and file with the Commission such amendments, including post-effective
amendments, to each 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 as may be required 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 possible to any comments received
from the Commission with respect to the Registration Statement or any amendment
thereto (and, in any event, respond within seven Business Days of receipt of
such comments, if such comments relate to accounting issues, and within five
Business Days of receipt of such comments, if such comments relate to any other
issue), and provide Investor true and complete copies of all such comments and
all other material correspondence from and to the Commission relating to the
Registration Statement immediately upon receipt of such comments or other
correspondence; 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 Investor set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented.
(b) Notify
the Investor in writing promptly upon the occurrence of any of the following
events: (i) any Registration Statement or any post-effective
amendment is declared effective; (ii) the Commission notifies the Company
whether there will be a “review” of any Registration Statement; (iii) the
Commission comments in writing on any Registration Statement; (iv) any
Registration Statement or any post-effective amendment is declared effective;
(v) the Commission or any other Federal or state governmental authority
requests any amendment or supplement to any Registration Statement or Prospectus
or requests additional information related thereto; (vi) the Commission
issues any stop order suspending the effectiveness of any Registration Statement
or initiates any Proceedings for that purpose; (vii) the Company receives
notice of any suspension of the qualification or exemption from qualification of
any Registrable Securities for sale in any jurisdiction, or the initiation or
threat of any Proceeding for such purpose; or (viii) the financial
statements included in any Registration Statement become ineligible for
inclusion therein or any Registration Statement or Prospectus or other document
contains any untrue statement of a material fact or omits 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; and
(viii) the occurrence, threat or existence of any development with respect
to the Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interest of the Company
to allow continued availability of a Registration Statement or Prospectus, provided that the
Company will not deliver or make available to the Investor material, nonpublic
information unless the Investor requests in advance in writing to receive
material, nonpublic information and agrees to keep such information
confidential.
(c) Use
its commercially reasonable best efforts to avoid the issuance of or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of any
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 possible.
-8-
(d) Promptly
after the filing of a Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), provide the
Investor, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by
reference, and all exhibits (including those previously furnished or
incorporated by reference); provided, that any
such item which is available on the EDGAR system (or successor thereto) need not
be furnished in physical form.
(e) (i) In
the time and manner as may be required by each Trading Market, prepare and file
with such Trading Market an additional shares listing application covering all
of the Registrable Securities; (ii) take all steps necessary to cause such
shares of Common Stock to be approved for listing on each Trading Market as soon
as possible thereafter; (iii) provide to the Investor evidence of such
listing; and (iv) during the Effectiveness Period, maintain the listing of
such shares of Common Stock on each such Trading Market, as
applicable.
(f) Prior
to any resale of Registrable Securities, use its commercially reasonable best
efforts to register or qualify or cooperate with the selling Investor in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for resale under
the securities or Blue Sky laws of such jurisdictions within the United States
as the Investor requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective for so long as required, but
not to exceed the duration of the Effectiveness Period, and to do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(g) Cooperate
with the Investor to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to a Registration Statement, which certificates shall be free, to the
extent permitted by this Agreement and under law, of all restrictive legends,
and to enable such certificates to be in such denominations and registered in
such names as the Investor may reasonably request.
(h) Upon
the occurrence of any event described in Section 3(b)(vii), 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 the light of the circumstances under which they were made, not
misleading.
(i) Cooperate
with any reasonable due diligence investigation undertaken by the Investor in
connection with the sale of Registrable Securities, including, without
limitation, by making available documents and information; provided that the
Company will not deliver or make available to the Investor material, nonpublic
information unless the Investor requests in advance in writing to receive
material, nonpublic information and to keep such information
confidential.
-9-
(j) Comply
with all rules and regulations of the Commission applicable to the registration
of the Registrable Securities.
(k) Comply
with all applicable rules and regulations of the Commission under the Securities
Act and the Exchange Act, including, without limitation, Rule 172 under the
Securities Act, file any final Prospectus, including any supplement or amendment
thereof, with the Commission pursuant to Rule 424 under the Securities Act,
promptly inform the Investor in writing if, at any time during the Effectiveness
Period, the Company does not satisfy the conditions specified in Rule 172 and,
as a result thereof, the Investor is required to make available a Prospectus in
connection with any disposition of Registrable Securities and take such other
actions as may be necessary to facilitate the registration of the Registrable
Securities hereunder.
(l) It
shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of the Investor or to make any Event Payments set forth in Section
2(f) to the Investor that such Investor furnish to the Company information
regarding itself, the Registrable Securities and other shares of Common Stock
held by it and the intended method of disposition of the Registrable Securities
held by it, and shall complete and execute such documents in connection with
such registration, as are required pursuant to the Securities Act to effect the
registration of such Registrable Securities.
4.
Registration
Expenses. The Company shall pay all fees and expenses incident
to the performance of or compliance with this Agreement, whether or not any
Registrable Securities are sold pursuant to a 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 of the Company’s counsel and independent
registered public accountants) (A) with respect to filings made with the
Commission, (B) with respect to filings required to be made with any
Trading Market on which the Common Stock is then listed for trading, (C) in
compliance with applicable state securities or Blue Sky laws reasonably agreed
to by the Company in writing (including, without limitation, fees and
disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities) and (D) if not
previously paid by the Company in connection with any documents or information
required by FINRA Rule 5110 to be filed with FINRA, with respect to any filing
that may be required to be made by any broker through which an Investor intends
to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110,
so long as the broker is receiving no more than a customary brokerage commission
in connection with such sale, (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities),
(iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and (v) Securities Act liability
insurance, if the Company so desires such insurance. In no event
shall the Company be responsible for any broker or similar commissions of the
Investor or any legal fees or other costs of the Investor.
-10-
5.
Indemnification.
(a) Indemnification by the
Company. The Company shall, notwithstanding any termination of
this Agreement or any other Transaction Document, indemnify and hold harmless
each Holder, the officers, directors, agents, investment advisors, partners,
members, shareholders, 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, investment
advisors, partners, members, shareholders, 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 costs of preparation and reasonable attorneys’
fees and expenses) (collectively, “Losses”), as incurred, arising out of or
relating to 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 (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 (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly 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 expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
or (2) with respect to any Prospectus, if the untrue statement or omission of
material fact contained in such Prospectus was corrected on a timely basis in
the Prospectus, as then amended or supplemented, if such corrected Prospectus
was timely made available by the Company to the Investor, and the Investor
seeking indemnity hereunder was advised in writing not to use the incorrect
Prospectus prior to the use giving rise to Losses. The Company shall notify each
Holder 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 or any other Transaction Document.
(b) Conduct of Indemnification
Proceedings. Any indemnification provided pursuant to Section 5(a) shall
be governed by the following procedures:
(i) 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 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 proximately and materially
adversely prejudiced the Indemnifying Party.
-11-
(ii)
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: (A) the Indemnifying Party has agreed in writing
to pay such fees and expenses; or (B) 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 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 such 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 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.
(iii) All
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 5) shall
be paid to the Indemnified Party, as incurred, within ten (10) Trading Days of
written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the
Indemnifying Party may require an Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification
hereunder).
(iv) Contribution. If
a claim for indemnification under Section 5(a) 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 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 Section 5 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(b) 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 this Section
5.2(iv). Notwithstanding the provisions of this Section 5(b)(iv), 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 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.
-12-
(c)
The indemnity and contribution agreements contained in this Section 5 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6.
Miscellaneous.
(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 agree 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) Amendments and
Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed by the Company and the Holders of
no less than a majority of the outstanding Registrable Securities. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such
right.
(c) Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile telephone number
specified in this Section 6(c) prior to 6:30 p.m. (New York City time)
on a Trading Day, (ii) the Trading Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section 6(c) later than 6:30 p.m.
(New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service, or
(iv) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as
follows:
If to the
Company: Zoo
Entertainment, Inc.
c/o Zoo
Publishing, Inc.
3805
Edwards Road, Suite 605
Cincinnati,
Ohio 45209
Facsimile
No.: 513-278-0111
Attn:
Mark Seremet
-13-
and
Zoo
Games, Inc.
575
Broadway
New York,
New York 10012
Facsimile No.:
646-495-6392
Attention:
David Fremed
With a
copy
to:
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo P.C.
666 Third
Avenue
New York,
NY 10017
Facsimile
No.: 212-983-3115
Attn: Kenneth
Koch, Esq.
|
If
to the Investor:
|
To
the address and facsimile number set forth under such Investor’s name on
the signature pages hereto
|
If to any
other Person who is then the registered Holder:
To the
address and facsimile number of such Holder as it appears in the stock transfer
books of the Company
or such
other address as may be designated in writing hereafter, in the same manner, by
such party.
(d) Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The Company may not assign
its rights or obligations hereunder without the prior written consent of each
Holder. Each Holder may assign its rights or obligations under this
Agreement to any Person to whom Investor or such Holder assigns or transfers any
Registrable Securities, provided such
transferee agrees in writing to be bound, with respect to the transferred
Registrable Securities, by the provisions hereof that apply to such
Holder. Notwithstanding anything to the contrary herein, Registrable
Securities may be assigned to any Person in connection with a bona fide margin
account or other loan or financing arrangement secured by such Registrable
Securities.
(e) 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.
-14-
(f) Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby. If any party shall commence a Proceeding to enforce any
provisions of a Transaction Document, then the prevailing party in such
Proceeding shall be reimbursed by the non-prevailing party for the prevailing
party’s attorney’s fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.
(g) Cumulative
Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(h) 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 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.
(i) Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(j) No Third-Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except that each Indemnified Party is an intended third party
beneficiary of Section 5 and (in each case) may enforce the provisions of such
Section 5 directly against the parties with obligations thereunder.
(k) Rescission and Withdrawal
Right. Notwithstanding anything to the contrary contained
herein or in any of the other Transaction Documents, whenever Investor exercises
a right, election, demand or option owed to Investor by the Company under a
Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided (including any applicable cure
period), then, prior to the performance by the Company of the Company’s related
obligation, Investor may rescind or withdraw, in its sole discretion from time
to time upon written notice to the Company, any relevant notice, demand or
election in whole or in part without prejudice to its future actions and
rights.
(l) Legal
Fees. Company will pay Investor’s actual legal fees related to
negotiating and drafting the Transaction Documents, not to exceed
$50,000.00.
-15-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.
|
Company:
|
||
|
ZOO
ENTERTAINMENT, INC.
|
||
|
By:
|
/s/ David Fremed
|
|
|
Name:
|
David Fremed
|
|
|
Title:
|
Chief Financial Officer
|
|
|
Investor:
|
||
|
SOCIUS
CAPITAL GROUP, LLC
|
||
|
By:
|
/s/ Terry Peizer
|
|
|
Name: Terry
Peizer
|
||
|
Title: Managing
Director
|
||
|
11150
Santa Monica Blvd
|
||
|
Los
Angeles, CA 90025
|
||
|
Facsimile
No.: (310) 444-5300
|
||
|
Attn: Terry
Peizer
|
||
|
With
a copy to:
|
||
|
Luce
Forward Hamilton & Scripps LLP
|
||
|
601
S. Figueroa St., 39th
Floor
|
||
|
Los
Angeles, CA 90017
|
||
|
Facsimile
No. (213) 452-8035
|
||
|
Attn: John
C. Kirkland, Esq.
|
||
-16-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.
|
Company:
|
||
|
ZOO
ENTERTAINMENT, INC.
|
||
|
By:
|
/s/ David Fremed
|
|
|
Name:
|
David Fremed
|
|
|
Title:
|
Chief Financial Officer
|
|
|
Investor:
|
||
|
FOCUS
CAPITAL PARTNERS, LLC
|
||
|
By:
|
/s/ Terry Peizer
|
|
|
Name: Terry
Peizer
|
||
|
Title: Managing
Director
|
||
|
Address
for Notice:
|
||
|
11150
Santa Monica Blvd
|
||
|
Los
Angeles, CA 90025
|
||
|
Facsimile
No.: (310) 444-5300
|
||
|
Attn: Terry
Peizer
|
||
|
With
a copy to:
|
||
|
Luce
Forward Hamilton & Scripps LLP
|
||
|
601
S. Figueroa St., 39th
Floor
|
||
|
Los
Angeles, CA 90017
|
||
|
Facsimile
No. (213) 452-8035
|
||
|
Attn: John
C. Kirkland, Esq.
|
||