Exhibit 4.2
J2 COMMUNICATIONS
JIMIRRO REGISTRATION RIGHTS AGREEMENT
May 17, 2002
JIMIRRO REGISTRATION RIGHTS AGREEMENT
THIS JIMIRRO REGISTRATION RIGHTS AGREEMENT, dated as of May 17, 2002
(this "AGREEMENT"), entered into by and is made between J2 COMMUNICATIONS, a
California corporation (the "COMPANY") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "SHAREHOLDER").
In consideration of the promises made herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Article 1. DEFINITIONS.
Section 1.1 DEFINITIONS. As used in this Article 1 and elsewhere in this
Agreement, the following terms shall have the following respective meanings:
"COMMISSION" means the Securities and Exchange Commission or any other
federal agency administering the Securities Act.
"COMMON SHARES" means the Company's Common Shares, no par value per
share.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any similar federal law then in force.
"PERSON" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization, a government or any department or agency thereof or any other
entity.
"REGISTRABLE SECURITIES" means any Common Shares.
"REGISTRATION EXPENSES" shall have the meaning set forth in Section 5.1.
"REGISTRATION STATEMENT" means the prospectus and other documents filed
with the Commission to effect a registration under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"SELLING EXPENSES" means all underwriting discounts, selling commissions
and transfer taxes incurred pursuant to the sale of Registrable Securities.
Article 2. DEMAND REGISTRATIONS.
Section 2.1 REQUESTS FOR REGISTRATION. Subject to Section 2.7, the
Shareholder shall have the right to make up to two separate requests in writing
that the Company effect the registration of all or a part of the Registrable
Securities held by the Shareholder, each such request to specify the
registration form to be used and the intended method or methods of disposition
of the Registrable Securities. The Company shall pay all Registration Expenses
in connection with any registration pursuant to this Section 2.1, and all
Selling Expenses shall be borne by the holders of the securities so registered
pro rata on the basis of the number of their shares so registered. Each request
for a registration pursuant to this Section 2.1 shall specify the approximate
number of Registrable Securities requested to be registered. A request for
registration will not count
as a request for registration under this Section 2.1 until the Registration
Statement relating to the registration has become effective, provided that, in
any event, the Company will pay all Registration Expenses in connection with any
registration pursuant to this Section 2.1, regardless of whether the
Registration Statement relating thereto has become effective unless such
Registration Statement is withdrawn at the request of the Shareholder, other
than pursuant to Section 2.4, in which case the Shareholder shall pay all such
Registration Expenses.
Section 2.2 SHORT-FORM REGISTRATIONS. The Company shall use its best
efforts to qualify for registration on Form S-2 or S-3 or any comparable or
successor form or forms or any similar short form registration ("SHORT-FORM
REGISTRATIONS"). Subject to Section 2.7 (for registration on Form S-2 or any
comparable or successor form or forms) and to Section 2.4 below, in addition to
the demand registrations provided pursuant to Section 2.1 above, the Shareholder
will be entitled to request at any time and from time to time an unlimited
number of Short-Form Registrations in which the Company will pay all
Registration Expenses, provided that the Company shall not be obligated to
effect any registration pursuant to this Section 2.2 more than twice in any one
year. Registration on Form S-3 or any comparable or successor form or forms
shall not be subject to the minimum demand threshold set forth in Section 2.7.
Section 2.3 PRIORITY ON DEMAND REGISTRATIONS. If any registration
pursuant to Section 2.1 or Section 2.2 (a "DEMAND REGISTRATION") is an
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and other
securities requested to be included in the offering exceeds the number of
Registrable Securities and other securities, if any, which can be sold therein
without adversely affecting the marketability of the offering, the Company will
include in the offering prior to the inclusion of any securities which are not
Registrable Securities the number of Registrable Securities requested to be
included that, in the opinion of such underwriters, can be sold without
adversely affecting the marketability of the offering.
Section 2.4 RESTRICTIONS ON DEMAND REGISTRATIONS. The Company may
postpone for a reasonable period of time, not to exceed 120 days, the filing of
a prospectus or the effectiveness of a Registration Statement for a Demand
Registration if the Company concludes, following consultation with, and after
obtaining the good faith approval of, the board of directors of the Company,
that the Demand Registration would reasonably be expected to have a material
adverse effect on any proposal or plan by the Company to engage in any
acquisition of assets (other than in the ordinary course of business) or any
merger, amalgamation, consolidation, tender offer or similar transaction or
otherwise would have a material adverse effect on the business, assets,
operations, prospects or financial or other condition of the Company; provided,
however, that in that event, the Shareholder will be entitled to withdraw his
request and, if the request is withdrawn, such Demand Registration will not
count as one of the permitted Demand Registrations hereunder and the Company
will pay, to the fullest extent permitted by applicable law, all Registration
Expenses in connection with the registration or prospectus; provided, further,
that the Company may not use this deferral right more than twice in the
aggregate
or more than once in any twelve month period.
Section 2.5 SELECTION OF UNDERWRITERS. On any Demand Registration, the
Shareholder will have the right to select the investment banker(s) and
manager(s) to administer the offering, subject to the Company's approval which
will not be unreasonably withheld or delayed.
Section 2.6 OTHER REGISTRATION RIGHTS. Except as provided in this
Agreement and except for registration rights granted pursuant to the NLAG
Registration Rights Agreement of even date herewith among the Company, National
Lampoon Acquisition Group LLC ("NLAG") and certain other Shareholders and option
holders of the Company and their designees (NLAG and such other Shareholders and
option holders and their designees are collectively referred to herein as the
"NLAG HOLDERS"), the Company will not grant to any holder or prospective holder
of any securities of the Company registration rights with respect to the
securities which are senior or pari passu to the rights granted hereunder
without the prior written consent of the Shareholder.
Section 2.7 DEMAND THRESHOLD. The minimum demand threshold for any
Demand Registration under Section 2.1 or on Form S-2 or any comparable or
successor form or forms (but not Form S-3 or any comparable or successor form or
forms) under Section 2.2 of this Agreement shall be the lesser of (1) Five
Hundred Thousand Dollars ($500,000) and (2) the greater of (a) Fifty Percent
(50%) of the Common Shares owned by the Shareholder and (b) One Hundred Thousand
Dollars ($100,000).
Article 3. PIGGYBACK REGISTRATIONS.
Section 3.1 RIGHT TO PIGGYBACK. Whenever the Company proposes to
register or qualify for distribution by prospectus any of its securities (other
than pursuant to a Demand Registration or a registration under the Securities
Act on Form S-4 or S-8 or any successor or similar forms) and the registration
form or prospectus to be filed may be used for the registration or qualification
for distribution of Registrable Securities (a "PIGGYBACK REGISTRATION"), whether
or not for sale for its own account, the Company will give prompt written notice
to the Shareholder of its intention to effect the registration or file the
prospectus and will include in the registration or qualification all Registrable
Securities with respect to which the Company has received a written request for
inclusion therein within fifteen (15) days after the receipt of the Company's
notice. The Shareholder may withdraw his Registrable Securities from the related
Piggyback Registration by giving written notice to the Company and the managing
underwriter, if any, on or before the thirtieth (30th) day prior to the planned
effective date of the related Piggyback Registration.
Section 3.2 PIGGYBACK EXPENSES. The Registration Expenses of the
Shareholder will be paid by the Company in all Piggyback Registrations whether
or not any registration or prospectus has become effective or final.
Section 3.3 PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an
underwritten primary registration or distribution by prospectus on behalf of the
Company, and the managing underwriters advise the Company in writing (with a
copy to the Shareholder provided he has requested registration or qualification
for distribution by prospectus of Registrable Securities) that in their opinion
the number of securities requested to be included in the registration or
prospectus exceeds the number which can be sold in an offering without adversely
affecting the marketability of the offering, the Company will include in the
registration or prospectus (i) first, the securities the Company proposes to
sell, (ii) second, the Registrable Securities requested to be included in the
registration and any securities requested by any of the NLAG Holders to be
included in the registration, pro rata among the holders of the securities on
the basis of the number of securities so requested to be included therein owned
by each holder, and (iii) third, other securities requested to be included in
the registration. The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section prior to the effectiveness of
such registration, whether or not the Shareholder has elected to include
securities in the registration, and except pursuant to Section 3.2 the Company
shall have no liability to the Shareholder in connection with such termination
or withdrawal.
Section 3.4 PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration or distribution by
prospectus on behalf of holders of the Company's securities, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in the registration or qualification for
distribution by prospectus exceeds the number which can be sold in an offering
without adversely affecting the marketability of the offering, the Company will
include in the registration or prospectus (i) first, the securities requested to
be included therein by the holders requesting the registration, (ii) second, the
Registrable Securities requested to be included in the registration, and (iii)
third, other securities requested to be included in the registration.
Section 3.5 OTHER REGISTRATIONS. If the Company has previously filed a
Registration Statement with respect to Registrable Securities pursuant to
Article 2 or pursuant to Article 3, and if such previous registration or
offering by prospectus has not been withdrawn or abandoned, the Company will not
file and shall not be required to file or cause to be effected any other
registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except under the Securities Act on Form S-4 or S-8 or any successor or
similar forms), whether on its own behalf or at the request of the Shareholder,
until a period of at least ninety (90) days have elapsed from the effective date
of such previous registration.
Article 4. REGISTRATION PROCEDURES.
Section 4.1 REGISTRATION PROCEDURES. Subject to Sections 2.4 and 3.5,
whenever the Shareholder has requested that any Registrable Securities be
registered pursuant to this Agreement, the Company will use its best efforts to
effect the registration and sale of those Registrable Securities in accordance
with the intended method of disposition
thereof, and pursuant thereto the Company will as expeditiously as possible:
(a) prepare and, within sixty (60) days after the end of the period
within which requests for registration may be given to the Company, unless the
failure to file within such sixty (60) day period occurs due to matters outside
the Company's control, in which case as soon as practicable, file with the
Commission a Registration Statement with respect to the Registrable Securities
and thereafter use its best efforts to cause the Registration Statement to
become effective (provided that before filing a Registration statement or any
amendments or supplements thereto, the Company will furnish to the counsel
selected by the Shareholder (provided he holds Registrable Securities covered by
the Registration Statement) copies of all documents proposed to be filed, which
documents will be subject to review of counsel);
(b) prepare and file with the Commission any amendments and supplements
to the Registration Statement as may be necessary to keep the Registration
Statement effective for a period of either (i) not less than ninety (90) days
(subject to extension pursuant to Section 7.2) or, if the Registration Statement
relates to an underwritten offering, such longer period as in the opinion of
counsel for the underwriters a prospectus is required by law to be delivered in
connection with sales of Registrable Securities by an underwriter or dealer or
(ii) a shorter period as will terminate when all of the securities covered by
the Registration Statement have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in the
Registration Statement (but in any event not before the expiration of any longer
period required under the Securities Act), and to comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
the Registration Statement until such time as all of the securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in the Registration Statement;
(c) furnish to the Shareholder the number of copies of the Registration
Statement, each amendment and supplement thereto, including each preliminary
prospectus, final prospectus and other documents as he may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by him;
(d) use its best efforts to register or qualify the Registrable
Securities under any other securities or blue sky laws of any jurisdictions as
the Shareholder reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to enable the Shareholder to
consummate the disposition in those jurisdictions of the Registrable Securities
owned by the Shareholder (provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any jurisdiction or (iii) consent to general service of process
in any jurisdiction);
(e) promptly notify the Shareholder (provided he is selling Registrable
Securities), at any time when a prospectus relating thereto is required to be
delivered under the
Securities Act, upon discovery that, or upon the discovery of the happening of
any event as a result of which, the prospectus contains an untrue statement of a
material fact or omits to state any fact necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, and, at the request of the Shareholder, the Company will prepare and
furnish to the Shareholder a reasonable number of copies of a supplement or
amendment to the prospectus so that, as thereafter delivered to the purchasers
of Registrable Securities, the prospectus will not contain an untrue statement
of a material fact or omit to state any fact necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made;
(f) use its best efforts to cause all the Registrable Securities to be
listed on each securities exchange on which similar securities issued by the
Company are then listed;
(g) provide a transfer agent and registrar for all the Registrable
Securities not later than the effective date of, or date of final receipt for,
the Registration Statement;
(h) enter into any customary agreements (including underwriting
agreements with customary provisions) and take all other actions as the
Shareholder (provided he holds Registrable Securities being sold) or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of the Registrable Securities (including, without limitation,
effecting a share split or a combination of shares);
(i) make available for inspection, subject to reasonable confidentiality
restrictions on use, by the Shareholder (provided he is selling Registrable
Securities), any underwriter participating in any disposition pursuant to the
Registration Statement and any attorney, accountant or other agent retained by
the Shareholder (provided he is selling Registrable Securities) or underwriter,
all financial and other records, pertinent corporate documents and documents
relating to the business of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by the Shareholder (provided he is selling Registrable
Securities), underwriter, attorney, accountant or agent in connection with the
Registration Statement; (j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve (12) months beginning with the first day
of the Company's first full calendar quarter after the effective date of the
Registration Statement, which earnings statement shall satisfy, in the case of a
registration in the United States, the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related prospectus or ordering the cessation of
trading or suspending the qualification of any securities included in the
Registration Statement for sale in any jurisdiction, the Company will use its
best efforts promptly to obtain the withdrawal of the order;
(l) obtain one or more comfort letters, addressed to the Shareholder
(provided he holds Registrable Securities being sold), dated the effective date
of such Registration Statement (and, if the registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement) signed by the Company's independent public accountants
in customary form and covering matters of the type customarily covered by
comfort letters as the Shareholder (provided he holds Registrable Securities
being sold) reasonably requests; and
(m) provide legal opinions of the Company's outside counsel, addressed
to the Shareholder (provided he holds Registrable Securities being sold), dated
the effective date of the Registration Statement (and, if the registration
includes an underwritten public offering, dated the date of the closing under
the underwriting agreement), with respect to the Registration Statement, each
amendment and supplement thereto (including the preliminary prospectus) and all
other documents relating thereto in customary form and covering matters of the
type customarily covered by legal opinions of such nature. The Company may
require the Shareholder (provided he is selling Registrable Securities as to
which any registration is being effected) to furnish the Company with
information regarding the Shareholder and the intended and actual distribution
of the securities as the Company may from time to time reasonably request.
Article 5. REGISTRATION EXPENSES.
Section 5.1 REGISTRATION EXPENSES. Except as otherwise expressly
provided herein, all expenses incidental to the Company's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, word processing, duplicating and printing expenses, messenger and delivery
expenses, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters and other Persons
retained by the Company (all expenses being herein called "REGISTRATION
EXPENSES"), will be borne by the Company. The Company will, in any event, pay
its internal expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expense of any annual audit or quarterly review, the expense of any liability
insurance and the expenses and fees for listing the securities to be registered
on each securities exchange on which similar securities issued by the Company
are then listed. Notwithstanding the foregoing, all Selling Expenses shall be
borne by the holders of the securities so registered pro rata on the basis of
the number of their shares so registered.
Section 5.2 COUNSEL FEES. In connection with each Demand Registration
and each Piggyback Registration, the Company will reimburse the Shareholder with
respect to Registrable Securities covered by the registration or qualification
for the reasonable fees and disbursements of, if applicable, one United States
counsel chosen by the Shareholder.
Section 5.3 ALLOCATION OF UNPAID EXPENSES. To the extent Registration
Expenses are not required to be paid by the Company, each holder of securities
included in any registration or qualification hereunder will pay those
Registration Expenses allocable to
the registration or qualification of the holder's securities so included, and
any Registration Expenses not so allocable will be borne by all sellers of
securities included in the registration in proportion to the aggregate selling
price of the securities to be so registered or qualified.
Article 6. INDEMNIFICATION.
Section 6.1 INDEMNIFICATION. The Company agrees to indemnify and hold
harmless, and hereby does indemnify and hold harmless, the Shareholder, his
affiliates and their respective officers, directors and partners and each Person
who controls the Shareholder (within the meaning of the Securities Act) against,
and pay and reimburse the Shareholder, affiliate, director, officer or partner
or controlling person for any losses, claims, damages and liabilities, joint or
several, to which the Shareholder or any such affiliate, director, officer or
partner or controlling person may become subject under the Securities Act or
otherwise, insofar as the losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon (i) any untrue or alleged untrue statement of material fact
contained in any Registration Statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or, (ii) any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Company will pay and reimburse
the Shareholder and each affiliate, director, officer, partner and controlling
person for any legal or any other expenses actually and reasonably incurred by
them in connection with investigating or defending any loss, claim, liability,
action or proceeding; provided, however, that the Company shall not be liable in
any case to the extent that any loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged omission,
made in the Registration Statement, any prospectus or preliminary prospectus or
any amendment or supplement thereto, or in any application, in reliance upon,
and in conformity with, written information prepared and furnished to the
Company by the Shareholder expressly for use therein or by the Shareholder's
failure to deliver a copy of the Registration Statement or prospectus or any
amendments or supplements thereto after the Company has furnished the
Shareholder with a sufficient number of copies of the same. In connection with
an underwritten offering, the Company, if requested, will indemnify the
underwriters, their officers and directors and each Person who controls the
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Shareholder.
Section 6.2 COOPERATION. In connection with any Registration Statement
in which the Shareholder is participating, the Shareholder will furnish to the
Company in writing the information and affidavits as the Company reasonably
requests for use in connection with any Registration Statement or prospectus and
will indemnify and hold harmless the Company, its directors and officers, each
underwriter and each other Person who controls the Company (within the meaning
of the Securities Act) against any losses, claims, damages and liabilities,
joint or several, to which the Company or any director or officer, any
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as the losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon (i) any untrue or alleged untrue statement of material fact
contained in the Registration Statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or in any application or (ii) any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that the untrue statement or omission is made in the Registration Statement, any
prospectus or preliminary prospectus or any amendment or supplement thereto, or
in any application, in reliance upon and in conformity with written information
prepared and furnished to the Company by the Shareholder expressly for use
therein, and the Shareholder will reimburse the Company and each director,
officer, underwriter and controlling Person for any legal or any other expenses
actually and reasonably incurred by them in connection with investigating or
defending any loss, claim, liability, action or proceeding; provided, however,
that the obligation to indemnify and hold harmless will be individual and
several to the Shareholder and will be limited to the net amount of proceeds
received by the Shareholder from the sale of Registrable Securities pursuant to
the Registration Statement.
Section 6.3 CONTRIBUTION. If the indemnification provided for in
Sections 6.1 or 6.2 is unavailable to an indemnified party under such Sections
(other than by reason of exceptions provided in those Sections) in respect of
any claims referred to in such Sections, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such claims in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and of the Shareholder on the other in connection with the
statements or omissions which resulted in such claims. The amount paid or
payable by a party as a result of the claims referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim. The relative
fault of the Company on the one hand and of the Shareholder on the other shall
be determined by reference to, among other things, whether the applicable
misstatement or alleged misstatement relates to information supplied by the
Company or by the Shareholder and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such misstatement or
alleged misstatement. The Company and the Shareholder agree that it would not be
just and equitable if contribution pursuant to this Section 6.3 were determine
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 6.3, the Shareholder shall not be required to
contribute any amount pursuant hereto in excess of the net proceeds (after
deducting any discounts or commissions received by an underwriter in connection
with such registration) from the offering received by the Shareholder. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution hereunder from any person
who was not guilty of such fraudulent misrepresentation.
Section 6.4 NOTICE. Any Person entitled to indemnification hereunder
will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in the indemnified party's
reasonable judgment a conflict of interest between the indemnified and
indemnifying parties may exist with respect to the claim, permit the
indemnifying party to assume the defense of the claim with counsel reasonably
satisfactory to the indemnified party. If the defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without the indemnifying party's consent (but its
consent will not be unreasonably withheld). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by the indemnifying party with respect to the claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between the indemnified party and any other of the indemnified parties with
respect to the claim.
Section 6.5 SURVIVAL. The indemnification provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling Person of the indemnified party and will survive the transfer of
securities. Each party hereto also agrees to make any provisions, as are
reasonably requested by any indemnified party, for contribution to the party in
the event that indemnification from the party hereto is unavailable for any
reason.
Article 7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
Section 7.1 PARTICIPATION. The Shareholder may not participate in any
registration hereunder which is underwritten unless the Shareholder (i) agrees
to sell his securities on the basis provided in any underwriting arrangements
approved by the Person or Persons entitled hereunder to approve the arrangements
(including, without limitation, pursuant to the terms of any over-allotment or
"green shoe" option requested by the managing underwriter(s), provided that the
Shareholder will not be required to sell more than the number of Registrable
Securities that the Shareholder has requested the Company to include in any
registration), (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of the underwriting arrangements, and (iii) cooperates
with the Company's reasonable requests in connection with the registration or
qualification (it being understood that the Company's failure to perform its
obligations hereunder, which failure is caused by the Shareholder's failure to
cooperate, will not constitute a breach by the Company of this Agreement). The
Shareholder shall not be required to provide for indemnification obligations on
the part of the Shareholder that are greater than its obligations pursuant to
Section 6.2.
Section 7.2 NOTICE. The Shareholder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 4.1(e) above, the Shareholder will forthwith discontinue the disposition
of his Registrable Securities pursuant to the Registration Statement until his
receipt of the copies of a supplemented or amended prospectus as contemplated by
Section 4.1(e). In the event the Company shall give any such notice, the
applicable time period mentioned in Section 4.1(b) during
which a Registration Statement is to remain effective shall be extended by the
number of days during the period from and including the date of the giving of
the notice pursuant to this Section to and including the date when the
Shareholder shall have received the copies of the supplemented or amended
prospectus contemplated by Section 4.1(e).
Article 8. RULE 144 REPORTING.
Section 8.1 RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit the
sale of the Restricted Securities to the public without registration, the
Company agrees to:
(a) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time; and (c) so long as the Shareholder owns any Restricted Securities,
furnish to the Shareholder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144, and of
the Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and any other reports and documents so filed as
the Shareholder may reasonably request in availing itself of any rule or
regulation of the Commission allowing the Shareholder to sell any such
securities without registration.
Article 9. MISCELLANEOUS.
Section 9.1 NO INCONSISTENT AGREEMENTS. Subject to Section 2.6, the
Company will not hereafter enter into any agreement with respect to its
securities which is inconsistent with or violates the rights granted to the
Shareholder in this Agreement.
Section 9.2 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company
will not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
Shareholder to include the Registrable Securities in a registration or
qualification for sale by prospectus undertaken pursuant to this Agreement or
which would adversely affect the marketability of the Registrable Securities in
any registration or qualification (including, without limitation, effecting a
share split or a combination of shares).
Section 9.3 REMEDIES. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that any party hereto shall have the right to injunctive
relief, in addition to all of its other rights and remedies at law or in equity,
to enforce the provisions of this Agreement; provided, however, that the
Shareholder shall not have any right to an injunction to prevent the filing or
effectiveness of any Registration Statement of the Company.
Section 9.4 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and the Shareholder.
Section 9.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the Shareholder as such shall be for the benefit of and
enforceable by any subsequent holder of any Registrable Securities (or of such
portion thereof), subject to the provisions respecting the minimum numbers or
percentages of shares of Registrable Securities (or of such portion thereof)
required in order to be entitled to certain rights, or take certain actions,
contained herein.
Section 9.6 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in the manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement shall be reformed, construed and enforced
in the jurisdiction as if the invalid, illegal or unenforceable provision had
never been contained herein.
Section 9.7 COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all counterparts taken together will constitute one and
the same Agreement.
Section 9.8 DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
Section 9.9 GOVERNING LAW. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of California
without regard to the principles of conflicts of law thereof.
Section 9.10 NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed effectively given: (i) upon personal delivery
to the party to be notified, (ii) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All notices shall be
addressed to the Company at its principal office, to the Shareholder at the
address of the Shareholder appearing on the books of the Company or to such
other address as the Company or the Shareholder shall have furnished to the
other in writing.
IN WITNESS WHEREOF, the undersigned have set their hands and seals as of
the above date.
J2 COMMUNICATIONS
By: _________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
"SHAREHOLDER"
_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇