Exhibit 99.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of August 4, 1999 (this
"Agreement") is made by and between MDI Entertainment, Inc., a Delaware
corporation (the "Company"), and International Capital Partners, LLC (the
"Initial Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the Stock
Purchase Agreement, dated as of August 4, 1999, between the Initial Investor and
the Company (the "Stock Purchase Agreement"), the Company has agreed to issue
and sell to the Initial Investor shares of Series A Preferred Stock of the
Company (the "Preferred Stock"), which Preferred Stock will be convertible into
shares of the common stock, $.001 par value (the "Common Stock"), of the Company
(the "Conversion Shares") upon the terms and subject to the conditions of such
Preferred Stock; and
WHEREAS, to induce the Initial Investor to execute and deliver the
Stock Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Conversion Shares;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agrees as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Investor" means the Initial Investor and any permitted
transferee or assignee who holds Registrable Securities (as defined
below) and agrees to become bound by the provisions of this Agreement
in accordance with Section 9 hereof.
(ii) "Potential Material Event" means any of the following:
(a) the possession by the Company of material information not ripe for
disclosure in a registration statement, which shall be evidenced by
determinations in good faith by the Board of Directors of the Company
that disclosure of such information in the registration statement would
be detrimental to the business and affairs of the Company; or (b) any
material engagement or activity by the Company which would, in the good
faith determination of the Board of Directors of the Company, be
adversely affected by disclosure in a registration statement at such
time, which determination shall be accompanied by a good faith
determination by the Board of Directors of the Company that the
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registration statement would be materially misleading absent the
inclusion of such information.
(iii) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a registration statement
or statements in compliance with the Securities Act and pursuant to
Rule 415 under the Securities Act or any successor rule providing for
offering securities on a continuous basis ("Rule 415"), and the
declaration or ordering of effectiveness of such registration statement
by the United States Securities and Exchange Commission (the "SEC").
(iv) "Registrable Securities" means (1) the Conversion Shares,
(2) any Common Stock issued as a dividend or other distribution with
respect to, or in exchange or replacement of, such Series A Preferred
Stock or Common Stock, or (3) any Common Stock of the Company issuable
upon conversion, exercise or exchange of convertible securities,
warrants, options or similar rights issued as a dividend or other
distribution with respect to, or in exchange or replacement of such
Series A Preferred Stock or Common Stock.
(v) "Registration Statement" means a registration statement of
the Company under the Securities Act.
(b) Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Stock Purchase Agreement.
2. REGISTRATION.
(a) MANDATORY REGISTRATION. The Company shall prepare and file with the
SEC, no later than forty-five (45) days following the Closing Date under the
Stock Purchase Agreement, a Registration Statement on Form SB-2, or other
applicable form, registering for resale a sufficient number of shares of Common
Stock by the Initial Investor (or such lesser number as may be required by the
SEC, but in no event less than the number of shares into which the Preferred
Stock would be convertible at the time of filing of the Form SB-2 or other
applicable form, and such Registration Statement shall state that, in accordance
with Rule 416 and 457 under the Securities Act, it also covers such
indeterminate number of additional shares of Common Stock as may become issuable
upon conversion of the Preferred Stock resulting from adjustment in the
Conversion Price, or to prevent dilution resulting from stock splits, or stock
dividends). Such Registration Statement shall also provide for offering of the
securities on a continuous basis in accordance with Rule 415. If at any time the
number of shares of Common Stock into which the Preferred Stock may be converted
exceeds the aggregate number of shares of Common Stock then registered, the
Company shall, within fifteen (15) business days after receipt of a written
notice from any Investor, either (i) amend the Registration Statement filed by
the Company pursuant to the preceding sentence, if such Registration Statement
has not been declared effective by the SEC at that time, to register all shares
of Common Stock into which the Preferred Stock may be converted, or (ii) if such
Registration Statement has been declared effective by the SEC at that time, file
with the SEC an additional Registration Statement on Form SB-2, or other
applicable form, to register the shares of Common Stock into which the Preferred
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Stock may be converted that exceed the aggregate number of shares of Common
Stock already registered. If the staff of the SEC determines that all of the
Conversion Shares cannot be registered by the Company for resale by the Investor
because, in the view of the staff, such registration would constitute a primary
offering the Company, then the Company shall have an additional sixty (60) days
in which to amend such Registration Statement to another available form.
(b) PAYMENTS BY THE COMPANY.
(i) If the Registration Statement covering the Registrable
Securities is not filed in proper form with the SEC within forty-five
(45) days after the Closing, the Company will make payment to the
Initial Investor in the amount of $500 per day for each $10,000 in
principal amount of Preferred Stock outstanding for each day thereafter
until such Registration Statement, in proper form, is filed with the
SEC.
(ii) If the Registration Statement covering the Registrable
Securities required to be filed by the Company pursuant to Section 2(a)
hereof is not effective (x) on the earlier of (i) five days after
notice from the SEC that the Registration Statement may be declared
effective, or (ii) one hundred twenty (120) days following the initial
Closing Date (the "Initial Date"), (except as provided by the last
sentence of Section 2(a)), or (y) on the conclusion of a Suspension
Period (as defined in Section 3(f)), then the Company will make
payments to the Initial Investor in such amounts and at such times as
shall be determined pursuant to this Section 2(b); provided that the
one hundred twenty (120) day period set forth in the preceding clause
shall be extended by (A) the number of days in excess of thirty (30)
after filing of the Registration Statement by which the Company
receives the SEC's first round of comments on the Registration
Statement, plus (B) the number of days in excess of fourteen (14) after
the Company's response to the prior round of SEC comments by which the
Company receives the SEC's second and third rounds of comments on the
Registration Statement. There shall be no extension for other rounds of
SEC comments. The amount to be paid by the Company to the Initial
Investor shall be determined as of each Computation Date, and such
amount shall be equal to one and three-quarters (1 3/4 %) percent of
the purchase price paid by the Initial Investor for all Preferred Stock
then purchased and outstanding pursuant to the Stock Purchase Agreement
for any period from the Initial Date (as extended in accordance with
the preceding sentence) to the first Computation Date, and shall
increase by 1/4% for each computation period thereafter to a maximum of
2 1/2%, to the date the Registration Statement is declared effective by
the SEC (pro rated for partial periods) (the "Periodic Amount"). The
Company will use its best efforts to cause the Registration Statement
to be declared effective and to keep it effective and will respond as
promptly as practicable upon receipt of comments from the SEC. The
Company will respond to the first three rounds of comments from the SEC
within ten business days of receiving such comments; provided, however,
that if the SEC does not send first round comments within thirty (30)
days of receipt of the initial filing of the Registration Statement
then the Company shall have one (1) extra day to respond to SEC
comments for each day over thirty (30) days that it takes the SEC to
comment. The Company shall respond to any further rounds of comments
within ten (10) business days regardless of the amount of days it takes
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the SEC to send comments. The amount to be paid by the Company to
Initial Investor if the Company fails to respond within the time limits
set out above shall be $25,000 per day for each day in excess of the
amount of days allowed by this provision; provided that if the
Registration Statement shall be declared effective within one hundred
twenty (120) days of the date hereof, all amounts paid in accordance
with this sentence shall be refunded to the Company within five (5)
business days of the effective date of the Registration Statement. The
full Periodic Amount shall be paid by the Company in immediately
available funds within three business days after each Computation Date.
Notwithstanding the foregoing, the amounts payable by the Company
pursuant to this provision shall not be payable to the extent any delay
in the effectiveness of the Registration Statement occurs because of an
act of, or a failure to act or to act timely by the Investor or its
counsel, or in the event all of the Registrable Securities may be sold
pursuant to Rule 144 or another available exemption under the
Securities Act.
As used in this Section 2(b), the following terms shall have the
following meanings:
"Computation Date" means the date which is the earlier of (i) five days
after notice from the SEC that the Registration Statement may be declared
effective, or (ii) one hundred twenty (120) days after the initial Closing Date
(except as provided by the last sentence of Section 2(a)), and, if the
Registration Statement required to be filed by the Company pursuant to Section
2(a) has not theretofore been declared effective by the SEC or a Suspension
Period is in effect, each date which is thirty (30) days after the previous
Computation Date (pro rated for partial periods) until such Registration
Statement is so declared effective.
3. OBLIGATIONS OF THE COMPANY. In connection with the registration of
the Registrable Securities, the Company shall do each of the following:
(a) Prepare promptly, and file with the SEC by forty-five (45) days
after the initial Closing Date, a Registration Statement with respect to not
less than the number of Registrable Securities provided in Section 2(a) above,
and thereafter used its best efforts to cause each Registration Statement
relating to Registrable Securities to become effective on the earlier of (i)
five days after notice from the SEC that the Registration Statement may be
declared effective, or (b) one hundred twenty (120) days after the Closing Date,
and keep the Registration Statements effective at all times until the earliest
(the "Registration Period") of (i) the date that is one year after the Closing
Date (ii) the date when the Investors may sell all Registrable Securities under
Rule 144 or (iii) the date the Investors no longer own any of the Registrable
Securities, which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
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provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) The Company shall permit a single firm of counsel designated by the
Investors to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing with the
SEC, and not file any document in a form to which such counsel reasonably
objects;
(d) Furnish to each Investor whose Registrable Securities are included
in the Registration Statement and its legal counsel identified to the Company
(i) promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one (1) copy of the Registration Statement,
each preliminary prospectus and prospectus, and each amendment or supplement
thereto, and (ii) such number of copies of a prospectus, and all amendments and
supplements thereto and such other documents, as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor;
(e) As promptly as practicable after becoming aware of such event,
notify each Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to each Investor as such Investor may reasonably
request;
(f) Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing of the existence of a Potential Material
Event, the Investors shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until such Investor receives written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; provided, however, that the
Company may not so suspend the right to such holders of Registrable Securities
for more than two (2) twenty (20) day periods in the aggregate during any
12-month period (the "Suspension Period") with at least a ten (10) business day
interval between such periods, during the period the Registration Statement is
required to be in effect. The Company may extend one (1) of the twenty (20) day
periods for (a) up to ninety (90) days if the Potential Material Event involves
an acquisition which requires pro forma financial information to be filed in
accordance with Item 7 of Form 8-K pursuant to the Securities Exchange Act of
1934 and the acquired company does not have audited financial statements; or (b)
up to forty-five (45) days if the Potential Material Event involves an
acquisition which requires pro forma financial information to be filed in
accordance with Item 7 of Form 8-K pursuant to the Securities and Exchange Act
of 1934 and the acquired company has audited financial statements.
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(g) As promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the SEC of a Notice of Effectiveness or any stop order or other suspension of
the effectiveness of the Registration Statement at the earliest possible time;
(h) Use its reasonable efforts as soon as it qualifies to secure
designation of all the Registrable Securities covered by the Registration
Statement as a National Association of Securities Dealers Automated Quotations
System ("NASDAQ") "Small Capitalization" within the meaning of Rule 11Aa2-1 of
the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the quotation of the Registrable Securities of the NASDAQ Small Cap
Market; or if, despite the Company's reasonable efforts to satisfy the preceding
clause, the Company is unsuccessful in doing so, to secure NASDAQ/OTC Bulletin
Board authorization and quotation for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register with the National Association of Securities Dealers, Inc.
("NASD") as such with respect to such Registrable Securities;
(i) Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of the
Registration Statement;
(j) Cooperate with the Investors who hold Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the Registration Statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts as the case may be, as the Investors may reasonably
request, and, within three (3) business days after a Registration Statement
which includes Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel selected by the Company to
deliver to the transfer agent for the Registrable Securities (with copies to the
Investors whose Registrable Securities are included in such Registration
Statement) an appropriate instruction and opinion of such counsel; and
(k) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investors of the Registrable Securities pursuant
to the Registration Statement.
4. OBLIGATIONS OF THE INVESTORS. In connection with the registration
the Registrable Securities, the Investors shall have the following obligations:
(a) 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 a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of the Registrable Securities
held by it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least five (5) days prior
to the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from each
such Investor (the "Requested Investment") if such Investor elects to have any
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of such Investor's Registrable Securities included in the Registration
Statement. If at least two (2) business days prior to the filing date the
Company has not received the Requested Information from an Investor (a
"Non-Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(e) or
3(f), above, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or 3(f) and, if
so directed by the Company, such Investor shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
5. EXPENSES OF REGISTRATION. All reasonable expenses (other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualification pursuant to Section 3), but including,
without limitation, all registration, listing, and qualifications fees, printers
and accounting fees, the fees and disbursements of counsel for the Company and
one counsel for the Investors, shall be borne by the Company.
6. INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Investor who holds such Registrable Securities, the directors, if
any, of such Investor, the officers, if any, of such Investor, each person, if
any, who controls any Investor within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, liabilities or expenses
(joint or several) incurred (collectively, "Claims") to which any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations in the Registration Statement, or any post-effective
amendment thereof, or any prospectus included therein: (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereof or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
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therein, in light of the circumstances under which the statements therein were
made, not misleading or (iii) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any state securities law or any rule or
regulation under the Securities Act, the Exchange Act or any state securities
law (the matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations"). The Company shall reimburse the Investors, promptly as such
expenses are incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by them in connection with investigation or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a) shall not
(I) apply to a Claim arising out of or based upon a Violation with respect to an
Investor which occurs in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of such Investor expressly
for use in connection with the preparation of the Registration Statement or any
such amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(b) hereof; (II) be available to
the extent such Claim is based on a failure of the Investor to deliver or cause
to be delivered the prospectus made available by the Company; or (III) apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld. Each Investor will indemnify the Company and its
officers, directors and agents against any claims arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company, by or on behalf of such Investor, expressly
for use in connection with the preparation of the Registration Statement,
subject to such limitations and conditions as are applicable to the
indemnification provided by the Company pursuant to this Section 6. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified person and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.
(b) Promptly after receipt by an indemnified person or indemnified
party under this Section 6 of notice of the commencement of any action
(including any governmental action), such indemnified person or indemnified
party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the indemnified person or the indemnified party, as the
case may be; provided, however, that an indemnified person or indemnified party
shall have the right to retain its own counsel with the reasonable fees and
expenses to be paid by the indemnifying party, if, in the reasonable opinion of
counsel retained by the indemnifying party, the representation by such counsel
of the indemnified person or indemnified party and the indemnifying party would
be inappropriate due to actual or potential differing interests between such
indemnified person or indemnified party and any other party represented by such
counsel in such proceeding. In such event, the Company shall pay for only one
separate legal counsel for the Investors; such legal counsel shall be selected
by the Investors holding a majority in interest of the Registrable Securities
included in the Registration Statement to which the Claim relates. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action shall not relieve such indemnifying party
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of any liability to the indemnified person or indemnified party under this
Section 6, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation; and (c)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Investors the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Investors to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to:
(a)make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company and
(iii) such other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by Initial Investors and the Investors to any transferee
of at least 25% of the Registrable Securities only if: (a) the Investor agrees
in writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, and (d) at or before the time the Company received the
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written notice contemplated by clause (b) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein. In the event of any delay in filing or effectiveness of the
Registration Statement as a result of such assignment, the Company shall not be
liable for any damages arising from such delay, or the payments set forth in
Section 2(c) hereof.
10. (A) AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
hold a fifty-one percent (51%) interest of the Registrable Securities. Any
amendment or waiver effective in accordance with this Section 10 shall be
binding upon each Investor and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
(by hand, by courier, by telephone line facsimile transmission, receipt
confirmed, or other means) or sent by certified mail, return receipt requested,
properly addressed and with proper postage pre-paid (i) if to the Company, MDI
Entertainment, Inc., ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
with a copy to Squardron, Ellenoff, Plesent & Sheinfeld, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; (ii) if to the Initial Investor, at the address set forth
under its name in the Stock Purchase Agreement, with a copy to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esquire, ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and (iii) if to any other Investor, at such address as such
Investor shall have provided in writing to the Company, or at such other address
as each such party furnishes by notice given in accordance with this Section
11(b), and shall be effective, when personally delivered, upon receipt and, when
so sent by certified mail, four (4) calendar days after deposit with the United
States Postal Service.
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Delaware. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
County of Lancaster or the state courts of the State of Delaware sitting in the
County of Lancaster in connection with any dispute arising under this Agreement
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens, to the bringing of any
such proceeding in such jurisdictions.
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(e) If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
(f) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
(g) Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
(h) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(i) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.
(j) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
(k) The Company acknowledges that any failure by the Company to perform
its obligations under Section 3(a), or any delay in such performance could
result in harm to the Investors and the Company agrees that, in addition to any
other liability of the Company may have by reason of any such failure or delay,
the Company shall be liable for all direct damages caused by any such failure or
delay, unless same is the result of force majeure. Neither party shall be liable
for consequential damages.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
MDI ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
INTERNATIONAL CAPITAL PARTNERS LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
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