Exhibit 10.55
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REGISTRATION RIGHTS AGREEMENT
by and between
EUNIVERSE, INC.
and
550 DIGITAL MEDIA VENTURES INC.
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Dated as of October 23, 2001
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TABLE OF CONTENTS
1. Certain Definitions...............................................................................3
2. Demand Registrations..............................................................................4
(a) Right to Request Registration.................................................................4
(b) Number of Demand Registrations................................................................5
(c) Priority on Demand Registrations..............................................................5
(d) Restrictions on Demand Registrations..........................................................5
(e) Selection of Underwriters.....................................................................6
(f) Other Registration Rights.....................................................................6
(g) Effective Period of Demand Registrations......................................................6
3. Piggyback Registrations...........................................................................7
(a) Right to Piggyback............................................................................7
(b) Priority on Primary Registrations.............................................................7
(c) Priority on Secondary Registrations...........................................................7
(d) Selection of Underwriters.....................................................................8
(e) Other Registrations...........................................................................8
4. S-3 Registrations.................................................................................8
5. Holdback Agreements...............................................................................8
6. Registration Procedures...........................................................................9
7. Registration Expenses............................................................................12
8. Indemnification..................................................................................13
9. Participation in Underwritten Registrations......................................................15
10. Rule 144.........................................................................................15
11. Miscellaneous....................................................................................15
(a) Notices......................................................................................15
(b) No Waivers...................................................................................16
(c) Successors and Assigns.......................................................................16
(d) Governing Law................................................................................16
(e) Jurisdiction.................................................................................16
(f) Waiver of Jury Trial.........................................................................17
(g) Counterparts; Effectiveness..................................................................17
(h) Entire Agreement.............................................................................17
(i) Captions.....................................................................................17
(j) Severability.................................................................................17
(k) Amendments...................................................................................17
(l) Equitable Relief.............................................................................18
(m) Costs and Expenses. Except as otherwise expressly provided for herein, each party
to this Agreement shall bear its own costs and expenses, including but not limited to
attorneys' fees and expenses, in connection with the closing of the transactions
contemplated hereby..............................................................................18
REGISTRATION RIGHTS AGREEMENT dated as of October 23, 2001, between
eUniverse, Inc., a Nevada corporation (the "Company"), and 550 Digital Media
Ventures Inc., a Delaware corporation (the "Stockholder").
In consideration of the mutual covenants and agreements herein
contained and other good and valid consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. Certain Definitions.
In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of any Person means any other Person which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with such Person. The term "control" (including the
terms "controlled by" and "under common control with") as used with respect to
any Person means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" means this Registration Rights Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to this Registration Rights Agreement as the
same may be in effect at the time such reference becomes operative.
"Business Day" means any day on which commercial banks are open for
business in New York, New York.
"Common Stock" means common stock, par value $.001 per share, of the
Company.
"Conversion Shares" means any of (x) the shares of Common Stock owned
by the Stockholder, (y) the shares of Common Stock issued or issuable upon
conversion of the Series B Preferred Stock or (z) any securities issued or
issuable with respect to the Common Stock or Series B Preferred Stock by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means any holder of record of Registrable Common Stock (as
defined below) and any transferees of such Registrable Common Stock from such
Holders (or in the case of a Holder of Series B Preferred Stock, the transferees
of such Holder). For purposes of this Agreement, the Company may deem and treat
the registered holder of Registrable Common Stock as the Holder and absolute
owner thereof, and the Company shall not be affected by any notice to the
contrary.
"Person" means an individual, partnership, corporation, trust, limited
liability company, or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" means the prospectus or prospectuses included in any
Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Common Stock covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus or prospectuses.
"Purchase Agreement" means the stock purchase agreement, dated as of
July 13, 2001, between the Company and the Stockholder.
"Registrable Common Stock" means the Conversion Shares. All references
herein to a "Holder" or "Holder of Registrable Common Stock" shall include the
holder or holders of Series B Preferred Stock to the extent of the Conversion
Shares then underlying such Series B Preferred Stock. For purposes of
determining the number of shares of Registrable Common Stock held by a Holder
and the number of shares of Registrable Common Stock outstanding, for purposes
of this Agreement (including the definition of "Holder") but not for any other
purpose, any holder of record of Series B Preferred Stock shall be deemed to be
a Holder of the number of Conversion Shares issuable upon conversion of such
Series B Preferred Stock and all such Conversion Shares shall be deemed to be
outstanding shares of Registrable Common Stock.
"Registration Statement" means any registration statement of the
Company which covers any of the Registrable Common Stock pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all materials incorporated by reference in such Registration
Statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series B Preferred Stock" means the Series B Convertible Preferred
Stock, par value $0.10 per share, of the Company held by the Stockholder.
"underwritten registration or underwritten offering" means a
registration in which securities of the Company are sold to underwriters for
reoffering to the public.
2. Demand Registrations.
(a) Right to Request Registration. Beginning two and one-half (2 1/2)
years after the date of this Agreement, any Holder or Holders who together hold
a majority of the then outstanding Registrable Common Stock ("Initiating
Holders") may request registration under the Securities Act of all or part of
the Registrable Common Stock ("Demand Registration").
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Within 10 days after receipt of any such request for Demand
Registration, the Company shall give written notice of such request to all other
Holders of Registrable Common Stock and shall, subject to the provisions of
Section 2(d) hereof, include in such registration all such Registrable Common
Stock with respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the Company's notice.
(b) Number of Demand Registrations. Subject to the provisions of
Section 2(a), the Initiating Holders of Registrable Common Stock shall be
entitled to request an aggregate of five (5) Demand Registrations. A
registration shall not count as one of the permitted Demand Registrations (i)
until it has become effective, (ii) if the Initiating Holder requesting such
registration is not able to register and sell at least 50% of the Registrable
Common Stock requested by such Initiating Holder to be included in such
registration or (iii) in the case of a Demand Registration that would be the
last permitted Demand Registration requested hereunder, if the Initiating Holder
requesting such registration is not able to register and sell all of the
Registrable Common Stock requested to be included by such Initiating Holder in
such registration.
(c) Priority on Demand Registrations. Except as provided in Section
2(g), the Company shall not include in any Demand Registration any securities
which are not Registrable Common Stock without the written consent of the
Holders of a majority of the shares of Registrable Common Stock to be included
in such registration, or, if such Demand Registration is an underwritten
offering, without the written consent of the managing underwriters. If the
managing underwriters of the requested Demand Registration advise the Company in
writing that in their opinion the number of shares of Registrable Common Stock
proposed to be included in any such registration exceeds the number of
securities which can be sold in such offering and/or that the number of shares
of Registrable Common Stock proposed to be included in any such registration
would adversely affect the price per share of the Company's equity securities to
be sold in such offering, the Company shall include in such registration only
the number of shares of Registrable Common Stock which in the opinion of such
managing underwriters can be sold. If the number of shares which can be sold is
less than the number of shares of Registrable Common Stock proposed to be
registered, the amount of Registrable Common Stock to be so sold shall be
allocated pro rata among the Holders of Registrable Common Stock desiring to
participate in such registration on the basis of the amount of such Registrable
Common Stock initially proposed to be registered by such other Holders. If the
number of shares which can be sold exceeds the number of shares of Registrable
Common Stock proposed to be sold, such excess shall be allocated pro rata among
the other holders of securities, if any, desiring to participate in such
registration based on the amount of such securities initially requested to be
registered by such holders or as such holders may otherwise agree.
(d) Restrictions on Demand Registrations. The Company shall not be
obligated to effect any Demand Registration within six months after the
effective date of a previous Demand Registration, a previous S-3 Registration
(as hereinafter defined) or a previous registration under which the Initiating
Holders had piggyback rights pursuant to Section 3 hereof wherein the Initiating
Holders were permitted to register, and sold, at
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least 50% of the shares of Registrable Common Stock requested to be included
therein. The Company may (i) postpone for up to ninety (90) days the filing or
the effectiveness of a Registration Statement for a Demand Registration if,
based on the good faith judgment of the Company's board of directors, such
postponement or withdrawal is necessary in order to avoid premature disclosure
of a matter the board has determined would not be in the best interest of the
Company to be disclosed at such time or (ii) postpone the filing of a Demand
Registration in the event the Company shall be required to prepare audited
financial statements as of a date other than its fiscal year end (unless the
stockholders requesting such registration agree to pay the expenses of such an
audit); provided, however, that in no event shall the Company withdraw a
Registration Statement under clause (i) above after such Registration Statement
has been declared effective; and provided, further, however, that in any of the
events described in clause (i) or (ii) above, the Initiating Holders requesting
such Demand Registration shall be entitled to withdraw such request and, if such
request is withdrawn, such Demand Registration shall not count as one of the
permitted Demand Registrations. The Company shall provide written notice to the
Initiating Holders requesting such Demand Registration of (x) any postponement
or withdrawal of the filing or effectiveness of a Registration Statement
pursuant to this Section 2(d), (y) the Company's decision to file or seek
effectiveness of such Registration Statement following such withdrawal or
postponement and (z) the effectiveness of such Registration Statement. The
Company may defer the filing of a particular Registration Statement pursuant to
this Section 2(d) only once every 12 months.
(e) Selection of Underwriters. If any of the Registrable Common Stock
covered by a Demand Registration or an S-3 Registration pursuant to Section 4
hereof is to be sold in an underwritten offering, the Initiating Holders shall
have the right to select the managing underwriter(s) to administer the offering
subject to the approval of the Company, which will not be unreasonably withheld.
(f) Other Registration Rights. The Company shall not grant to any
Person the right, other than as set forth herein and except to employees of the
Company with respect to registrations on Form S-8 (or any successor forms
thereto), to request the Company to register any securities of the Company
except such rights as are not more favorable than or inconsistent with the
rights granted to the Holders herein. The stock transfer restriction imposed on
the shares of the Company's Capital Stock held by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇▇▇
Restrictions") are not more favorable than or inconsistent with the stock
transfer restrictions contained in this Agreement. In the event the Company
grants rights which are more favorable or relaxes the ▇▇▇▇▇▇▇▇▇ Restrictions,
the Company will make such provisions available to the Holders and will enter
into any amendments necessary to confer such rights on the Holders.
(g) Effective Period of Demand Registrations. After any Demand
Registration filed pursuant to this Agreement has become effective, the Company
shall use its best efforts to keep such Demand Registration effective for a
period equal to 180 days from the date on which the SEC declares such Demand
Registration effective (or if such Demand Registration is not effective during
any period within such 180 days, such 180-day period shall be extended by the
number of days during such period when such
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Demand Registration is not effective), or such shorter period which shall
terminate when all of the Registrable Common Stock covered by such Demand
Registration has been sold pursuant to such Demand Registration. If the Company
shall withdraw any Demand Registration pursuant to subsection (d) of this
Section 2 (a "Withdrawn Demand Registration"), the Initiating Holders of the
Registrable Common Stock remaining unsold and originally covered by such
Withdrawn Demand Registration shall be entitled to a replacement Demand
Registration which (subject to the provisions of this Section 2) the Company
shall use its best efforts to keep effective for a period commencing on the
effective date of such Demand Registration and ending on the earlier to occur of
the date (i) which is 180 days from the effective date of such Demand
Registration and (ii) on which all of the Registrable Common Stock covered by
such Demand Registration has been sold. Such additional Demand Registration
otherwise shall be subject to all of the provisions of this Agreement.
3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register any
of its common equity securities under the Securities Act (other than a
registration statement on Form S-8 or on Form S-4 or any similar successor forms
thereto), whether for its own account or for the account of one or more
stockholders of the Company, and the registration form to be used may be used
for any registration of Registrable Common Stock (a "Piggyback Registration"),
the Company shall give prompt written notice (in any event within 10 business
days after its receipt of notice of any exercise of other demand registration
rights) to all Holders of its intention to effect such a registration and,
subject to Sections 3(b) and 3(c), shall include in such registration all
Registrable Common Stock with respect to which the Company has received written
requests for inclusion therein within 15 days after the receipt of the Company's
notice. The Company may postpone or withdraw the filing or the effectiveness of
a Piggyback Registration at any time in its sole discretion.
(b) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering and/or that the number of shares of
Registrable Common Stock proposed to be included in any such registration would
adversely affect the price per share of the Company's equity securities to be
sold in such offering, the Company shall include in such registration (i) first,
the securities the Company proposes to sell, and (ii) second, the Registrable
Common Stock requested to be included therein by the Holders and other
securities requested to be included in such registration pro rata among all the
holders of such securities on the basis of the number of shares requested to be
registered by such holders or as such holders may otherwise agree.
(c) Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of a holder of the Company's
securities other than Registrable Common Stock, and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be
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included in such registration exceeds the number which can be sold in such
offering and/or that the number of shares of Registrable Common Stock proposed
to be included in any such registration would adversely affect the price per
share of the Company's equity securities to be sold in such offering, the
Company shall include in such registration (i) first, the securities the Company
proposes to sell, and (ii) second the Registrable Common Stock requested to be
included therein by the Holders and other securities requested to be included in
such registration pro rata among all the holders of such securities on the basis
of the number of shares requested to be registered by such holders or as such
holders may otherwise agree.
(d) Selection of Underwriters. If any Piggyback Registration is an
underwritten primary offering, the Company shall have the right to select the
managing underwriter or underwriters to administer any such offering.
(e) Other Registrations. If the Company has previously filed a
Registration Statement with respect to Registrable Common Stock pursuant to
Sections 2 or 4 hereof or pursuant to this Section 3, and if such previous
registration has not been withdrawn or abandoned, the Company shall not be
obligated to cause to become effective any other registration of any of its
securities under the Securities Act, whether on its own behalf or at the request
of any holder or holders of such securities, until a period of at least three
months has elapsed from the effective date of such previous registration.
4. S-3 Registrations.
If at any time that the Company is eligible to use Form S-3 or any
successor thereto, any Holder or Holders requests that the Company file a
Registration Statement on Form S-3 or any successor thereto for a public
offering of all or any portion of the Registrable Common Stock held by such
Holders, then the Company shall use its best efforts to register under the
Securities Act on Form S-3 (an "S-3 Registration") or any successor thereto, for
public sale in accordance with the method of disposition specified in such
notice, the number of shares of Registrable Common Stock specified in such
notice; provided, however, that the Company shall have no obligation to register
such shares of Registrable Common Stock pursuant to this Section if (based on
the current market prices) the number of shares of Registrable Common Stock
specified in such notice would not yield gross proceeds to the selling
stockholders of at least $1,000,000. Whenever the Company is required by this
Section 4 to use its best efforts to effect the registration of Registrable
Common Stock, each of the procedures and requirements of Section 2 (including
but not limited to the requirement that the Company notify all Holders from whom
notice has not been received and provide them with the opportunity to
participate in the offering) shall apply to such registration. There is no
limitation on the number of registrations pursuant to this Section 4 that the
Company is obligated to effect.
5. Holdback Agreements.
(a) The Company agrees not to effect any sale or distribution of any of
its equity securities during the 10 days prior to and during the 180 days
beginning on the
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effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration or any underwritten S-3 Registration (except as part of
such underwritten registration or pursuant to registrations on Form S-8 or S-4
or any successor forms thereto) unless the underwriters managing the offering
otherwise agree to a shorter period.
(b) The Holders agree not to effect any sale or distribution of any
equity securities of the Company during the eighteen (18) month period following
the date of this Agreement; provided, that such restriction shall not apply to
(i) transactions related to Common Stock acquired in open market transactions
after the date of this Agreement, (ii) sales or distributions conducted pursuant
to Section 3 of this Agreement, or (iii) transfers to Affiliates, or other
private transactions which do not require registration under the Securities Act,
provided that the transferee pursuant to this Section 5(b)(iii) agrees in
writing to be subject to the terms hereof to the same extent as if the
transferee were a Holder hereunder.
6. Registration Procedures.
Whenever the Holders request that any Registrable Common Stock be
registered pursuant to this Agreement, the Company shall use its best efforts to
effect the registration and the sale of such Registrable Common Stock in
accordance with the intended methods of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement with respect
to such Registrable Common Stock and use its best efforts to cause such
Registration Statement to become effective as soon as practicable thereafter;
and before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, furnish to the Holders of Registrable Common Stock covered
by such Registration Statement and the underwriter or underwriters, if any,
copies of all such documents proposed to be filed, including documents
incorporated by reference in the Prospectus and, if requested by such Holders,
the exhibits incorporated by reference, and such Holders shall have the
opportunity to object to any information pertaining to such Holders that is
contained therein and the Company will make the corrections reasonably requested
by such Holders with respect to such information prior to filing any
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto;
(b) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for a period of
not less than 180 days, in the case of a Demand Registration or an S-3
Registration, or such shorter period as is necessary to complete the
distribution of the securities covered by such Registration Statement and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement;
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(c) furnish to each seller of Registrable Common Stock such number of
copies of such Registration Statement, each amendment and supplement thereto,
the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Common Stock
owned by such seller;
(d) use its best efforts to register or qualify such Registrable Common
Stock under such other securities or blue sky laws of such jurisdictions as any
seller reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Common Stock owned by such
seller (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 (d), (ii) subject itself to taxation in any
such jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Common Stock, at any time
when a Prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of any event as a result of which the
Prospectus included in such Registration Statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such Prospectus so that, as thereafter
delivered to the purchasers of such Registrable Common Stock, such Prospectus
shall not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading;
(f) in the case of an underwritten offering, enter into such customary
agreements (including underwriting agreements in customary form) and take all
such other actions as the Holders of a majority of number of shares of the
Registrable Common Stock being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Common Stock (including, without limitation, making members of senior management
of the Company available to participate in, and cause them to cooperate with the
underwriters in connection with, "road-show" and other customary marketing
activities (including one-on-one meetings with prospective purchasers of the
Registrable Common Stock)) and cause to be delivered to the underwriters and the
sellers, if any, opinions of counsel to the Company in customary form, covering
such matters as are customarily covered by opinions for an underwritten public
offering as the underwriters may request and addressed to the underwriters and
the sellers;
(g) make available, for inspection by any seller of Registrable Common
Stock, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller,
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underwriter, attorney, accountant or agent in connection with such Registration
Statement;
(h) use its best efforts to cause all such Registrable Common Stock to
be listed on each securities exchange on which securities of the same class
issued by the Company are then listed or, if no such similar securities are then
listed, on Nasdaq or a national securities exchange selected by the Company;
(i) provide a transfer agent and registrar for all such Registrable
Common Stock not later than the effective date of such Registration Statement;
(j) if requested, cause to be delivered, immediately prior to the
effectiveness of the Registration Statement (and, in the case of an underwritten
offering, at the time of delivery of any Registrable Common Stock sold pursuant
thereto), letters from the Company's independent certified public accountants
addressed to each selling Holder (unless such selling Holder does not provide to
such accountants the appropriate representation letter required by rules
governing the accounting profession) and each underwriter, if any, stating that
such accountants are independent public accountants within the meaning of the
Securities Act and the applicable rules and regulations adopted by the SEC
thereunder, and otherwise in customary form and covering such financial and
accounting matters as are customarily covered by letters of the independent
certified public accountants delivered in connection with primary or secondary
underwritten public offerings, as the case may be;
(k) make generally available to its stockholders a consolidated
earnings statement (which need not be audited) for the 12 months beginning after
the effective date of a Registration Statement as soon as reasonably practicable
after the end of such period, which earnings statement shall satisfy the
requirements of an earning statement under Section 11(a) of the Securities Act;
(l) promptly notify each seller of Registrable Common Stock and the
underwriter or underwriters, if any:
(i) when the Registration Statement, any
pre-effective amendment, the Prospectus or any Prospectus
supplement or post-effective amendment to the Registration
Statement has been filed and, with respect to the Registration
Statement or any post-effective amendment, when the same has
become effective;
(ii) of any written request by the SEC for amendments
or supplements to the Registration Statement or Prospectus;
(iii) of the notification to the Company by the SEC
of its initiation of any proceeding with respect to the
issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement; and
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(iv) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of any Registrable Common Stock for sale under
the applicable securities or blue sky laws of any
jurisdiction.
At all times after the Company has filed a registration statement with
the SEC pursuant to the requirements of either the Securities Act or the
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder, and take such further action as any Holders may
reasonably request, all to the extent required to enable such Holders to be
eligible to sell Registrable Common Stock pursuant to Rule 144 (or any similar
rule then in effect).
The Company may require each seller of Registrable Common Stock as to
which any registration is being effected to furnish to the Company any other
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request in writing.
Each seller of Registrable Common Stock agrees by having its stock
treated as Registrable Common Stock hereunder that, upon notice of the happening
of any event as a result of which the Prospectus included in such Registration
Statement contains an untrue statement of a material fact or omits any material
fact necessary to make the statements therein not misleading (a "Suspension
Notice"), such seller will forthwith discontinue disposition of Registrable
Common Stock until such seller is advised in writing by the Company that the use
of the Prospectus may be resumed and is furnished with a supplemented or amended
Prospectus as contemplated by Section 6(e) hereof, and, if so directed by the
Company, such seller will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such seller's possession, of
the Prospectus covering such Registrable Common Stock current at the time of
receipt of such notice; provided, however, that such postponement of sales of
Registrable Common Stock by the Holders shall not exceed ninety (90) days in the
aggregate in any one year. If the Company shall give any notice to suspend the
disposition of Registrable Common Stock pursuant to a Prospectus, the Company
shall extend the period of time during which the Company is required to maintain
the Registration Statement effective pursuant to this Agreement by the number of
days during the period from and including the date of the giving of such notice
to and including the date such seller either is advised by the Company that the
use of the Prospectus may be resumed or receives the copies of the supplemented
or amended Prospectus contemplated by Section 6(e). In any event, the Company
shall not be entitled to deliver more than three (3) Suspension Notices in any
one year.
7. Registration Expenses.
All expenses incident 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, listing
application fees, printing expenses, transfer agent's and registrar's fees, cost
of distributing Prospectuses in preliminary and final form as well as any
supplements thereto, and fees and
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disbursements of counsel for the Company and all independent certified public
accountants and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses") (but not including any underwriting
discounts or commissions attributable to the sale of Registrable Common Stock or
fees and expenses of counsel representing the Holders of Registrable Common
Stock), shall be borne by the Company. In addition, the Company shall 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 they are to be listed.
8. Indemnification.
(a) The Company agrees to indemnify, to the fullest extent permitted by
law, each Holder, its officers, directors and affiliates and each Person who
controls such Holder (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses arising out of or based upon
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 any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading or any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or applicable "blue sky" laws, except insofar
as the same are made in reliance and in conformity with information relating to
such Holder furnished in writing to the Company by such Holder expressly for use
therein or caused by such Holder's failure to deliver to such Holder's immediate
purchaser a copy of the Registration Statement or Prospectus or any amendments
or supplements thereto (if the same was required by applicable law to be so
delivered) after the Company has furnished such Holder with a sufficient number
of copies of the same. In connection with an underwritten offering, the Company
shall indemnify such underwriters, their officers and directors and each Person
who controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the
Holders.
(b) In connection with any Registration Statement in which a Holder of
Registrable Common Stock is participating, each such Holder shall furnish to the
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such Registration Statement or
Prospectus and, to the extent permitted by law, shall indemnify the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses arising out of or based upon 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 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 such untrue statement or omission is made in reliance on and in conformity
with information or affidavit so furnished in writing by such Holder expressly
for use in the Registration Statement; provided, however, that the obligation to
indemnify shall be several, not joint
13
and several, among such Holders and the liability of each such Holder shall be
in proportion to and limited to the net amount received by such Holder from the
sale of Registrable Common Stock pursuant to such Registration Statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party there may be one or more legal or equitable defenses
available to such indemnified party which are in addition to or may conflict
with those available to another indemnified party with respect to such claim.
Failure to give prompt written notice shall not release the indemnifying party
from its obligations hereunder.
(d) The indemnification provided for under this Agreement shall 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 such
indemnified party and shall survive the transfer of securities.
(e) If the indemnification provided for in or pursuant to this Section
8 is due in accordance with the terms hereof, but is held by a court to be
unavailable or unenforceable in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified person as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
which result in such losses, claims, damages, liabilities or expenses as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party on the one hand and of the indemnified person on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party, and by such party's relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. In no event shall the liability of any selling Holder be
greater in amount than the amount of net proceeds received by such Holder upon
such sale or the amount for which such indemnifying party would have been
obligated to pay by way of indemnification if the indemnification provided for
under Section 8(a) or 8(b) hereof had been available under the circumstances.
14
9. Participation in Underwritten Registrations.
No Person may participate in any registration hereunder which is
underwritten unless such Person (a) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
10. Rule 144.
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and it will take such further action
as any Holder may reasonably request to make available adequate current public
information with respect to the Company meeting the current public information
requirements of Rule 144(c) under the Securities Act, to the extent required to
enable such Holder to sell Registrable Common Stock without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.
11. Miscellaneous.
(a) Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing) and
shall be given,
If to the Company:
eUniverse, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: President
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholder:
15
550 Digital Media Ventures Inc.
c/o Sony Music Entertainment, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Senior Vice President and
General Counsel of 550 Digital Media
Ventures, Inc; and Senior Vice President
and General Counsel - Sony Music
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to a transferee Holder, to the address of such Holder set forth in
the transfer documentation provided to the Company;
in each case with copies to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or facsimile number as such party (or transferee) may
hereafter specify for the purpose of providing notice to the other parties. Each
such notice, request or other communication shall be effective (a) if given by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section and the appropriate facsimile confirmation is received or (b) if
given by any other means, when delivered at the address specified in this
Section.
(b) No Waivers. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
(c) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, it being understood that subsequent Holders of the
Registrable Common Stock are intended third party beneficiaries hereof.
(d) Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of New York, without regard to principles
of conflicts of law.
(e) Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in any federal
or state court located in the State of California, and each of the parties
hereby consents to the
16
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 10(a)
shall be deemed effective service of process on such party.
(f) Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(g) Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
(h) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the transactions contemplated herein. No
provision of this Agreement or any other agreement contemplated hereby is
intended to confer on any Person other than the parties hereto any rights or
remedies.
(i) Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
(j) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
(k) Amendments. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the prior written consent of the holders of a majority of the Conversion
Shares (as constituted on the date hereof); provided, however, that the consent
or agreement of the Company shall
17
be required with regard to any termination, amendment, modification or
supplement of, or waivers or consents to departures from, the terms hereof,
which affect the Company's obligations hereunder.
(l) Equitable Relief. The parties hereto agree that legal remedies may
be inadequate to enforce the provisions of this Agreement and that equitable
relief, including specific performance and injunctive relief, may be used to
enforce the provisions of this Agreement.
(m) Costs and Expenses. Except as otherwise expressly provided for
herein, each party to this Agreement shall bear its own costs and expenses,
including but not limited to attorneys' fees and expenses, in connection with
the closing of the transactions contemplated hereby.
[Execution Page Follows]
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IN WITNESS WHEREOF, this Registration Rights Agreement has been duly
executed by each of the parties hereto as of the date first written above.
550 DIGITAL MEDIA VENTURES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and General Counsel
EUNIVERSE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
19