Exhibit 2.6
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
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AGREEMENT dated as of July 21, 2005, between MERCATOR MOMENTUM FUND, L.P.,
MERCATOR MOMENTUM FUND III, L.P, MONARCH POINTE FUND, LTD. (collectively, the
"Funds") and M.A.G. Capital, LLC ("MAG") (the Funds and MAG are referred to
individually as a "Holder" and collectively as the "Holders"), and Futuremedia
PLC a corporation organized under the laws of England and Wales (the "Company").
WHEREAS, the Funds have purchased convertible debentures the
("Debentures"), for an aggregate purchase price of $4,000,000,from the Company,
and have the right to cause their Debentures to be converted into Ordinary
Shares, (the "Ordinary Shares"), of the Company, pursuant to the conversion
price set forth in the Debentures;
WHEREAS, each Fund and MAG have acquired Warrants (together, the
"Warrants") from the Company, pursuant to which the Holders have the right to
purchase in the aggregate up to Six Million One Hundred Seventy-Five Thousand
One Hundred Four (6,175,104) shares of the Ordinary Shares through the exercise
of the Warrants;
WHEREAS, the Company desires to grant to the Holders the registration
rights set forth herein with respect to the Ordinary Shares issuable upon the
conversion of the Debentures and the exercise of the Warrants.
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. Registrable Securities. As used herein the terms "Registrable Security"
means each of the Ordinary Shares (i) issued upon the conversion of the
Debentures (the "Conversion Shares") or (ii) upon exercise of the Warrants (the
"Warrant Shares"), provided, however, that with respect to any particular
Registrable Security, such security shall cease to be a Registrable Security
when, as of the date of determination that (a) it has been effectively
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and disposed of pursuant thereto, or (b) registration under the Securities Act
is no longer required for the immediate public distribution of such security.
The term "Registrable Securities" means any and/or all of the securities falling
within the foregoing definition of a "Registrable Security." In the event of any
merger, reorganization, consolidation, recapitalization or other change in
corporate structure affecting the Ordinary Shares, such adjustment shall be made
in the definition of "Registrable Security" as is appropriate in order to
prevent any dilution or enlargement of the rights granted pursuant to this
Section 1.
2. Registration.
(a) The Company shall file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") within
forty-five (45) days after the date of this Agreement in order to register the
resale of the Registrable Securities under the Securities Act. Once effective,
the Company shall maintain the effectiveness of the Registration Statement until
the earlier of (i) the date that all of the Registrable Securities have been
sold, or (ii) the date that all of the Registrable Securities may be freely
traded without registration under the Securities Act, under Rule 144 promulgated
under the Securities Act or otherwise.
(b) The Company will initially include in the Registration Statement
as Registrable Securities Eighteen Million Two Hundred Sixty-Two Thousand
(18,262,000) Ordinary Shares.
3. Covenants of the Company with Respect to Registration.
The Company covenants and agrees as follows:
(a) The Company shall use best efforts to cause the Registration
Statement to become effective with the SEC as promptly as possible and in no
event more than 100 days after filing the Registration Statement with the SEC.
If any stop order shall be issued by the SEC in connection therewith, the
Company shall use best efforts to obtain promptly the removal of such order.
Following the effective date of the Registration Statement, the Company shall,
upon the request of any Holder, forthwith supply such reasonable number of
copies of the Registration Statement, preliminary prospectus and prospectus
meeting the requirements of the Securities Act, and any other documents
necessary or incidental to the public offering of the Registrable Securities, as
shall be reasonably requested by the Holder to permit the Holder to make a
public distribution of the Holder's Registrable Securities. The obligations of
the Company hereunder with respect to the Holder's Registrable Securities are
subject to the Holder's furnishing to the Company such appropriate information
concerning the Holder, the Holder's Registrable Securities and the terms of the
Holder's offering of such Registrable Securities as the Company may reasonably
request in writing.
(b) The Company shall pay all costs, fees and expenses in connection
with the Registration Statement filed pursuant to Section 2 hereof including,
without limitation, the Company's legal and accounting fees, printing expenses,
and blue sky fees and expenses; provided, however, that each Holder shall be
solely responsible for the fees of any counsel retained by the Holder in
connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Registrable Securities sold by
the Holder pursuant thereto.
(c) The Company will take all actions which may be required to
qualify or register the Registrable Securities included in the Registration
Statement for the offer and sale under the securities or blue sky laws of such
states as are reasonably requested by each Holder of such securities, provided
that the Company shall not be obligated to execute or file any general consent
to service of process or to qualify as a foreign corporation to do business
under the laws of any such jurisdiction.
4. Additional Terms.
(a) The Company shall indemnify and hold harmless the Holders and
each underwriter, within the meaning of the Securities Act, who may purchase
from or sell for any Holder, any Registrable Securities, from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
of a material fact contained in the Registration Statement, any other
registration statement filed by the Company under the Securities Act with
respect to the registration of the Registrable Securities, any post-effective
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amendment to such registration statements, or any prospectus included therein or
caused by any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission based upon information furnished or required to be
furnished in writing to the Company by the Holders or underwriter expressly for
use therein, which indemnification shall include each person, if any, who
controls any Holder or underwriter within the meaning of the Securities Act and
each officer, director, employee and agent of each Holder and underwriter;
provided, however, that the indemnification in this Section 4(a) with respect to
any prospectus shall not inure to the benefit of any Holder or underwriter (or
to the benefit of any person controlling any Holder or underwriter) on account
of any such loss, claim, damage or liability arising from the sale of
Registrable Securities by the Holder or underwriter, if a copy of a subsequent
prospectus correcting the untrue statement or omission in such earlier
prospectus was provided to such Holder or underwriter by the Company prior to
the subject sale and the subsequent prospectus was not delivered or sent by the
Holder or underwriter to the purchaser prior to such sale and provided further,
that the Company shall not be obligated to so indemnify any Holder or any such
underwriter or other person referred to above unless the Holder or underwriter
or other person, as the case may be, shall at the same time indemnify the
Company, its directors, each officer signing the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act, from and against any and all losses, claims, damages and liabilities caused
by any untrue statement of a material fact contained in the Registration
Statement, any registration statement or any prospectus required to be filed or
furnished by reason of this Agreement or caused by any omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission based upon
information furnished in writing to the Company by the Holder or underwriter
expressly for use therein.
(b) If for any reason the indemnification provided for in the
preceding section is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, claim, damage, liability or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect the relative fault
of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations.
(c) Neither the filing of a Registration Statement by the Company
pursuant to this Agreement nor the making of any request for prospectuses by the
Holder shall impose upon any Holder any obligation to sell the Holder's
Registrable Securities.
(d) Each Holder, upon receipt of notice from the Company that an
event has occurred which requires a Post-Effective Amendment to the Registration
Statement or a supplement to the prospectus included therein, shall promptly
discontinue the sale of Registrable Securities until the Holder receives a copy
of a supplemented or amended prospectus from the Company, which the Company
shall provide as soon as practicable after such notice.
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(e) If the Company fails to keep the Registration Statement referred
to above continuously effective during the requisite period, then the Company
shall, promptly upon the request of any Holder, use best efforts to update the
Registration Statement or file a new registration statement covering the
Registrable Securities remaining unsold, subject to the terms and provisions
hereof.
(f) Each Holder agrees to provide the Company with any information
or undertakings reasonably requested by the Company in order for the Company to
include any appropriate information concerning the Holder in the Registration
Statement or in order to promote compliance by the Company or the Holder with
the Securities Act.
(g) The Company agrees that it shall cause each of its directors and
officers to refrain from selling any shares of the Company's Ordinary Shares
until the Registration Statement has been declared effective.
(h) Commencing on the date hereof and continuing until such time as
the Debentures and Warrants are no longer outstanding, each Holder, on behalf of
themselves and their affiliates, hereby covenant and agree not to, directly or
indirectly, offer to "short sell", contract to "short sell" or otherwise "short
sell" the securities of the Company, including, without limitation, Ordinary
Shares that will be received as a result of the conversion of the Debentures or
exercise of the Warrants.
5. Governing Law. The Registrable Securities will be, if and when issued,
delivered in New York. This Agreement shall be deemed to have been made and
delivered in the State of New York and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
substantive laws of the State of New York, without giving effect to the choice
of law rules thereof.
6. Amendment. This Agreement may only be amended by a written instrument
executed by the Company and the Holders.
7. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
8. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
9. Notices. Any notices required or permitted to be given under the terms
of this Agreement shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy , and
shall be effective five days after being placed in the mail, if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:
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To Company:
Futuremedia Plc
Nile House
Nile Street
Brighton
BN1 1HW
Tel: +44 (0) 1273 829700
Fax: +44 (0) 1273 829702
With a copy to:
Mark A. Dorff, Esq.
Brown Rudnick / 8 Clifford Street / London W1S 2LQ
Tel: +44-20-7851-6005 (Direct)
Fax: +44-20-7851-6100
If to Holder:
M.A.G. Capital, LLC
555 South Flower Street
Suite 4200
Los Angeles, CA 90071
Telephone No.: (213) 533-8288
Facsimile No.: (213) 533-8285
Attention: David Firestone
With a copy to
Sheppard Mullin Richter & Hampton LLP
333 South Hope Street
48th Floor
Los Angeles, CA 90071-1448
Telephone No.: (213) 620-1780
Facsimile No.: (213) 620-1398
Attention: David C. Ulich
Each party hereto may from time to time change its address or facsimile number
for notices under this Section by giving at least ten (10) days' prior written
notice of such changed address or facsimile number, in the case of the Funds to
the Company, and in the case of the Company to all of the Funds and M.A.G.
10. Binding Effect; Benefits. Any Holder may assign its rights hereunder.
This Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and their respective heirs, legal representatives, successors and
assigns. Nothing herein contained, express or implied, is intended to confer
upon any person other than the parties hereto and their respective heirs, legal
representatives and successors, any rights or remedies under or by reason of
this Agreement.
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11. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
12. Severability. Any provision of this Agreement which is held by a court
of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
13. Reserved.
14. Attorneys' Fees and Disbursements. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the prevailing
party or parties shall be entitled to receive from the other party or parties
reasonable attorneys' fees and disbursements in addition to any other relief to
which the prevailing party or parties may be entitled.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
FUTUREMEDIA PLC
By: /s/ Leonard M. Fertig
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Name: Leonard M. Fertig
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Its: President
HOLDERS:
MERCATOR MOMENTUM FUND, L.P.
By: M.A.G. CAPITAL, LLC
Its: General Partner
By: /s/ David Firestone
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Name: David Firestone
Its: Managing Member
MERCATOR MOMENTUM FUND III, L.P.
By: M.A.G. CAPITAL, LLC
Its: General Partner
By: /s/ David Firestone
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Name: David Firestone
Its: Managing Member
MONARCH POINTE FUND, LTD.
By: /s/ David Firestone
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Name: David Firestone
Its: President
M.A.G. CAPITAL, LLC
By: /s/ David Firestone
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Name: David Firestone
Its: Managing Member
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