EXHIBIT 10.5
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AMENDED AND RESTATED INVESTOR REGISTRATION RIGHTS AGREEMENT
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THIS AMENDED AND RESTATED INVESTOR REGISTRATION RIGHTS AGREEMENT
(this
"Agreement"), dated as of July 20, 2006, by and among MM(2) GROUP,
INC. (F/K/A
WIEN GROUP, INC.), a New Jersey corporation (the "Company"), and
the undersigned
investors listed on Schedule I attached hereto (each, an "Investor"
and
collectively, the "Investors").
WHEREAS:
A. MM(2) Group, Inc., a New Jersey corporation ("MM(2)") and
the
Investor entered into that certain Securities Purchase Agreement,
and
convertible debenture issue thereto, and other related documents,
instruments
and agreements therewith, including without limitation a Security
Agreement,
Investor Registration Rights Agreement, an Escrow Agreement and
Irrevocable
Transfer Agent Instructions, all of which are dated April 1, 2005
(collectively,
the "MM(2) SPA Documents").
B. On October 19, 2005, the Company completed its acquisition of
MM(2)
pursuant to the Acquisition Agreement dated July 8, 2005. The
Company assumed
the obligations of MM(2) to Investor under the Securities Purchase
Agreement
dated April 1, 2005 pursuant to the Assignment and Assumption
Agreement
effective as of October 18, 2005 by and between MM(2) and the
Company and
consented to by the Investor (the "Assignment and Assumption
Agreement").
C. In connection with the Amended and Restated Securities
Purchase
Agreement by and among the parties hereto of even date herewith
(the "Securities
Purchase Agreement"), which supersedes the terms of the MM(2) SPA
Documents and
reflects the Assignment and Assumptions Agreement, the Company has
agreed, upon
the terms and subject to the conditions of the Securities Purchase
Agreement, to
issue and sell to the Investors secured convertible debentures (the
"Convertible
Debentures") which shall be convertible into that number of shares
of the
Company's Class A common stock, no par value per share (the "Common
Stock"),
pursuant to the terms of the Securities Purchase Agreement for an
aggregate
purchase price of up to Two Million Five Hundred Thousand Dollars
($2,500,000).
Capitalized terms not defined herein shall have the meaning
ascribed to them in
the Securities Purchase Agreement.
D. This Agreement shall amend and restate the Security Agreement
dated
April 1, 2005 and the Amendment No.1 to the Investor Registration
Rights
Agreement dated March 16, 2006.
E. To induce the Investors to execute and deliver the
Securities
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"), and applicable state securities laws.
NOW, THEREFORE, for and in consideration of the premises and the
mutual
covenants contained herein and other good and valuable
consideration, the
receipt and
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sufficiency of which are hereby acknowledged, the Company and the
Investors
hereby agree as follows:
1.
DEFINITIONS.
As used in this Agreement, the following terms shall have the
following
meanings:
(a) "Person" means a corporation, a limited liability company,
an
association, a partnership, an organization, a business, an
individual, a
governmental or political subdivision thereof or a governmental
agency.
(b) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more
Registration
Statements (as defined below) 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 or delayed basis ("Rule 415"),
and the
declaration or ordering of effectiveness of such Registration
Statement(s) by
the United States Securities and Exchange Commission (the
"SEC").
(c) "Registrable Securities" means the shares of Common Stock
issuable to the Investors upon conversion of the Convertible
Debentures pursuant
to the Securities Purchase Agreement, and the Warrant Shares and
the Commitment
Shares, as these terms are defined in the Securities Purchase
Agreement.
(d) "Registration Statement" means a registration statement
under
the Securities Act which covers the Registrable Securities.
2.
REGISTRATION.
(a) Subject to the terms and conditions of this Agreement, the
Company shall prepare and file, no later than September 1, 2006
(the "Scheduled
Filing Deadline"), with the SEC a registration statement on Form
S-1 or SB-2
(or, if the Company is then eligible, on Form S-3) under the
Securities Act (the
"Initial Registration Statement") for the resale by the Investors
of the
Registrable Securities, which includes at least 231,675,214 shares
of Common
Stock to be issued upon conversion of the Convertible Debentures,
5,000,000
shares of Common Stock as and for the Commitment Shares and
20,750,000 shares as
and for the Warrant Shares. The Company shall cause the
Registration Statement
to remain effective until all of the Registrable Securities have
been sold.
Prior to the filing of the Registration Statement with the SEC, the
Company
shall furnish a copy of the Initial Registration Statement to the
Investors for
their review and comment. The Investors shall furnish comments on
the Initial
Registration Statement to the Company within twenty-four (24) hours
of the
receipt thereof from the Company.
(b) Effectiveness of the Initial Registration Statement. The
Company shall use its best efforts (i) to have the Initial
Registration
Statement declared effective by the SEC no later than ninety (90)
days from the
date hereof (the "Scheduled Effective Deadline") and (ii) to insure
that the
Initial Registration Statement and any subsequent Registration
Statement remains
in effect until all of the Registrable Securities have been sold,
subject to the
terms and conditions of this Agreement.
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(c) Failure to File or Obtain Effectiveness of the Registration
Statement. In the event the Registration Statement is not filed by
the Scheduled
Filing Deadline or is not declared effective by the SEC on or
before the
Scheduled Effective Date, or if after the Registration Statement
has been
declared effective by the SEC, sales cannot be made pursuant to the
Registration
Statement (whether because of a failure to keep the Registration
Statement
effective, failure to disclose such information as is necessary for
sales to be
made pursuant to the Registration Statement, failure to register
sufficient
shares of Common Stock or otherwise) then as partial relief for the
damages to
any holder of Registrable Securities by reason of any such delay in
or reduction
of its ability to sell the underlying shares of Common Stock (which
remedy shall
not be exclusive of any other remedies at law or in equity), the
Company will
pay as liquidated damages (the "Liquidated Damages") to the holder,
at the
holder's option, either a cash amount or shares of the Company's
Common Stock
within three (3) business days, after demand therefore, equal to
two percent
(2%) of the liquidated value of the Convertible Debentures
outstanding as
Liquidated Damages for each thirty (30) day period after the
Scheduled Filing
Deadline or the Scheduled Effective Date as the case may be.
(d) Liquidated Damages. The Company and the Investor hereto
acknowledge and agree that the sums payable under subsection 2(c)
above shall
constitute liquidated damages and not penalties and are in addition
to all other
rights of the Investor, including the right to call a default. The
parties
further acknowledge that (i) the amount of loss or damages likely
to be incurred
is incapable or is difficult to precisely estimate, (ii) the
amounts specified
in such subsections bear a reasonable relationship to, and are not
plainly or
grossly disproportionate to, the probable loss likely to be
incurred in
connection with any failure by the Company to obtain or maintain
the
effectiveness of a Registration Statement, (iii) one of the reasons
for the
Company and the Investor reaching an agreement as to such amounts
was the
uncertainty and cost of litigation regarding the question of actual
damages, and
(iv) the Company and the Investor are sophisticated business
parties and have
been represented by sophisticated and able legal counsel and
negotiated this
Agreement at arm's length.
3. RELATED
OBLIGATIONS.
(a) The Company shall keep the Registration Statement effective
pursuant to Rule 415 at all times until the date on which the
Investor shall
have sold all the Registrable Securities covered by such
Registration Statement
(the "Registration Period"), 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) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to
a
Registration Statement and the prospectus used in connection with
such
Registration Statement, which prospectus is to be filed pursuant to
Rule 424
promulgated under the Securities Act, as may be necessary to keep
such
Registration Statement effective at all times during the
Registration Period,
and, during such period, comply with the provisions of the
Securities Act with
respect to the disposition of all Registrable Securities of the
Company covered
by such Registration Statement until such time as all of such
Registrable
Securities shall have been disposed of in accordance with the
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intended methods of disposition by the seller or sellers thereof as
set forth in
such Registration Statement. In the case of amendments and
supplements to a
Registration Statement which are required to be filed pursuant to
this Agreement
(including pursuant to this Section 3(b)) by reason of the
Company's filing a
report on Form 10-KSB, Form 10-QSB or Form 8-K or any analogous
report under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the Company
shall incorporate such report by reference into the Registration
Statement, if
applicable, or shall file such amendments or supplements with the
SEC on the
same day on which the Exchange Act report is filed which created
the requirement
for the Company to amend or supplement the Registration
Statement.
(c) The Company shall furnish to each Investor whose
Registrable
Securities are included in any Registration Statement, without
charge, (i) at
least one (1) copy of such Registration Statement as declared
effective by the
SEC and any amendment(s) thereto, including financial statements
and schedules,
all documents incorporated therein by reference, all exhibits and
each
preliminary prospectus, (ii) ten (10) copies of the final
prospectus included in
such Registration Statement and all amendments and supplements
thereto (or such
other number of copies as such Investor may reasonably request) and
(iii) such
other documents as such Investor may reasonably request from time
to time in
order to facilitate the disposition of the Registrable Securities
owned by such
Investor.
(d) The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by a Registration
Statement under
such other securities or "blue sky" laws of such jurisdictions in
the United
States as any Investor reasonably requests, (ii) prepare and file
in those
jurisdictions, such amendments (including post-effective
amendments) and
supplements to such registrations and qualifications as may be
necessary to
maintain the effectiveness thereof during the Registration Period,
(iii) take
such other actions as may be necessary to maintain such
registrations and
qualifications in effect at all times during the Registration
Period, and (iv)
take all other actions reasonably necessary or advisable to qualify
the
Registrable Securities for sale in such jurisdictions; provided,
however, that
the Company shall not be required in connection therewith or as a
condition
thereto to (w) make any change to its articles of incorporation or
by-laws, (x)
qualify to do business in any jurisdiction where it would not
otherwise be
required to qualify but for this Section 3(d), (y) subject itself
to general
taxation in any such jurisdiction, or (z) file a general consent to
service of
process in any such jurisdiction. The Company shall promptly notify
each
Investor who holds Registrable Securities of the receipt by the
Company of any
notification with respect to the suspension of the registration or
qualification
of any of the Registrable Securities for sale under the securities
or "blue sky"
laws of any jurisdiction in the United States or its receipt of
actual notice of
the initiation or threat of any proceeding for such purpose.
(e) As promptly as practicable after becoming aware of such
event
or development, the Company shall notify each Investor in writing
of the
happening of any event as a result of which the prospectus included
in a
Registration Statement, as then in effect, includes an untrue
statement of a
material fact or omission 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 (provided that in no event
shall such
notice contain any material, nonpublic information), and promptly
prepare a
supplement or amendment to such Registration Statement to correct
such untrue
statement or omission, and deliver ten (10) copies of such
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supplement or amendment to each Investor. The Company shall also
promptly notify
each Investor in writing (i) when a prospectus or any prospectus
supplement or
post-effective amendment has been filed, and when a Registration
Statement or
any post-effective amendment has become effective (notification of
such
effectiveness shall be delivered to each Investor by facsimile on
the same day
of such effectiveness), (ii) of any request by the SEC for
amendments or
supplements to a Registration Statement or related prospectus or
related
information, and (iii) of the Company's reasonable determination
that a
post-effective amendment to a Registration Statement would be
appropriate.
(f) The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of
a
Registration Statement, or the suspension of the qualification of
any of the
Registrable Securities for sale in any jurisdiction within the
United States of
America and, if such an order or suspension is issued, to obtain
the withdrawal
of such order or suspension at the earliest possible moment and to
notify each
Investor who holds Registrable Securities being sold of the
issuance of such
order and the resolution thereof or its receipt of actual notice of
the
initiation or threat of any proceeding for such purpose.
(g) At the reasonable request of any Investor, the Company
shall
furnish to such Investor, on the date of the effectiveness of the
Registration
Statement and thereafter from time to time on such dates as an
Investor may
reasonably request (i) a letter, dated such date, from the
Company's independent
certified public accountants in form and substance as is
customarily given by
independent certified public accountants to underwriters in an
underwritten
public offering, and (ii) an opinion, dated as of such date, of
counsel
representing the Company for purposes of such Registration
Statement, in form,
scope and substance as is customarily given in an underwritten
public offering,
addressed to the Investors.
(h) The Company shall make available for inspection by (i) any
Investor and (ii) one (1) firm of accountants or other agents
retained by the
Investors (collectively, the "Inspectors") all pertinent financial
and other
records, and pertinent corporate documents and properties of the
Company
(collectively, the "Records"), as shall be reasonably deemed
necessary by each
Inspector, and cause the Company's officers, directors and
employees to supply
all information which any Inspector may reasonably request;
provided, however,
that each Inspector shall agree, and each Investor hereby agrees,
to hold in
strict confidence and shall not make any disclosure (except to an
Investor) or
use any Record or other information which the Company determines in
good faith
to be confidential, and of which determination the Inspectors are
so notified,
unless (a) the disclosure of such Records is necessary to avoid or
correct a
misstatement or omission in any Registration Statement or is
otherwise required
under the Securities Act, (b) the release of such Records is
ordered pursuant to
a final, non-appealable subpoena or order from a court or
government body of
competent jurisdiction, or (c) the information in such Records has
been made
generally available to the public other than by disclosure in
violation of this
or any other agreement of which the Inspector and the Investor has
knowledge.
Each Investor agrees that it shall, upon learning that disclosure
of such
Records is sought in or by a court or governmental body of
competent
jurisdiction or through other means, give prompt notice to the
Company and allow
the Company, at its expense, to undertake appropriate action to
prevent
disclosure of, or to obtain a protective order for, the Records
deemed
confidential.
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(i) The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the
Company unless
(i) disclosure of such information is necessary to comply with
federal or state
securities laws, (ii) the disclosure of such information is
necessary to avoid
or correct a misstatement or omission in any Registration
Statement, (iii) the
release of such information is ordered pursuant to a subpoena or
other final,
non-appealable order from a court or governmental body of
competent
jurisdiction, or (iv) such information has been made generally
available to the
public other than by disclosure in violation of this Agreement or
any other
agreement. The Company agrees that it shall, upon learning that
disclosure of
such information concerning an Investor is sought in or by a court
or
governmental body of competent jurisdiction or through other means,
give prompt
written notice to such Investor and allow suc
