Document:

ex104to8k09196003_09242015.htm

Exhibit 10.4

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of September [  ], 2015, is made and entered into by and among Remark Media, Inc., a Delaware corporation (the “Company”), each of the parties listed as Subscribers on the signature page hereto (each, a “Subscriber” and collectively, the “Subscribers”, and the Company and the Subscribers are each a “Party”, and collectively, the “Parties”).  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Subscription Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Company and the Subscribers are parties to a Subscription Agreement of dated as of the date hereof (the “Subscription Agreement”), pursuant to which, upon the terms and subject to the conditions set forth in the Subscription Agreement, the Subscribers will receive certain securities of the Company as inducement for the Subscribers to enter into that certain Financing Agreement, dated as of the date hereof, by and among the Company and certain of its subsidiaries, as borrowers, certain subsidiaries of the Company, as guarantors, the lenders from time to time party thereto, and MGG Investment Group, LP. (“MGG”), as administrative agent for the lenders thereunder, and as collateral agent for the lenders thereunder; and

 

WHEREAS, as a condition to the Closing, the Company and the Subscribers agreed to enter into this Agreement to provide for, among other things, certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1           Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such terms in the Subscription Agreement. For purposes of this Agreement:

 

(a)           “Advice” has the meaning set forth in Section 2.4.

 

(b)           “Board” means the Company’s Board of Directors.

 

(c)           “Common Stock” means (i) the Company’s shares of Common Stock, par value $0.001 per share, and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

 

  

  

  

 

(d)           “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

(e)           “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

(f)           “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

(g)           “Holder” means any holder of Registrable Securities who is a party to this Agreement.

 

(h)           “Initial Shares” means 130% of the shares of Common Stock issuable upon exercise of the Warrants issued to the Subscribers at Closing.

 

(i)           “Lead Investor” means MGG Specialty Finance Fund LP.

 

(j)           “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision of such governmental agency.

 

(k)           “Prospectus” means a prospectus forming a part of the Registration Statement.

 

(l)           “Registrable Securities” means the Shares, as well as any securities issued as a dividend or other distribution with respect to, or in exchange or in replacement of, the Shares; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Section 3.1, and excluding for purposes of Article II any Shares for which registration rights have terminated pursuant to Section 2.7 of this Agreement.

 

(m)         “Registration Period” has the meaning set forth in Section 2.1(a).

 

(n)          “Registration Statement” has the meaning set forth in Section 2.1(a).

 

(dd)       “Required Holders” means the holders of at least a majority of the Registrable Securities and shall include the Lead Investor so long as the Lead Investor or any of its Affiliates holds any Registrable Securities.

 

(o)          “Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

(p)          “SEC” means the Securities and Exchange Commission.

 

  

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(q)          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

(r)           “Shares” means the Initial Shares and the Subsequent Shares.

 

(s)          “Subsequent Shares” means any shares of Common Stock issuable in accordance with the Put Option provided under Section 4 of the Warrants.

 

(t)           “Warrants” means the warrants to purchase Common Stock to be issued to the Subscribers upon the terms and subject to the conditions set forth in the Subscription Agreement.

 

ARTICLE II

 

REGISTRATION RIGHTS

 

Section 2.1            Registration.

 

(a)           The Company, at its sole cost and expense, shall prepare and file with the SEC a registration statement on Form S-3 (or on Form S-1 if the Company is then ineligible to use Form S-3) pursuant to Rule 415 under the Securities Act (a “Registration Statement”) covering the resale of the Initial Shares as soon as reasonably practicable following the Closing Date, but in no event later than forty-five (45) days thereafter.  The Company shall use its reasonable best efforts:  (i) to cause such Registration Statement to be declared effective by the SEC promptly after filing; and (ii) to maintain the effectiveness of such Registration Statement until the earlier of such time that all of the Registrable Securities covered thereby (x) have been sold by the Holders or (y) are permitted to be sold by each Holder without volume or manner-of- sale restrictions and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144 (the “Registration Period”).

 

(b)           The Company, at its sole cost and expense, shall prepare and file with the SEC a Registration Statement covering, or amend an existing Registration Statement to cover, the resale of any Subsequent Shares (if any), as soon as reasonably practicable following their issuance, but in no event later than forty-five (45) days thereafter.  The Company shall use its reasonable best efforts:  (i) to cause such Registration Statement or post-effective amendment to be declared effective by the SEC promptly after filing; and (ii) to maintain the effectiveness of such Registration Statement until the end of the Registration Period with respect to such Subsequent Shares.

 

  

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(c)           Notwithstanding anything to the contrary contained in this Agreement, in the event the staff of the SEC (the “Staff”) or the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities by, or on behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit such Registration Statement to become effective and used for resales in a manner that does not constitute such an offering and that permits the continuous resale at the market by the Holders participating therein (or as otherwise may be acceptable to each Holder) without being named therein as an “underwriter,” then the Company shall reduce the number of shares to be included in such Registration Statement by all Holders until such time as the Staff and the SEC shall permit such Registration Statement to become effective as aforesaid. In making such reduction, the Company shall reduce the number of shares to be included by all Holders on a pro rata basis (based upon the number of Registrable Securities otherwise required to be included for each Holder) unless the inclusion of shares by a particular Holder or a particular set of Holders are resulting in the Staff or the SEC’s “by or on behalf of the Company” offering position, in which event the shares held by such Holder or set of Holders shall be the only shares subject to reduction (and if by a set of Holders on a pro rata basis by such Holders or on such other basis as would result in the exclusion of the least number of shares by all such Holders). In addition, in the event that the Staff or the SEC requires any Holder seeking to sell securities under a Registration Statement filed pursuant to this Agreement to be specifically identified as an “underwriter” in order to permit such Registration Statement to become effective, and such Holder does not consent to being so named as an underwriter in such Registration Statement, then, in each such case, the Company shall reduce the total number of Registrable Securities to be registered on behalf of such Holder, until such time as the Staff or the SEC does not require such identification or until such Holder accepts such identification and the manner thereof. In the event of any reduction in Registrable Securities pursuant to this paragraph, an affected Holder shall have the right to require, upon delivery of a written request to the Company signed by such Holder, the Company to file a registration statement within twenty (20) days of such request (subject to any restrictions imposed by Rule 415 or required by the Staff or the SEC) for resale by such Holder in a manner acceptable to such Holder, and the Company shall following such request cause to be and keep effective such registration statement in the same manner as otherwise contemplated in this Agreement for registration statements hereunder, in each case until the end of the Registration Period with respect to such Registrable Securities or until such Holder agrees to be named as an underwriter in any such Registration Statement in a manner acceptable to such Holder as to all Registrable Securities held by such Holder and that have not theretofore been included in a Registration Statement under this Agreement (it being understood that the special demand right under this sentence may be exercised by an Holder multiple times and with respect to limited amounts of Registrable Securities in order to permit the resale thereof by such Holder as contemplated above).

 

Section 2.2            Registration Procedures.  In connection with the registration of any Registrable Securities, the Company shall, as soon as reasonably practicable:

 

(a)           Prepare and file with the SEC such pre-effective and post-effective amendments and supplements to the Registration Statement and the Prospectus used in connection with the Registration Statement, and/or file such reports under the Exchange Act, as may be necessary to cause the Registration Statement to become effective, to keep the Registration Statement continuously effective during the Registration Period and ensure that each 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 the case of prospectuses, in the light of the circumstances in which they were made) not misleading, and as may otherwise be required or applicable under, and to comply with the provisions of, the Securities Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the Registration Period.

 

  

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(b)           Furnish to each Holder such number of copies of the Prospectus, and each amendment or supplement thereto, in conformity with the requirements of the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate the disposition of Registrable Securities owned by it.

 

(c)           Notify each Holder:  (i) when a Prospectus or any Prospectus supplement or post-effective amendment is proposed to be filed and, with respect to any post-effective amendment, when the same has become effective, except for any filing to be made solely to incorporate by reference a Current Report on Form 8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K to be filed with the SEC; (ii) of any request by the SEC, or any other federal or state governmental authority, for amendments or supplements to a Registration Statement or a Prospectus or for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; and (v) of the occurrence of any event or circumstance that makes any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, Prospectus or documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any 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, however, in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company.

 

(d)           Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of, any order suspending the effectiveness of the Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, promptly.

 

(e)           If requested by any of the Holders, (i) incorporate in a Prospectus supplement or post-effective amendment such information as such Holders reasonably request be included therein regarding such Holders or the plan of distribution of the Registrable Securities and (ii) make all required filings of the Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of such matters to be incorporated in such Prospectus supplement or post-effective amendment; provided, however, that the Company shall not be required to take any action pursuant to this Section 2.2(e) that would, in the opinion of counsel to the Company, violate applicable law.

 

(f)           Upon the occurrence of any event contemplated by Section 2.2(c), prepare and deliver to the Holders any required supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document, including such reports as may be required to be filed under the Exchange Act, so that, as thereafter delivered, the Prospectus will not contain an 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 under which they were made, not misleading.

 

  

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(g)           Use its reasonable best efforts to cause all Registrable Securities, the resale of which is registered under cover of the Registration Statement, to be listed on the NASDAQ Capital Market or such other securities exchange or automated quotation system, if any, as is then the principal securities exchange or automated quotation system on which the Common Stock is then listed.

 

(h)           Use its reasonable best efforts to cause all Registrable Securities registered by the Registration Statement to be registered or qualified under the securities or “blue sky” laws of such states as the Holders shall reasonably request; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or to subject itself to any material tax in any such jurisdiction where it is not then so subject.

 

(i)            Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold pursuant to the Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may reasonably request, a reasonable period of time prior to sales of the Registrable Securities pursuant to the Registration Statement.

 

(j)            Neither the Company nor any Subsidiary or Affiliate thereof shall identify any Holder as an underwriter in any public disclosure or filing with the SEC, the Principal Market or any Eligible Market and any Holder being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Subscription Agreement).

 

Section 2.3            Obligation to Furnish Information.  It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the Registrable Securities of a Holder that such Holder shall have furnished to the Company such information regarding it, the Registrable Securities held by it, and the intended method of disposition of such Registrable Securities as the Company shall reasonably request and as shall be required in connection with the action to be taken by the Company.

 

Section 2.4            Delay or Suspension of Registration Statement.  Upon receipt of any notice from the Company to the Holders of the existence of any fact of the kind described in Section 2.2(c)(v), each Holder shall forthwith discontinue disposition of Registrable Securities until such Holder’s receipt of copies of a supplemented or amended Prospectus contemplated by Section 2.2(f), or until it is advised in writing (the “Advice”) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus.  If so directed by the Company, each Holder shall deliver to the Company (at the sole expense of the Company) all copies, other than permanent file copies then in each Holder’s possession, of the Prospectus current at the time of receipt of such notice.  In the event the Company shall give any such notice, the Registration Period shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 2.2(c)(v) to and including the date when the Holders shall have received the copy of the supplemented or amended prospectus contemplated by Section 2.2(f) or the Advice.

 

  

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Section 2.5            Expenses of Registration.  All expenses incurred in connection with the registration pursuant to Section 2.1 (excluding any underwriters’ discounts and commissions and fees and disbursements of counsel for the Holders), including, without limitation all registration and qualification fees, and fees and disbursements of counsel and accountants for the Company, shall be borne solely by the Company.

 

Section 2.6            Indemnification.

 

(a)           To the fullest extent permitted by law, the Company shall, and hereby does, indemnify and hold harmless each Holder, each director, officer, manager, partner, member, employee, representative and agent of each Holder, and each person, if any, who controls each Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (a “Controlling Person”), against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the Securities Act and applicable state securities laws insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, including any preliminary Prospectus or final Prospectus or any amendments or supplements thereto or in any qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), (ii) 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 in light of the circumstances, or (iii) any violation by the Company of any rule or regulation promulgated under the Securities Act applicable to the Company and relating to action or inaction required of the Company in connection with any such registration; and shall reimburse each such Person for any legal or other expenses reasonably incurred by him in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such claim.  The indemnity agreement contained in this Section 2.6 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed) nor shall the Company be liable to a Holder or Controlling Person of such Holder for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon an untrue statement or an alleged untrue statement or omission or alleged omission made in connection with the Registration Statement, preliminary Prospectus, final Prospectus, or amendments or supplements thereto or Blue Sky Filing, in reasonable reliance upon and in conformity with information furnished by such Holder in writing expressly for use in connection with such registration by or on behalf of such Holder or Controlling Person of such Holder.

 

(b)           To the fullest extent permitted by law, each Holder shall indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the Registration Statement, each Controlling Person of the Company, and any underwriter for the Company (as defined in the Securities Act), against any losses, claims, damages or liabilities, joint or several, to which the Company or any such director, officer, Controlling Person or underwriter may become subject, under the Securities Act and applicable state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, including any preliminary Prospectus or final Prospectus or any amendments or supplements thereto or in any Blue Sky Filing, or (ii) 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 in light of the circumstances, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, preliminary Prospectus or final Prospectus or any amendments or supplements thereto or Blue Sky Filing, in reasonable reliance upon and in conformity with information furnished by such Holder or Controlling Person of such Holder in writing expressly for use in connection with such registration.  The indemnity agreement contained in this Section 2.6 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld, conditioned or delayed).

 

  

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(c)           In no event shall the liability of any Holder under Section 2.6(b) be greater than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

(d)           Promptly after receipt by an indemnified party under this Section 2.6 of notice of the commencement of any action or actual knowledge of a claim that would, if asserted, give rise to a claim for indemnity hereunder, such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.6, notify the indemnifying party in writing of the commencement thereof or knowledge 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 the defense thereof with qualified counsel.  The failure to notify an indemnifying party promptly of the commencement of any such action or of the knowledge of any such claim, only if materially and demonstrably prejudicial to its ability to defend such action, shall relieve such indemnifying party of liability to the indemnified party under this Section 2.6 to the extent of such prejudice, but the omission so to notify the indemnifying party shall not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.6.

 

(e)           If the indemnification provided for in this Section 2.6 is for any reason, other than pursuant to the terms thereof, held to be unavailable to an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact relates to information supplied by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 2.6(e) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to above in this Section 2.6(e).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this Section 2.6(e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim, but shall be subject, in the case of a Holder, to the limitation of Section 2.6(c) above.  No Person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any person who was not also guilty of such fraudulent misrepresentation.  No Party shall be liable for contribution with respect to any loss, claim, damage, liability, or action if such settlement is effected without the prior written consent of such Party, which consent shall not be unreasonably withheld, conditioned or delayed.

 

  

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Section 2.7            Termination.  The registration rights under Article II of this Agreement shall terminate upon expiration of the applicable Registration Period, provided that the rights and obligations of the Parties pursuant to Section 2.6 shall survive such termination.

 

Section 2.8            Rule 144.  The Company shall use its reasonable best efforts to file the reports required to be filed by it under the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it shall, upon the request of any Holder, use its reasonable best efforts to make publicly available other information so long as is necessary to permit sales pursuant to Rule 144.  The Company shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act pursuant to the exemption provided by Rule 144 under the Securities Act.  Upon the request of any Holder, the Company shall deliver to the Holders a written statement as to whether it has complied with such information requirements.

 

Section 2.9            Grant of Other Registration Rights.  From time to time, the Company may grant registration rights to any other holder or prospective holder of any of the capital stock of the Company.  Notwithstanding the foregoing, in no event shall the Company include any securities other than Registrable Securities and the securities issued and issuable pursuant to the Unit Purchase Agreement on any Registration Statement without the prior written consent of the Required Holders.

 

ARTICLE III

 

MISCELLANEOUS.

 

Section 3.1            Assignment; No Third Party Beneficiaries.

 

(a)           This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.

 

  

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(b)           The rights under this Agreement shall be automatically assignable by the Holders to any transferee of all or any portion of such Holder’s Registrable Securities if:  (i) the Holder 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; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act or applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Subscription Agreement.

 

(c)           This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the Holders, the permitted assigns and its successors and the permitted assigns of the Holders.

 

(d)           This Agreement shall not confer any rights or benefits on any Persons that are not Parties hereto, other than as expressly set forth in this Agreement.

 

Section 3.2            Further Assurances.  Upon the reasonable request of the Company, each Subscriber will execute and deliver, or cause to be executed and delivered, all further documents and instruments and take all further action as may be reasonably necessary in order to satisfy its obligations under this Agreement.  Each Subscriber will not, directly or indirectly, take any action that would make any representation or warranty of such Subscriber contained herein untrue or incorrect in any material respect or that would reasonably be expected to have the effect of preventing or materially delaying such Subscriber from performing any of such Subscriber’s obligations under this Agreement.

 

Section 3.3            Governing Law; Venue.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

  

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Section 3.4            Counterparts.  This Agreement may be executed in multiple counterparts (including by means of electronically mailed or telecopied signature pages), any one of which need not contain the signatures of more than one Party, but all such counterparts taken together shall constitute one and the same instrument.

 

Section 3.5            Notices.  All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered, (b) when transmitted via telecopy (or other facsimile device) mail to the number set out in Section 6.3 of the Subscription Agreement if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (c) when transmitted via electronic mail to the email address set out in Section 6.3 of the Subscription Agreement, (d) the day following the day (except if not a business day then the next business day) on which the same has been delivered prepaid to a reputable national overnight air courier service or (e) the third business day following the day on which the same is sent by certified or registered mail, postage prepaid.  Notices, demands and communications, in each case to the respective Parties, shall be sent to the applicable address set forth in the Notices section of the Subscription Agreement, unless another address has been previously specified in writing.

 

Section 3.6            Amendment and Waiver.  Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be amended or waived only in a writing signed by the Company and the Required Holders.  No waiver of any provision under this Agreement or any breach or default under this Agreement shall extend to or affect in any way any other provision or prior or subsequent breach or default.

 

Section 3.7            Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

Section 3.8            Entire Agreement.  This Agreement and the other Transaction Documents contain the complete agreement between the Parties and supersede any prior understandings, agreements or representations by or between the Parties, written or oral, which may have related to the subject matter hereof and thereof in any way.

 

Section 3.9            Delays or Omissions.  No delay or omission to exercise any right, power, or remedy accruing to any Party under this Agreement, upon any breach or default of any other Party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  All remedies, whether under this Agreement or by law or otherwise afforded to any Party, shall be cumulative and not alternative.

 

[Signature Pages Follow]

 

  

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

 

	  	
COMPANY:

	  	  
	  	
REMARK MEDIA, INC.

	  	  
	  	  
	  	
By:

	/s/ Douglas Osrow
	  	
Name:

	
Douglas Osrow

	  	
Title:

	
Chief Financial Officer

	  	  	  
	  	  	  

 

  

 

  

 

	  	
SUBSCRIBER:

	  	  
	  	
MGG SPECIALTY FINANCE FUND LP

	  	  
	  	  
	  	
By:

	/s/ Kevin Griffin
	  	
Name:

	
Kevin Griffin

	  	
Title:

	
Chief Executive Officer and

	  	  	
Chief Investment Officer

	  	  

 

 

 

Signature Page to Registration Rights Agreementex105to8k09196003_09242015.htm

Exhibit 10.5

 

LOAN AGREEMENT

 

This Agreement dated as of September 24, 2015, is between BANK OF AMERICA, N.A. (the "Bank") and VEGAS.COM, LLC, a Nevada limited liability company (the "Borrower").

 

1. LETTER OF CREDIT FACILITY

 

	
1.1

	
Letters of Credit.

 

	
  

	
(a)

	
At the request of the Borrower, between the date of this Agreement and May 31, 2016 (the "LC Facility Expiration Date"), the Bank will issue:

 

	
  

	
(i)

	
standby letter(s) of credit with a maximum maturity of 365 days but not to extend more than 365 days beyond the LC Facility Expiration Date. The standby letters of credit may include a provision providing that the maturity date will be automatically extended each year for an additional year unless the Bank gives written notice to the contrary.

 

	
  

	
(b)

	
The amount of the letter(s) of credit outstanding at any one time (including the drawn and unreimbursed amounts of the letter(s) of credit) may not exceed Nine Million Three Hundred Thousand and 00/100 Dollars ($9,300,000.00) (the "Total LC Commitment"). Notwithstanding the foregoing, Borrower may, at any time prior to the LC Facility Expiration Date, request to increase the Total LC Commitment. Any such request shall be submitted in writing by the Borrower to Bank, and shall specify both the proposed increase effective date and the amount of such proposed increase in the Total LC Commitment (an "Increase Request"). No increase in the Total LC Commitment shall be made under this Agreement unless all of the following conditions are satisfied:

 

	
  

	
(i)

	
Borrower shall have delivered to Bank the relevant Increase Request not less than five (5) business days prior to the increase effective date identified in such Increase Request;

 

	
  

	
(ii)

	
The incremental increase in the Total LC Commitment requested in the relevant Increase Request shall be not less than the lesser of (A) $100,000.00, and (B) the difference between the Total LC Commitment at the time of the relevant Increase Request and the Maximum Total LC Commitment (defined below);

 

	
  

	
(iii)

	
After giving effect to the incremental increase requested in the Increase Request, the Total LC Commitment will not exceed Ten Million and 00/100 Dollars ($10,000,000.00) (the "Maximum Total LC Commitment");

 

	
  

	
(iv)

	
Borrower shall have deposited into the Account (defined below) immediately available funds in an amount equal to the incremental increase in the Total LC Commitment requested in the relevant Increase Request;

 

	
  

	
(v)

	
As of the date of the Increase Request, and after giving effect to the Increase Request, there shall be no event of default under this Agreement; and

 

  

  

  

 

	
  

	
(vi)

	
In connection with any Increase Request, Borrower shall have executed and delivered such documentation relating to such increase in the Total LC Commitment as the Bank may reasonably request, including new or amended guaranties, new or amended security agreements, joinder agreements, reaffirmations of any guaranty or security agreement, and copies of resolutions regarding any increase in the Total LC Commitment; provided, that until the date on which the MGG Credit Agreement is repaid in full and all commitments thereunder are terminated, (A) the security interests securing obligations under this Agreement shall be limited to the liens on the Cash Collateral Account, and (B) no entity that is a borrower or a guarantor under the MGG Credit Agreement (or a subsidiary of a borrower or guarantor under the MGG Credit Agreement), other than Borrower, shall be permitted to guarantee or otherwise provide credit support for the obligations under this Agreement.

 

	
  

	
(c)

	
The letters of credit identified on the attached Schedule A are outstanding from the Bank for the account of the Borrower, and as of the date of this Agreement, these letters of credit (each an "Existing Letter of Credit") shall be deemed to be outstanding under this Agreement, and shall be subject to all the terms and conditions stated in this Agreement.

 

	
1..2

	
Other Terms. The Borrower agrees:

 

	
  

	
(a)

	
If an event of default has occurred and is continuing under this Agreement and the obligations under this Agreement have been accelerated pursuant to Paragraph 8 hereof, to immediately prepay and make the Bank whole for any outstanding letters of credit, which prepayment shall be effected by the Bank's debiting of the Cash Collateral Account.

 

	
  

	
(b)

	
The issuance of any new letter of credit and the renewal of any Existing Letter of Credit must be in form and content reasonably satisfactory to the Bank and in favor of a beneficiary reasonably acceptable to the Bank, and shall be conditioned upon Borrower’s deposit of funds into the Cash Collateral Account to the extent necessary to ensure that, effective immediately upon such issuance or renewal, Borrower will be in compliance with the terms of Paragraph 1.2(d). Any amendment to a letter of credit is subject to the Bank's written approval.

 

	
  

	
(c)

	
To sign the Bank's form Application and Agreement for Standby Letter of Credit, as applicable, the terms and conditions of which shall be controlling as to the applicable letter of credit.

 

	
  

	
(d)

	
The Borrower agrees to deposit in the Cash Collateral Account with the Bank (and to maintain on deposit so long as any letter of credit issued hereunder remains outstanding) an amount equal to 101.25% of the Total LC Commitment on such date. The Borrower grants a security interest in such Cash Collateral Account to the Bank. Amounts held in such Cash Collateral Account shall be applied by the Bank to the payment of drafts drawn under such letters of credit and to the obligations and liabilities of the Borrower to the Bank.

 

	
  

	
(e)

	
To allow the Bank to automatically charge the Cash Collateral Account for applicable fees, discounts, and other charges due and owing.

 

	
  

	
(f)

	
To pay the Bank, by the Bank's debiting of the Cash Collateral Account, in addition to all fees previously paid in connection with the Existing Letters of Credit (all of which are deemed fully earned and non-refundable), directly or through direct debit of the Cash Collateral Account, non-refundable fee(s) on each new standby letter or credit and each renewal of any Existing Letter of Credit as follows, which fee(s) shall be payable annually in advance, calculated on the basis of the face amount of the relevant letter of credit outstanding on the day the fee is established:

 

	
  

	
(i)

	
a non-refundable fee equal to .75% per annum of the outstanding undrawn amount of each standby letter of credit; and

 

	
  

	
(ii)

	
all issuance, amendment and other customary fees required under each letter of credit application and agreement.

 

2. FEES AND EXPENSES

 

	
2.1

	
Fees.

 

	
(a)

	
Waiver Fee. If the Bank, at its discretion, agrees to waive or amend any terms of this Agreement, the Borrower will, at the Bank's option, pay the Bank a fee for each waiver or amendment in an amount advised by the Bank at the time the Borrower requests the waiver or amendment. Nothing in this paragraph shall imply that the Bank is obligated to agree to any waiver or amendment requested by the Borrower. The Bank may impose additional requirements as a condition to any waiver or amendment.

 

	
(b)

	
Late Fee. To the extent permitted by law, the Borrower agrees to pay a late fee in an amount not to exceed four percent (4%) of any payment that is more than fifteen (15) days late. The imposition and payment of a late fee shall not constitute a waiver of the Bank's rights with respect to the default.

 

  

  

  

 

	
2.2

	
Expenses.

 

The Borrower agrees to repay the Bank for reasonable and documented out of pocket expenses that it incurs in connection with this Agreement, which include, but are not limited to, filing, recording and search fees, and documentation fees.

 

	
2.3

	
Reimbursement Costs.

 

(a)           The Borrower agrees to reimburse the Bank for any reasonable and documented expenses it incurs in the preparation of this Agreement and any agreement or instrument required by this Agreement. Expenses include, but are not limited to, reasonable and documented out-of-pocket attorneys' fees, excluding any allocated costs of the Bank's in-house counsel to the extent permitted by applicable law.

 

	
3.

	
COLLATERAL

 

The personal property listed below will secure the Borrower's obligations to the Bank under this Agreement. The collateral is further defined in the security agreement required by the Bank and executed by the Borrower.

 

	
(a)

	
A deposit account opened by Borrower with Bank and designated as Account Number 501010966772 (the "Cash Collateral Account"), as described in the security agreement required by the Bank.

 

Regulation U of the Board of Governors of the Federal Reserve System places certain restrictions on loans secured by margin stock (as defined in the Regulation). The Bank and the Borrower shall comply with Regulation U. If any of the collateral is margin stock, the Borrower shall provide to the Bank a Form U-1 Purpose Statement

 

	
4.

	
DISBURSEMENTS, PAYMENTS AND COSTS

 

	
4.1

	
Disbursements and Payments.

 

	
(a)

	
Each payment by the Borrower will be made in U.S. Dollars and immediately available funds by debit to the Cash Collateral Account. For payments not made by direct debit, payments will be made by mail to the address shown on the Borrower's statement or at one of the Bank's banking centers in the United States, or by such other method as may be permitted by the Bank.

 

	
(b)

	
The Bank may honor applications or amendments from any of the undersigned individuals, or by any one of the individuals authorized to sign loan agreements on behalf of the Borrower, or any other individual designated by any one of such authorized signers (each an "Authorized Individual").

 

	
Name:

	
Specimen Signature:

	
Douglas Osrow

	  /s/  Douglas Osrow
	  	  
	  	  

 

The Bank may honor any such instructions made by any one of the Authorized Individuals, whether such instructions are given in writing or by telephone, telefax or Internet and intranet websites designated by the Bank with respect to separate products or services offered by the Bank.

 

	
(c)

	
Each disbursement by the Bank and each payment by the Borrower will be evidenced by records kept by the Bank. In addition, the Bank may, at its discretion, require the Borrower to sign one or more promissory notes.

 

  

  

  

 

	
4.2

	
Payments on Existing Letters of Credit.

 

Each payment required of Borrower under an Existing Letter of Credit shall be made by Borrower in accordance with the terms set forth in the application and agreement for that Existing Letter of Credit; provided that all payments shall be made by debiting the Cash Collateral Account unless the Borrower elects otherwise.

 

	
4.3

	
Banking Days.

 

Unless otherwise provided in this Agreement, a banking day is a day other than a Saturday, Sunday or other day on which commercial banks are authorized to close, or are in fact closed, in the state where the Bank's lending office is located, and, if such day relates to amounts bearing interest at an offshore rate (if any), means any such day on which dealings in dollar deposits are conducted among banks in the offshore dollar interbank market. All payments and disbursements which would be due on a day which is not a banking day will be due on the next banking day. All payments received on a day which is not a banking day will be applied to the credit on the next banking day.

 

	
4.4

	
Interest Calculation.

 

Except as otherwise stated in this Agreement, all interest and fees, if any, will be computed on the basis of a 360-day year and the actual number of days elapsed.  This results in more interest or a higher fee than if a 365-day year is used.  If any drawing is made on a letter of credit that is not paid when due under this Agreement the principal amount thereof shall bear interest until paid pursuant to Paragraph 4.5 (other than amounts not paid as a result of the failure of the Bank to debit the Cash Collateral Account).

 

	
4.5

	
Default Rate.

 

All amounts outstanding under this Agreement, including any interest, fees, or costs which are not paid when due (other than as a result of the failure of the Bank to debit the Cash Collateral Account), will at the option of the Bank bear interest at a rate equal to 6.0 percent per annum. This may result in compounding of interest which is hereby agreed to in accordance with NRS 99.050. This will not constitute a waiver of any default.

 

	
5.

	
CONDITIONS

 

Before the Bank is required to extend any credit to the Borrower under this Agreement, it must receive any documents and other items it may reasonably require, in form and content acceptable to the Bank, including any items specifically listed below:

 

	
5.1

	
Authorizations.

 

Evidence that the execution, delivery and performance by the Borrower of this Agreement and any instrument or agreement required under this Agreement have been duly authorized.

 

	
5.2

	
Governing Documents.

 

If required by the Bank, a copy of the Borrowers organizational documents.

 

	
5.3

	
Security Agreements.

 

Signed original security agreements and/or pledge agreements covering the Cash Collateral Account.

 

	
5.4

	
Perfection and Evidence of Priority.

 

Evidence that the security interests and liens in favor of the Bank in the Cash Collateral Account are valid, enforceable (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability), properly perfected and prior to all others' rights and interests, except those the Bank consents to in writing.

 

  

  

  

 

	
5.5

	
Payment of Fees.

 

Payment of all fees and other amounts due and owing to the Bank, including without limitation payment of all accrued and unpaid expenses incurred by the Bank as required by paragraphs 2.2 and 2.3.

 

	
5.6

	
Good Standing.

 

Certificate of good standing for the Borrower from its state of formation.

 

	
6.

	
REPRESENTATIONS AND WARRANTIES

 

When the Borrower signs this Agreement, the Borrower makes the following representations and warranties. Each request for issuance of a letter of credit constitutes a renewal of these representations and warranties as of the date of the request:

 

	
6.1

	
Formation.

 

Borrower is duly formed and existing under the laws of the state or other jurisdiction where organized.

 

	
6.2

	
Authorization.

 

This Agreement, and any instrument or agreement required hereunder, are within the Borrower's powers, have been duly authorized, and do not conflict with any of its organizational papers.

 

	
6.3

	
Enforceable Agreement.

 

This Agreement is a legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, and any instrument or agreement required hereunder, when executed and delivered, will be similarly legal, valid, binding and enforceable, in each case, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

 

	
6.4

	
Good Standing.

 

The Borrower is in good standing in its jurisdiction of organization.

 

	
6.5

	
No Conflicts.

 

This Agreement does not conflict with any law, agreement, or obligation by which the Borrower is bound, except to the extent any such conflict is not reasonably likely to result in a Material Adverse Effect. "Material Adverse Effect" means a material adverse effect upon the financial condition of the Company.

 

	
6.6

	
Financial Information.

 

All financial information supplied to the Bank after the date of this Agreement pursuant to Paragraph 7.2(a) and (b), fairly present in all material respects the Borrower’s financial condition, including all material contingent liabilities. The financial statements ended June 30, 2015, that have been supplied to the Bank fairly present in all material respects the Borrower’s financial condition, including all material contingent liabilities. Since June 30, 2015, no Material Adverse Effect has occurred.

 

	
6.7

	
Lawsuits.

 

There is no lawsuit, tax claim or other dispute pending or, to the knowledge of Borrower,  threatened against the Borrower which is reasonably likely to result in a Material Adverse Effect, except as have been disclosed in writing to the Bank.

 

	
6.8

	
Permits, Franchises.

 

The Borrower possesses all material permits, memberships, franchises, contracts and licenses required and all trademark rights, trade name rights, patent rights, copyrights, and fictitious name rights necessary to enable it to conduct the business in which it is now engaged, except to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

 

  

  

  

 

	
6.9

	
Other Obligations.

 

The Borrower is not in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation, except as have been disclosed in writing to the Bank, or as could not reasonably be expected to result in or constitute a Material Adverse Effect..

 

	
6.10

	
Tax Matters.

 

The Borrower has no knowledge of any pending assessments or adjustments of its income tax for any year and all taxes due have been paid, except (a) as have been disclosed in writing to the Bank, (b) to the extent contested in good faith by appropriate proceedings, or (c) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

 

	
6.11

	
No Event of Default.

 

There is no event which is, or with notice or lapse of time or both would be, an event of default under this Agreement.

 

7. COVENANTS

 

The Borrower agrees, so long as credit is available under this Agreement and until the Bank is repaid in full:

 

	
7.1

	
Use of Credit.

 

	
(a)

	
To use the Letter of Credit Facility only for the issuance, renewal, or replacement of letters of credit.

 

	
(b)

	
The proceeds of the credit extended under this Loan Agreement may not be used directly or indirectly to purchase or carry any "margin stock" as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System, or extend credit to or invest in other parties for the purpose of purchasing or carrying any such "margin stock," or to reduce or retire any indebtedness incurred for such purpose if such usage would result in a violation of Regulation U.

 

	
7.2

	
Financial Information.

 

To provide the following financial information and statements in form reasonably acceptable to the Bank.

 

	
(a)

	
Within 120 days of the fiscal year end, the annual financial statements of Borrower and any Guarantor, which may be, presented on a consolidated basis as, included, within the annual financial statements of Borrower's parent company, Remark Media, Inc., a Delaware corporation ("Remark"). These financial statements must be audited (which opinion shall be without a "going concern" qualification (except with respect to indebtedness maturing within the next 12 months), or any qualification as to the scope of such audit) by a Certified Public Accountant.

 

	
(b)

	
Within 45 days of the end of March, June, September and December quarterly financial statements of Borrower and any Guarantor, certified and dated by an authorized financial officer. These financial statements may be company-prepared.

 

	
(c)

	
On the date, hereof, Borrower's current balance sheet after giving effect to Remark's acquisition of Borrower and the transactions related thereto.

 

  

  

  

 

	
7.3

	
Maintenance of Assets.

 

	
(a)

	
Not to sell, assign, lease, transfer or otherwise dispose of any funds on deposit in the Cash Collateral Account to the extent such funds are required to be maintained as Collateral under the Security Agreement, other than application to payment of the Obligations hereunder.

 

	
7.4

	
[Reserved].

 

	
7.5

	
Other Liens.

 

Not to create, assume or allow any security interest or lien (including judicial liens) on the Cash Collateral Account, except:

 

(a)           Liens and security interests in favor of the Bank.

 

(b)           Liens for taxes not yet due.

 

(c)           Liens outstanding on the date of this Agreement disclosed in writing to the Bank, including the lien granted by Borrower pursuant to Pledge and Security Agreement, dated as of the date hereof, made by the Borrower and certain of its affiliates in favor of MGG Investment Group LP, as collateral agent (the "MGG Security Agreement"), whether or not perfected on the date of this Agreement, and refinancings thereof.

 

	
7.6

	
Change of Ownership.

 

Remark shall cease to have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting or economic power of the equity interests of the Borrower.

 

	
7.7

	
Additional Negative Covenants.

 

Not to, without the Bank's written consent, liquidate or dissolve the Borrower's business.

 

	
7.8

	
Notices to Bank.

 

To promptly notify the Bank in writing of:

 

	
(a)

	
Any lawsuit naming the Borrower as a party thereto that could reasonably be expected to have a Material Adverse Effect.

 

	
(b)

	
Any event of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default.

 

	
(c)

	
Any event that has, or could reasonably be expect to have, a Material Adverse Effect.

 

	
(d)

	
Any change in the Borrower's or any Obligor's name, legal structure, principal residence (for an individual), state of registration (for a registered entity), place of business, or chief executive office if the Borrower or any Obligor has more than one place of business, in each case, to the extent that such change could otherwise result in an impairment of the Bank's lien on the Cash Collateral Account.

 

For purposes of this Agreement, "Obligor" shall mean any guarantor, any party pledging collateral to the Bank, or, if the Borrower is comprised of the trustees of a trust, any trustor.

 

	
7.9

	
Compliance with Laws.

 

To comply with the laws (including any fictitious or trade name statute), regulations, and orders of any government body with authority over the Borrower's business, except to the extent the failure to so comply is not reasonably likely to result in a Material Adverse Effect. The Bank shall have no obligation to issue any letter of credit on behalf of the Borrower except in compliance with all applicable laws and regulations and the Borrower shall fully cooperate with the Bank in complying with all such applicable laws and regulations.

 

 

  

  

  

 

	
7.10

	
[Reserved].

 

	
7.11

	
Books and Records.

 

To maintain adequate books and records to the extent necessary to produce the financial statements required by Paragraph 7.2.

 

	
7.12

	
[Reserved].

 

	
7.13

	
Perfection of Liens.

 

To help the Bank perfect and protect its security interests and liens in the Cash Collateral Account, and reimburse it for reasonable and documented out of pocket costs it incurs to protect its security interests and liens in the Cash Collateral Account.

 

	
7.14

	
Cooperation.

 

To take any action reasonably requested by the Bank that is necessary to carry out the intent of this Agreement.

 

	
7.15

	
No Consumer Purpose.

 

Not to use this loan for personal, family, or household purposes. The Bank may provide the Borrower (or any Guarantor) with certain disclosures intended for loans made for personal, family, or household purposes. The fact that the Bank elects to make such disclosures shall not be deemed a determination by the Bank that the loan will be used for such purposes.

 

	
7.19

	
[Reserved].

 

	
7.20

	
[Reserved].

 

	
7.21

	
Bank as Principal Depository.

 

To maintain the Bank or one of its affiliates as its principal depository bank, including for the maintenance of business, cash management, operating and administrative deposit accounts.

 

8. DEFAULT AND REMEDIES

 

If any of the following events of default occurs, the Bank may do one or more of the following: declare the Borrower in default, stop making any additional credit available to the Borrower, and require the Borrower to repay its entire debt immediately and without prior notice. If an event which, with notice or the passage of time, will constitute an event of default has occurred and is continuing, the Bank has no obligation to make advances or extend additional credit under this Agreement. In addition, if any event of default occurs, the Bank shall have all rights, powers and remedies available under any instruments and agreements required by or executed in connection with this Agreement, as well as all rights and remedies available at law or in equity. If an event of default occurs under the paragraph entitled "Bankruptcy," below, with respect to the Borrower, then the entire debt outstanding under this Agreement will automatically be due immediately.

 

	
8.1

	
Failure to Pay.

 

The Borrower fails to make a payment under this Agreement, or under an Application and Agreement for Standby Letter of Credit when due and such failure continues unremedied for five (5) business days following written notice thereof from the Bank, except any such failure that results from the Bank failing to debit the amount due from the Cash Collateral Account.

 

  

  

  

 

	
8.2

	
Other Bank Agreements.

 

Any default occurs under any security agreement, or other document required by or delivered in connection with this Agreement, subject to the passing of any applicable notice or cure period therein.

 

	
8.3

	
[Reserved].

 

	
8.4

	
False Information.

 

Any representation made by the Borrower in this Agreement or any document required to be executed or delivered pursuant to this agreement is materially false or materially misleading when made.

 

	
8.5

	
Bankruptcy.

 

The Borrower files a bankruptcy petition, a bankruptcy petition is filed against the Borrower, and is not dismissed within 60 days following the petition date, or the Borrower makes a general assignment for the benefit of creditors.

 

	
8.6

	
Receivers.

 

A receiver or similar official is appointed for a substantial portion of the Borrower's or any Obligor's business, or the business is terminated, or such Obligor is liquidated or dissolved.

 

	
8.7

	
Lien Priority.

 

The Bank fails to have an enforceable first lien (except for any prior liens to which the Bank has consented in writing) on or security interest in the Cash Collateral Account.

 

	
8.8

	
[Reserved].

 

	
8.9

	
[Reserved].

 

	
8.10

	
[Reserved].

 

	
8.11

	
[Reserved].

 

	
8.12

	
[Reserved].

 

	
8.13

	
Other Breach Under Agreement.

 

A breach occurs under any other term or condition of this Agreement not specifically referred to in this Article.  If such breach is capable of being remedied, the breach will not be considered an event of default under this Agreement for a period of thirty (30) days after the date on which the Bank gives written notice of the breach to the Borrower.

 

9. ENFORCING THIS AGREEMENT; MISCELLANEOUS

 

	
9.1

	
GAAP.

 

Except as otherwise stated in this Agreement, all financial information provided to the Bank and all financial covenants will be made under generally accepted accounting principles, consistently applied.

 

	
9.2

	
Governing Law.

 

Except to the extent that any law of the United States may apply, this Agreement shall be governed and interpreted according to the laws of Nevada (the "Governing Law State"), without regard to any choice of law, rules or principles to the contrary. Nothing in this paragraph shall be construed to limit or otherwise affect any rights or remedies of the Bank under federal law.

 

  

  

  

 

	
9.3

	
Venue and Jurisdiction.

 

The Borrower agrees that any action or suit against the Bank arising out of or relating to this Agreement shall be filed in federal court or state court located in the Governing Law State. The Borrower agrees that the Bank shall not be deemed to have waived its rights to enforce this paragraph by filing an action or suit against the Borrower in a venue outside of the Governing Law State. If the Bank does commence an action or suit arising out of or relating to this Agreement, the Borrower agrees that the case may be filed in federal court or state court in the Governing Law State. The Bank reserves the right to commence an action or suit in any other jurisdiction where the Borrower, any Guarantor, or any collateral has any presence or is located. The Borrower consents to personal jurisdiction and venue in such forum selected by the Bank and waives any right to contest jurisdiction and venue and the convenience of any such forum. The provisions of this paragraph are material inducements to the Bank's acceptance of this Agreement

 

	
9.4

	
Successors and Assigns.

 

This Agreement is binding on the Borrower's and the Bank's successors and assignees. The Borrower agrees that it may not assign this Agreement without the Bank's prior consent. The Bank may sell participations in or assign this loan, and may exchange information about the Borrower (including, without limitation, any information regarding any hazardous substances) with actual or potential participants or assignees (subject to the execution of a confidentiality agreement in form and substance reasonably satisfactory to the Borrower).

 

	
9.5

	
Waiver of Jury Trial.

 

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY

 

OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER DOCUMENTS CONTEMPLATED HEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH AND (c) CERTIFIES THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE.

 

	
9.6

	
Waiver of Class Actions.

 

The terms "Claim" or "Claims" refer to any disputes, controversies, claims, counterclaims, allegations of liability, theories of damage, or defenses between Bank of America, N.A., its subsidiaries and affiliates, on the one hand, and the other parties to this Agreement, on the other hand (all of the foregoing each being referred to as a "Party" and collectively as the "Parties"). Whether in state court, federal court, or any other venue, jurisdiction, or before any tribunal, the Parties agree that all aspects of litigation and trial of any Claim will take place without resort to any form of class or representative action. Thus the Parties may only bring Claims against each other in an individual capacity and waive any right they may have to do so as a class representative or a class member in a class or representative action. THIS CLASS ACTION WAIVER PRECLUDES ANY PARTY FROM PARTICIPATING IN OR BEING REPRESENTED IN ANY CLASS OR REPRESENTATIVE ACTION REGARDING A CLAIM.

 

	
9.7

	
Severability; Waivers.

 

If any part of this Agreement is not enforceable, the rest of the Agreement may be enforced. The Bank retains all rights, even if it makes a loan after default. If the Bank waives a default, it may enforce a later default. Any consent or waiver under this Agreement must be in writing.

 

  

  

  

 

	
9.8

	
Expenses.

 

	
(a)

	
The Borrower shall pay to the Bank promptly following written demand therefor the full amount of all reasonable and documents out of pocket payments, advances, charges, costs and expenses, including reasonable attorneys' fees, expended or incurred by the Bank in connection with (i) the negotiation and preparation of this Agreement and any related agreements, the Bank's continued administration of this Agreement and such related agreements, and the preparation of any amendments and waivers related to this Agreement or such related agreements, (ii) filing, recording and search fees, appraisal fees, field examination fees, title report fees, and documentation fees with respect to any collateral and books and records of the Borrower or any Obligor, (iii) the Bank's costs or losses arising from any changes in law which are allocated to this Agreement or any credit outstanding under this Agreement, and (iv) costs or expenses required to be paid by the Borrower or any Obligor that are paid, incurred or advanced by the Bank.

 

	
(b)

	
The Borrower will indemnify and hold the Bank harmless from any loss, liability, damages, judgments, and costs of any kind relating to or arising directly or indirectly out of (i) this Agreement or any document required hereunder, (ii) any credit extended or committed by the Bank to the Borrower hereunder, and (iii) any litigation or proceeding related to or arising out of this Agreement, any such document, or any such credit, including, without limitation, any act resulting from the Bank complying with instructions the Bank reasonably believes are made by any Authorized Individual, but in each case, excluding any such losses, liabilities, damages, judgments and costs to the extent resulting from the gross negligence or willful misconduct of the Bank.  This paragraph will survive this Agreement's termination, and will benefit the Bank and its officers, employees, and agents.

 

	
(c)

	
The Borrower shall reimburse the Bank for any reasonable and documents out of pocket costs and attorneys' fees incurred by the Bank in connection with (i) the enforcement or preservation of the Bank's rights and remedies and/or the collection of any obligations of the Borrower which become due to the Bank and in connection with any "workout" or restructuring, and (ii) the prosecution or defense of any action in any way related to this Agreement, the credit provided hereunder or any related agreements, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by the Bank or any other person) relating to the Borrower or any other person or entity.

 

	
9.9

	
Release.

 

Borrower, on behalf of itself and its heirs, successors, assigns, administrators, personal representatives, executors, general and limited partners, agents, attorneys, contractors, affiliates and employees, and the officers, directors and shareholders of its respective partners (collectively, the "Releasing Parties") hereby release, remise and discharge Bank, and each of Bank's subsidiaries, divisions, affiliate corporations, trustees, beneficiaries, officers, directors, agents, employees, servants, successors, attorneys and assigns (collectively, the "Released Parties") from and against any and all claims, demands, debts, liabilities, contracts, obligations, accounts, causes of action or claims for relief of whatever kind or nature, whether known or unknown, suspected or unsuspected by Releasing Parties, past or present, which arise from or by reason of or are in any way connected with any agreements, transactions, occurrences, conduct, acts or omissions of Released Parties, whatsoever, commenced, done or occurred at any time prior to the execution of this Agreement in respect of (a) this Letter of Credit Facility, and any and all loan documents related thereto, (b) any alleged oral or written agreements or understandings by and between Releasing Parties and Released Parties in any way arising out of or related to the this Letter of Credit Facility, or (c) the disbursement, administration and modification of this Letter of Credit Facility, and/or any loan documents related thereto. Releasing Parties further agree to refrain and forbear from commencing, instituting or participating in, either as a named or unnamed party, any lawsuit, action or other proceedings against Released Parties, or any of them which is in any way connected with, based upon, related to or arising out of, directly or indirectly, the matters released herein.

 

	
9.10

	
Set-Off.

 

If the Borrower fails to pay any amount hereunder when due, the Borrower authorizes the Bank to debit the Cash Collateral Account for the amount due.  After the occurrence and during the continuance of an event of default under this Agreement, the Borrower hereby authorizes the Bank, at any time and from time to time, without notice, which is hereby expressly waived by the Borrower, and whether or not the Bank shall have declared any credit subject hereto to be due and payable in accordance with the terms hereof, to set off against, and to appropriate and apply to the payment of, the Borrower's Obligations (whether matured or unmatured, fixed or contingent, liquidated or unliquidated), any and all amounts on deposit in the Cash Collateral Account. "Obligations" means all obligations, now or hereafter existing, of the Borrower to the Bank under this Agreement and under any other agreement or instrument executed in connection with this Agreement.

 

  

  

  

 

	
9.11

	
One Agreement.

 

This Agreement and any related security or other agreements required by this Agreement (including, without limitation, the Existing Letters of Credit) constitute the entire agreement between the Borrower and the Bank with respect to each credit subject hereto and supersede all prior negotiations, communications, discussions and correspondence concerning the subject matter hereof. In the event of any conflict between this Agreement and any other agreements required by this Agreement, this Agreement will prevail.

 

	
9.12

	
Indemnification.

 

The Borrower will indemnify and hold the Bank harmless from any loss, liability, damages, judgments, and costs of any kind relating to or arising directly or indirectly out of (a) any credit extended or committed by the Bank to the Borrower hereunder, and (b) any litigation or proceeding related to or arising out of any such credit except due to the gross negligence or willful misconduct of Bank. Except to the extent Borrower is a prevailing party as set forth in Paragraph 9.6, this indemnity includes but is not limited to reasonable and documented out of pocket attorneys' fees (excluding the allocated cost of in-house counsel to the extent permitted by applicable law). This indemnity extends to the Bank, its parent, subsidiaries and all of their directors, officers, employees, agents, successors, attorneys, and assigns. This indemnity will survive repayment of the Borrower's obligations to the Bank. All sums due to the Bank hereunder shall be obligations of the Borrower, due and payable promptly following written demand therefor..

 

	
9.13

	
Notices.

 

Unless otherwise provided in this Agreement or in another agreement between the Bank and the Borrower, all notices required under this Agreement shall be personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of this Agreement, or sent by facsimile to the fax numbers listed on the signature page, or to such other addresses as the Bank and the Borrower may specify from time to time in writing. Notices and other communications shall be effective (i) if mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or otherwise (including telegram, lettergram or mailgram), when delivered.

 

	
9.14

	
Headings.

 

Article and paragraph headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Agreement.

 

	
9.15

	
Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original, and all of which when taken together shall constitute one and the same Agreement. Delivery of an executed counterpart of this Agreement (or of any agreement or document required by this Agreement and any amendment to this Agreement) by telecopy or other electronic imaging means shall be as effective as delivery of a manually executed counterpart of this Agreement; provided, however, that the telecopy or other electronic image shall be promptly followed by an original if required by the Bank.

 

  

  

  

 

	
9.16

	
Borrower Information; Reporting to Credit Bureaus.

 

The Borrower authorizes the Bank at any time to verify or check any information given by the Borrower to the Bank, check the Borrower's credit references, verify employment, and obtain credit reports. The Borrower agrees that the Bank shall have the right at all times to disclose and report to credit reporting agencies and credit rating agencies such information pertaining to the Borrower and/or all guarantors as is consistent with the Bank's policies and practices from time to time in effect.

 

	
9.17

	
Customary Advertising Material.

 

The Borrower and each Obligor consent to the publication by the Bank of customary advertising material relating to the transactions contemplated hereby using the name, product photographs, logo or trademark of the Borrower or such Obligor.

 

	
9.18

	
Amendment and Restatement of Prior Agreement.

 

This Agreement is an amendment and restatement, in its entirety, of the Loan Agreement entered into as of July 30, 2010, between the Bank and the Borrower, and any indebtedness outstanding thereunder in respect of letters of credit issued thereunder that are Existing Letters of Credit hereunder shall be deemed to be outstanding under this Agreement. Nothing in this Agreement shall be deemed to be a repayment or novation of the indebtedness, or to release or otherwise adversely affect any lien, mortgage or security interest securing such indebtedness or any rights of the Bank against any guarantor, surety or other party primarily or secondarily liable for such indebtedness, except as may be expressly agreed to in a separate writing executed by Bank's undersigned authorized representative.

 

	
9.19

	
Amendments.

 

This Agreement may be amended or modified only in writing signed by each party hereto.

 

	
9.20

	
Consent to Acquisition and Indebtedness.

 

Notwithstanding anything to the contrary contained in the Existing Credit Agreement., Bank hereby consents, to the transfer to Remark of all of the outstanding equity interests in Borrower pursuant to Remark Media, Inc., and to the indebtedness of Borrower secured under the MGG Security Agreement.  The foregoing shall not be deemed Bank's consent to or waiver of its right to prior approval of any future lien granted by Borrower with respect to the Cash Collateral Account.

 

 

(Signatures to Loan Agreement on Following Page]

 

  

  

  

 

(Signature Page to Loan Agreement]

 

 

	
Bank of America, N.A.

	  	
VEGAS.COM, LLC,

	  	  	
A Nevada limited liability company

	  	  	  
	  	  	  
	
By:

	

/s/ Joda Gibson

	  	
By:

	
REMARK MEDIA, INC.,

	
Name:

	
Joda Gibson

	  	
a Delaware corporation,

	
Title:

	
Senior Vice President

	  	
as Member

	  	  	  
	
Address where notices to the Bank are to be sent:

	  	  
	  	  	  	
By:

	

/s/ Douglas Osrow

	
300 S. 4th Street, 2nd Floor

	  	
Name:

	
Douglas Osrow

	
Las Vegas, NV 89101

	  	
Title:

	
Chief Financial Officer

	
Facsimile: 702-824-9012

	  	  	  	  

	  	  	  	  	
Address where notices to the Borrower

	  	  	  	  	
are to be sent:

	  	  	  
	  	  	
Remark Media, Inc.

	  	  	
3930 Howard Hughes Parkway

	  	  	
Suite 400

	  	  	
Las Vegas, NV 89169

  

  

  

 

Federal law requires Bank of America, N.A. (the "Bank") to provide the following notice. The notice is not part of

the foregoing agreement or instrument and may not be altered. Please read the notice carefully.

 

USA PATRIOT ACT NOTICE

 

Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or obtains a loan. The Bank will ask for the Borrower's legal name, address, tax ID number or social security number and other identifying information. The Bank may also ask for additional information or documentation or take other actions reasonably necessary to verify the identity of the Borrower, guarantors or other related persons.

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