REGISTRATION RIGHTS AGREEMENT
Exhibit
4.3
THIS
REGISTRATION RIGHTS AGREEMENT is entered into as of January 22, 2010, by
and between Caprius, Inc., a Delaware corporation (the “Company”), and
Vintage Capital Group, LLC, a Delaware limited liability company (together with
its successors and assigns, the “Investor”).
R
E C I T A L S
A. The
Company and the Investor are parties to that certain Securities Purchase and
Sale Agreement, dated as of September 16, 2009 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Securities Purchase
Agreement”) providing for, among other things, (i) the issuance by
the Company and the purchase by the Investor of that certain Note, and
(ii) the issuance by the Company and the purchase by the Investor of a
warrant (the “Warrant”) to purchase
40% (in the aggregate) of the Company’s common stock (the “Common Stock”) on a
Fully Diluted Basis as defined in the Warrant.
B. The
Company and the stockholders of the Company will gain substantial direct and
indirect benefits from the consummation of the Securities Purchase Agreement and
the transactions contemplated thereby.
C. The
transactions contemplated by the Securities Purchase Agreement are conditioned
upon the extension of the rights set forth herein to the Investor, including the
registration rights set forth herein, and the Company desires to extend such
rights.
D. All
capitalized terms used but not otherwise defined herein shall have the meanings
set forth in the Securities Purchase Agreement.
A
G R E E M E N T
NOW
THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. Registration
Rights.
1.1 Certain
Definitions. Except as defined herein, all capitalized terms
used and not otherwise defined in this Agreement shall have the meanings set
forth in the Securities Purchase Agreement.
As used
in this Agreement, the following terms shall have the following respective
meanings:
“Commission” shall
mean the Securities and Exchange Commission of the United States or any other
U.S. federal agency at the time administering the Securities Act.
“Registrable
Securities” means (i) any Common Stock issuable or issued on
exercise of the Warrant, (ii) any other shares of Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of, the shares listed in
clause (i), and (iii) other shares of Common Stock (or securities
convertible into Common Stock) that may be acquired by the Investor after the
date hereof from time to time. Shares of Common Stock shall only be
treated as Registrable Securities if they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, (B) sold in a single transaction exempt from the
registration and prospectus delivery requirements of the Securities Act so that
all transfer restrictions and restrictive legends with respect thereto are
removed upon the consummation of that sale, or (C) sold in a sale pursuant
to Rule 144 promulgated under the Securities Act, or if such shares of Common
Stock could then be sold pursuant to Rule 144 without any limitations on volume
or manner of sales.
The terms
“register,” “registered” and “registration” refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness of that registration
statement.
“Registration
Expenses” shall mean all fees, costs and expenses, other than Selling
Expenses, incurred by the Company in complying with Section 1.2,
Section 1.3 and
Section 1.4
hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company and reasonable fees and disbursements of one counsel retained by
the Investor, Blue Sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of and counsel to the Company, which shall be paid in any
event by the Company).
“Securities Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations of
the Commission thereunder, or any similar United States federal
statute.
“Selling Expenses”
shall mean all underwriting fees, costs and expenses, selling discounts and
selling commissions applicable to the securities registered for the account of
the Investor.
“Special Registration
Statement” shall mean a registration statement relating to any employee
benefit plan or with respect to any corporate reorganization or other
transaction under Rule 145 of the Securities Act.
1.2 Requested
Registrations.
(a) Request for
Registration. In case the Company shall receive from the
Investor a written request (a “Registration Notice”)
that the Company effect any registration, qualification or compliance with
respect to Registrable Securities offered to the public having an aggregate
offering price of not less than $1,000,000 (as determined in good faith in
consultation with a one or more proposed underwriter(s) for an offering), the
Company thereupon will use commercially reasonable efforts to effect the
registration of the Registrable Securities which the Company has been so
requested to register as soon as practicable after the receipt of the
Registration Notice (including, without limitation, appropriate qualification
under applicable Blue Sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act and any
other governmental requirements or regulations) as may be so requested and as
would permit or facilitate the sale and distribution of all or such portion of
such Registrable Securities specified in such
request. Notwithstanding the foregoing, the Company shall not be
obligated to take any action to effect any registration, qualification or
compliance pursuant to this Section 1.2:
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(i) prior
to one hundred twenty (120) days following the date hereof;
(ii) in
any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities
Act;
(iii) during
the period starting with the date sixty (60) days prior to the Company’s
estimated date of filing of, and ending on the date six (6) months
immediately following the effective date of, any registration statement
pertaining to securities of the Company sold for the account of the Company
(other than with respect to a Special Registration Statement), provided that the
Company is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;
(iv) after
the Company has effected two (2) registrations pursuant to this Section 1.2, and
such registrations have been declared or ordered effective;
(v) during
the 120-day period following a registration effected pursuant to this Section 1.2;
or
(vi) if
the Company shall furnish to the Investor pursuant to this Section 1.2 a
certificate signed by the Chief Executive Officer of the Company stating that in
the good faith judgment of the Board of Directors of the Company (the “Board”) it would be
seriously detrimental to the Company or its stockholders for a registration
statement to then be filed, then the Company’s obligation to use its best
efforts to register, qualify or comply under this Section 1.2
shall be deferred for a period not to exceed one hundred twenty (120) days
from the date of receipt by the Company of the Registration Notice regarding
which the Company has furnished such certificate from the Chief Executive
Officer of the Company; provided, however, that the
Company shall not utilize this right more than once in any 12-month
period.
Subject
to the foregoing clauses (i) through (v), the Company shall file a registration
statement covering the Registrable Securities so requested to be registered
pursuant to this Section 1.2 as
soon as practicable (and in any event within sixty (60) days of receipt of
the Registration Notice), after receipt of the request by the
Investor.
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(b) Underwriting. In
the event that a registration pursuant to this Section 1.2 is
specified in the Registration Notice to be a registered public offering
involving an underwriting, the right of the Investor to registration pursuant to
Section 1.2
shall be conditioned upon the Investor’s participation in the underwriting
arrangements required by this Section 1.2, and
the inclusion of the Investor’s Registrable Securities in the underwritten
offering to the extent requested shall be limited to the extent provided
herein. The Company shall enter into an underwriting agreement in
customary form with the managing underwriter selected for the underwriting by
the Company, but subject to the reasonable approval of the Investor (which
approval may be withheld on the grounds such underwriter’s discount would exceed
customary amounts). Notwithstanding any other provision of this Section 1.2, if
the managing underwriter advises the Company in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Company shall so advise the Investor. The number of shares that may
be included in the registration and underwriting shall be allocated first, pro
rata based upon the amount of Registrable Securities held by the Investor, to
the Registrable Securities desired to be sold by the Investor and thereafter any
additional shares that may be included in the offering shall be allocated to the
Company. To facilitate the allocation of shares in accordance with
the above provisions, the Company may round the number of shares allocated to
the Investor to the nearest one hundred (100) shares. If the Investor
disapproves of the terms of the underwriting, the Investor may elect to withdraw
therefrom by written notice to the Company and the managing underwriter, in
which case such withdrawal or request for registration shall not count as a
registration of Registrable Securities hereunder.
1.3 Company
Registrations.
(a) Notice of
Registration. If at any time or from time to time the Company
shall determine to register any of its securities, either for its own account or
the account of a security holder or holders, other than pursuant to a Special
Registration Statement, the Company will:
(i) promptly
give to the Investor written notice thereof; and
(ii) include
in such registration (and any related qualification under Blue Sky laws or other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request received by the Company within
ten (10) Business Days after the Investor’s receipt of the written notice
from the Company. Such request shall state the intended method of
disposition of the Registrable Securities by the Investor if the intended method
of disposition is inconsistent with the Company’s plan of distribution stated
therein.
(b) Underwriting. If
the registration of which the Company gives notice is for a registered public
offering involving an underwriting, the Company shall so advise the Investor as
a part of the written notice given pursuant to Section 1.3(a)(i). In
such event the right of the Investor to registration pursuant to this Section 1.3
shall be conditioned upon the Investor’s participation in the underwritten
offering and the inclusion of Registrable Securities in the underwritten
offering to the extent provided herein. The Investor shall enter into
an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company. Notwithstanding any
other provision of this Section 1.3, if
the managing underwriter determines that marketing factors require a limitation
of the number of shares to be underwritten, the managing underwriter may limit
the Registrable Securities and other securities to be included in the
registration. The Company shall so advise the Investor in writing and
the number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated first to the shares desired to
be sold by the Company (if the registration has been initiated by the Company)
and thereafter any additional shares that may be included in the offering shall
be allocated to the Investor pro rata in accordance with the number of shares
requested to be included; provided, that if the
Note or any PIK Note is then outstanding, at least 35% of the Common Stock in
such offering shall be Registrable Securities held by the Investor to the extent
Investor holds an adequate number of shares. To facilitate the
allocation of shares in accordance with the above provisions, the Company may
round the number of shares allocated to the Investor to the nearest one
hundred (100) shares. If the Investor disapproves of the terms
of the underwriting, the Investor may elect to withdraw therefrom by written
notice to the Company and the managing underwriter, in which case such
withdrawal or request for registration shall not count as a registration of
Registrable Securities hereunder.
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(c) Right to Terminate
Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 1.3
prior to the effectiveness of the registration whether or not the Investor has
elected to include Registrable Securities in the registration; provided, however, if the
Investor elects to use one of the demand registration rights pursuant to Section 1.2
hereof, then the registration shall be governed by Section 1.2 and
it shall not be terminated by the Company without the consent of the
Investor.
1.4 Registrations on Form
S-3.
(a) Request for
Registration. If at any time or from time to time, the
Investor requests that the Company file a registration statement on Form S-3 (or
any successor form to Form S-3) for a public offering of shares of the
Registrable Securities with a reasonably anticipated aggregate price to the
public of at least $1,000,000, and the Company is a registrant entitled to use
Form S-3 to register such Registrable Securities for that type of offering, the
Company will use its best efforts to cause such Registrable Securities to be
registered for the offering on that form and to cause those Registrable
Securities to be qualified in those jurisdictions as the Investor may reasonably
request.
The
substantive provisions of Section 1.2(b)
shall be applicable to each such registration initiated under this Section 1.4
involving an underwriting.
(b) Limitations. Notwithstanding
the foregoing, the Company shall not be obligated to take any action pursuant to
this Section 1.4:
(i) prior
to one hundred twenty (120) days following the date hereof;
(ii) in
any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting a registration, qualification
or compliance, unless the Company is already subject to service in that
jurisdiction and except as may be required by the Securities Act;
(iii) if
the Company, within thirty (30) days of the receipt of a request under this
Section 1.4 from
the Investor for a registration under the terms of this Agreement relates, gives
notice of its bona fide intention to effect the filing of a registration
statement with the Commission within ninety (90) days of receipt of such
requests (other than with respect to a Special Registration Statement), or gives
notice that it has filed such a registration statement which has not yet been
declared effective, in each case for so long as the Company continues to employ
reasonable good faith efforts to prepare and file such registration statement
(if not already filed) and to cause such registration statement to become
effective;
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(iv) if
the Company has completed such a registration within the prior ninety (90)
days; or
(v) if
the Company shall furnish to the Investor a certificate signed by the Chief
Executive Officer of the Company stating that in the good faith judgment of the
Board it would be seriously detrimental to the Company or its stockholders for a
registration statement to then be filed, then the Company’s obligation to use
its best efforts to file a registration statement shall be deferred for a period
not to exceed ninety (90) days from the receipt of requests by the Investor
to file the registration; provided, however, that the
Company shall not utilize this right more than once in any 12-month
period.
1.5 Expenses of
Registration.
(a) Registration
Expenses. The Company shall bear all Registration Expenses
incurred in connection with all registrations pursuant to Sections 1.2,
Section 1.3 and
Section 1.4. With
respect to a registration under either Section 1.2 or
Section 1.4, in
the event the Investor withdraws a registration request for a registered public
offering involving an underwriting, abandons a registration statement or,
following an effective registration pursuant to Section 1.2
hereof, does not sell Registrable Securities, then all Registration Expenses in
respect of such registration request shall be borne by the Investor; provided, that, if at
the time of such withdrawal, the Investor has learned of a material adverse
change in the condition, business, or prospects of the Company from that known
to the Investor at the time of its request and has withdrawn the request with
reasonable promptness following disclosure by the Company of such material
adverse change, then all Registration Expenses in respect of such registration
request shall be borne by the Company.
(b) Selling
Expenses. Unless otherwise stated, all Selling Expenses
relating to Registrable Securities registered on behalf of the Investor shall be
borne by the Investor.
1.6 Registration and
Qualification. If and whenever the Company is required to use
its best efforts to effect the registration of any Registrable Securities under
the Securities Act pursuant to this Agreement, the Company will as expeditiously
as is practicable:
(a) prepare
and file with the Commission, as soon as practicable, and use all commercially
reasonable efforts to cause to become effective, a registration statement under
the Securities Act relating to the Registrable Securities to be offered on the
form as the Investor, or if not filed pursuant to Section 1.2 or
Section 1.4
hereof, the Company, may determine and for which the Company then
qualifies;
(b) prepare
and file with the Commission any amendments (including post-effective
amendments) and supplements to the registration statement and the prospectus
used in connection therewith as may be necessary to keep the registration
statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities until the earlier of
the time that all of the Registrable Securities have been disposed of in
accordance with the intended methods of disposition set forth in the
registration statement or the expiration of one hundred eighty (180) days
after the registration statement becomes effective; provided, that this
180-day period shall be extended in the case of a registration pursuant to Section 1.2
hereof for that number of days that equals the number of days elapsing from
(i) the date the written notice contemplated by Section 1.6(f)
hereof is given by the Company to (ii) the date on which the Company
delivers to the Investor the supplement or amendment contemplated by Section 1.6(f)
hereof; provided, further, that upon
receipt of such notice from the Company, sellers of the Registrable Securities
covered by such registration statement shall discontinue disposition of such
Registrable Securities until the delivery by the Company to the Investor of the
supplement or amendment contemplated by Section 1.6(f)
hereof;
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(c) furnish
to each seller of Registrable Securities covered by such registration statement
and to any underwriter of Registrable Securities that number of conformed copies
of the registration statement and of each amendment and supplement thereto (in
each case including all exhibits), that number of copies of the prospectus
included in the registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, those documents incorporated by reference in such registration
statement or prospectus, and any other documents, as such seller or the
underwriter may reasonably request;
(d) make
every commercially reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the registration statement at the earliest
possible moment;
(e) if
requested by the Investor in any underwritten offering, (i) furnish to the
Investor an opinion of counsel for the Company addressed to the Investor and
dated the date of the closing under the underwriting agreement (if any) (or if
the offering is not underwritten, dated the effective date of the registration
statement), and (ii) use its best efforts to furnish to the Investor a
“comfort” or “special procedures” letter addressed to the Investor and signed by
the independent public accountants who have audited the Company’s financial
statements included in the registration statement, in each case covering
substantially the same matters with respect to the registration statement (and
the prospectus included therein) as are customarily covered in opinions of
issuer’s counsel and in accountants’ letters delivered to underwriters in
underwritten public offerings of securities and any other matters as the
Investor may reasonably request and, in the case of the accountants’ letter,
with respect to events subsequent to the date of such financial
statements;
(f) immediately
notify the Investor in writing (i) at any time when a prospectus relating to a
registration hereunder is required to be delivered under the Securities Act of
the happening of any event as a result of which the prospectus included in the
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state 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, and (ii) of any request by the Commission
or any other regulatory body or other body having jurisdiction for any amendment
of or supplement to any registration statement or other document relating to the
offering, and in either case (i) or (ii), at the request of the Investor,
prepare and furnish to the Investor a reasonable number of copies of a
supplement to or an amendment of the prospectus as may be necessary so that, as
thereafter delivered to the purchasers of the Registrable Securities, that
prospectus shall not include 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 are made, not
misleading;
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(g) use
its commercially reasonable efforts to list all Registrable Securities covered
by a registration statement on each securities exchange and inter-dealer
quotation system on which a class of common equity securities of the Company is
then listed, and to pay all fees and expenses in connection
therewith;
(h) upon
the transfer of shares by the Investor in connection with a registration
hereunder, furnish unlegended certificates representing ownership of the
Registrable Securities being sought in denominations as shall be requested by
the Investor or the underwriters;
(i) use
its commercially reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Investor,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions;
(j) in
the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering; and
(k) provide
a transfer agent and registrar for all Registrable Securities registered
pursuant hereunder and a CUSIP number for all such Registrable Securities, in
each case not later than the effective date of such registration.
1.7 Indemnification.
(a) By the
Company. The Company will indemnify and hold harmless the
Investor, each of its partners, principals, affiliates, officers and directors,
and each person controlling the Investor within the meaning of Section 15
of the Securities Act, with respect to whom registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls any underwriter within the meaning of
Section 15 of the Securities Act, against all fees, expenses, costs,
claims, losses, damages or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any registration, qualification or compliance,
or based on any omission (or alleged omission) to state therein 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, or any
violation by the Company of the Securities Act or any rule or regulation
promulgated under the Securities Act applicable to the Company in connection
with a registration, qualification or compliance, and the Company will reimburse
the Investor, and each of its partners, principals, affiliates, officers and
directors, each person controlling the Investor, and each underwriter and each
person who controls any underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending any
claim, loss, damage, liability or action; provided, that the
Company will not be liable in any case to the extent that any claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished by the Investor to the Company
by an instrument duly executed by the Investor specifically for inclusion in the
registration statement, prospectus, offering circular, or other documents,
amendment or supplement, as applicable. If the Investor is
represented by counsel other than counsel for the Company, the Company will not
be obligated under this Section 1.7(a)
to reimburse legal fees, costs and expenses of more than one separate counsel
for the Investor.
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(b) By the
Investor. The Investor will indemnify and hold harmless the
Company, each of its directors and officers, each underwriter, if any, of the
Company’s securities covered by such a registration statement, and each person
who controls the Company or an underwriter within the meaning of Section 15
of the Securities Act, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in a registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, directors, officers, underwriters or controlling persons for any
legal or any other fees, costs and expenses reasonably incurred in connection
with investigating or defending any claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that the untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in the
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished by the
Investor by an instrument duly executed by the Investor and stated to be
specifically for inclusion therein. Notwithstanding the foregoing,
the liability of the Investor under this subsection (b) shall be limited in an
amount equal to the net proceeds from the Registrable Securities sold by such
Investor, unless such liability arises out of or is based on willful misconduct
or gross negligence by the Investor.
(c) Procedure for
Indemnification. Each party indemnified under
paragraph (a) or (b) of this Section 1.7 (the
“Indemnified
Party”) shall, promptly after receipt of notice of any claim or the
commencement of any action against such Indemnified Party in respect of which
indemnity may be sought, notify the party required to provide indemnification
(the “Indemnifying
Party”) in writing of the claim or the commencement thereof; provided, that the
failure of the Indemnified Party to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability it may have to an Indemnified
Party on account of the indemnity agreement contained in paragraph (a) or (b) of
this Section 1.7,
unless the Indemnifying Party was materially prejudiced by that failure, and in
no event shall relieve the Indemnifying Party from any other liability it may
have to that Indemnified Party. If any claim or action shall be
brought against an Indemnified Party, it shall notify the Indemnifying Party
thereof and the Indemnifying Party shall be entitled to participate therein,
and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of any claim or action, the Indemnifying Party shall not be liable
(except to the extent the proviso to this sentence is applicable, in which event
it will be so liable) to the Indemnified Party under this Section 1.7 for
any legal or other fees, costs or expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation; provided, that each
Indemnified Party shall have the right to employ separate counsel to represent
it and assume its defense (in which case, the Indemnifying Party shall not
represent it) if (i) upon the advice of counsel, the representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, or (ii) in the event the Indemnifying
Party has not assumed the defense thereof within ten (10) days of receipt
of notice of such claim or commencement of action, and in each case the fees and
expenses of one such separate counsel shall be paid by the Indemnifying
Party. If any Indemnified Party employs such separate counsel, it
will not enter into any settlement agreement not approved by the Indemnifying
Party, whose approval is not to be unreasonably withheld. If the
Indemnifying Party so assumes the defense thereof, it may not agree to any
settlement of any claim or action as the result of which any remedy or relief,
other than monetary damages for which the Indemnifying Party shall be
responsible hereunder, shall be applied to or against the Indemnified Party,
without the prior written consent of the Indemnified Party. In any
action hereunder as to which the Indemnifying Party has assumed the defense
thereof with counsel reasonably satisfactory to the Indemnified Party, the
Indemnified Party shall continue to be entitled to participate in the defense
thereof, with counsel of its own choice, but, except as set forth above, the
Indemnifying Party shall not be obligated hereunder to reimburse the Indemnified
Party for the costs thereof.
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If the
indemnification provided for in this Section 1.7
shall for any reason be unavailable to an Indemnified Party in respect of any
loss, claim, damage or liability, or any action in respect thereof, referred to
therein, then each Indemnifying Party shall, in lieu of indemnifying that
Indemnified Party, contribute to the amount paid or payable by that Indemnified
Party as a result of the loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other with respect to the statements or omissions that resulted in the loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied specifically for inclusion in any registration
statement, prospectus, offering circular or other similar document by the
Indemnifying Party on the one hand or the Indemnified Party on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission, but not by
reference to any Indemnified Party’s stock ownership in the
Company. In no event, however, shall the Investor be required to
contribute in excess of the amount of the net proceeds received by the Investor
in connection with the sale of Registrable Securities in the offering that is
the subject of the loss, claim, damage or liability. The amount paid
or payable by an Indemnified Party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this paragraph
shall be deemed to include, for purposes of this paragraph, any legal or other
expenses reasonably incurred by the Indemnified Party in connection with
investigating or defending the action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 12(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of a fraudulent misrepresentation.
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(d) Conflict with Underwriting
Agreement. Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
1.8 Information by the
Investor. The Investor shall furnish to the Company that
information regarding the Investor as shall be necessary to enable the Company
to comply with the provisions hereof in connection with any registration,
qualification or compliance referred to in this Agreement.
1.9 Rule 144
Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may at any time permit the
sale of restricted securities to the public without registration or pursuant to
a registration statement on Form S-3, the Company agrees to use its best efforts
to, within one hundred twenty (120) days following the date
hereof:
(a) make
and keep public information available, as those terms are understood and defined
in Rule 144 under the Securities Act, at all times after the effective date that
the Company becomes subject to the reporting requirements of the Securities Act
or the Securities Exchange Act of 1934, as amended (the “Exchange
Act”);
(b) file
with the Commission in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act (at any time after
it has become subject to such reporting requirements);
(c) furnish
to the Investor forthwith upon request a written statement by the Company that
it qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies) or as to its compliance with the reporting
requirements of Rule 144, and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company and other information in the
possession of or reasonably obtainable by the Company as the Investor may
reasonably request in availing itself of any rule or regulation of the
Commission allowing the Investor to sell any securities without registration;
and
(d) take
such action, including the voluntary registration of its Common Stock under
Section 12 of the Exchange Act, as is necessary to enable each Investor to
utilize Form S-3 for the sale of its Registrable Securities, such action to be
taken as soon as practicable after the end of the fiscal year in which the first
registration statement filed by the Company for the offering of its securities
to the general public is declared effective.
11
1.10 Transfer of Registration
Rights. The rights to cause the Company to register securities
granted to the Investor under Section 1.2,
Section 1.3 and
Section 1.4 may
be assigned in connection with any transfer or assignment of Registrable
Securities (and only with respect to the transferred Registrable Securities) by
the Investor provided that: (a) the transfer may otherwise be
effected in accordance with applicable securities laws; (b) the transfer is
effected in compliance with the restrictions on transfer contained in this
Agreement and in any other agreement between the Company and the Investor; and
(c) the assignee or transferee receives at least five percent (5%) of
the outstanding Common Stock and agrees in writing to be bound by the terms of
this Agreement and assumes all of the obligations of the Investor
hereunder. For purposes of determining the percentage of shares
transferred, the shares owned by the Investor shall be aggregated with the
shares owned by the Affiliates of the Investor. Subject to the terms
of Section 1.12
below, no transfer or assignment will divest the Investor or any subsequent
owner of those rights and powers with respect to the shares of Registrable
Securities still held, unless all Registrable Securities are transferred or
assigned and at such time the transferring Investor has no claims for
indemnification or contribution pending and no factual basis for such claims
exist (whether or not know to the Investor). Notwithstanding the
foregoing, the Investor may transfer its rights hereunder to an affiliate
without regard to the minimum number of shares specified in clause (c)
above. Any permitted transferee shall be an “Investor” for purposes
of this Agreement.
1.11 No Registration Rights to
Third Parties. Without the prior written consent of the
Investor, the Company covenants and agrees that it shall not grant, or cause or
permit to be created, for the benefit of any person or entity any registration
rights of any kind (whether similar to the demand, “piggyback” or Form S-3
registration rights described in this Section 1, or
otherwise) relating to shares of the Company’s Common Stock or any other
securities of the Company, other than rights that are subordinate to the
Investor’s rights to include all of the Registrable Securities owned by the
Investor in any registration statement prior to any such person having the right
to include any securities of the Company owned by them in such registration
statement.
1.12 Termination of Registration
Rights. The registration rights granted in Sections 1.2,
Section 1.3 and
Section 1.4
shall terminate, with respect to the Investor, at such time as (a) all
Registrable Securities held by the Investor can be sold pursuant to Rule 144
without compliance with the registration requirements of the Securities Act, or
(b) all Registrable Securities held by the Investor constitute less than
five percent (5%) of the voting securities of the Company (on an
as-converted basis) and can be sold pursuant to Rule 144 within a consecutive
three month period without compliance with the registration requirements of the
Securities Act. The respective indemnities, representations and
warranties of the Investor and the Company shall survive a termination of
registration rights by reason of this Section 1.12,
with respect to any registration of Registrable Securities effected under this
Agreement prior to such termination.
2. Miscellaneous.
2.1 “Market Stand-Off”
Agreement; Agreement to Furnish Information. The Investor
agrees not to sell, transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction with the same
economic effect as a sale of, any Common Stock (or other securities) of the
Company held by the Investor (other than those included in the registration) for
a period specified by the representative of the underwriters of Common Stock (or
other securities) of the Company not to exceed one hundred eighty (180)
days following the effective date of a registration statement of the Company
filed under the Securities Act; provided, that all
executive officers and directors of the Company and all other holders of at
least three percent (3%) of the outstanding equity securities of the
Company enter into similar agreements.
12
The
Investor shall not be subject to this Section 2.1 in
the event that the Company or any underwriter has released any executive
officer, director or holder of three percent (3%) or more of the equity
securities of the Company from the provisions of this Section 2.1. The Investor
agrees to execute and deliver such other agreements as may be reasonably
requested by the Company or the underwriter which are consistent with the
foregoing or which are necessary to give further effect thereto. In addition, if
requested by the Company or the representative of the underwriters of Common
Stock (or other securities) of the Company, the Investor shall provide, within
twenty (20) days of such request, such information as may be required by
the Company or such representative in connection with the completion of any
public offering of the Company’s securities pursuant to a registration statement
filed under the Securities Act. The obligations described in this
Section 2.1
shall not apply to a registration pursuant to a Special Registration
Statement. The Company may impose stop-transfer instructions with
respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of said one hundred eighty (180) day
period. The Investor agrees that any transferee of any shares of
Registrable Securities shall be bound by this Section 2.1.
2.2 Waivers and
Amendments. With the written consent of the Company and the
Investor, the obligations of the Company and the rights of the Investor under
this Agreement may be waived (either generally or in a particular instance,
either retroactively or prospectively and either for a specified period of time
or indefinitely), and with the same consent, the Company, when authorized by
resolution of the Board, may amend this Agreement or enter into a supplementary
agreement for the purpose of adding any provisions to this
Agreement. Neither this Agreement nor any provisions hereof may be
changed, waived, discharged or terminated orally, but only by a signed statement
in writing. Any amendment, waiver or supplementary agreement effected
in accordance with this paragraph shall be binding upon the Investor and each
future holder of Registrable Securities. Notwithstanding the
foregoing, it shall not be deemed an amendment to make subsequent purchasers of
Common Stock who purchased such Common Stock directly from the Company parties
to this Agreement only for purposes of Section 1.3.
2.3 Notices. All
notices, requests, demands and other communications which are required or may be
given under this Agreement shall be in writing and shall be deemed to have been
duly given at the earliest of (i) the date received, or
(ii) one (1) Business Day after being sent by a nationally recognized
overnight courier for next Business Day delivery, with receipt acknowledged, or
(iii) five (5) Business Days after being mailed, postage prepaid, by
certified mail, return receipt requested, addressed to the parties hereto as
specified in the Annex 1 or to
such other address or addresses as the Investor or the Company, as the case may
be, may specify by written notice given in accordance with this Section 2.3.
2.4 Descriptive
Headings. The descriptive headings herein have been inserted
for convenience only and shall not be deemed to limit or otherwise affect the
construction of any provisions hereof.
2.5 Governing
Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT REGARD TO THE
CHOICE OF LAW OR CONFLICTS OF LAW PROVISIONS THEREOF) AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
13
2.6 Counterparts. This
Agreement may be executed in two or more counterparts and by facsimile or PDF
signature, each of which shall be deemed to be an original, and all of which
together shall constitute one instrument.
2.7 Expenses. If
any action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney’s
fees, costs, expenses and necessary disbursements in addition to any other
relief to which such party may be entitled.
2.8 Successors and
Assigns. Except as otherwise expressly provided in this
Agreement, this Agreement shall benefit and bind the successors, assigns, heirs,
executors and administrators of the parties to this Agreement.
2.9 Entire
Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter of this Agreement.
2.10 Severability. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall be severable and, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.
2.11 Stock
Splits. All references to numbers of shares in this Agreement
shall be appropriately adjusted to reflect any stock dividend, split,
combination or other recapitalization of shares by the Company occurring after
the date of this Agreement.
2.12 Waiver of Trial by
Jury. TO THE EXTENT PERMITTED BY AND ENFORCEABLE UNDER
APPLICABLE LAW, EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, COUNTERCLAIM OR OTHER
PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF,
CONNECTED WITH OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, OR THE ACTIONS OF THE COMPANY OR THE INVESTOR IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF, REGARDLESS OF
WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
2.13 Interpretation. No
provision of this Agreement shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
14
2.14 Consent to
Forum. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED,
AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS
OF THE COMPANY OR ANY OTHER PARTY HERETO, EACH PARTY HERETO HEREBY CONSENTS AND
AGREES THAT THE SUPERIOR COURT OF LOS ANGELES COUNTY, CALIFORNIA, OR, AT
THE INVESTOR’S OPTION, THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT
OF CALIFORNIA, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES PERTAINING TO THIS AGREEMENT OR ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT. EACH PARTY HERETO EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION WHICH EACH PARTY
HERETO MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY
HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY CERTIFIED MAIL ADDRESSED TO
SUCH PARTY AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE
SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY’S ACTUAL RECEIPT
THEREOF OR FIVE DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE
PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
AFFECT THE RIGHT OF ANY INVESTOR TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY THE INVESTOR OF ANY JUDGMENT
OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT
TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
[signature pages
follow]
15
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
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By:
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/s/Xxxxxx Xxxxxx
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||
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Name:
Title:
|
Xxxxxx Xxxxxx
Chief Executive
Officer
|
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||||
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By:
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/s/Xxxx X.
Xxxxx
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Name:
Title:
|
Xxxx X. Xxxxx
Chairman
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ANNEX
1
Notice
Addresses
If to the
Investor, to:
Vintage
Capital Group, LLC
00000 Xxx
Xxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx,
XX 00000
|
Attention:
|
Xxxxxx
Xxxxxxx
|
|
Telephone:
|
(000)
000-0000
|
|
Facsimile:
|
(000)
000-0000
|
|
E-Mail:
|
xxxxxxxx@xxxxxxx-xxx.xxx
|
With a
copy to:
Klee,
Tuchin, Xxxxxxxxx & Xxxxx LLP
1999
Avenue of the Stars, 00xx Xxxxx
Xxx
Xxxxxxx, XX 00000
|
Attention:
|
Xxxx
X. Xxxxxx
|
|
Telephone:
|
(000)
000-0000
|
|
Facsimile:
|
(000)
000-0000
|
|
E-Mail:
|
XXxxxxx@xxxxxxx.xxx
|
If to the
Company, to:
Caprius,
Inc.
00 Xxxxxx
Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
|
Attention:
|
Xxxxxx
Xxxxxx
|
|
Telephone:
|
(000)
000-0000
|
|
Facsimile:
|
(000)
000-0000
|
|
E-Mail:
|
xxxxxxx@xxxxxxxx.xxx
|
With a
copy to:
Xxxxxx
Xxxxxxx & Xxxxxxx LLP
0 Xxxx
Xxxxxx
Xxx Xxxx,
XX 00000
|
Attention:
|
Xxxxx
X. Xxxx
|
|
Telephone:
|
(000)
000-0000
|
|
Facsimile:
|
(000)
000-0000
|
|
E-Mail:
|
xxxx@xxx.xxx
|
