Ex. 10-8
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of the 23rd day of January, 2002 between Vantage
Holdings I, LLC, a Delaware limited liability company ("Holder") and Hand Brand
Distribution Inc., a Florida corporation (the "Company").
RECITALS
A. Simultaneously with the execution and delivery of this Agreement, the
Holder is acquiring 1,783,950 shares of the Company's common stock ("Shares")
pursuant to a Stock Purchase Agreement ("SPA") between the Holder and the
Company.
B. The Company desires to grant to the Holder the registration rights set
forth herein with respect to the Shares and but for the granting of such rights,
the Holder would not have entered into the SPA.
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. REGISTRABLE SECURITIES. As used herein the term "Registrable Security"
means each of the Shares; provided, however, that with respect to any particular
Registrable Security, such security shall cease to be a Registrable Security
when, as of the date of determination, (i) it has been effectively registered
under the Securities Act of 1933, as amended (the "Securities Act") and disposed
of pursuant thereto, or (ii) registration under the Securities Act is no longer
required for the immediate public distribution of such security. The term
"Registrable Securities" means any and/or all of the securities falling within
the foregoing definition of a "Registrable Security." In the event of any
merger, reorganization, consolidation, recapitalization or other change in
corporate structure affecting the Common Stock, such adjustment shall be made in
the definition of "Registrable Security" as is appropriate in order to prevent
any dilution or enlargement of the rights granted pursuant to this Article 1.
2. PIGGYBACK REGISTRATION.
a. If, at any time, the Company proposes to prepare and file
with the Securities and Exchange Commission (the "Commission") a registration
statement covering equity or debt securities of the Company, or any such
securities of the Company held by its shareholders (in any such case, other than
in connection with a merger, acquisition or pursuant to Form S-8 or successor
form) (for purposes of this Article 2, collectively, a "Registration
Statement"), it will give written notice of its intention to do so by registered
mail ("Notice"), at least thirty (30) days prior to the filing of each such
Registration Statement, to the holder of the Registrable Securities. Upon the
written request of such a holder (a "Requesting Holder"), made within twenty
(20) days after receipt of the Notice, that the Company include any of the
Requesting Holder's Registrable Securities in the proposed Registration
Statement, the Company shall use its best efforts to effect the registration
under the Securities Act of the Registrable Securities which it has been so
requested to register ("Piggyback Registration"), at the Company's sole cost and
expense and at no cost or expense to the Holder except as provided in Section
4(b) hereof.
b. The Company agrees to include the shares in its registration
statement to be filed with the Securities and Exchange Commission in connection
with its equity line credit facility with Prima Capital Growth LLC.
3. DEMAND REGISTRATION. At any time commencing on June 30, 2002, the
Holder of the Registrable Securities shall have the right (which right is in
addition to the piggyback registration rights provided for under Article 2
hereof), exercisable by written notice to the Company (the "Demand Registration
Request"), to have the Company prepare and file with the Commission, on one
occasion, at the sole expense of the Company (except as provided in Section 4(b)
hereof), in respect of all holders of Registrable Securities, a Registration
Statement so as to permit a public offering and sale of the Registrable
Securities. Once effective, the Company will be required to maintain the
effectiveness of the Registration Statement until the earlier of (i) the date
that all of the Registrable Securities have been sold, or (ii) the date that all
holders of Registrable Securities receive an opinion of counsel to the Company
that all of the Registrable Securities may be freely traded without registration
under the Securities Act, under Rule 144 promulgated under the Securities Act or
otherwise.
4. COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. The Company
covenants and agrees as follows:
a. In connection with any registration under Article 3 hereof,
the Company shall use its best efforts to file the Registration Statement as
expeditiously as possible, but in no event later than thirty (30) days following
receipt of any demand therefor. The Company shall use its best efforts to cause
the Registration Statement to become effective as promptly as possible and, if
any stop order shall be issued by the Commission in connection therewith, to use
its reasonable efforts to obtain the removal of such order. Following the
effective date of a Registration Statement, the Company shall, upon the request
of the Holder, forthwith supply such reasonable number of copies of the
Registration Statement, preliminary prospectus and prospectus meeting the
requirements of the Securities Act, and other documents necessary or incidental
to the public offering of the Registrable Securities, as shall be reasonably
requested by the Holder to permit the Holder to make a public distribution of
the Holder's Registrable Securities. The obligations of the Company hereunder
with respect to the Holder's Registrable Securities are subject to the Holder's
furnishing to the Company such appropriate information concerning the Holder,
the Holder's Registrable Securities and the terms of the Holder's offering of
such Registrable Securities as the Company may reasonably request in writing.
b. Notwithstanding the provision under Section 4(a) hereof, if,
at the time the Demand Registration Request is given to the Company under
Article 3 hereof, the Company is negotiating a merger, consolidation,
acquisition or sale of all or substantially all of its assets or similar
transaction and in the written opinion of counsel to the Company, the
Registration Statement would be required to include information concerning such
transactions or the parties thereto that is not available at the time, the
Company shall promptly so advise the holder of the Registrable Securities and,
at the Company's election, to be set forth in such notice ("Notice of
Postponement"), the filing of the Registration Statement may be postponed for a
period not to exceed ninety (90) days from the date the Demand Registration
Request is given to the Company under Article 3 hereof (notwithstanding the
provisions of Section 4(a) to the contrary); provided,
however, that the Company shall not be permitted to give any such Notice of
Postponement and to so postpone the filing of the Registration Statement more
than once in any 365 day period; and provided, further, that in the event of
such postponement, the Holder may withdraw the notice of Demand Registration
during the 60-day period following the date Notice of Postponement is given by
the Company and will thereafter continue to be entitled to one (1) Demand
Registration Request pursuant to Article 3 hereof.
c. The Company shall pay all costs, fees and expenses in
connection with all Registration Statements filed pursuant to Article 2 or
Article 3 hereof including, without limitation, the Company's legal and
accounting fees, printing expenses, and blue sky fees and expenses; provided,
however, that the Holder shall be solely responsible for the fees of any counsel
retained by the Holder in connection with such registration and any transfer
taxes or underwriting discounts, commissions or fees applicable to the
Registrable Securities sold by the Holder pursuant thereto.
d. The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities included in a
Registration Statement for offering and sale under the securities or blue sky
laws of such states as are reasonably requested by the holders of such
securities, provided that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify as a foreign corporation
to do business under the laws of any such jurisdiction.
5. ADDITIONAL TERMS.
a. The Company shall indemnify and hold harmless the Holder and
each underwriter, within the meaning of the Securities Act, who may purchase
from or sell for the Holder, any Registrable Securities, from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
of a material fact contained in the Registration Statement, any other
registration statement filed by the Company under the Securities Act with
respect to the registration of the Registrable Securities, any post-effective
amendment to such registration statements, or any prospectus included therein or
caused by any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission based upon information furnished or required to be
furnished in writing to the Company by the Holder or underwriter expressly for
use therein, which indemnification shall include each person, if any, who
controls either the Holder or underwriter within the meaning of the Securities
Act and each officer, director, employee and agent of the Holder and
underwriter; provided, however, that the indemnification in this Section 5(a)
with respect to any prospectus shall not inure to the benefit of the Holder or
underwriter (or to the benefit of any person controlling the Holder or
underwriter) on account of any such loss, claim, damage or liability arising
from the sale of Registrable Securities by the Holder or underwriter, if a copy
of a subsequent prospectus correcting the untrue statement or omission in such
earlier prospectus was provided to the Holder or underwriter by the Company
prior to the subject sale and the subsequent prospectus was not delivered or
sent by the Holder or underwriter to the purchaser prior to such sale and
provided further, that the Company shall not be obligated to so indemnify the
Holder or any such underwriter or other person referred to above unless the
Holder or underwriter or other person, as the case may be, shall at the same
time indemnify the Company, its directors, each officer signing the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact contained in the
Registration Statement, any registration statement or any prospectus required to
be filed or furnished by reason of this Agreement or caused by any omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or omission based upon
information furnished in writing to the Company by the Holder or underwriter
expressly for use therein.
b. If for any reason the indemnification provided for in the
preceding section is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, claim, damage, liability or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.
c. Neither the filing of a Registration Statement by the Company
pursuant to this Agreement nor the making of any request for prospectuses by the
Holder shall impose upon the Holder any obligation to sell the Holder's
Registrable Securities.
d. The Holder, upon receipt of notice from the Company that an
event has occurred which requires a Post-Effective Amendment to the Registration
Statement or a supplement to the prospectus included therein, shall promptly
discontinue the sale of Registrable Securities until the Holder receives a copy
of a supplemented or amended prospectus from the Company, which the Company
shall provide as soon as practicable after such notice.
e. If the Company fails to keep the Registration Statement
referred to in Article 3 above continuously effective during the requisite
period, then the Company shall, promptly upon the request of the Holders of at
least a majority of the unsold Registrable Securities, use its best efforts to
update the Registration Statement or file a new registration statement covering
the Registrable Securities remaining unsold, subject to the terms and provisions
hereof.
f. The Holder agrees to provide the Company with any information
or undertakings reasonably requested by the Company in order for the Company to
include any appropriate information concerning the Holder in the Registration
Statement or in order to promote compliance by the Company or the Holders with
the Securities Act.
6. MISCELLANEOUS.
a. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. THE
COMPANY AND THE INVESTOR EACH WAIVES AND AGREES NOT TO ASSERT IN ANY SUCH,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER. NOTHING IN THIS SECTION SHALL AFFECT OR LIMIT ANY RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
b. Submission to Jurisdiction. Any proceeding with respect to the
interpretation of this Agreement or the rights and obligations of the parties
shall be exclusively brought in the United States District Court for the
Southern District of New York or if such Court lacks subject matter
jurisdiction, in the Supreme Court of the State of New York, County of New York.
Each of the Company and the Investor waives the right to object to the
jurisdiction of either of such courts or the right to claim it is an
inconvenient forum. Each of the parties waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same. Each of the parties agrees that service
of process in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to it at its address set forth in this Agreement or at
such other address as may have been furnished in writing to the other parties.
In any action or proceeding arising out of this Agreement, the prevailing party
in such action or proceeding shall be entitled to recover from the other party
thereto the reasonable attorneys' fees, including one or more appeals, court
costs, filing fees, publication costs and other expenses incurred by the
prevailing party.
c. EACH OF THE COMPANY AND THE INVESTOR HEREBY IRREVOCABLY WAIVES
UNCONDITIONALLY TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN
CLAUSE (a) ABOVE.
d. Amendment. This Agreement may only be amended by a written
instrument executed by the Company and the Holder.
e. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.
f. Execution in Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
g. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly given when
delivered by hand, facsimile (with original to follow) or mailed by registered
or certified mail, postage prepaid, return receipt requested, to the address set
forth on the signature page.
h. Binding Effect; Benefits. The Holder may assign his or her
rights hereunder. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their
respective heirs, legal representatives and successors. Nothing herein
contained, express or implied, is intended to confer upon any person other than
the parties hereto and their respective heirs, legal representatives and
successors, any rights or remedies under or by reason of this Agreement.
i. Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
j. Severability. Any provision of this Agreement which is held by
a court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
THE COMPANY:
HAND BRAND DISTRIBUTION INC.
BY:/s/
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Xxxx Xxxxxxx, President
VANTAGE HOLDINGS I, LLC.
BY:/s/
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Xxxxxx Xxxxxxxx, Managing Member
