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EXHIBIT 4.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of the 29th day
of May, 1998, among the entities listed on Schedule A (collectively referred to
as the "Holders"), and FRESH'N LITE, INC., a corporation
incorporated under the laws of the State of Texas, and having its principle
place of business at 0000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 (the "Company").
WHEREAS, the Holders are purchasing from the Company, pursuant
to a 6% Convertible Debenture Subscription Agreement dated the date hereof (the
"Subscription Agreement"), an aggregate of up to Three Million ($3,000,000)
Dollars principal amount of the Company's Convertible Debenture (each a
"Debenture") in two separate tranches, and a warrant (the "Warrant")to purchase
one hundred fifty thousand (150,000) shares of the Company's common stock, par
value $0.01 per share (each a share of "Common Stock"); and
WHEREAS, the Company desires to grant to the Holders the
registration rights set forth herein with respect to the shares of Common Stock
underlying the Debentures and Warrants (such shares of Common Stock
collectively hereinafter referred to as the "Stock" or "Securities" of the
Company).
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. Registrable Securities. As used herein the
term "Registrable Security" means the Securities; 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 sold, transferred or otherwise disposed of pursuant
thereto, (ii) registration under the Securities Act is no longer required for
the immediate public distribution of all of such security as a result of the
provisions of Rule 144 promulgated under the Securities Act, or (iii) it has
ceased to be outstanding. 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 Section 1.
Section 2. Restrictions on Transfer. The Holders acknowledge
and understand that prior to the registration of the Securities as provided
herein, the Securities are "restricted securities" as defined in Rule 144
promulgated under the Securities Act and may be "control securities" as defined
in Rule 144 promulgated under the Securities Act. The Holders understand that
no disposition or transfer of the Securities may be made by the Holders in the
absence of (i) an opinion of counsel to the Holders that such transfer may be
made without registration under the Securities Act or (ii) such registration.
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Section 3. Registration Rights.
(a) The Company agrees that it will prepare and
file with the Securities and Exchange Commission ("Commission"), within thirty
(30) days after the First Tranche Closing Date, a registration statement (on
Form X-0, XX-0 or SB-2, or other applicable registration statement) under the
Securities Act (the "Registration Statement"), at the sole expense of the
Company (except as provided in Section 3(c) hereof), in respect of the Holders
for resales under the Securities Act of the shares of Common Stock underlying
both the Debentures and the Warrants. The Company shall use its best efforts
to cause the Registration Statement to become effective within one hundred
twenty (120) days from the First Tranche Closing Date. The number of shares of
Common Stock designated in the Registration Statement to be registered shall be
two hundred (200%) percent of the number of shares of Common Stock that would
be required if all the Debentures and Warrants were converted or exercised on
the day before the filing of the Registration Statement.
(b) The Company will use commercially reasonable
efforts to maintain the effectiveness the Registration Statement or
post-effective amendment filed under this Section 3 hereof under the Securities
Act until the earlier of (i) the date that all of the Registrable Securities
have been sold pursuant to the Registration Statement, (ii) the date the
holders thereof receive an opinion of counsel that all of the Registrable
Securities may be sold under the provisions of Rule 144 or (iii) two years
after the First Tranche Closing Date.
(c) All fees, disbursements and out-of-pocket
expenses and costs incurred by the Company in connection with the preparation
and filing of the Registration Statement under subparagraph 3(a) and in
complying with applicable securities and Blue Sky laws (including, without
limitation, all attorneys' fees) shall be borne by the Company. Each Holder
shall bear the cost of underwriting discounts and commissions, if any,
applicable to the respective Registrable Securities being registered for resale
by such Holder, and the fees and expenses of such Holder's counsel.
(d) The Company shall not be required by this
Section 3 to include a Holder's Registrable Securities in any Registration
Statement which is to be filed if, in the opinion of counsel for all of the
Holders, and the Company (or, should they not agree, in the opinion of another
counsel experienced in securities law matters acceptable to counsel for the
Holders and the Company), the proposed offering or other transfer as to which
such registration is requested is exempt from applicable federal and state
securities laws and would result in all Investors or transferees obtaining
securities which are not "restricted securities", as defined in Rule 144 under
the Securities Act.
(e) In the event the Registration Statement to be
filed by the Company pursuant to Section 3(a) above is not filed with the
Commission within thirty (30) days after the First Tranche Closing Date and/or
the Registration Statement is not declared effective by the Commission within
one hundred twenty (120) days from the First Tranche Closing Date, and
provided that such non-filing or non-effectiveness is not due in part, or in
whole, to any Holder's failure to comply with Section 4 hereof, then the
Company will pay to the Holders (pro rated on a daily basis), as liquidated
damages for such failure and not as a penalty, two (2%) percent of
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the principal amount of the then outstanding Debentures for every thirty (30)
day period until the Registration Statement has been filed and/or declared
effective. Such payment of the liquidated damages shall be made to the Holders
in cash, immediately upon written demand, provided, however, that the payment
of such liquidated damages shall not relieve the Company from its obligations
to register the Securities pursuant to this Section and registration shall not
relieve the Company from any obligation to pay liquidated damages, to the
extent any such obligation arose prior to the effective date of such
Registration Statement. The aforementioned liquidated damages shall cease to
accrue two years after the First Tranche Closing Date or on such earlier date
as that the Holders may rely on Rule 144 for the resale, without volume
limitation, of all of the Securities then held by the Holders.
If the Company does not remit the damages to the
Holders as set forth above, the Company will pay the Holders' reasonable costs
of collection, including reasonable attorney's fees, in addition to the
liquidated damages. The registration of the Securities pursuant to this
provision shall not affect or limit Holders' other rights or remedies as set
forth in this Agreement.
(f) No provision contained herein shall preclude
the Company from selling securities pursuant to any Registration Statement
relating to Registrable Securities pursuant to this Section 3.
(g) If at any time or from time to time after the
effective date of the Registration Statement, the Company notifies the Holders
in writing of the existence of a Potential Material Event (as defined in
Section 3(h) below), the Holders shall not offer or sell any Registrable
Securities or engage in any other transaction involving or relating to
Registrable Securities, from the time of the giving of notice with respect to a
Potential Material Event until such Holder receives written notice from the
Company that such Potential Material Event either has been disclosed to the
public or no longer constitutes a Potential Material Event; provided, however,
that the Company may not so suspend the right to such holders of Securities for
more than one (1) thirty (30) day period in the aggregate during any twelve
month period, during the period in which the Registration Statement is
required to be in effect. If a Potential Material Event shall occur prior to
the date the Registration Statement is filed, then the Company's obligation to
file the Registration Statement shall be delayed without penalty for not more
than thirty (30) days. The Company must give each Holder notice in writing at
least two (2) business days prior to the first day of the blackout period
relating to any Potential Material Event.
(h) "Potential Material Event" means any of the
following: (a) the possession by the Company of material information not ripe
for disclosure in a registration statement; or (b) any material engagement or
activity by the Company which would be adversely affected by disclosure in a
registration statement at such time, provided that in the absence of disclosure
of such material engagement or activity in the Registration Statement, such
Registration Statement reasonably could be deemed to be materially misleading
absent the inclusion of such information.
Section 4. Cooperation with Company. Each Holder will
cooperate with the Company in all respects in connection with this Agreement,
including timely supplying all
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information reasonably requested by the Company and executing and returning all
documents reasonably requested in connection with the registration and sale of
the Registrable Securities.
Section 5. Registration Procedures. If and whenever the
Company is required by any of the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Securities Act, the
Company shall (except as otherwise provided in this Agreement), as
expeditiously as possible:
(a) prepare and file with the Commission such
amendments and supplements to the Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all Securities covered by such
Registration Statement whenever the Holder of such Securities shall desire to
sell or otherwise dispose of the same (including prospectus supplements with
respect to the sales of securities from time to time in connection with a
Registration Statement pursuant to Rule 415 promulgated under the Securities
Act);
(b) furnish to each Holder such numbers of copies
of the Registration Statement (and any amendments thereto), a summary
prospectus or other prospectus, including a preliminary prospectus or any
amendment or supplement to any prospectus, in conformity with the requirements
of the Securities Act, and such other documents, as such Holder may reasonably
request in order to facilitate the public sale or other disposition of the
Securities owned by such Holder;
(c) register and qualify the Securities covered
by the Registration Statement under such other securities or blue sky laws of
such jurisdictions as the Holders shall reasonably request, and do any and all
other acts and things which may be necessary or advisable to enable each Holder
to consummate the public sale or other disposition in such jurisdiction of the
securities owned by such Holder, except that the Company shall not for any such
purpose be required to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified, or to file therein any general
consent to service of process, or to qualify any of the securities for sale in
any state which will require an escrow or other restriction relating to the
Company and/or sellers;
(d) list such Securities on the OTC Bulletin
Board or NASDAQ Small Cap Stock Market or other national securities exchange on
which any securities of the Company are then listed, if the listing of such
Securities is then permitted under the rules of such exchange or NASDAQ;
(e) notify each Holder of Registrable Securities
covered by the Registration Statement, at any time when a prospectus relating
thereto covered by the Registration Statement is required to be delivered under
the Securities Act, of the happening of any event of which the executive
officers of the Company have knowledge, 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 a material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing.
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Section 6. Indemnification.
(a) The Company agrees to indemnify and hold
harmless the Holders, and each officer, director or person, if any, who
controls each Holder within the meaning of the Securities Act ("Distributing
Holder") against any losses, claims, damages or liabilities, joint or several
(which shall, for all purposes of this Agreement, include, but not be limited
to, all costs of defense and investigation and all reasonable attorneys' fees),
to which the Distributing Holder may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, or any related preliminary prospectus, final prospectus, offering
circular, notification or amendment or supplement thereto, or arise out of or
are based upon 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; provided, however, that the Company (i) will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, preliminary
prospectus, final prospectus, offering circular, notification or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by the Distributing Holder, specifically
for use in the preparation thereof, or (ii) cannot pay any amounts paid in
settlement of any loss, claim, damage or liability if such settlement is
effected without the consent of the Company, which consent shall not be
unreasonably withheld. This Section 6(a) shall not inure to the benefit of any
Distributing Holder with respect to any person asserting such loss, claim,
damage or liability who purchased the Registrable Securities which are the
subject thereof if the Distributing Holder failed to send or give (in violation
of the Securities Act or the rules and regulations promulgated thereunder) a
copy of the prospectus contained in such Registration Statement to such person
at or prior to the written confirmation of such person of the sale of such
Registrable Securities, where the Distributing Holder was obligated to do so
under the Securities Act or the rules and regulations promulgated thereunder.
This indemnity provision will be in addition to any liability which the Company
may otherwise have.
(b) Each Distributing Holder agrees that it will
indemnify and hold harmless the Company, each officer, director, or person, if
any, who controls the Company within the meaning of the Securities Act (each a
"Company Indemnitee"), and each other Distributing Holder, against any losses,
claims, damages or liabilities, joint or several (which shall, for all purposes
of this Agreement, include, but not be limited to, all costs of defense and
investigation and all reasonable attorneys' fees) to which any Company
Indemnitee or other Distributing Holder may become subject under the
Securities Act or otherwise, insofar as such losses claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, or any related preliminary prospectus, final
prospectus, offering circular, notification or amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary
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to make the statements therein not misleading, but in each case 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, final prospectus, offering circular, notification or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by such Distributing Holder, specifically
for use in the preparation thereof. This indemnity provision will be in
addition to any liability which the Distributing Holder may otherwise have.
(c) Promptly after receipt by an indemnified
party under this Section 6 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than as to the particular item as to which
indemnification is then being sought solely pursuant to this Section 6. In
case any such action is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, assume the defense
thereof, subject to the provisions herein stated and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 6 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation, unless the indemnifying party shall not
pursue the action to its final conclusion. The indemnified party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall not be at
the expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the indemnified
party; provided that if the indemnified party is the Distributing Holder, the
fees and expenses of such counsel shall be at the expense of the indemnifying
party if (i) the employment of such counsel has been specifically authorized in
writing by the indemnifying party, or (ii) the named parties to any such action
(including any impleaded parties) include both the Distributing Holder and the
indemnifying party and the Distributing Holder shall have been advised by such
counsel that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any legal defenses which
may be available to the Distributing Holder (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf
of the Distributing Holder, it being understood, however, that the indemnifying
party shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable only for the
reasonable fees and expenses of one separate firm of attorneys for the
Distributing Holder, which firm shall be designated in writing by the
Distributing Holder). No settlement of any action against an indemnified party
shall be made without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld.
Section 7. Contribution. In order to provide for just
and equitable contribution under the Securities Act in any case in which (i)
the indemnified party makes a claim for indemnification pursuant to Section 6
hereof but is judicially determined (by the entry
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of a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that the express provisions of Section 6 hereof provide for indemnification in
such case, or (ii) contribution under the Securities Act may be required on the
part of any indemnified party, then the Company and the applicable Distributing
Holder shall contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees), in either such case (after contribution from others) on the
basis of relative fault 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 or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the applicable Distributing Holder
on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Distributing Holder agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 7. 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 7 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. 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 guilty of such
fraudulent misrepresentation.
Section 8. Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i)
personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery, telegram,
or facsimile, addressed as set forth below or to such other address as such
party shall have specified most recently by written notice. Any notice or
other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day
following the date of mailing by reputable courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:
If to Fresh'n Lite, Inc.:
Fresh'n Lite, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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If to the Holders at the addresses set forth on Schedule A attached
hereto.
Any party hereto may from time to time change its address or facsimile
number for notices under this Section by giving at least ten (10) days' prior
written notice of such changed address or facsimile number to the other party
hereto.
Section 9. Assignment. This Agreement is binding upon
and inures to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. In the event of a transfer of the rights
granted under this Agreement, the Holder agrees that the Company may require
that the transferee comply with reasonable conditions as determined in the
discretion of the Company.
Section 10. Counterparts; Facsimile; Amendments. This
Agreement may be executed in multiple counterparts, each of which may be
executed by less than all of the parties and shall be deemed to be an original
instrument which shall be enforceable against the parties actually executing
such counterparts and all of which together shall constitute one and the same
instrument. Except as otherwise stated herein, in lieu of the original
documents, a facsimile transmission or copy of the original documents shall be
as effective and enforceable as the original. This Agreement may be amended
only by a writing executed by all parties.
Section 11. Termination of Registration Rights. This
Agreement shall terminate as to each Holder (and permitted transferees or
assignees) upon the occurrence of any of the following:
(a) all Holder's Securities subject to this Agreement
have been registered;
(b) all of such Holder's Securities subject to this
Agreement may be sold without such registration pursuant to Rule 144
promulgated by the Commission pursuant to the Securities Act; and
(c) all of such Holder's Securities subject to this
Agreement can be sold pursuant to Rule 144(k) without limitation.
Section 12. Headings. The headings in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 13. Governing Law: Venue; Jurisdiction. This
Agreement will be construed and enforced in accordance with and governed by the
laws of the State of New York, except for matters arising under the Securities
Act, without reference to principles of conflicts of law. Each of the parties
consents to the jurisdiction of the U.S. District Court sitting in the
Southern District of the State of New York or the state courts of the State of
New York sitting in Manhattan in connection with any dispute arising under this
Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions. Each party hereby
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agrees that if another party to this Agreement obtains a judgment against it in
such a proceeding, the party which obtained such judgment may enforce same by
summary judgment in the courts of any country having jurisdiction over the
party against whom such judgment was obtained, and each party hereby waives any
defenses available to it under local law and agrees to the enforcement of such
a judgment. Each party to this Agreement irrevocably consents to the service
of process in any such proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such party at its address set
forth herein. Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law.
Section 14. Severability. If any provision of this
Agreement shall for any reason be held invalid or unenforceable, such
invalidity or unenforceablity shall not affect any other provision hereof and
this Agreement shall be construed as if such invalid or unenforceable provision
had never been contained herein. Terms not otherwise defined herein shall be
defined in accordance with the Agreement.
Section 15. Capitalized Terms. All capitalized terms not
otherwise defined herein shall have the meaning assigned to them in the
Subscription Agreement.
Section 16. Entire Agreement. This Agreement, together
with all documents referenced herein, embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms
and provisions of this Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed, on the day and year first
above written.
FRESH'N LITE, INC.
By
---------------------------
Name:
Title:
DOMINION CAPITAL FUND, LTD.
By
--------------------------------
Xxxx Xxxxxxxxx, Agent
CANADIAN ADVANTAGE LIMITED
PARTNERSHIP
By
--------------------------------
Xxxx Xxxxxxxxx, General Partner
SOVEREIGN PARTNERS LIMITED
PARTNERSHIP
By
--------------------------------
Xxxx Xxxxxxxxx, Agent
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