EXHIBIT 10.8
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is entered into as of August 15, 1997,
by and among BRIAZZ, INC., a Washington corporation with its principal offices
at 0000 X.X. Klickitat Avenue, Building B - Xxxxx 000, Xxxxxxx, Xxxxxxxxxx
00000 (the "Company"), and the parties listed on Schedule A hereto (the
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"Investors").
RECITALS
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Certain Investors own shares of the Company's Series A Convertible
Preferred Stock (the "Series A Stock"), the Company's Series B Convertible
Preferred Stock (the "Series B Stock") and/or the Company's Series C Convertible
Preferred Stock (the "Series C Stock").
AGREEMENT
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NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
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For purposes of this Agreement:
(a) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means (i) the common stock of the
Company ("Common Stock") issuable or issued upon conversion of the Series A
Stock, the Series B Stock and the Series C Stock and (ii) any 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, such
Series A Stock, Series B Stock, Series C Stock or Common Stock, excluding in all
cases, however, any Registrable Securities sold by a person in a transaction in
which its rights under this Agreement are not assigned or assignable;
(c) The number of shares of "Registrable Securities then outstanding" shall
be determined by the number of shares of Common Stock outstanding which are, and
the number of shares of Common Stock issuable pursuant to then exercisable or
convertible securities which are, Registrable Securities;
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(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities who is a party to this Agreement as of the date
hereof or who may be added as a party hereto pursuant to the terms of this
Agreement, and any assignee thereof in accordance with Section 12;
(e) The term "affiliate" shall mean with respect to any person, any other
person which directly or indirectly, by itself or through one or more
intermediaries, controls, or is controlled by, or is under direct or indirect
common control with, such person;
(f) The term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract or
otherwise; and
(g) The term "Form S-3" means such form under the Act as in effect on the
date hereof or any registration form under the Act subsequently adopted by the
Securities and Exchange Commission (the "SEC") which similarly permits inclusion
or incorporation of substantial information by reference to other documents
filed by the Company with the SEC.
2. Request for Registration.
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(a) If the Company shall receive, at any time after six (6) months
following the effective date of the first registration statement for a public
offering of securities of the Company to the general public (but not within six
months after the effective date of a registration statement respecting
securities of the Company), a written request from the Holders of at least one-
third (1/3) in interest of the Series A Stock, Series B Stock or Series C Stock
that the Company file a registration statement under the Act with respect to at
least twenty-five percent (25%) of the Registrable Securities (or any lesser
percentage if the aggregate offering price, net of underwriting discounts and
commissions, is anticipated by the managing underwriter of such offering to
exceed $5,000,000), then the Company shall, within ten (10) days of the receipt
of such request, give written notice of such request to all Holders and shall,
subject to the limitations of Section 2(b), use its best efforts to effect as
soon as practicable the registration under the Act of all Registrable Securities
which the Holders request to be registered in a written request to be given
within twenty (20) days of the mailing of such notice by the Company.
(b) The Holders initiating the registration request hereunder (the
"Initiating Holders") must distribute the Registrable Securities covered by
their request by means of a public offering underwritten by a recognized
national or regional underwriter or underwriters designated by the Initiating
Holders in their registration request hereunder and approved by the
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Company, which approval shall not be unreasonably withheld. The right of any
Holder to include its Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall (together with the Company as
provided in Section 4(e)) enter into an underwriting agreement in customary form
with the underwriter or underwriters selected in accordance with this Section
2(b). Notwithstanding any other provision of this Section 2, if the managing
underwriter advises the Initiating Holders in writing that factors relating to
the pricing or marketing of the securities to be underwritten require a
limitation of the number of securities to be underwritten, then the Initiating
Holders shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and either (i) the number of shares
of Registrable Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating Holders, in
proportion (as nearly as practicable) to the amount of Registrable Securities of
the Company owned by each Holder (provided, however, that no Registrable
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Securities shall be excluded from a registration requested pursuant to the terms
hereof until all other securities of the Company whose holders have registration
rights shall have first been excluded from such registration) or (ii) the
Initiating Holders shall designate another underwriter or underwriters, which
designation shall be subject to approval by the Company in accordance with this
Section 2(b). Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(c) The Company is obligated to effect only two registrations pursuant to
this Section 2. The Company may elect to use Form S-3 to satisfy either
registration pursuant to this Section 2 if (i) such form is available and (ii)
the managing underwriter of the offering being underwritten does not believe
that the use of such form will impair the pricing or marketing of the securities
to be underwritten. Notwithstanding the foregoing, (i) if the Company shall
effect a registration at the request of Holders of Series A Stock in which all
Registrable Securities which the Holders of Series B Stock request to be
included in such registration are not included, the Company shall be obligated
to effect one additional registration pursuant to this Section 2 if so requested
by Holders of Series B Stock in accordance with Section 2(a) and (ii) if the
Company shall effect a registration at the request of Holders of Series A Stock
in which all Registrable Securities which the Holders of Series C Stock request
to be included in such registration are not included, the Company shall be
obligated to effect one additional registration pursuant to this Section 2 if so
requested by Holders of Series C Stock in accordance with Section 2(a).
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(d) Notwithstanding the foregoing, if the Company shall furnish to the
Holders requesting a registration statement pursuant to this Section 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 it would be
seriously detrimental to the Company and its shareholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than six months after receipt of the request of the
Initiating Holders; provided, however, that the Company may not exercise this
right more than once in any 12-month period.
3. Company Registration.
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If (but without any obligation to do so) the Company proposes to register
(including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its Common Stock or other securities
under the Act in connection with the public offering of such securities solely
for cash (other than a registration relating solely to the sale of securities to
participants in a Company stock-based incentive plan), the Company shall, at
each such time, promptly give each Holder written notice of such registration.
Upon the written request of each Holder given within twenty (20) days after
mailing of such notice by the Company, the Company shall, subject to the
provisions of Section 8, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.
4. Obligations of the Company.
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Whenever required under this Agreement to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) file with the SEC a registration statement under the Act on Form S-3 or
other form appropriate to register the resale of Registrable Securities by the
selling Holders;
(b) use its best efforts, subject to receipt of necessary information from
the selling Holders, to cause such Registration Statement to become effective as
promptly after filing as practicable;
(c) prepare and file with the SEC such amendments and supplements to such
Registration Statement and the prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective until the earlier to
occur of (i) 90 days after the effective date of the Registration Statement or
(ii) such time as all Registrable Securities have been sold pursuant thereto;
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(d) furnish to the selling Holders with respect to the Registrable
Securities registered on the Registration Statement (and to each underwriter, if
any, of such Registrable Securities) such number of copies of the Registration
Statement and supplements to the prospectus contained therein and such other
documents as the selling Holders or underwriter may reasonably request in order
to facilitate the public sale or other disposition of all or any of the
Registrable Securities by the selling Holders;
(e) use its best efforts to register and qualify the Registrable Securities
covered by such Registration Statement under such other securities or "Blue Sky"
laws of such jurisdictions as shall be reasonably requested by the Holders,
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;
(f) promptly notify the selling Holders of the time when such Registration
Statement has become effective or a supplement to any prospectus forming a part
of such Registration Statement has been filed;
(g) promptly notify the selling Holders of any request by the SEC after the
Registration Statement has become effective for the amending or supplementing of
the Registration Statement or prospectus or for additional information;
(h) prepare and file with the SEC, promptly upon the request of any selling
Holder, any amendments or supplements to such Registration Statement or
prospectus which, in the opinion of counsel for such selling Holder are required
under the Act or the rules and regulations thereunder in connection with the
distribution of Registrable Securities by such selling Holder, unless counsel
for the Company is of the opinion that such amendment or supplement is not so
required;
(i) prepare and promptly file with the SEC and promptly notify the selling
Holders of the filing of such amendment or supplement to the Registration
Statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Act, any event shall have occurred as the
result of which any such prospectus or any other prospectus as then in effect
would include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading;
(j) advise the selling Holders promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of the
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Registration Statement or the initiation or threatening of any proceeding for
that purpose and promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such stop order should be issued;
(k) if such registration includes an underwritten public offering or upon
written request by any selling Holder or group of selling Holders whose
Registrable Securities shall be included in such Registration Statement with an
aggregate market value at the date of such request exceeding $5,000,000, furnish
on the effective date of the Registration Statement and, if such registration
includes an underwritten public offering, at the closing provided for in the
underwriting agreement: (i) opinions, dated such respective date, of the counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the selling Holder or Holders making such request,
covering such matters as such underwriters and selling Holder or Holders may
reasonably request and (ii) letters, dated such respective dates, from the
independent certified public accountants of the Company, addressed to the
underwriters and selling Holder or Holders, covering such matters as such
underwriters and selling Holder or Holders may reasonably request, in which
letters such accountants shall state (without limiting the generality of the
foregoing) that they are independent certified public accountants within the
meaning of the Act and that in the opinion of such accountants the financial
statements and other financial data of the Company included in the Registration
Statement or any amendment or supplement thereto comply in all material respects
with the applicable accounting requirements of the Act;
(l) otherwise comply with all applicable rules and regulations of the SEC;
(m) provide the selling Holders and any underwriters of Registrable
Securities a reasonable opportunity to perform due diligence concerning the
Company, including a reasonable opportunity to interview officers and employees
of the Company and to review documents relating to the Company;
(n) make available its officers and employees and otherwise provide
reasonable assistance (taking into account the needs of the Company's business)
to any underwriters of Registrable Securities in their marketing of Registrable
Securities; and
(o) enter into a customary underwriting agreement with any underwriters of
Registrable Securities selected in accordance with Section 2(b) which shall be
satisfactory in form and substance to the selling Holders selling Registrable
Securities thereunder and shall include representations and warranties,
covenants and indemnities of the Company typical in underwriting agreements
pertaining to transactions of this type.
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5. Furnish Information.
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It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Agreement with respect to any selling Holder that
such selling Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of such securities as shall be reasonably required to effect the
registration of its Registrable Securities and to execute such documents in
connection with such registration as the Company may reasonably request.
6. Expenses of Demand Registration.
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All expenses (other than underwriting discounts and commissions) and the
fees and disbursements of one special counsel to the selling Holders incurred in
connection with the underwriting, registrations, filings or qualifications
pursuant to Section 2, including, without limitation, all registration, filing
and qualification fees, printing and accounting fees, and the fees and
disbursements of counsel for the Company shall be borne by the Company;
provided, however, that the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section 2 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered (which Holders shall
bear such expenses), unless the Holders of a majority of the Series A Stock, of
the Series B Stock and of the Series C Stock, respectively, agree to forfeit
their right to one demand registration pursuant to Section 2; provided further,
however, that if at the time of such withdrawal, the Holders have learned of a
material adverse change in the condition, business or prospects of the Company
from the time of their request, then the Holders shall not be required to pay
any of such expenses and shall retain their rights pursuant to Section 2.
7. Expenses of Company Registration.
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All expenses (other than underwriting discounts and commissions) and the
fees and disbursements of one special counsel to the selling Holders incurred in
connection with registrations in which any Holders participate pursuant to
Section 3, including, without limitation, all registration, filing and
qualification fees, printing and accounting fees, and the fees and disbursements
of counsel for the Company shall be borne by the Company.
8. Underwriting Requirements.
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The Company shall not be required under Section 3 or Section 15, to include
any of the Holders' securities in an underwritten offering of the Company's
securities unless such Holders accept
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the terms of the underwriting as agreed upon between the Company and the
underwriters selected by the Company, assuming usual and customary underwriting
terms. If the total amount of securities, including Registrable Securities and
any other securities of the Company whose holders have registration rights,
requested by shareholders (including the Holders) to be included in such
offering exceeds the amount of securities that the underwriters reasonably
believe compatible with the success of the offering, from a pricing or marketing
point of view, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities, which the
underwriters believe will not impair the pricing or marketing of the securities
to be underwritten (the securities so included to be apportioned pro rata among
the selling shareholders according to the total amount of Registrable
Securities, and other securities of the Company whose holders have registration
rights, owned by each selling shareholder or in such other proportions as shall
mutually be agreed to by such selling shareholders); provided, however, that in
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no event shall the amount of securities of the selling Holders included in the
offering be reduced below 20% of the total amount of securities included in such
offering, unless such offering is the initial public offering of the Company's
securities, in which case the selling Holders and the other such selling holders
may be excluded if the underwriters make the determination described above and
provided no other shareholder's securities are included.
9. Delay of Registration.
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No Holder shall have any right to obtain or seek an injunction restraining
or otherwise delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or implementation of this
Agreement.
10. Indemnification.
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In the event any Registrable Securities are included in a registration
statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, the partners, officers, agents, employees and directors of
each Holder, any underwriter (as defined in the Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"),
against any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact
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contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law; and the
Company will reimburse each such Holder, partner, officer, agent, employee or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 10(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by, or on behalf of, any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder severally and not
jointly will indemnify and hold harmless the Company, each of its officers,
directors, agents or employees, each person, if any, who controls the Company
within the meaning of the Act, any underwriter and any other Holder selling
securities in such registration statement or any of its partners, agents,
employees, directors or officers or any person who controls such Holder, against
any losses, claims, damages or liabilities (joint or several) to which the
Company or any such director, partner, agent, employee, officer, controlling
person, or underwriter, or other such Holder or director, officer, partner,
agent, employee or controlling person may become subject, under the Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by, or on behalf of, such Holder expressly for use in connection with
such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such partner, agent,
employee, director, officer, controlling person, underwriter or other Holder, in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 10(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be
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unreasonably withheld; and provided, further, that each selling Holder shall be
liable, under this Section 10(b) for only that amount of losses, claims, damages
and liabilities as does not exceed the proceeds to such selling Holder as a
result of such registration.
(c) Promptly after receipt by an indemnified party under this Section 10 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 10, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly notified, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if, in
the opinion of counsel for the indemnifying party, representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable period of time of the commencement of any such action shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 10 to the extent materially prejudicial to its ability to defend
such action, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 10.
(d) If the indemnification provided for in this Section 10 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omissions.
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(e) 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.
11. Reports Under the Act.
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With a view to making available to the Holders the benefits of SEC Rule 144
promulgated under the Act and any other rule or regulation of the SEC that may
at any time permit a Holder to sell securities of the Company to the public
without registration or pursuant to a registration on Form S-3, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after 90 days after the
effective date of the first registration statement filed by the Company for the
offering of its securities to the general public;
(b) take such action, including the voluntary registration of its Common
Stock under Section 12 of the 1934 Act, as is necessary to enable the Holders to
utilize Form S-3 for the sale of their 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;
(c) file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company as to
its compliance with the reporting requirements of SEC Rule 144 (at any time
after 90 days after the effective date of the first registration statement filed
by the Company), the Act and the 1934 Act (at any time after it has become
subject to such reporting requirements), or as to its qualification as a
registrant whose securities may be resold pursuant to Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
12. Assignment of Registration Rights.
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The rights to cause the Company to register Registrable Securities pursuant
to this Agreement may be assigned by a Holder to a transferee or assignee of
such securities (other than a competitor of the Company) that (a) shall acquire
at least one percent (1%) in interest of the Registrable Securities or (b) is a
partner or an affiliate of such Holder. Upon such transfer or assignment, such
transferee or assignee shall be deemed a "Holder" under this Agreement, provided
the Company is, within a reasonable period of time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; provided, further, that such assignment shall be effective only
if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
13. Limitations on Subsequent Registration Rights.
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Subject to Section 12 hereof, from and after the date of this Agreement,
the Company shall not, without the prior written consent of a two-thirds
majority in interest of the Holders of the Series A Stock, of the Series B Stock
and of the Series B Stock, respectively, enter into any agreement with any
holder or prospective holder of any securities of the Company which would allow
any registration rights to such holder or prospective holder.
14. "Market Stand-Off" Agreement.
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The Holders severally hereby agree that they each shall not, to the extent
requested by the Company and the managing underwriter of a public offering
meeting the per share price and gross offering proceeds criteria set forth in
(a) and (b) below, sell or otherwise transfer or dispose of any Registrable
Securities or other securities of the Company then beneficially owned for a
period reasonably requested by such managing underwriter but not to exceed six
months following the effective date of a firm commitment, underwritten public
offering by the Company of shares of Common Stock, registered under the Act, (a)
at a per share price at which such shares of Common Stock are offered to the
public of at least two (2) times the Series B Conversion Price (as defined in
the Amended and Restated Articles of Incorporation of the Company, as at any
time amended) in effect immediately prior to the closing of such public offering
and (b) resulting in gross offering proceeds of at least $15,000,000 (before
deduction of underwriters' discounts and commissions and expenses of the
offering); provided, however, that all officers and directors of the Company and
all other persons with registration rights (whether or not pursuant to this
Agreement) enter into similar agreements.
In order to enforce the foregoing covenant, the Company may impose stop
transfer instructions with respect to the Registrable
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Securities of the Holders (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period.
15. Form S-3 Registration.
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In case the Company shall receive from the Holders of at least twenty
percent (20%) in interest of the Series A Stock, of the Series B Stock or of the
Series C Stock, respectively, a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to Registrable Securities, the Company will:
(a) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders;
(b) as soon as practicable, effect such registration and all such
reasonable qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within fifteen (15) days after receipt of written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 15: (i) if
Form S-3 is not available for such offering by the Holders; (ii) if the Holders,
together with the Holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $2,000,000; (iii) if the
Company shall furnish to the Holders a certificate signed by the President of
the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its
shareholders for such Form S-3 registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than ninety (90) days after
receipt of the request of the Holder or Holders under this Section 15; provided,
however, that the Company shall not utilize this right more than once in any 12-
month period; (iv) if the Company has, within the 12-month period preceding the
date of such request, already effected one such registration on Form S-3 for the
Holders pursuant to this Section 15; (v) if the Company, within the 180-day
period preceding the date of such request, has effected a registration of
securities in which the Holders of Registrable Securities requesting
registration pursuant to this Section 15 were entitled to participate to the
fullest extent they desired
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pursuant to Section 2 or 3; or (vi) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance; and
(c) subject to the foregoing, file a registration statement covering the
Registrable Securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Holders. All expenses (other
than underwriting discounts and commissions) incurred in connection with a
registration requested pursuant to this Section 15, including, without
limitation, all registration, filing, qualification, printing and accounting
fees and the reasonable fees and disbursements of counsel for the Company and
one special counsel for the Holders, shall be borne by the Company.
16. Notices.
-------
All notices and other communications called for or required by this
Agreement shall be in writing to the parties at their respective addresses
stated on the first page hereof or on Schedule A hereto, or to such other
----------
address as a party may subsequently specify and shall be deemed to have been
received (i) upon delivery in person, (ii) upon the passage of seventy-two (72)
hours following post by first class registered or certified mail, return receipt
requested, with postage prepaid, (iii) upon the passage of twenty-four (24)
hours following post by overnight receipted courier service, or (iv) upon
transmittal by confirmed telex or facsimile provided that if sent by facsimile a
copy of such notice shall be concurrently sent by certified mail, return receipt
requested and postage prepaid, with an indication that the original was sent by
facsimile and the date of its transmittal.
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17. Amendments and Waivers.
----------------------
Any term of this Agreement may be amended and the observance of any term
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with the written consent of the Company and the
Holders of a two-thirds (2/3) majority in interest of the outstanding Series A
Stock, of the outstanding Series B Stock and of the outstanding Series C Stock,
respectively. Additional Holders (other than those permitted by Section 12
hereof) may be added to this Agreement with the consent of the Holders of a two-
thirds (2/3) majority in interest of the outstanding Series A Stock, of the
outstanding Series B Stock and of the outstanding Series C Stock, respectively,
by amending Schedule A hereto and adding a signature page executed by such
----------
additional Holder. Notwithstanding the foregoing, a purchaser who shall have
purchased, at the same price per share at which the Series B Stock is first
sold, shares of Series B Stock pursuant to the Series B Convertible Preferred
Stock Purchase Agreement dated as of August 15, 1997 may be added to this
Agreement as a "Holder" by amending Schedule A hereto and adding a signature
----------
page executed by such purchaser.
18. Termination of Registration Rights.
----------------------------------
The registration rights described in sections 2, 3 and 15 shall terminate
on the fifth anniversary of the closing of the first firm commitment,
underwritten public offering by the Company of shares of Common Stock,
registered under the Act, (a) at a per share price at which such shares of
Common Stock are offered to the public of at least two (2) times the Series B
Conversion Price (as defined in the Amended and Restated Articles of
Incorporation of the Company, as at any time amended) in effect immediately
prior to the closing of such public offering and (b) resulting in gross offering
proceeds of at least $15,000,000 (before deduction of underwriters' discounts
and commissions and expenses of the offering). Such registration rights shall
sooner terminate with respect to any Investor (or permitted transferee or
assignee) who holds less than one percent (1%) of the issued and outstanding
Common Stock of the Company (assuming full conversion of all Registrable
Securities into Common Stock) and such shares are eligible for resale pursuant
to Rule 144 under the Act.
19. Severability.
------------
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision(s) shall be excluded from this Agreement,
and the balance of this Agreement shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its terms.
20. Governing Law.
-------------
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This Agreement, including all matters of construction, validity and
performance, shall be governed by and construed and enforced in accordance with
the laws of the State of Washington, as applied to contracts made, executed and
to be fully performed in such state by citizens of such state, without regard to
its choice of law and conflict of laws rules. The parties hereto agree that the
exclusive jurisdiction and venue for any action brought between the parties
under this Agreement shall be the state and federal courts sitting in King
County, Washington, and each of the parties hereby agrees and submits itself to
the exclusive jurisdiction and venue of such courts for such purpose.
21. Counterparts.
------------
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
22. Entire Agreement.
----------------
This Agreement constitutes the full and entire understanding and agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements with respect to the subject matter hereof, including that
certain Registration Rights Agreement, dated as of October 18, 1996, among the
Company and certain Holders.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
first hereinabove written.
BRIAZZ, INC.
By:___________________________
Xxxxxx X. Xxxxxxxx,
Chief Executive Officer
INVESTORS:
___________________________________
By:________________________________
Title:
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Schedule A
----------
Common Stock
------------
Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxxx
Xxx Xxxxxx
Xxxxxxx Xxxxxxxx
Series A Convertible Preferred Stock
------------------------------------
Benaroya Capital Company, L.L.C.
Chartwell Capital Investors, L.P.
Talon Opportunity Fund, L.P.
Xxxxxxx Xxxxxxxx
Xxx Xxxxxxxx
B.F.P., L.L.C.
Sarkowsky Family Limited Partnership
Xxxxx X. Xxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Company, Ltd.
Xxx Xxxxxxxxx
Xxxxxx Xxxxxxxx
Xxxxx Living Trust
Xxxxxx X. Xxxxx
Xxxx and Xxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx Xxxxxxxxx
Xxx X. and Xxxxxxxx Xxxxxx Living Trust
Xxxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxxxxxx Family Partnership
Xxxx Xxxxxxxxxx
Xxxxx X. Xxxxx
Xxxxxxx Xxxx
Xxxxxxx Xxxxx
Xxxxxx X. and Xxxx X. Xxxxx
Xxxxxxx Xxxxxx
Xxx Xxxxx
Xxxxx Xxx
Xxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxxx and Xxxx Xxxxxxx
Xxxx and Xxxxx Xxxxx
The Xxxxxxx X. XxXxxxxx and Xxxxxxx X. XxXxxxxx Family Living Trust
Xxxxx X. XxXxxxxx
N. Xxxx Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxx
Xxxx Xxxxx
Xxx Xxxxx
Xxxx Xxxx
Xxxxxxx Xxxxxxx
Xxxx Xxxxx
Xxxxxxx Xxxxxxxx
Xxx Xxxxxxxxx
The Xxxxx X. Xxxx Trust
The Xxxxx X. XxXxxxxx Trust
The Xxxxx X. Xxxxxx Trust
Xxxx and Xxxx Xxxxxxx
Xxxxx Xxxxxxxx
Xxxx Xxxxxx
Xxxx X. Xxxxxxxxxx
Xxxxxxxx Xxxxxxxx
Series B Convertible Preferred Stock
------------------------------------
Whitney Equity Partners, L.P.
Xxxx X. Xxxxxxxx
Chartwell Capital Investors, L.P.
Talon Opportunity Fund, L.P.
Series C Convertible Preferred Stock
-------------------------------------
---------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx
---------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx X.
Xxxxxxxx Limited Partnership II
Amon, Xxxxxxx
Xxxxx, Xxxx
Xxxxx, Xxxxxx X.
Xxxxxxx, Xxxxxxx X.
Xxxxxxxxx Family Ltd. Partnership
Whittall Company Ltd.
Sarkowsky Family Limited Partnership
Xxxxx, Xxxx
Madison Investors
Xxxxx, Xxxxxx
Xxxxxxx Equity Partners, X.X.
Xxxxxxxxxxx, Xxxxx
Xxxxxxx, Xxxxxx XxXxxxxx
Xxxx X. Xxxxxxxxxx Trust
The Springs Company
KZ Limited
Xxxxx, Xxxxx X.
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Xxxxxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxx
Xxxxx, Xxxxx X.
XxXxxxxx, Xxxxx X.
Xxxx, Xxxxx
Xxxxxxxx, Xxxxxx X.
YIS Capital, Inc.
Molbak, Jens & Xxxxxxxxx Xxxxx Xxxxxxxx
Xxxxxxx Trading Corp. Retirement Trust
Xxx X. & Xxxxxxxx Xxxxxx Living Trust
Xxxxxxxx, Xxxx and Xxxxxxx
Coyote Capital Corp., Bear Xxxxxxx Securities Corp. Custodian, Master Defined
Contribution P/S
Plan, Xxxxxxx X. Xxxxxxx TTEE
Xxxxxxx, Xxxxxx
Xxxxx, Xxxx
Xxxxx, Xxxxx X.
Xxxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxxxx X.
Xxxxxxxx Limited Partnership II
Xxxx Family Partnership, L.L.C.
Benaroya, Xxxx X.
Xxxxxxxx, Xxxx X.
Xxxxxxxx, Xxxx
Xxxxxxx, Xxxxxxx X.
Xxxxx, Xxxxx X.
The Xxxxx X. Xxxxxx Trust
Chartwell Capital Investors, X.X.
Xxxxxx, Xxxxxxx
Xxxxx, Xxxxx X.
Xxxxxxxxxxx, Xxxxx
Xxxxx, Xxxx
Xxxxxxxx, Xxxxxxx
Xxx B. & Xxxxxxxx Xxxxxx Living Trust
Jonsson, Xxxxxx XxXxxxxx
Kirlan Venture Partners II, LP
Madison Investors
Xxxxx, Xxxxx X.
Xxxxx XxXxxxxx TTEE for Xxxxx Xxxx Trust
XxXxxxxx, Xxxxx X.
Xxxxx XxXxxxxx Trust
Xxxxxxx B and Xxxxxxx XxXxxxxx Trust
Michiana Securities LP
1997 Stand By Fund
Sarkowsky Family Limited Partnership
Xxxxxxxxxx, Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxxxxxx, Xxxxxx
Xxxxxxx, Xxxxxx
National Securities Corp. Custodian for Xxxxxxx X. Xxxxxxxx XXX Rollover
Xxxxxxx, Xxxxxx and Xxxx
Xxxxx, Xxxxxx
The Springs Company
Stroum, Xxxxxxx
Xxxxx Opportunity Fund, X.X.
Xxxxxxx, Xxxxx X.
Xxxxxxxxx Family Ltd. Partnership
Xxxxxxxxx, Xxx
Xxxxxxx Equity Partners, X.X.
Xxxxxxxx Company Ltd.
Xxxx, Xxxxx
Strategic Restaurant Engineering, Inc.
Xxxxxxxxxx, Xxxxxxx
Xxxxxx, Xxxxxxx
Amon, Xxxxxxx
Xxxxxxxx Limited Partnership II
Xxxxx, Xxxx & Xxxxx
Xxxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxxxx X.
Xxxxxxx, Xxxxxx
Xxxxxxxxxxx, Xxxxx
Xxxxxxxx, Xxxx X.
XxXxxxxx, Xxxxx X.
Xxxxxxx, Xxxxxx XxXxxxxx
Xxxxxxxx, Xxxx and Xxxxxxx
Xxxxx, Xxxxxx X.
Xxxxx, Xxxxx X.
Xxxxx, Xxxx
1984 Xxxxxxx Family Trust
Xxxxx, Xxxxx X.
Tower Venture Fund I, L.L.C.
Whitney Equity Partners, X.X.
Xxxxxxxx, Xxxxxx X.
Xxx X. & Xxxxxxxx Xxxxxx Living Trust
Xxxxxxx Trading Corp. Retirement Trust
