EXHIBIT 10.39
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of ------------------, among
Olympic Cascade Financial Corporation (the "Company") and each of the purchasers
named on the signature pages hereto (individually, a "Purchaser" and
collectively, the "Purchasers").
WHEREAS, in connection with that certain ------------------------, the
Company has agreed, upon the terms and subject to the conditions of
------------------------, to issue and sell to the Purchasers an aggregate of up
to (a) -------------- principal amount of -------- Senior Subordinated
Promissory Notes (the "Notes") and (b) warrants (the "Warrants") to purchase up
to ------------- shares of the Company's common stock, $0.02 par value per share
(the "Common Stock"), at an initial exercise price of $----- per share;
WHEREAS, to induce the Purchasers to execute and deliver the
----------------, the Company has agreed to provide certain registration rights
with respect to the shares of Common Stock issuable upon exercise of the
Warrants (the "Registrable Securities") on the terms and conditions provided
herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Piggyback Registration Statement. If, at any time, the Company proposes
to file any registration statement on Form S-3 or such other appropriate form in
accordance with the Securities Act of 1933, as amended (the "Securities Act")
for purposes of a public offering of securities of the Company (including, but
not limited to, registration statements relating to secondary offerings of
securities of the Company, but excluding registration statements relating to
employee benefit plans or with respect to corporate reorganizations or other
transactions under Rule 145 of the Securities Act or initial public offerings)
it will give written notice by facsimile or mail, at least five (5) days prior
to the filing of each registration statement, to the Purchasers of its intention
to do so. If the Purchaser notifies the Company within five (5) days after
receipt of any such notice of its or their desire to include any such securities
in such proposed registration statement, the Company shall afford the Purchasers
the opportunity to have any Registrable Securities registered under such
registration statement.
2. Obligations of the Company. In connection with the filing of any
registration statement herein, the Company shall:
2.1 Prepare and file with the Securities and Exchange Commission
(the "SEC") such amendments and supplements to such registration statement and
the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement.
2.2 Furnish to the Purchasers such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
2.3 Use its commercially reasonable efforts to register and qualify
the securities covered by such registration statement under such other
securities or "blue sky" laws of such jurisdictions as shall be reasonably
requested by the Purchasers; provided, however, 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.
2.4 Notify each Purchaser of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such 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.
2.5 Use its commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be listed on each
securities exchange on which similar securities listed by the Company are then
listed.
3. Obligations of the Purchasers.
Each Purchaser of Registrable Securities shall furnish to the
Company such information regarding such Purchaser, the number of Registrable
Securities owned and proposed to be sold by it, the intended method of
disposition of such securities and any other information as shall be required to
effect the registration of such Purchaser's Registrable Securities, and
cooperate with the Company in preparing the registration statement and in
complying with the requirements of the Securities Act.
4. Registration Expenses.
The Company shall bear and pay all expenses incurred in connection
with any registration, filing or qualification of Registrable Securities,
including without limitation all registration, listing, filing and qualification
fees, printers and accounting fees, but excluding (i) underwriting discounts and
commissions relating to the Registrable Securities and (ii) legal fees and
disbursements of any and all counsel retained by the Purchasers.
5. Suspension of Effectiveness.
If the Company shall furnish to all Purchasers a certificate signed
by the President or Chief Executive Officer of the Company stating that, in the
good faith judgment of the Board of Directors of the Company, it is necessary to
suspend the effectiveness of any registration statement filed hereunder, the
Company shall have the right, exercisable two (2) times only in any consecutive
twelve (12) month period, to suspend the effectiveness of the registration
statement with respect to such offering for a period of not more than an
aggregate of ninety (90) days per suspension.
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6. Indemnification.
6.1 To the extent permitted by law, the Company will indemnify each
Purchaser, its directors, officers, shareholders, employees, agents and
affiliates, legal counsel for the Purchasers, and each person controlling such
Purchaser within the meaning of the Securities Act, with respect to which
registration, qualification or compliance of Registrable Securities has been
effected pursuant to this Agreement, against any losses, claims, damages,
liabilities or actions in respect thereof (collectively, "Damages"), arising out
of or based on any untrue statement or alleged untrue statement of a material
fact contained in a Registration Statement filed pursuant hereto, prospectus
offering circular or other document, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation or alleged violation by
the Company of the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any state securities laws or any rule or
regulation promulgated under such laws and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance; and the Company will pay each such Purchaser any legal and other
expenses reasonably incurred by them in connection with investigating or
defending any such claim, loss, damage, liability or action; provided, however,
that the indemnity contained in this Section 6.1 shall not apply to: (i) amounts
paid in settlement of any such Damages if settlement is effected without the
consent of the Company (which consent shall not unreasonably be withheld); (ii)
any such Damages arising out of or a based upon any untrue statement or omission
based upon information furnished to the Company by such Purchaser and stated to
be for use in connection with the offering of securities of the Company; or
(iii) any such Damages arising out of or based upon such Purchaser's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto.
6.2 To the extent permitted by law, each Purchaser will, if
Registrable Securities held by such Purchaser are included in the securities as
to which such registration, qualification or compliance is being effected
pursuant to this Agreement, indemnify the Company, each of its directors,
officers, shareholders, employees, agents and affiliates, each legal counsel and
independent accountant of the Company, each person who controls the Company
within the meaning of the Securities Act, and each other such Purchaser, each of
its directors, officers, shareholders, employees, agents and affiliates, legal
counsel, and each person controlling such other Purchaser within the meaning of
the Securities Act, against all Damages arising out of or based upon arising any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement filed pursuant hereto, prospectus offering circular or
other document, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any violation or alleged violation by such Purchaser of the
Securities Act, the Exchange Act, or any state securities laws or any rule or
regulation promulgated under such laws and relating to action or inaction
required of such Purchaser in connection with any such registration,
qualification or compliance; and such Purchaser will pay the Company or such
other Purchasers any legal and other expenses reasonably incurred by them in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case, to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission is made in such registration statement, prospectus, offering circular
or other document in reliance on and in conformity with information furnished to
the Company by such Purchaser and stated to be for use in connection with the
offering of securities of the Company; provided, however, that the indemnity
contained in this Section 6.2 shall not apply to amounts paid in settlement of
any such Damages if settlement is effected without the consent of such Purchaser
(which consent shall not unreasonably be withheld).
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6.3 Promptly after receipt by an indemnified party under this
Section 6 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 6, 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 chooses, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain one separate counsel, with the reasonable fees and
expenses to be paid by the indemnifying party, if 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 time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 6, but the omission to
so 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 6.
6.4 If the indemnification provided for in this Section 6 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 Damages 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 Damages 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 or alleged 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 omission.
6.5 The obligations of the Company and the Purchasers under this
Section 6 shall survive the completion of any offering of Registrable Securities
pursuant to a registration statement under this Agreement.
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7. Notices.
7.1 Any notice or communication required or permitted hereunder
shall be given in writing and shall be made by hand delivery, by confirmed
facsimile, by overnight courier or by registered or certified mail, addressed
(i) if to a Purchaser, to such Purchaser's address as set forth on Schedule A
hereto, and (ii) if to the Company, to Olympic Cascade Financial Corporation,
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, facsimile number (312)
751-0769, Attn: Xxxxxx X. Xxxxxx, with a copy to Xxxxxxx Krooks LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, facsimile number (000) 000-0000, Attn: Xxxxxxxx X.
Xxxxxxx, Esq.
7.2 All such notices and other communications shall be deemed to
have been delivered and received (i) in the case of personal delivery or
facsimile, on the date of such delivery, (ii) in the case of overnight courier,
on the business day after the date when sent, and (iii) in the case of
registered or certified mail, on the third business day following such mailing.
8. Miscellaneous.
8.1 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 the
conflict of laws thereof. The parties hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the State of
New York located in New York County and any Federal court located within New
York County for any actions, suits or proceedings arising out of or relating to
this Agreement. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement in the courts of the State of New York located in New York
County or the courts of the United States of America located in New York County,
and hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such action, suit of proceeding brought in
any such court has been brought in an inconvenient forum.
8.2 Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Purchasers of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each Purchaser of any Registrable
Securities then outstanding, each future Purchaser of all such Registrable
Securities, and the Company.
8.3 Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement, excepts as
expressly provided herein.
8.4 If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
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8.5 The headings of the Sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
8.6 This Agreement constitutes the entire contract among the Company
and the Purchasers relative to the subject matter hereof and supersedes in its
entirety any and all prior agreements, understandings and discussions with
respect thereto.
8.7 The 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
COMPANY:
OLYMPIC CASCADE FINANCIAL CORPORATION
By:_____________________________________
Name: Xxxx Xxxxxxxxxx
Title: Chief Executive Officer
PURCHASERS:
By:_____________________________________
Name:
Title:
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Schedule A
Number of
Purchaser Name Purchaser Address Registrable Securities
-------------- ----------------- ----------------------
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