Exhibit 10.37
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") dated as of March
6, 2003, by and among BRIAZZ, Inc., a Washington corporation with its principal
offices at 0000 - 0xx Xxxxxx Xxxxx, #000, Xxxxxxx, Xxxxxxxxxx 00000 (the
"COMPANY") and Briazz Venture, L.L.C., an Illinois limited liability company
("PURCHASER") with respect to the following.
RECITALS
Pursuant to the Amended and Restated Purchase Agreement dated as of
March 5, 2003 (the "PURCHASE AGREEMENT"), the Company sold and issued to
Purchaser a warrant to purchase shares of the Company's common stock (the
"WARRANT") equal to 19.99% of the outstanding Common Stock as of the date of the
Purchase Agreement, at a purchase price per Share of $0.50 pursuant to a Warrant
to Purchase Shares of Common Stock of even date herewith and one hundred shares
of Series D preferred stock ("SERIES D PREFERRED STOCK"), the terms and
conditions of which are set forth the Articles of Amendment of even date
herewith. The Warrant is exercisable and the Series D Preferred Stock is
convertible, in certain circumstances, into shares of common stock of the
Company (the "SHARES").
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
For purposes of this Agreement:
(a) The term "Act" shall mean the Securities Act of 1933, as
amended.
(b) 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;
(c) The term "Registrable Securities" means (i) the Shares
issuable or issued upon exercise of the Warrant and conversion
of the Series D Preferred Stock, (ii) any Registrable
Securities added to this Agreement pursuant to Section 13
hereof, and (iii) any common stock of the Company ("COMMON
STOCK") 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 securities, 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;
(d) 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;
(e) The term "Registration Statement" shall mean any registration
statement under the Act that includes Registrable Securities.
(f) The term "Holder" means Purchaser and any permitted
transferees under the terms of this Agreement;
(g) 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;
(h) 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
(i) 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. Initial Registration.
The Company shall, subject to the limitations of Section 5, use its
best efforts to effect within ninety (90) days of satisfying one or both of the
Laurus Conditions (defined below) the registration under the Act of all
Registrable Securities then outstanding. Notwithstanding the foregoing, (i) if
the Company shall furnish to 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, including a majority of the directors designated or nominated by
Flying Food Group, LLC, or its affiliates (collectively, "FFG"), if any, it
would be seriously detrimental to the Company and its shareholders for such
registration statement (or any amendment thereto) to be filed and it is
therefore essential to defer the filing of such registration statement (or any
amendment thereto), the Company shall have the right to defer such filing for a
period of not more than sixty (60) additional days; and (ii) the Company will
not be required to cause the registration statement to be declared effective,
and Holders will not be permitted to transfer or sell the Registrable Securities
pursuant to the registration statement unless and until: (x) Laurus Master Fund,
Ltd. ("LAURUS") consents to the effectiveness of the registration statement or
(y) the Promissory Note in the original principal amount of $1,250,000, dated
June 18, 2002, between Laurus and the Company, is repaid in full (collectively
the "LAURUS CONDITIONS".)
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 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. The Company shall
include in such registration, subject to the provisions of Sections 5, 8 and 9,
all the Registrable Securities then outstanding and specified in a written
request or requests made by Holders within (15) days after the date of the
written notice by the Company of such registration. A Holder's written request
may specify that all or a portion of such Holder's Registrable Securities be
registered in the registration.
4. Obligations of the Company.
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-1, Form S-3 or such other form, as required by the
applicable provision of this Agreement, as is 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 (i) in the case of
a Section 2 registration, within 90 days after the issuance of
the Notes pursuant to the Purchase Agreement, and (ii) in the
case of a Section 3 or 11 registration, 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 (i) in the case of a
Section 2 registration, the earlier to occur of (A) such time
as no Holder named in the Registration Statement holds or has
the right to receive any of the Registrable Securities
registered therein or (B) such time as such Holders may sell
their Registrable Securities pursuant to Rule 144(k) of the
Act or pursuant to any similar rules that may be promulgated
without volume limitations, and (ii) in the case of a Section
3 or 11 registration, such time as no Holder named in the
Registration Statement holds or has the right to receive any
of the Registrable Securities registered therein;
(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;
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(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 reasonable
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;
(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
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 $500,000, 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,
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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) cause all the Registrable Securities covered by such
Registration Statement to be included for quotation on the
interdealer Nasdaq National Market;
(n) provide a transfer agent and registrar for all Registrable
Securities covered by such Registration Statement and a CUSIP
number for all such Registrable Securities to the extent not
already provided, in each case not later than the effective
date of such registration;
(o) 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; and
(p) 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.
(q) cooperate with each selling Holder and each underwriter in
connection with the filing required to be made with NASD.
5. Limitations; Agreements of Holders.
(a) 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
requested by the Company in effecting the registration of its
Registrable Securities and to execute such documents in
connection with such registration as the Company may
reasonably request.
(b) the Company may at any time that it is eligible to do so,
prepare and file an amendment or supplement to the
Registration Statement or prospectus with the
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SEC and promptly notify the selling Holders of the filing of
such amendment or supplement to the Registration Statement or
prospectus as the Company may desire in order to effect the
conversion of the Registration Statement from Form S-1 to Form
S-3, or vice versa;
(c) each Holder agrees that, if so requested by the Company, it
will not effect any offer or sale of shares pursuant to the
Registration Statement, or otherwise, or engage in any hedging
or other transaction intended to reduce or transfer the risk
of ownership for any period deemed necessary (i) by the
Company in connection with a notice provided pursuant to
Section 4(g) or 4(j) or a proposed supplement or amendment
pursuant to Section 4(h) or 4(i), or (ii) by the Company at
any other time that the Company determines, in its sole
discretion, that the existence of material nonpublic
information regarding the Company or other circumstances make
such activities inappropriate. Any period within the period
provided for in Section 4(c) during which the Company fails to
keep the Registration Statement effective and usable for
resales of the Registrable Securities, or requires pursuant to
this subsection that the Holders not effect sales of shares
pursuant to the Registration Statement, is hereafter referred
to as a "Suspension Period." A Suspension Period shall
commence on the date set forth in a written notice by the
Company to the Holders that the Registration Statement is no
longer usable for resales of shares or, in the case of a
suspension pursuant to this subsection the date specified in
the notice delivered by the Company pursuant to this
subsection, and shall end on the date when each holder of
shares covered by the Registration Statement either receives
the copies of the supplemented or amended prospectus
contemplated by herein or is advised in writing by the Company
that use of the prospectus or sales may be resumed. If the
event that any Suspension Period occurs, the effective period
under Section 4(c) shall be extended by an amount of time
equal to the Suspension Period.
(d) each Holder agrees that, if so requested by the Company, it
shall keep the fact of any notification pursuant to Section
4(g), 4(j) or 5(c) and the contents of any such notification
confidential.
6. Liquidated Damages
(a) The Company acknowledges and agrees that
Purchaser shall suffer damages and that it would not be
feasible to ascertain the extent of such damages with
precision if the Company fails to fulfill certain of its
obligations hereunder. Accordingly, in the event of such
failure, the Company agrees to pay to Purchaser, as liquidated
damages, and not as a penalty, under the circumstances and to
the extent set forth below:
(i) if, pursuant to Section 2
hereof, the registration statement covering all of
the Registrable Securities then outstanding has not
been filed with the SEC on or prior to 90 days after
the issuance of the Warrant and the Series D
Preferred Stock;
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(ii) if such registration
statement is not declared effective by the SEC on or
prior to 150 days after the issuance of the Notes
pursuant to the Purchase Agreement;
(iii) if the registration of the
Registrable Securities is not consummated on or
before the 30th Business Day after the date on which
the such registration statement is declared effective
by the SEC; or
(iv) if such registration
statement is filed and declared effective by the SEC,
but thereafter ceases to be effective at any time
prior to the time that the Registrable Securities are
sold by the Holders thereof subject to the
Registration Statement.
(each of the foregoing an "EVENT," and the date on which the Event occurs being
referred to herein as an "EVENT DATE").
(b) Upon the occurrence of any Event, the Company shall pay, as
liquidated damages, and not as a penalty, to Purchaser for
each weekly period beginning on the Event Date an amount equal
to the Liquidated Damages; provided, that such Liquidated
Damages, in each case, shall cease to accrue (subject to the
occurrence of another Event) on the date on which all Events
have been cured. The Company shall not be required to pay
Liquidated Damages for more than one Event at any given time.
An Event under clause (i) above shall be cured on the date
that the registration statement is filed with the SEC; and an
Event under clause (ii) above shall be cured on the date that
the registration statement is declared effective by the SEC;
and an Event under clause (iii) above shall be cured on the
date on which the registration statement is no longer subject
to an order suspending the effectiveness thereof or
proceedings relating thereto. The Liquidated Damages will be
determined by multiplying the applicable Liquidated Damages
rate by the principal amount of the Notes, multiplied by a
fraction, the numerator of which is the number of days such
Liquidated Damages rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve
30-day months) and the denominator of which is 360.
(c) The Company shall notify Purchaser of the occurrence of an
Event within five Business Days after each Event Date. The
Company shall pay the liquidated damages due by transferring
to Purchaser, by 12:00 noon, Chicago time, immediately
available funds in sums sufficient to pay the Liquidated
Damages then due. The Liquidated Damages due shall be payable
in the same manner as interest payments on the Notes on each
interest payment date to Purchaser to be made on such date as
set forth in the Notes.
(d) For purposes of this Section 6, "Liquidated Damages" means,
with respect to any Event, an amount equal to the interest
that shall accrue on the Notes over and above the stated
interest at a rate of 0.25% per annum for the first 90 days
immediately following the Event Date, increasing by an
additional 0.25% per
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annum at the beginning of each subsequent 90-day period;
provided, that the increase in the stated interest shall not
exceed 1.00% per annum in the aggregate.
7. Expenses of Initial and Company Registration.
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 Sections 2, 3 or 11 hereof, 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.
The Company shall not be required under Sections 3 or 11 to include any
of the Holders' securities in an underwritten offering of the Company's
securities unless such Holders accept the terms of the underwriting as agreed
upon between the Company and the underwriters selected by the Company, assuming
usual and customary underwriting terms. Notwithstanding any other provisions of
this Agreement, in the case of an underwritten offering in which Registrable
Securities are to be included pursuant to Section 3, if the managing underwriter
shall advise the Company in writing that the total number of securities,
including Registrable Securities, requested by shareholders to be included in
such offering exceeds the amount of securities, other than securities to be sold
by the Company, that marketing factors allow, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the managing underwriter believes marketing
factors allow the securities so included to be reduced as follows: (i) all
securities which are not Registrable Securities, securities held by Laurus, or
its affiliates, or securities covered by the Registration Rights Agreement dated
August 15, 1997 (the "REGISTRATION AGREEMENT") shall be excluded from the
offering to the extent limitation on the number of shares included in the
underwriting is required, and (ii) if further limitation on the number of shares
to be included in the underwriting is required, then the number of shares that
may be included in the underwriting held by Holders of Registrable Securities
shall be reduced pro rata based on the total number of securities held by such
persons; provided that, in no event shall the number of securities requested to
be registered by Holders of Registrable Securities be reduced below 20% of the
aggregate shares to be offered in the registration unless such Holders request
that securities constituting less than 20% of the aggregate shares to be offered
in the registration be registered on such Registration Statement, in which
event, all such securities shall be included.
9. Indemnification.
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
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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 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 9(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 9(b) shall
not apply to amounts paid in settlement of any
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such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder,
which consent shall not be unreasonably withheld; and
provided, further, that each selling Holder shall be liable,
under this Section 9(b) for only that amount of losses,
claims, damages and liabilities as does not exceed the net
proceeds to such selling Holder as a result of such
registration.
(c) Promptly after receipt by an indemnified party under this
Section 9 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 9, 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 9 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 9.
(d) If the indemnification provided for in this Section 9 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.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in
the underwriting agreement entered
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into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in
the underwriting agreement shall control.
10. Reports Under the Act.
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;
(b) take such action as is necessary to enable the Holders to
utilize Form S-3 for the sale of their Registrable Securities;
(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 written request (i) a
written statement by the Company as to its compliance with the
reporting requirements of SEC Rule 144, the Act and the 1934
Act, 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.
11. Form S-3 Registration.
In case the Company shall receive from the Holders of at least
twenty-five percent (25%) in interest of the Registrable Securities, 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;
and
(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
twenty (20) days after receipt of written notice from the
Company; provided, however,
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that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this
Section 11: (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 of less than $500,000; (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, including a majority of the
directors designated by FFG, if any, such registration would
be materially detrimental to the Company, and the Board of
Directors of the Company, including a majority of the
Directors designated by the FFG, if any, concludes as a result
that it is essential to defer the filling of such registration
statement at such time, then the Company shall have the right
to defer such filing of the registration statement for a
period of not more than sixty (60) days after receipt of the
request of the Holder or Holders under this Section 11;
provided, however, that the Company shall not utilize this
right more than once in any 12-month period; or (iv) 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.
12. 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 the signature page to the Purchase
Agreement, 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.
13. 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
Holders representing at least a majority of the Registrable Securities.
14. Termination of Registration Rights.
The registration rights hereunder shall terminate on the earlier of (i)
the fifth anniversary of the issuance of the Warrant and Preferred Stock or (ii)
such time as no Holder holds or has the right to receive upon conversion or
exercise any Registrable Securities; provided, however, that the Company's
obligations to maintain the effectiveness of Registration Statements filed prior
to
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the termination of this Agreement shall survive the termination of this
Agreement and such obligations shall instead terminate as set forth in Section
4(c). The registration rights hereunder shall sooner terminate with respect to
any Holder upon the occurrence of any of the following: (i) such Holder no
longer holds or has the right to receive upon conversion any Registrable
Securities, or (ii) such Holder may resell all of such Holder's Registrable
Securities pursuant to Rule 144(k) under the Act.
15. 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.
16. Governing Law.
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.
17. 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.
18. 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.
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SEPARATE SIGNATURE PAGE
REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day first hereinabove written.
BRIAZZ, INC.,
a Washington corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CEO
14
SEPARATE SIGNATURE PAGE
REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day first hereinabove written.
PURCHASER:
BRIAZZ VENTURE, L.L.C., AN ILLINOIS LIMITED LIABILITY COMPANY
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
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