REGISTRATION RIGHTS AGREEMENT
MADE AS OF SEPTEMBER 28, 2000
BETWEEN
SMARTSERV ONLINE, INC.
AND
HEWLETT-PACKARD COMPANY
TABLE OF CONTENTS
1. Demand Registration........................................................................1
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2. Piggyback Registrations....................................................................2
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3. Holdback Agreements........................................................................3
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4. Registration Procedure.....................................................................4
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5. HP Procedures..............................................................................6
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6. Registration Expenses......................................................................6
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7. Indemnification and Contribution...........................................................6
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8. Participation in Underwritten Registrations................................................9
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9. Compliance with Rule 144...................................................................9
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10. Definitions................................................................................9
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11. Miscellaneous.............................................................................11
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
as of September 28, 2000, between SmartServ Online, Inc. (the "Company") and
Hewlett-Packard Company ("HP").
WHEREAS, the parties to this Agreement are parties to a Note
Purchase Agreement of even date herewith (the "Note Purchase Agreement "),
pursuant to which the Company shall issue to HP a Convertible Secured U.S.
$20,00,000 Note (the "Note") convertible into shares of Common Stock (as defined
below). In order to induce HP to enter into the Note Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement. Unless otherwise provided in this Agreement, capitalized terms used
herein shall have the meanings set forth in Section 10 hereof.
NOW, THEREFORE, the parties hereto agree as follows:
1. Demand Registration.
(a) HP may, at any time, request registration under the Securities
Act of all or 30% or greater of its Registrable Securities on
Form S-1 or any similar or successor long-form registration
("Long-Form Registration") or, if available, on Form X-0, X-0,
or on any similar or successor short-form registration
("Short-Form Registration") provided that the total gross
estimated proceeds of such offering are at least $2,000,000.
HP shall be entitled to request two (2) Long-Form Registration
and unlimited Short-Form Registrations. All registrations
requested pursuant to this Section 1(a) are referred to as
"Demand Registrations". A Demand Registration will be a
Short-Form Registration whenever the Company is permitted to
use any applicable short form.
(b) If a Demand Registration is an underwritten public offering
and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be
included in such registration exceeds the number which can
successfully be sold in such offering, the Company will
include in such registration the Registrable Securities
requested to be included in such registration by HP and all
other Common Stock requested to be included in such
registration, to be included pro rata on the basis of the
number of shares of such securities for which the Company has
been given written requests for inclusion therein by each such
holder thereof.
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(c) The Company shall not be obligated to effect any Demand
Registration within one hundred and eighty (180) days of a
previous Demand Registration or within one hundred and eighty
(180) days of a previous registration in which HP was given
piggyback rights pursuant to Section 2. The Company may
postpone for up to one hundred and eighty (180) days the
filing or effectiveness of a registration statement for a
Demand Registration if the Company reasonably believes such
Demand Registration would have an adverse effect on any
proposal or plan by the Company or any of its subsidiaries to
engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation,
tender offer or other significant transaction or to permit the
Company to avoid a special audit.
(d) The Company shall have the right to select the investment
banker(s) and manager(s), if any, to administer the offering.
(e) The Registration Expenses of HP will be paid by the Company in
all Demand Registrations.
2. Piggyback Registrations.
(a) If, at any time during which any Registrable Securities remain
outstanding, the Company proposes to register any of its
Common Stock under the Securities Act in an underwritten
public offering, other than pursuant to a registration on Form
S-8 or Form S-4, or any similar forms then in effect (a
"Piggyback Registration"), the Company will give prompt
written notice to HP of its intention to effect such a
registration (the "Registration Notice") and will, subject to
Sections 2(c) and 2(d), include in such registration all
Registrable Securities of HP with respect to which the Company
has received written requests for inclusion therein within
fifteen (15) days after the receipt of the Company's notice,
not to exceed a maximum number of shares for HP equal to the
product obtained when HP's pre-registration holdings of
Registrable Securities are multiplied by a fraction, the
numerator of which is the total number of shares proposed to
be sold in the Piggyback Registration by all other selling
shareholders and the denominator of which is the total
pre-transaction shareholdings of all other selling
shareholders ("Pro Rata Fraction").
(b) The Registration Expenses of HP will be paid by the Company in
all Piggyback Registrations.
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(c) If a Piggyback Registration includes shares to be sold on
behalf of the Company ("Primary Shares"), and the managing
underwriter or underwriters advise the Company that in their
opinion the number of securities requested to be included in
such registration exceeds the number which can be sold in such
offering without materially adversely affecting the
marketability of the offering, the Company will include in
such registration, (i) first, the securities the Company
proposes to sell; and (ii) second, the Registrable Securities
requested to be included in such registration by HP and all
other Common Stock requested to be included in such
registration (the "Other Common Stock"), to be included pro
rata on the basis of the number of shares of such securities
for which the Company has been given written requests for
inclusion therein by each such holder thereof.
(d) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities
(not including Primary Shares), and the managing underwriters
advise the Company in writing that in their opinion the number
of securities requested to be included in such registration
exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, the
Company will include in such registration (i) first, the
securities requested to be included therein by the holders
requesting such registration, if any, and (ii) second, the
Registrable Securities requested to be included in such
registration by HP and all Other Common Stock requested to be
included in such registration, to be included pro rata on the
basis of the number of shares of such securities for which the
Company has been given written requests for inclusion therein
by each such holder thereof.
3. Holdback Agreements. HP agrees not to effect any public sale or distribution
(including sales pursuant to Rule 144) of equity securities of the Company, or
any securities convertible into or exchangeable or exercisable for such
securities, during the seven (7) days prior to and the earlier of (a) the one
hundred and eighty (180) day period beginning on the effective date of any
Demand Registration or Piggyback Registration in which Registrable Securities
are included (except as part of such underwritten registration), and (b) the
time period for which all executive officers and directors of the Company agree
to be bound pursuant to similar agreements, or such shorter term period to which
the underwriters managing the registered public offering otherwise agree.
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4. Registration Procedure. The Company will effect the registration and the sale
of such Registrable Securities in accordance with the provisions of this
Agreement, and pursuant thereto the Company will, as expeditiously as possible
but subject to the terms hereof:
(a) Prepare and file with the SEC a Registration Statement with
respect to such Registrable Securities on such appropriate and
legally available form as the Company in its discretion shall
elect (the "Registration Statement") and use all commercially
reasonable efforts to cause such Registration Statement to
become effective within 30 days of any request for a Demand
Registration (provided that before filing a Registration
Statement or prospectus or any amendments or supplements
thereto, the Company will furnish to the counsel selected and
paid for by HP copies of all such documents proposed to be
filed). Notwithstanding anything in this Agreement, the Note
or the Note Purchase Agreement to the contrary, if the
Registration Statement does not become effective within thirty
(30) days of a request for a Demand Registration, and if the
conversion was the result of the Company's exercise of its
conversion rights pursuant to Section 6(b) of the Note, the
Company's election to convert outstanding Obligations under
the Note, as provided for therein, which conversion has given
rise to said request for Demand Registration, shall be
ineffective, and the Obligations (as defined in the Note)
which the Company had sought to convert shall be reinstated as
if the Company had not elected to convert pursuant to the
terms of the Note;
(b) Prepare and file with the SEC such amendments and supplements
to such Registration Statement and the prospectus used in
connection therewith (the "Prospectus") as may be necessary to
keep such Registration Statement effective for a period of not
less than one hundred and eighty (180) days from the effective
date of the Registration Statement and comply with the
provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration
Statement during such period;
(c) Furnish HP such number of copies of such Registration
Statement, each amendment and supplement thereto, the
Prospectus included in such Registration Statement (including
each preliminary Prospectus) and such other documents as HP
may reasonably request in order to facilitate the disposition
of the Registrable Securities;
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(d) Use all commercially reasonable efforts to register or qualify
such Registrable Securities under the securities or blue sky
laws of such states and the District of Columbia as HP
reasonably requests and do any and all other acts and things
which may be reasonably or advisable to enable HP to
consummate the disposition in such states and the District of
Columbia of the Registrable Securities owned by HP (provided
that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection (d),
(ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such
jurisdiction);
(e) Notify HP of the happening of any event of which the Company
becomes aware, as a result of which the Prospectus included in
such Registration Statement contains an untrue statement of a
material fact or omits any fact necessary to make the
statements therein not misleading, and the Company will
prepare a supplement or amendment to the Prospectus so that,
as thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus will not contain an untrue
statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(f) Cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the
Company are then listed;
(g) Otherwise use all commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at
least twelve months beginning with the first day of the
Company's first full calendar quarter after the effective date
of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder; and
(h) In the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order
suspending or preventing the use of any related Prospectus or
suspending the qualification of any Common Stock included in
such Registration Statement for sale in any jurisdiction, the
Company will use all commercially reasonable efforts promptly
to obtain the withdrawal of such order.
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5. HP Procedures.
(a) In connection with any Registration Statement, the Company may
require HP to furnish to the Company such information
regarding HP and its proposed distribution of Registrable
Securities, to the extent necessary to comply with the
Securities Act, as the Company may from time to time
reasonably request in writing.
(b) HP agrees to cooperate with the Company in all reasonable
respects in connection with the preparation and filing of each
Registration Statement and any amendment thereof, any
Prospectus relating thereto and any Prospectus supplement
relating thereto with respect to the offer and sale of
Registrable Securities of HP.
6. Registration Expenses. All expenses incident to the Company's or HP's
performance of or compliance with this Agreement, including all NASD
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, listing fees, printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for the Company and all independent
certified public accountants, and other Persons retained by the Company,
including all consultants, advisors, and experts fees and expenses of the
Company of the type ordinarily incurred in connection with the registration of
securities (all such expenses being herein called "Registration Expenses"), will
be borne by the Company; provided that Registration Expenses shall not include,
and HP shall vis a vis the other selling stockholders, pay its respective Pro
Rata Fraction of, all underwriting discounts and commissions applicable to
Registrable Securities sold by it pursuant to this Agreement and all legal fees
and expenses of counsel, consultants, advisors and experts retained by HP. Any
Registration Expenses not so allocable will be borne by all sellers of
securities included in such registration in proportion to the aggregate selling
price of the securities to be so registered.
7. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless, to the fullest
extent permitted by law, HP, against all losses, claims,
damages, liabilities and expenses (including reasonable fees
and legal expenses) resulting from any untrue statement of a
material fact contained in the Registration Statement, any
Prospectus, or any amendment or supplement thereto, or any
omission of a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
except in each case insofar as the same arises out of or is
based upon an untrue statement of a material
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fact or an omission to state a material fact in such
Registration Statement, Prospectus, amendment or supplement,
as the case may be, made or omitted, as the case may be, in
reliance upon and in conformity with written information
furnished to the Company by HP for use therein or by HP's
failure to deliver a copy of the Registration Statement or
Prospectus or any amendments or supplements thereto after the
Company has furnished HP with a sufficient number of copies of
the same.
(b) HP shall indemnify and hold harmless to the fullest extent
permitted by law, the Company, its officers, directors,
employees, representatives and agents, and each Person who
controls (within the meaning of the Securities Act) the
Company, against all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and
legal expenses) resulting from any untrue statement of a
material fact contained in any Registration Statement, any
Prospectus, or any amendment or supplement thereto, or any
omission of a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, to
the extent the same arises out of or is based upon any untrue
statement of a material fact or any omission to state a
material fact in such Registration Statement, Prospectus,
amendment or supplement, as the case may be, made or omitted,
as the case may be in reliance upon and in conformity with
written information furnished to the Company by HP for use
therein.
(c) Each party entitled to indemnification under this Section 7
(the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of
any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who will conduct the
defense of such claim or litigation, is approved by the
Indemnified Party (whose approval will not be unreasonably
withheld or delayed); and provided further, that the failure
of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations
except to the extent that its defense of the claim or
litigation involved is prejudiced by such failure; provided,
however, that the Indemnified Party shall have the right to
retain one separate counsel, with the fees and expenses to be
paid by the Indemnifying Party, if representation of such
Indemnified Party by the
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counsel retained by the Indemnifying Party would be
inappropriate due to the conflicted interests between such
Indemnified Party and the Indemnifying Party. The Indemnified
Party may participate in such defense at such Indemnified
Party's expense. No Indemnifying Party, in the defense of any
such claim or litigation, except with the prior consent of
each Indemnified Party, shall consent to entry of any judgment
or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to any claim or litigation, and no
Indemnified Party will consent to entry of any judgment or
settle any claim or litigation without the prior written
consent of the Indemnifying Party. Each Indemnified Party
shall furnish such information regarding himself, herself, or
itself and the claim in question as the Indemnifying Party may
reasonably request and as shall be reasonably required in
connection with the defense of such claim and litigation
resulting therefrom.
(d) If for any reason the indemnification provided for in this
Section 7 from an Indemnifying Party, although otherwise
applicable by its terms, is determined by a court of competent
jurisdiction to be unavailable to an Indemnified Party
hereunder, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by the Indemnified Parties as a result
of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative
fault of such Indemnifying Party and the Indemnified Parties
in connection with the actions that resulted in such losses,
claims, damages, liabilities, or expenses, as well as any
other relevant equitable considerations. The relative fault of
such Indemnifying Party and the Indemnified Parties shall be
determined by reference to, among other things, whether any
action in question, including any untrue statement of a
material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or the Indemnified
Parties, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred
to above shall be deemed to include, subject to the
limitations set forth in Section 7(c), any legal or other fees
or expenses reasonably incurred by such party in connection
with any investigation or proceeding.
8. Participation in Underwritten Registrations. No Person may participate in any
registration hereunder which is underwritten unless such Person (a) agrees to
sell such
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Person's securities on the basis provided in any underwriting arrangements
approved by the Company and other Person or Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, share custody agreements, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
9. Compliance with Rule 144. To the extent the Company is a publicly traded
company and with a view to making available to HP the benefits of Rule 144 and
any other rule or regulation of the SEC that may at any time permit HP to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to use commercially reasonable
efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144, at all times;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and
the Securities Exchange Act; and
(c) Furnish to HP, so long as HP owns any Registrable Securities,
promptly upon request (i) a written statement by the Company
that it has complied with the reporting requirements of the
Securities Exchange Act, or that it qualifies 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
HP of any rule or regulation of the SEC that permits the
selling of any such securities without registration or
pursuant to such Form S-3.
10. Definitions.
(a) "Agreement" has the meaning set forth in the preamble.
(b) "Common Stock" means the Company's Common Stock, $.01 par
value per share.
(c) "Company" has the meaning set forth in the preamble.
(d) "Demand Registrations" has the meaning set forth in Section
1(a).
(e) "HP" has the meaning set forth in the preamble.
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(f) "Indemnified Party" has the meaning set forth in Section 7(c).
(g) "Indemnifying Party" has the meaning set forth in Section
7(c).
(h) "Long-Form Registration" has the meaning set forth in Section
1(a).
(i) "Note" has the meaning set forth in the recitals.
(j) "Note Purchase Agreement" has the meaning set forth in the
recitals.
(k) "Other Common Stock" has the meaning set forth in Section
2(c).
(l) "Person" means any natural person and any corporation,
partnership, limited liability company or other business
entity.
(m) "Piggyback Registration" has the meaning set forth in Section
2(a).
(n) "Primary Shares" has the meaning set forth in Section 2(c).
(o) "Pro Rata Fraction" has the meaning set forth in Section 2(a).
(p) "Prospectus" has the meaning set forth in Section 4(b).
(q) "Registrable Securities" means, with respect to HP, (i) the
Common Stock issued to HP upon conversion of the Note, and
(ii) any Common Stock or other equity securities issued or
issuable with respect to the securities referred to in clause
(i) by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular
Registrable Securities, such securities will cease to be
Registrable Securities (A) when they have been distributed to
the public pursuant to an offering registered under the
Securities Act or (B) after the Registrable Securities held by
HP first become eligible for sale all at one time in a single
sale pursuant to Rule 144 (or any similar rule then in force).
(r) "Registration Expenses" has the meaning set forth in Section
6(a).
(s) "Registration Notice" has the meaning set forth in Section
2(a).
(t) "Registration Statement" has the meaning set forth in Section
4(a).
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(u) "Rule 144" means Rule 144 promulgated under the Securities
Act, as such Rule may be amended from time to time.
(v) "SEC" means the Securities and Exchange Commission.
(w) "Securities Act" means the Securities Act of 1933, as amended.
(x) "Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
(y) "Short-Form Registration" has the meaning set forth in Section
1(a).
11. Miscellaneous.
(a) Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement may be amended or waived only
upon the prior written consent of the Company and HP.
(b) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will
bind and inure to the benefit of the respective successors and
permitted assigns.
(c) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remainder of this Agreement.
(d) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such
counterparts taken together will constitute one and the same
agreement.
(e) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not
constitute a part of this Agreement
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal law, and not the law
of conflicts, of Delaware.
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(g) Waiver of Jury Trial. The Company and HP each hereby
irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby, whether the claims
raised in such proceeding are based on contract, tort, or
otherwise.
(h) Notices. Any notice, request, or other communication required
or permitted hereunder shall be in writing and shall be deemed
to have been duly given on the date of delivery if personally
delivered, or the date of being faxed if sent by confirmed
fax, on the first business day after being sent if sent by
recognized overnight courier, and on the third business day
after being mailed if sent by registered or certified mail,
postage prepaid, addressed (i) if to HP, to Hewlett-Packard
Company, Financing & Complements Group, 000 Xxxxx Xxxxxx,
Xxxxxxxx Xxxx, XX 00000, Attention: General Manager, Fax
Number 000-000-0000, with a copy to Hewlett-Packard Company,
0000 Xxxxxxx Xxxxxx, XX: 20BQ, Xxxx Xxxx, Xxxxxxxxxx, 00000,
Attention: Legal Department, Fax Number (000) 000-0000, or to
such other address as HP shall have furnished to the Company
in writing as provided herein, or (ii) if to the Company, to:
SmartServ Online, Inc., Xxx Xxxxxxx Xxxxx, Xxxxxxxx, XX 00000,
Attention: Chief financial Officer and General Counsel,
facsimile (000)000-0000, or to such other address as the
Company shall have furnished to HP in writing as provided
herein.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
COMPANY: HP:
SMARTSERV ONLINE, INC. HEWLETT-PACKARD COMPANY
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
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Title: Vice President, Chief Title: Vice President & GM
Accounting Officer ---------------------------
