REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") between BriteSmile,
Inc., a Utah corporation (the "Company"), and the stockholder signatories hereto
(each, a "Holder" and together the "Holders"), is made and entered into as of
January 18, 2000.
Recitals
A. The Company and Holders have entered into that certain Stock
Purchase Agreement (the "Purchase Agreement") of even date with this Agreement,
pursuant to which Holder has agreed to purchase and the Company has agreed to
sell shares of Company Common Stock, par value $.001 per share (the "Shares"),
which Shares (the "Registrable Securities") are now restricted and not
registered under the Securities Act of 1933, as amended, (the "Act") or under
the provisions of any state securities law.
X. Xxxxxx would not have agreed to execute the Purchase Agreement or to
consummate the transactions contemplated by the Purchase Agreement unless the
Company had agreed to enter into this Agreement.
Agreement
In consideration of the promises contained in this Agreement and in the
Purchase Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which the parties acknowledge by their signatures below, the
Company and Holder agree as follows:
1. Piggyback Registrations. If at any time after 180 days from the date
of this Agreement the Company proposes to file a registration statement covering
proposed sales by it or any of its shareholders of shares of its capital stock
in a manner which would permit registration of shares of common stock for sale
to the public (other than a registration statement (i) covering only shares
issuable upon (a) the exercise of employee stock options or pursuant to an
employee stock purchase, dividend reinvestment or similar plan, or (b) the
exercise of a convertible security, or (ii) under a Registration Statement filed
on Form S-4 or S-8 or any similar form under the Act or (iii) pursuant to
Section 2, below), the Company will give prompt notice to Holder of the proposed
registration (which notice shall describe the proposed filing date, the date by
which the registration rights granted pursuant to this Section 1 must be
exercised, and the nature and method of any such sale or disposition of
securities, and shall include a listing of the jurisdictions, if any, in which
the Company proposes to register or qualify the securities under the applicable
state securities or "Blue Sky" laws of such jurisdictions). At the request of
Holder given within thirty (30) calendar days after the receipt of such notice
by Holder (which request shall specify the number of shares Holder requests to
be included in such registration), the Company will use its best efforts to
cause all shares as to which registration has been requested
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by Holder to be included in such registration statement for sale or disposition
in accordance with the method described in the initial notice given to Holder
and subject to the same terms and conditions as the other shares of capital
stock being sold, and thereafter shall cause such registration statement to be
filed and become effective; provided, however, that the Company shall be
permitted to (A) withdraw the registration statement for any reason in its sole
and exclusive discretion and upon the written notice of such decision to Holder
shall be relieved of all of its obligations under this Section 1 with respect to
that particular registration; or (B) exclude all or any portion of the shares
sought to be registered by Holder from such registration statement if the
offering of the shares is an underwritten offering and to the extent that, in
the judgment of the managing underwriter of the offering, the inclusion of such
shares would be materially detrimental to the offering of the remaining shares
of capital stock, or such delay is necessary in light of market conditions. Any
shares sought to be registered by Holder so excluded from a registration
statement shall be excluded pro rata based on the total number of shares of
capital stock being sold by all selling security holders (other than the
Company). The Holders of Registrable Securities may withdraw all or any part of
the Registrable Securities from a Piggyback Registration at any time before ten
(10) business days prior to the effective date of the Piggyback Registration. A
registration of Registrable Securities pursuant to this Section 1 shall not be
counted as a Demand Registration as defined under Section 2
2. Demand Registration. If at any time after 180 days from the date of
this Agreement the Company shall be requested in writing by any one or more
Holders (and such Holders then hold any issued and outstanding Registrable
Securities at such time) to effect the registration under the Act of shares of
the Company's Common Stock then owned by Holder (a "Demand Registration") (which
request shall specify the aggregate number of shares intended to be offered and
sold by Holder, shall describe the nature or method of the proposed offer and
sale thereof, and shall contain an undertaking by Holder to cooperate fully with
the Company in order to permit the Company to comply with all applicable
requirements of the Act and the rules and regulations thereunder and to obtain
acceleration of the effective date of the registration statement contemplated
thereby), the Company shall effect the registration of such securities on an
appropriate form under the Act. Within ten (10) days after receipt of a demand,
the Company will notify in writing all Holders of Registrable Securities of the
demand. Any Holder who wants to include his or its Registrable Securities in the
Demand Registration must notify the Company within ten (10) business days of
receiving the notice of the Demand Registration. Except as provided in this
Section 2, the Company will include in all Demand Registrations all Registrable
Securities for which the Company receives the timely written demands for
inclusion, provided that:
2.1 Minimum Value of Shares Registered. Holder's rights under
this Section 2 shall be exercisable only if the shares as to which Holder
requests registration have an aggregate value of at least $500,000 based on the
average of the closing sale price for the Company's common stock as listed on
the American Stock Exchange or any other exchange on which the Company's common
stock then may be traded for the thirty (30) trading-day period immediately
preceding the date of such request for registration;
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2.2 Material Adverse Effect on Company. The independent
members of the Company's Board of Directors, with the advice of such investment
bankers or securities professionals as the Board shall deem necessary, shall
have determined in good faith that the cost of complying with the request for
registration under this Section 2 would not have a materially adverse effect
upon the Company, its operations, or the market for the Company's common stock,
provided, however, that if the independent members of the Company's Board of
Directors determine in good faith that the cost of complying with the request
for registration would have a material adverse effect upon the Company, its
operations or the market for the Company's common stock, the Company may decline
Holder's request to register Holder's Registrable Securities under the Act,
provided further, however, that in such event the Company may not thereafter
again decline Holder's request for registration based upon this Section so long
as such subsequent request is received by the Company more than 120 days after
Holder's request for registration which was declined based upon this Section;
2.3 Two Demand Registrations. Holders collectively shall be
entitled to two (2) demand registrations, provided that registration may be
effected on Form S-3 or its then equivalent form promulgated by the SEC and,
provided further, that any request for registration pursuant to this Section 2
which does not result in the declaration of effectiveness of a registration
statement (which effectiveness is maintained continuously for at least 180 days
or such shorter period ending when all shares to which Holder has requested
registration in accordance herewith have been sold in accordance with such
registration) covering the offer and sale of shares owned by Holder and
requested to be included in such registration statement, whether as a result of
the withdrawal of the registration statement by the Company or through other
action or inaction of the Company, or (in cases where the Demand Registration is
subject to an underwriting agreement) where the number of Registrable Securities
sold by the Holders in such Demand Registration is less than fifty percent (50%)
of the number of Registrable Securities requested to be included in such Demand
Registration by the Holders, or for any other reason except for the voluntary
decision of Holder to terminate the registration after the request for such
registration has been delivered to the Company, shall not be counted in
determining the number of times registration rights have been exercised pursuant
to this Section 2;
2.4 Material Interference with Company Transaction. The
Company shall be entitled to postpone the filing of any registration statement
otherwise required to be prepared and filed by it pursuant to this Section 2, if
at the time it receives a request for such registration, the independent members
of the Company's Board of Directors determine, in good faith, that such
registration and offering would materially interfere with any existing or then
presently contemplated financing, acquisition, corporate reorganization or other
material transaction involving the Company, and the Company promptly gives
Holder written notice of such determination, provided, however, that such
postponement shall not extend beyond the time that such material interference
continues to exist; notwithstanding the foregoing, the Company may not exercise
such right to postpone more than twice in any twelve (12) month period nor for
more than ninety (90) days at a time.
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2.5 Restrictions Following Registrations. Holder shall have no
right to demand registration with respect to any shares within ninety (90)
calendar days after the effective date of any registration statement previously
filed by the Company, other than a registration statement on Form S-8 or similar
form.
2.6 Priority on Demand Registrations. Where such Demand
Registration is subject to an underwriting agreement, and the managing
underwriter gives the Company and the Holders of the Registrable Securities
being registered a written opinion that the number of Registrable Securities
requested to be included in the Demand Registration exceeds the number of
securities that can be sold, the Company will include in the registration only
the number of Registrable Securities that the underwriters believe can be sold.
The number of securities registered shall be allocated pro rata to the Holders
requesting the Demand Registration on the basis of the total number of
securities requested to be included in the registration.
3. Registration Procedures. If and whenever this Agreement contemplates
that the Company will effect the registration under the Act of any shares held
by Holder, the Company shall:
3.1 Filing Registration Statements; Holder Approval of
Amendments. Prepare and file with the Securities and Exchange Commission (the
"SEC") a registration statement on the appropriate form with respect to such
shares and use its best efforts to cause such registration statement to become
and remain effective as provided herein, provided that at least ten (10) days
before filing a registration statement or prospectus, the Company will furnish
to the counsel of the Holders of the Registrable Securities being registered
copies of all documents proposed to be filed for that counsels review and
approval, which approval shall not be unreasonably withheld or delayed. Provided
further, that before filing any amendments or supplements to a registration
statement or prospectus, including documents incorporated by reference after the
initial filing of the registration statement, the Company will furnish to Holder
and the underwriters, if any, copies of all such documents proposed to be filed
at least five business days prior thereto, which documents will be subject to
the reasonable review of Holder, its counsel and underwriters, and the Company
will not file an amendment to a registration statement or prospectus or any
supplement thereto (including such documents incorporated by reference) to which
Holder, its counsel or the underwriters, if any, shall reasonably object;
3.2 Period of Effectiveness. Prepare and file with the SEC
such amendments and supplements to such registration statement and the
prospectus used in connection therewith and to take such other action as may be
necessary to keep such registration statement effective until the earlier of (i)
the completion of the distribution of shares so registered, or (ii) expiration
of the 180 day period following immediately the effective date of such
registration statement (at which time unsold shares may be deregistered), and
otherwise comply with applicable provisions of the Act and the rules and
regulations promulgated under the Act in accordance with the Holders' methods of
disposition as set forth in the registration statement;
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3.3 Prospectus Copies. Furnish to Holder and its counsel, and
to each underwriter of the shares to be sold by Holder, without charge, such
number of copies of the registration statement, each amendment and supplement
thereto (in each case including all exhibits), one or more preliminary
prospectuses, any supplements thereto and a final prospectus and any supplements
thereto in conformity with the requirements of the Act, and such other documents
as Holder or such underwriter may reasonably request, in order to facilitate the
public sale or other disposition of such shares;
3.4 Amendments or Supplements. If, during any period in which,
in the opinion of the Company's counsel, a prospectus relating to the shares is
required to be delivered under the Act in connection with any offer or sale
contemplated by any registration statement, any event known to the Company
occurs as a result of which the prospectus would include an untrue statement of
material fact or omit to state any material fact necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or supplement
the related prospectus to comply with the Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or the respective rules and regulations
thereunder, to notify Holder promptly and to prepare and file with the SEC an
amendment or supplement, whether by filing such documents pursuant to the Act or
the Exchange Act as may be necessary to correct such untrue statement or
omission or to make any registration statement or the related prospectus comply
with such requirements and to furnish to Holder and its counsel such amendment
or supplement to such registration statement or prospectus;
3.5 Timely Filings. Timely to file with the SEC (i) any
amendment or supplement to any registration statement or to any related
prospectus that is required by the Act or the Exchange Act or requested by the
SEC, and (ii) all documents (and any amendments to previously filed documents)
required to be filed by the Company pursuant to Section 13(a), 13(c), 14 and
15(d) of the Exchange Act;
3.6 Holder's Copies. Within five days of filing with the SEC
of (i) any amendment or supplement to any registration statement, (ii) any
amendment or supplement to the related prospectus, or (iii) any document
incorporated by reference in any of the foregoing or any amendment of or
supplement to any such incorporated document, to furnish a copy thereof to
Holder;
3.7 Notifications to Holder. To advise Holder and its counsel
promptly (i) when any post-effective amendment to any registration statement
becomes effective and when any further amendment of or supplement to the
prospectus shall be filed with the SEC, (ii) of any request or proposed request
by the SEC for an amendment or supplement to any registration statement, to the
related prospectus, to any document incorporated by reference in any of the
foregoing or for any additional information, (iii) of the issuance by the SEC of
any stop order suspending the effectiveness of any registration statement or any
order directed to the related prospectus or any document incorporated therein by
reference or the initiation or threat of any stop order proceeding or of any
challenge to the accuracy or adequacy of any document
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incorporated by reference in such prospectus, (iv) of receipt by the Company of
any notification with respect to the suspension of the qualification of the
shares for sale in any jurisdiction or the initiation or threat of any
proceeding for such purpose, and (v) of the happening of any event which makes
untrue any statement of a material fact made in any registration statement or
the related prospectus as amended or supplemented or which requires the making
of a change in such registration statement or such prospectus as amended or
supplemented in order to make any material statement therein not misleading;
3.8 Blue Sky Laws. On or before the date a registration
statement is declared effective, use its best efforts to register or qualify the
shares covered by such registration statement under the securities or blue sky
laws of such jurisdictions as Holder shall reasonably request, considering the
nature and size of the offering, and do such other acts and things as may be
reasonably necessary to enable Holder to consummate the public sale or other
disposition in each such jurisdiction of such shares; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it has not been qualified,
or to file any general consent to service of process;
3.9 Exchange Listing. To cause all shares sold pursuant
to any registration statement, if not already listed, to be listed on each
national securities exchange, if any, on which such shares are then listed;
3.10 Facilitate Disposition. Enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities;
3.11 Inspection of Company Records. Make reasonably available
for inspection by Holder, any underwriter participating in any disposition
pursuant to the registration statement, and any attorney, accountant or other
agent retained by Holder or underwriter (collectively, the "Inspectors"), all
pertinent financial and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and
cause the Company's officers, directors and employees to supply all information
reasonably requested by any such Inspector in connection with such registration
statement. Records and other information which the Company determines, in good
faith, to be confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records, in the opinion of counsel reasonably acceptable to the Company, is
necessary to avoid or correct a misstatement or omission in the registration
statement, or (ii) the release of such records is ordered pursuant to a subpoena
or other order from a court of competent jurisdiction. Holder agrees that it
will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;
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3.12 Cold Comfort Letters. To obtain a "cold comfort" letter
from the Company's independent public accountants in customary form and covering
such matters of the type customarily covered by "cold comfort" letters as
Holder, or the managing underwriter, reasonably requests (and, if the Company is
able after using commercially reasonable efforts, the letter shall be addressed
to the Holders of the Registrable Securities, the Company and the underwriters);
3.13 Company Opinions. To obtain an opinion or opinions from
counsel for the Company in customary form, and reasonably satisfactory to
counsel representing the Holders of Registrable Securities being registered, and
the underwriters of the offering, addressed to the underwriters and the Holders
of the Registrable Securities being registered;
3.14 Suspension Orders. Make every reasonable effort to
obtain the withdrawal of any order suspending the effectiveness of the
registration statement at the earliest possible moment; and
3.15 Stock Certificates. Cooperate with Holder and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legends)
representing securities to be sold under the registration statement, and enable
such securities to be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or Holder may request.
3.16 Transfer Agent: To provide an institutional transfer
agent and registrar and a CUSIP number for all Registrable Securities on or
before the effective date of the registration statement.
3.17 Compliance: To use its best 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 complying with
the provisions of Section 11(a) of the Securities Act and covering the period of
at least twelve (12) months, but not more than eighteen (18) months, beginning
with the first month after the effective date of the Registration Statement.
3.18 NASD Filings: To cooperate with each seller of
Registrable Securities and each underwriter participating in the disposition of
such Registrable Securities and their respective counsel in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc. ("NASD").
3.19 Co-operation: To take all other steps reasonably
necessary to effect registration of the Registrable Securities contemplated
hereby.
4. Agreements of Holder. Holder (i) upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Subsection 3.4
shall forthwith discontinue Holder's disposition of securities included in the
registration statement until Holder receives
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copies of the supplemented or amended prospectus, and (ii) if so directed by the
Company, shall deliver to the Company, at the Company's expense, all copies
(other than permanent file copies) then in Holder's possession of the prospectus
covering such securities that was in effect at the time of receipt of such
notice. If the Company gives such notice, the time period mentioned in
subsection 3.2 shall be extended by the number of days elapsing between the date
of notice and the date that each Holder receives the copies of the supplemented
or amended prospectus contemplated in subsection 3.4.
5. Withdrawal. If Holder disapproves of the terms of any offering, the
sole remedy of Holder shall be to withdraw Holder's securities therefrom by
giving written notice to the Company and any managing underwriter. Holder's
securities of the Company so withdrawn from the offering also shall be withdrawn
from registration.
6. Participation in Underwritten Registrations. In the case of any
registration under Section 2, if Holder or the Company determines to enter into
an underwriting agreement in connection therewith, or in the case of a
registration under Section 1, if the Company determines to enter into an
underwriting agreement in connection therewith, (i) all shares of Holder's
securities to be included in such registration shall be subject to an
underwriting agreement, which shall be in customary form and contain such terms
as are customarily contained in such agreements, and (ii) no person may
participate in any such registration unless such person (A) agrees to sell such
person's securities on the basis provided in such underwriting arrangement, and
(B) completes and executes all questionnaires, powers-of-attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
7. Registration Expenses. With respect to each registration effected
pursuant to Sections 1 or 2 of this Agreement, the Company shall pay the
following fees, disbursements and expenses: all registration and filing fees,
printing expenses and general disbursements, auditors' fees including reasonable
fees and disbursements of all independent certified public accountants
(including any audit or "comment" letters required by or incident to perform any
of the obligations contemplated by this Agreement), listing fees, registrar and
transfer agent's fees, fees and disbursements of counsel to the Company,
reasonable fees and disbursements of not more than one counsel to Holder in the
case of each registration under Section 2 of this Agreement, expenses (including
reasonable fees and disbursements of counsel) of complying with applicable
securities or "Blue Sky" laws, and the fees of any securities exchange in
connection with the review of such offering. The underwriting discounts and
commissions allocable to the shares included in any offering shall be borne by
each Holder, in proportion to the number of securities each registers.
8. Indemnification.
8.1 In each case of a registration of shares under the
Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless each Holder, its officers, directors, trustees, partners, employees,
advisors, and agents, and each other person, if any, who
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controls Holder within the meaning of the Act or the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including the fees
and expenses of counsel in connection therewith), arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such shares were registered under the Act,
any prospectus or preliminary prospectus contained therein, or any amendment or
supplement thereto (including, in each case, documents incorporated by reference
therein), or arising out of any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein not misleading, except insofar as such losses, claims, damages or
liabilities arise out of any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to Holder, and furnished
to the Company in writing by Holder expressly for use in the registration
statement; provided that the foregoing indemnification with respect to a
preliminary prospectus shall not inure to the benefit of any underwriter (or the
benefit of any person controlling such underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased shares to
the extent such losses, claims, damages or liabilities result from the fact that
a copy of the final prospectus had not been sent or given to such person at or
prior to written confirmation of the sale of such shares to such person. In
connection with a firm or best efforts underwritten offering, to the extent
customarily required by the managing underwriter, the Company will indemnify the
underwriters, their officers and directors and each person who controls the
underwriters (within the meaning of the Securities Act and the Exchange Act), to
the extent customary in such agreements.
8.2 In each case of a registration of shares under the Act
pursuant to this Agreement, Holder will indemnify and hold harmless the Company,
its directors, its officers who sign the registration statement, its attorneys,
and each person, if any, who controls the Company within the meaning of the Act
or the Exchange Act, to the same extent as the foregoing indemnity from the
Company to Holder, but only with reference to information provided to the
Company in writing by Holder and furnished to the Company by Holder expressly
for use in the registration statement, any publicly available report of Holder
published within the time frame of the registration statement, any prospectus or
preliminary prospectus contained therein, or any amendment or supplement thereto
and only in an amount not exceeding the net proceeds received by the Holder with
respect to securities sold by it pursuant to such registration statement. In
connection with a firm or best efforts underwritten offering, to the extent
customarily required by the managing underwriter, each participating Holder of
Registrable Securities will indemnify the underwriters, their officers and
directors and each person who controls the underwriters (within the meaning of
the Securities Act and the Exchange Act), to the extent customary in such
agreements but in no event shall such indemnity, plus the indemnity referred to
in the preceding sentence, exceed the net proceeds from the offering received by
such Holder.
8.3 In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"Indemnified Party") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Party") in writing and the
Indemnifying Party, upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the
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Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemni fied Party unless (i) the Indemnifying Party has agreed to the
retention of such counsel at its expense, or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party, the Indemnifying Party proposes that the same counsel
represent both the Indemnified Party and the Indemnifying Party and
representation of both parties by the counsel would be inappropriate due to
actual or potential differing interests between them. It is understood, where
the expense of separate counsel shall be borne by the Indemnifying Party
pursuant to the foregoing sentence, that the Indemnifying Party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm qualified in
such jurisdiction to act as counsel for such Indemnified Party. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Party agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party will consent to entry of any
judgment or will enter into any settlement that does not include as an
unconditional term thereof the claimant's or plaintiff's release of the
indemnified party from all liability concerning the claim or litigation.
8.4 Contribution. If the indemnification provided for in
Subsections 8.1 and 8.2 are unavailable to an indemnified party in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each indemnifying party thereunder shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the Company and the participating Holders of Registrable
Securities in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the Company and the
participating Holders of Registrable Securities shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the participating Holders
of Registrable Securities and the parties' relative intent and knowledge.
The parties hereto agree that it would not be just and equitable if
contribution pursuant this Subsection 8.4 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding anything herein to the contrary, no participating Holder of
Registrable Securities shall be required to contribute any amount in excess of
the net proceeds of the offering (before deducting expenses, if any) received by
such participating Holder net of the amount of any damages that such
participating Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act)
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shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
9. Holdback Agreement.
9.1 Restrictions on Public Sale by Holders. Holder agrees not
to effect any public sale or distribution of the Company's shares of capital
stock during the seven (7) calendar days prior to and the ninety (90) calendar
day period beginning on the effective date of any underwritten registration
statement effected pursuant to this Agreement (except as part of such
underwritten registration) unless the managing underwriter or underwriters with
respect to such offering otherwise agree; provided, however, that all officers
and directors of the Company, all holders of at least 1% of the Company's equity
securities purchased from the Company (other than securities purchased from the
Company at any time on or after the date of this Agreement in a registered
public offering), and all other persons with registration rights (whether or not
pursuant to this Agreement) are bound by and have entered into a similar
agreement and the restrictions on transfer have not been waived with respect to
any shares owned by any such persons.
9.2 Restrictions on Sale by the Company and Others. The
Company agrees not to effect any public sale or distribution of its equity
securities, including a sale under Regulation D under the Securities Act or
other exemption of or under the Securities Act, or any securities convertible
into or exchangeable or exercisable for its equity securities, (except as part
of the underwritten registration or pursuant to registrations on Forms S-8 or
S-4 or any successor form), during the seven (7) days prior to and the ninety
(90) calendar day period beginning on the effective date of any underwritten
registration statement effected pursuant to this Agreement (except as part of
such underwritten registration) unless the managing underwriter or underwriters
with respect to such offering otherwise agree, and the parties hereto agree that
the Company will not be required to effect any such registration or sale
notwithstanding the other provisions of this Agreement. The Company also agrees
to use reasonable efforts to cause each holder of at least 1% (on a
fully-diluted basis) of its equity securities (other than Registrable
Securities) or any securities convertible into or exchangeable or exercisable
for its equity securities (other than Registrable Securities), purchased from
the Company at any time on or after the date of this Agreement (other than in a
registered public offering), to agree not to make any public sale or
distribution of those securities, including a sale pursuant to Rule 144 (except
as part of the underwritten registration, if permitted), during the seven (7)
days prior to and the 90 days after the effective date of the registration
unless the managing underwriter or underwriters otherwise agree.
10. Selection of Underwriters. The Company will have the right to
select the investment banking firm(s) acting as managing underwriter in
connection with any underwritten public offering; provided, that in the event
the offering is pursuant to a demand registration hereunder, Holder shall have
the sole right to select such managing underwriter.
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11. Survival. The indemnification provisions of Section 8 shall not
terminate and shall survive forever.
12. Rule 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder, and it will take such
further action as any Holder of Registrable Securities reasonably may request,
all to the extent required from time to time, to enable such Holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with Rule 144's or
any successor rule's requirements. The Company also covenants that in such event
it will provide all such information and it will take such further action as any
Holder of Registrable Securities reasonably may request to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of Rule 144 under the Securities Act or any successor rule
requirements.
13. General.
13.1 Assignment. Holder's rights under this Agreement shall
not be transferable without the written consent of the Company. Any attempted
assignment or other transfer of this Agreement in contravention of this Section
13.1 shall be null and void. All of the terms and provisions of this Agreement
shall be binding on and inure to the benefit of the parties and their respective
successors and assigns, including without limitation all subsequent holders of
securities entitled to the benefits of this Agreement who agree in writing to
become bound by the terms of this Agreement. Without limiting the generality of
the foregoing, this Agreement and the rights and obligations of a Holder of
Registrable Securities hereunder may be assigned, in whole or in part, upon
notice to the Company, to a person who owns, or simultaneously with the
assignment of the rights under this Agreement to such person, will own, at least
500,000 shares of capital stock of the Company. Notwithstanding the foregoing,
this Agreement and the rights and obligations of each Holder hereunder may be
assigned, in whole or in part, upon notice to the Company, to (i) any partner or
stockholder of such Holder or (ii) any venture capital fund, investment entity
or investment account for which Pequot Capital Management, Inc. or its
successors or assigns is the investment manager or investment advisor, and such
assignee shall become subject to all of the rights and obligations of such
Holder hereunder.
13.2 Recapitalizations, Exchanges, etc. The provisions of this
Agreement shall apply to the full extent set forth herein with respect to (i)
the shares of Common Stock held by the Holders, (ii) any and all shares of
voting common stock of the Company into which the shares of such Common Stock
are converted, exchanged or substituted in any recapitalization or other capital
reorganization by the Company and (iii) any and all equity securities of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in conversion of, in exchange for or in substitution of, such shares of Common
Stock and shall be appropriately adjusted for any stock
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dividends, splits, reverse splits, combinations, recapitalizations and the like
occurring after the date hereof. The Company shall use its best efforts to cause
any successor or assign (whether by sale, merger or otherwise) to enter into a
new registration rights agreement with the Holders of Registrable Securities on
terms substantially the same as this Agreement as a condition of any such
transaction.
13.3 Attorneys' Fees. In any legal action or proceeding
brought to enforce any provision of this Agreement, the prevailing party shall
be entitled to recover all reasonable expenses, charges, court costs and
attorneys' fees in addition to any other available remedy at law or in equity.
13.4 Cooperation. The parties agree that after execution of
this Agreement they will from time to time, upon the request of any other party
and without further consideration, execute, acknowledge and deliver in proper
form any further instruments and take such other action as any other party may
reasonably require to carry out effectively the intent of this Agreement.
13.5 No Inconsistent Agreements. Except as disclosed in
Exhibit A to this Agreement, the Company represents and warrants that it has not
granted to any person the right to request or require the Company to register
any securities issued by the Company other than the rights contained herein.
Except with the prior written consent of the Holders of Registrable Securities,
the Company will not enter into any agreement with respect to its securities
that shall grant to any person registration rights that in any way conflict with
or are prior in right to the rights provided under this Agreement.
13.6 Validity of Provisions. Should any part of this Agreement
for any reason be declared by any court of competent jurisdiction to be invalid,
that decision shall not affect the validity of the remaining portion, which
shall continue in full force and effect as if this Agreement had been executed
with the invalid portion eliminated, it being the intent of the parties that
they would have executed the remaining portion of the Agreement without
including any part or portion that may for any reason be declared invalid.
13.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which when so signed shall be deemed to be an
original, and such counterparts together shall constitute one and the same
instrument. Facsimile execution and delivery of this Agreement shall be legal,
valid and binding execution and delivery for all purposes.
13.8 Entire Agreement. This Agreement sets forth the entire
agreement between the parties as to the subject matter hereof, supersedes any
and all prior or contemporaneous agreements or understandings of the parties
relating to the subject matter of this Agreement, and may not be amended except
by an instrument in writing signed by all of the parties to this Agreement.
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13.9 Governing Law. The laws of the State of New York (without
giving effect to the choice of law provisions thereof) shall govern the
interpretation and enforcement of this Agreement.
13.10 Headings. The headings of the sections and paragraphs of
this Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
13.11 Notices. All notices or other communications provided
for under this Agreement shall be in writing, and mailed, telecopied or
delivered by hand delivery or by overnight courier service, to the parties at
their respective addresses as indicated below or at such other address as the
parties may designate in writing:
If to Holder:
[Name of Purchaser]
c /o Pequot Capital Management, Inc.
Attn. Xxxxx X. Xxxxx, Chief Financial Officer
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxx Xxxxxxxxxx LLP
Attn: Xxx Xxxx, Esq. or Xxxxxxx Xxxxxx, Esq.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
If to the Company:
BriteSmile, Inc.
Attn: Xxxx X. Xxxxx, CFO
000 Xxxxx Xxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
With a copy to:
Durham Xxxxx & Xxxxxxx
00 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Xxxxx X. Xxxx, Esq.
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All notices and communications shall be effective as follows:
Upon receipt if mailed by first class mail, return receipt requested, postage
prepaid, or by courier; when telecopied, upon confirmed transmission of the
telecopied notice; when hand delivered, upon delivery.
13.12 Remedies. Any person having rights under any provision
of this Agreement will be entitled to enforce such rights specifically, to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.
PEQUOT PRIVATE EQUITY FUND II, L.P., a "Purchaser"
BY: PEQUOT CAPITAL MANAGEMENT, INC.
ITS: INVESTMENT MANAGER
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------------------------
Xxxxx X. Xxxxx, CFO
Date: January 18, 2000
PEQUOT PARTNERS FUND, L.P., a "Purchaser"
BY: PEQUOT CAPITAL MANAGEMENT, INC.
ITS: INVESTMENT MANAGER
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------------------------
Xxxxx X. Xxxxx, CFO
Date: January 18, 2000
PEQUOT INTERNATIONAL FUND, INC., a "Purchaser"
BY: PEQUOT CAPITAL MANAGEMENT, INC.
ITS: INVESTMENT ADVISOR
By: /s/ Xxxxx X.Xxxxx
-----------------------------------------------------------
Xxxxx X. Xxxxx, CFO
Date: January 18, 2000
15
BRITESMILE, INC., the "Company"
By: /s/ Xxxx X. Xxxxx
----------------------------------------------------------
Xxxx X. Xxxxx, CFO
Date: January 18, 2000
16
