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EXHIBIT 10.44
THE DELICIOUS FROOKIE COMPANY, INC.
0000 Xxxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxx 00000
October 21, 1997
Investors to be listed on Schedule A to
the Common Stock and Option Purchase Agreement
Re: Registration Rights
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Dear Investors:
The Delicious Frookie Company, Inc. ("Company") hereby agrees to
provide to each Investor who becomes a party to the Common Stock and Option
Purchase Agreement among Xxxxxxx X. Xxxxx, Xxxxxx Xxxxx, each of the Investors
listed on Schedule A thereto and the Company ("Stock and Option Agreement"), the
following registration rights with respect to any Shares and Option Shares
underlying Options (as defined in the Stock and Option Agreement) purchased by
such Investors pursuant to the Stock and Option Agreement. By executing a
Counterpart Signature Page to the Stock and Option Agreement, each Investor
signifies its acceptance of such registration rights and all other rights and
obligations of Investors described in this letter.
A. REGISTRATION IN IPO.
(1) GRANT OF RIGHT. The Shares and the Option Shares (together, the
"Registrable Securities") shall be registered for resale in the registration
statement under the Securities Act ("Registration Statement") filed with the
Securities and Exchange Commission ("Commission") in connection with the
Company's initial public offering of securities ("Specified IPO") to be managed
by Network 1 Financial Securities, Inc. ("Network 1"), as described in the
letter of intent dated May 21, 1997, as amended October 20, 1997 ("Letter of
Intent") between and the Company.
(2) TERMS. The Company shall bear all fees and expenses attendant to
registering the Registrable Securities, but the Investors shall pay any and all
underwriting commissions and the fees and expenses of any legal counsel selected
by the Investors to represent them in connection with the sale of the
Registrable Securities. The Company agrees to use its best efforts to qualify or
register the Registrable Securities in such States as are reasonably requested
by Network 1; provided, however, that in no event shall the Company be required
to register the Registrable Securities in a State in which such registration
would cause (i) the Company to be obligated to register or license to do
business in such State, or (ii) the principal stockholders of the Company to be
obligated to escrow their shares of capital stock of the Company. The Company
shall cause any registration statement filed pursuant to the rights granted
under Paragraph A(1) to remain effective, and any State qualifications or
registrations obtained or filed pursuant to this Paragraph A(2) to continue in
effect, until all of the Registrable Securities covered by such Registration
Statement have been sold.
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Investors to be listed on Schedule A to
the Common Stock and Option Purchase Agreement
October 21, 1997
Page 2
B. "PIGGY-BACK" REGISTRATION.
(1) GRANT OF RIGHT. In addition to the right of registration set
forth in Paragraph A, the Investors shall have the right until the date which is
seven years after the Closing Date (as defined in the Stock and Option
Agreement) to include any of the Registrable Securities as part of any other
registration of securities filed by the Company (other than in connection with a
transaction contemplated by Rule 145(a) promulgated under the Securities Act or
pursuant to Form S-8 or any equivalent form), provided, however, that if, in the
written opinion of the Company's managing underwriter or underwriters, if any,
for such offering, the inclusion of the Registrable Securities, when added to
the securities being registered by the Company or the selling stockholder(s),
will exceed the maximum amount of the Company's securities which can be marketed
(i) at a price reasonably related to their then current market value, or (ii)
without materially and adversely affecting the entire offering, the Company
shall nevertheless register all or any portion of the Registrable Securities
required to be so registered but such Registrable Securities shall not be sold
by the Investors until 180 days after the registration statement for such
offering has become effective and provided further that, if any securities are
registered for sale on behalf of other stockholders in such offering and such
stockholders have not agreed to defer such sale until the expiration of such 180
day period, the number of securities to be sold by all stockholders in such
public offering during such 180 day period shall be apportioned pro rata among
all such selling stockholders, including all holders of the Registrable
Securities, according to the total amount of securities of the Company owned by
said selling stockholders, including all holders of the Registrable Securities.
(2) TERMS. The Company shall bear all fees and expenses attendant to
registering the Registrable Securities, but the Investors shall pay any and all
underwriting commissions and the expenses of any legal counsel selected by the
Investors to represent them in connection with the sale of the Registrable
Securities. In the event of such a proposed registration, the Company shall
furnish the then holders of outstanding Options and Registrable Securities with
not less than thirty days' written notice prior to the proposed date of filing
of such registration statement. Such notice shall continue to be given for each
registration statement filed by the Company until the earlier of (i) such time
as all of the Registrable Securities have been sold by the holders thereof or
(ii) the expiration of the "piggy-back" rights provided for herein. The holders
of the Options and Registrable Securities shall exercise the "piggy-back" rights
provided for herein by giving written notice, within twenty days of the receipt
of the Company's notice of its intention to file a registration statement. The
Company shall cause any registration statement filed pursuant to the above
"piggy-back" rights to remain effective until all of the Registrable Securities
covered by such registration statement have been sold. Notwithstanding the
provisions of this Paragraph B, the Company shall have the right at any time
after it shall have given written notice of its intention to file a registration
statement (irrespective of whether a written request for inclusion of any
Registrable Securities shall have been made) to elect not to file any such
proposed registration statement, or to withdraw the same after the filing but
prior to the effective date thereof.
C. GENERAL TERMS.
(1) INDEMNIFICATION. The Company shall indemnify the holder(s) of
the Registrable Securities to be sold pursuant to any registration statement
hereunder ("Holder(s)") and each person, if any, who controls such Holders
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), against
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Investors to be listed on Schedule A to
the Common Stock and Option Purchase Agreement
October 21, 1997
Page 3
all loss, claim, damage, expense or liability (including all reasonable
attorney's fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Securities Act, the Exchange Act or otherwise, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in (i) such registration statement; or (ii) any
application or other document or written communication (in this Paragraph C
collectively called "application") executed by the Company or based upon written
information furnished by the Company in any jurisdiction in order to qualify the
Registrable Securities under the securities laws thereof or filed with the
Commission, any state securities commission or agency. Nasdaq or any securities
exchange; or the omission, or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
unless such statement or omission was made in reliance upon, and in strict
conformity with, written information furnished to the Company with respect to
the Holder(s) by or on behalf of the Holder(s) expressly for use in such
registration statement or in any application, as the case may be. The Company
agrees promptly to notify the Holder(s) of the commencement of any litigation or
proceedings against the Company or any of its officers, directors or controlling
persons in connection with the issue and sale of the Registrable Securities or
in connection with the registration statement or any application. The Holder(s)
and their successors and assigns shall severally, and not jointly, indemnify the
Company, against all loss, claim, damage, expense or liability (including all
reasonable attorney's fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Securities Act, the Exchange Act or otherwise,
arising from information furnished by or on behalf of such Holders, with respect
to such Holders, in writing, for specific inclusion in such registration
statement or any application.
(2) ELIMINATION OF REGISTRATION RIGHTS. Notwithstanding anything
to the contrary in Paragraph B hereof, no holders of Registrable Securities
shall be entitled to have such securities registered under the Securities Act
if, in the opinion of counsel to the Company, they may be sold without
restriction pursuant to Rule 144(k) promulgated under the Securities Act and
any restrictive legends under the Securities Act are removed from the
certificates representing such securities and any stop transfer order for such
certificates is removed.
(3) SUCCESSORS AND ASSIGNS. The registration rights granted to the
Investors hereunder inure to the benefit of all the Investors' successors,
heirs, pledges, assignees, transferees and purchasers of the Shares, Options and
Option Shares.
Very truly yours,
THE DELICIOUS FROOKIE COMPANY,INC.
By: /s/
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Xxxxxxx X. Xxxxx, Chief Executive Officer
