CONFIDENTIAL INFORMATION INDICATED BY X'S HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
REGISTRATION RIGHTS AGREEMENT
dated as of May 1, 1998
between
IVC INDUSTRIES, INC.
AND
XXXXXXXXXXXXXXXXXXXX
REGISTRATION RIGHTS AGREEMENT, dated as of May 1, 1998, between IVC
Industries, Inc., a Delaware corporation (the "Company"), and XXXXXXXX., a New
Jersey corporation ("Purchaser"). This Agreement is made pursuant to the Stock
Purchase Warrant, of even date herewith (the "Warrant") between the Company and
the Purchaser. The Company has agreed to provide the Purchaser and any Permitted
Transferees of Registrable Securities (as hereinafter defined) that may be
issued, from time to time, the registration rights with respect to the
Registrable Securities, as set forth in this Agreement. Capitalized terms used
herein without definition shall have the meanings set forth in the Warrant.
The parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized terms shall have the
following meanings:
"Commencement Date" shall have the meaning assigned to such term in
Section 3 hereof.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
"Demand Registration" shall have the meaning assigned to such term in
Section 3 hereof.
"Holder" shall mean the Purchaser, or any Permitted Transferee permitted
by the terms of the Warrant, who is the owner of the Registrable Securities.
"Permitted Transferee" means any transferee of the Purchaser permitted by
the terms of the Warrant.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint state company trust, unincorporated
organization, joint venture, a government authority or other entity of whatever
nature.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement, and all other amendments and supplements
to the Prospectus, including post-effective amendments to the Registration
Statement of which such Prospectus is a part, and all material incorporated by
reference in such Prospectus.
"Registrable Securities" shall mean the Securities, but only so long as
they remain Restricted Securities.
"Registration Statement" means any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the
Prospectus, amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference in such Registration Statement.
"Restricted Securities" means the Registrable Securities unless and until,
in the case of any such Securities, (i) they have been effectively registered
under the Securities Act and disposed of in accordance with the Registration
Statement covering them, (ii) they are distributed to the public pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act, or
(iii) they are otherwise freely transferable without restriction under the
Securities Act, and Purchaser has received an opinion of its legal counsel to
such effect.
"Securities" shall mean the shares of Common Stock issued or issuable from
time to time to Purchaser or its Permitted Transferees upon exercise of the
Warrant.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
2. Securities Subject to this Agreement. The Securities entitled to the
benefits of this Agreement are the Registrable Securities.
3. Demand Registration.
(a) Request for Registration. Subject to the provisions of Section 3(b)
hereof and during the period commencing at any time after the earlier to occur
of (i) six months following the effective date of the first Registration
Statement of a public offering of securities of the Company, or any successor
entity to the Company through merger, reorganization, exchange, transfer or
otherwise, and (ii) October 31, 2000, through and including the date five years
after the expiration date of the Warrant, the Holder may make a written request
to the Company for registration under and in accordance with the provisions of
the Securities Act of up to all of the Registrable Securities owned by the
Holder (a "Demand Registration").
(b) Number of Registrations. The Holder is entitled to two (2)
Demand Registrations. The Holder agrees that if the Company reasonably
determines that there are material developments which require the filing of a
post-effective amendment to the Registration Statement, then the Holder agrees
to refrain from selling any Registrable Securities until the post-effective
amendment is declared effective. The Company agrees to file and attempt to have
declared effective such post-effective amendment as soon as possible. The
Company shall not be deemed to have effected a Demand Registration unless and
until such Demand Registration is declared effective.
(c) Priority on Demand Registrations. If the managing underwriter of
a Demand Registration (or in the case of a Demand Registration not being
underwritten, the Holder) advises the Company in writing that in its opinion the
principal amount and/or number of Securities proposed to be sold in such
offering cannot be sold without resulting in an adverse effect on such offering,
the Company will include in any such registration only the number of securities
which, in the opinion of such underwriter (or the Holder, as the case may be)
can be
sold; provided, that all Registrable Securities which the Holder has requested
to be included in such Demand Registration pursuant to this Section 3 are not so
included, the Holder shall be entitled to any additional Demand Registration
hereunder (with all expenses of registration relating to such additional Demand
Registration to be borne by the Company) on the same terms and conditions as
would have applied to the Holder had such earlier Demand Registration not been
made.
(d) Selection of Underwriters and Counsel. If any Demand
Registration is an underwritten offering with respect to any issue of
Registrable Securities, the Holder will select the investment banker or bankers
and manager or managers to administer the offering and one counsel to the
sellers of such Registrable Securities in such offering; provided, that such
investment bankers and managers shall be of nationally recognized standing and
reasonably satisfactory to the Company. The Holder shall pay all underwriting
discounts and commissions of such investment banker or bankers and manager or
managers. The Company shall pay the reasonable fees and expenses of one such
counsel to the sellers of such Registrable Securities incurred in connection
with reviewing and otherwise acting in connection with the Registration
Statement relating to such underwritten public offering.
4. Piggyback Registration Rights.
(a) If the Company at any time or from time to time subsequent to the date
of this Agreement proposes to register any securities under the Securities Act
either for its own account or the account of any selling stockholders (other
than pursuant to Section 3 and other than pursuant to a registration statement
on Forms S-4 or S-8 or any successor or similar forms), it will give written
notice to the Holder of its intention at least thirty (30) days in advance of
the filing of any registration statement with respect thereto. Upon the written
request of the Holder given within fifteen (15) days after receipt of such
notice, the Company, subject to Section 4(b) below, will cause such number of
the Registrable Securities requested by the Holder to be registered to be so
registered pursuant to such registration statement.
(b) Underwritten Offerings.
(i) In the case of an underwritten offering by the Company of
securities, the Company shall, with respect to Registrable Securities that
the Holder then desires to sell, enter into an underwriting agreement with
the same underwriters engaged by the Company with respect to securities
being offered by the Company and cause such underwriters to include in any
such underwriting all of the Registrable Securities that the Holder then
desires to sell; provided, however, that such underwriting agreement is in
substantially the same form as the underwriting agreement that the Company
enters into in connection with the primary offering it is making.
(ii) If the managing underwriter with respect to an offering
pursuant to this Section 4 requests in writing that the number of shares
of Registrable Securities of the Holder that are entitled to be registered
pursuant to this Section 4 be reduced because in the judgment of the
managing underwriter the offering would be materially and adversely
affected, then the shares of Registrable Securities of the Holder that it
wishes to register
pursuant to this Section 4 shall be reduced by such amount as the managing
underwriter may determine in writing so as to not materially and adversely
affect the proposed offering.
5. Information. Upon making a request pursuant to Section 3 or 4, the
Holder shall specify the number of shares of Registrable Securities to be
registered and shall also specify the intended method of disposition thereof;
provided, however, that if the Holder specifies one particular type of
underwritten offering, such method of disposition shall be the type of
underwritten offering or a series of such underwritten offerings used in
connection with the disposition of the Securities as the Company may elect
during the time period the Registration Statement is effective.
The Company may require the Holder to furnish to the Company such
information regarding itself and the distribution of Registrable Securities as
the Company may from time to time reasonably request in writing in order to
comply with the Securities Act. The Holder agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information it has
previously furnished to the Company.
6. Registration Procedures. If and whenever the Company is required by the
provisions of Section 3 or 4 to effect a registration under the Securities Act,
the Company will, at its expense, as expeditiously as practicable, but in no
event later than 30 days after receipt of a request from a Holder pursuant to
the terms of Section 3 or 4:
(a) In accordance with the Securities Act and the rules and regulations of
the Commission, prepare and file with the Commission a Registration Statement in
the form of an appropriate registration statement with respect to the
Registrable Securities and use its best efforts to cause such Registration
Statement to become and remain continuously effective until all of the
Registrable Securities covered by such Registration Statement have been sold in
accordance with the intended methods of disposition of the seller or sellers set
forth in such Registration Statement. The Company shall prepare and file with
the Commission such amendments to such Registration Statement and supplements to
the Prospectus contained therein as may be necessary to keep such Registration
Statement effective and such Registration Statement and Prospectus accurate and
complete during such period;
(b) Furnish to the Holder such reasonable number of copies of the
Registration Statement and Prospectus and such other documents as the Holder may
reasonably request in order to facilitate the public offering of the Registrable
Securities;
(c) Use its best efforts to register or qualify the Securities covered by
such Registration Statement under such state securities or blue sky laws of such
jurisdictions as the Holder may reasonably request, provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation in any jurisdiction in which it is not so
qualified or to subject itself to taxation in connection with any such
registration or qualification of such Securities;
(d) Notify the Holder, promptly after receiving notice thereof, of the
date and time when such Registration Statement and each post-effective amendment
thereto has become effective or a supplement to any Prospectus forming a part of
such Registration Statement has been filed;
(e) Notify the Holder promptly of any request by the Commission for the
amending or supplementing of such Registration Statement or Prospectus or for
additional information;
(f) Prepare and file with the Commission, promptly upon the request of the
Holder, the Registration Statement and any amendments or supplements to such
Registration Statement or Prospectus which, in the reasonable opinion of counsel
for the Holder, is required under the Securities Act or the rules and
regulations thereunder in connection with the distribution of the Securities by
such Holder or to otherwise comply with the requirements of the Securities Act
and such rules and regulations;
(g) Prepare and promptly file with the Commission and promptly notify the
Holder of the filing of such amendments or supplements to such 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 Securities Act, any event has occurred as the
result of which any such Prospectus or any other Prospectus then in effect may
include an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading;
(h) Advise the Holder, promptly after receiving notice or obtaining
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such 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;
(i) Otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make generally available to the Company's
security holders earnings statements satisfying the provisions of Section 11(a)
of the Securities Act, no later than forty-five (45) days after the end of any
twelve (12) month period (or ninety (90) days, if such a period is a fiscal
year) beginning with the first month of the Company's first fiscal quarter
commencing after the effective date of a Registration Statement; and
(j) Not file any amendment or supplement to such Registration Statement or
Prospectus to which the Holder has objected on the grounds that such amendment
or supplement does not comply in all material respects with the requirements of
the Securities Act or the rules and regulations thereunder, after having been
furnished with a copy thereof at least three business days prior to the filing
thereof unless the Company shall have obtained an opinion of counsel that such
amendment is required under the Securities Act or the rules or regulations
adopted thereunder in connection with the distribution of Securities by the
Company or the Holder.
7. Expenses of Registration. All expenses of the Company incident to the
Company's performance of or compliance with the provisions of Sections 3, 4, 5
and 6 of this Agreement shall be borne by the Company, including without
limitation:
(a) All registration and filing fees;
(b) Fees and expenses of compliance with all securities or blue sky laws
(including fees and disbursements of counsel for the Company in connection with
blue sky qualifications of the Registrable Securities; provided, however, that
the Company shall not be required to consent to general service of process in
any such state);
(c) Printing, messenger, telephone and delivery expenses; and
(d) Fees and disbursements of counsel for the Company and its independent
auditors.
Nothing in this Section 7 shall be deemed to require the Company to pay or
bear the expenses of the Holder's attorney or accountants or any other personal
expenses or any underwriting discounts, selling commissions or similar fees if
any registration pursuant hereto results in an underwritten public offering of
all or any portion of the Registrable Securities.
8. Indemnification and Contribution.
(a) Indemnification by the Company. Whenever, pursuant to Section 3 or 4,
a Registration Statement relating to the Registrable Securities is filed under
the Securities Act, the Company will indemnify and hold harmless the Holder each
of its officers, directors and employees, and each person, if any, who controls
the Holder (collectively, the "Holder Indemnitee" and, individually, a "Holder
Indemnitees"), against any and all losses, claims, damages or liabilities, joint
or several, to which such Holder Indemnitees may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such Registration Statement, or Prospectus contained therein, or any amendment
or supplement thereto, or arise out of or are based upon 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, and will reimburse each
Holder Indemnitee for all legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action.
(b) Indemnification by Holder. The Holder will indemnify and hold harmless
the Company, each of its directors, each of its officers who has signed the
Registration Statement and each other person, if any, who controls the Company,
within the meaning of the Securities Act (collectively, the "Company
Indemnitees" and, individually, a "Company Indemnitee") against all losses,
claims, damages or liabilities, joint or several, to which such Company
Indemnitees may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such Registration Statement, or Prospectus
contained therein, or any amendment or supplement thereto, or arise out
of or are based upon 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, but only if, and to the extent that, such statement or
omission was in reliance upon and in conformity with written information
furnished to the Company by the Holder specifically for use in the preparation
thereof.
(c) Indemnification Procedures. Promptly after receipt by a Holder
Indemnitee or a Company Indemnitee (collectively, "Indemnitees" and,
individually, an "Indemnitee") under Section 8(a) or 8(b) of notice of the
commencement of any action, such Indemnitee will, if a claim in respect thereof
is to be made against the indemnifying party under such clause, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve the indemnifying party from
any liability which it may have to any Indemnitee otherwise than under such
clauses. In case any such action shall be brought against any Indemnitee, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such Indemnitee of its
election to assume the defense thereof, the indemnifying party shall not be
liable to such Indemnitee under such clause for any legal or other expenses
subsequently incurred by such Indemnitee in connection with the defense thereof
other than reasonable costs of investigation; provided, however, that the
Indemnitee shall have the right to employ one counsel to represent such
Indemnitee if, in the reasonable judgment of such Indemnitee it is advisable for
such party to be represented by separate counsel because separate defenses are
available, or because a conflict of interest exists between such indemnified and
indemnifying party in respect of such claim, and in that event the fees and
expenses of such separate counsel shall be paid by the indemnifying party.
Notwithstanding the foregoing, if the Company is an Indemnitee, the Company
shall designate the one counsel, and in all other circumstances, the one counsel
shall be designated by a majority in interest based upon the Registrable
Securities of the Indemnitees.
For purposes of this Section 7 the terms "control," and "controlling
person" have the meanings given to such terms under the Securities Act.
(d) Contribution. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an Indemnitee, then the
indemnifying party shall contribute to the amount paid or payable by the
Indemnitee as a result of such losses, claims, damages liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party on the one hand and the Indemnitee on the
other from the registration or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, or provides a lesser sum to the
Indemnitee than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the Indemnitee on the other but also the
relative fault of the indemnifying party and the Indemnitee as well as any other
relevant equitable considerations. Notwithstanding the foregoing, no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
9. Amendment and Modification. This Agreement may be amended, modified or
supplemented in any respect only by written agreement by the Company and the
Holder.
10. Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New Jersey, without giving effect to
the choice of law principles thereof.
11. Invalidity of Provision. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
12. Notices. All notices and other communications hereunder shall be in
writing and, unless otherwise provided herein, shall be deemed duly given if
delivered personally or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses or (at such other address
for the party as shall be specified by like notice):
(a) If to the Company:
IVC Industries, Inc.
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: I. Xxxx Xxxxxxxxxxx
or as the Company shall designate to the Holder in writing,
with a simultaneous copy to:
IVC Industries, Inc.
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: E. Xxxxxx Xxxxx
(b) If to the Holder:
XXXXXXXXXXXXXX
XXXXXXXXXXXXXX
XXXXXXXXXXXXXX
XXXXXXXXXXXXXX
or as the Holder shall designate to the Company in writing,
with a simultaneous copy to:
XXXXXXXXXXXXXX
XXXXXXXXXXXXXX
XXXXXXXXXXXXXX
XXXXXXXXXXXXXX
13. Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience of reference only and shall not control or
affect the meaning or construction of any provision hereof. This Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one and the same
instrument.
14. Entire Agreement. This Agreement, including any exhibits hereto and
the documents and instruments referred to herein and therein, embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
representations, warranties, covenants or undertakings other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
15. Attorneys' Fees. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover such reasonable attorneys fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it or they may be entitled, as may be ordered in connection with such
proceeding.
16. Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their successors and assigns.
IN WITNESS WHEREOF, this Agreement has been signed by each of the parties
hereto as of this 1st day of May, 1998.
IVC INDUSTRIES, INC.
By: /s/ I. Xxxx Xxxxxxxxxx
Name:
Title:
XXXXXXXXXXXXXX
By XXXXXXXXXXXXXXX
Name:
Title:
