Exhibit 4.10
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of the 18th day of December, 1997 by and between INNOPET
BRANDS CORP., a Delaware corporation (the "Company") and EXPLORER PARTNERS LLC
(sometimes referred to herein as "EP" or the "Shareholders").
R E C I T A L S :
WHEREAS, in connection with that certain Subscription
Agreement and Investment Representation dated as of December 18, 1997 by and
between the Company and EP (the "Investor Agreement"), the Company has agreed,
upon the terms and subject to the conditions contained therein, to issue and
sell to the Shareholders Series B Convertible Preferred Stock (the "Preferred
Stock") convertible into shares of the Company's common stock, par value $.01
per share (the "Common Stock", the Preferred Stock, and the Common Stock into
which the Preferred Stock is convertible, are sometimes hereinafter referred to
as the "Securities"); and
WHEREAS, the Company desires to grant to the Shareholders
certain registration rights relating to the Securities and the Shareholders
desire to obtain such registration rights, subject to the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the mutual premises,
representations, warranties and conditions set forth in this Agreement, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions and References. For purposes of this Agreement,
in addition to the definitions set forth above and elsewhere herein, the
following terms shall have the following meanings:
(a) The term "Commission" shall mean the United States
Securities and Exchange Commission and any successor agency.
(b) The terms "register", "registered" and
"registration" shall refer to a registration effected by
preparing and filing a registration statement or similar
document in compliance with the 1933 Act (as herein defined)
and the declaration or ordering of effectiveness of such
registration statement or document.
(c) For purposes of this Agreement, the term
"Registrable Securities" shall mean (i) any shares of Common
Stock issued or issuable upon the proper conversion of the
Preferred Stock; (ii) any Securities issued by way of a stock
split; and (iii) any Common Stock issued as a stock dividend
on the Preferred
Stock. For purposes of this Agreement, any Registrable
Securities shall cease to be Registrable Securities when (w) a
registration statement covering such Registrable Securities
has been declared effective and such Registrable Securities
have been disposed of pursuant to such effective registration
statement, (x) such Registrable Securities are eligible to be
sold pursuant to Rule 144 (or any similar provision then in
force) under the 1933 Act, (y) such Registrable Securities
have been otherwise transferred, no stop transfer order
affecting such Securities is in effect and the Company has
delivered new certificates or other evidences of ownership for
such Registrable Securities not bearing any legend indicating
that such Securities have not been registered under the 1933
Act, or (z) such Registrable Securities are sold by a person
in a transaction in which the rights under the provisions of
this Agreement are not assigned.
(d) The term "Holder" shall mean the Shareholders or
any transferee or assignee thereof to whom the rights under
this Agreement are assigned in accordance with Section 7
hereof and in accordance with the Investor Agreement, provided
that the Shareholder or such transferee or assignee shall then
own the Registrable Securities.
(e) The term "1933 Act" shall mean the Securities Act
of 1933, as amended.
(f) An "affiliate of such Holder" shall mean a person
who controls, is controlled by or is under common control with
such Holder, or the spouse or children (or a trust exclusively
for the benefit of the spouse and/or children) of such Holder,
or, in the case of a Holder that is a partnership, its
partners.
(g) The term "Person" shall mean an individual,
corporation, partnership, trust, limited liability company,
unincorporated organization or association or other entity,
including any governmental entity.
(h) References in this Agreement to any rules,
regulations or forms promulgated by the Commission shall
include rules, regulations and forms succeeding to the
functions thereof, whether or not bearing the same
designation.
2. Registration.
(a) Mandatory Registration. The Company shall prepare,
and within 30 days after the Second Tranche Closing Date (as
defined in the Investor Agreement), file with the Commission a
registration statement (the "Registration Statement") on Form
S-3 (or if Form S-3 is not then available, on such form of
Registration Statement as is then available to effect a
registration of all the Registrable Securities) covering the
resale of all of the Registrable Securities, which
Registration Statement, to the extent allowable under the 1933
Act and the Rules promulgated thereunder (including Rule 416),
shall state that such Registration Statement also covers such
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indeterminate number of additional shares of Common Stock as
may become issuable upon proper conversion of the
Preferred Stock (i) to prevent dilution resulting from stock
splits, stock dividends or similar transactions or (ii) by
reason of reductions in the conversion price of the Preferred
Stock in accordance with the terms thereof, including, but not
limited to, the terms which cause the conversion price to
decrease to the extent the average bid price of the Common
Stock decreases. The Registration Statement (and each
amendment or supplement thereto) shall be provided to the
Shareholders.
(b) Possible Payments by the Company.
(i) The Company shall file the Registration
Statement pursuant to Section 2(a) hereof not later
than 30 days from the Second Tranche Closing Date. If
the Registration Statement is not filed by the Company
within 30 days of the Second Tranche Closing Date, then
the Company shall pay Holders of the Preferred Stock a
cash penalty at the rate of one percent of the
Shareholders' aggregate investment paid to the Company
for each month (or a portion thereof) that such
Registration Statement has not been filed by the
Company.
(ii) The Company shall use its best efforts to
cause the Registration Statement to be filed pursuant
to Section 2(a) hereof to become effective not later
than 60 days from the Second Tranche Closing Date. If
(a) the Registration Statement is not declared
effective by the Commission within 60 days of the
Second Tranche Closing Date or (b) during the
Registration Period (as hereinafter defined) and after
the Registration Statement has been declared effective
by the Commission, sales of all the Registrable
Securities cannot be made pursuant to the Registration
Statement (by reason of a stop order or the Company's
failure to update the Registration Statement or any
other reason outside the control of and not caused by
any Holder or otherwise agreed to in writing by the
Shareholders or such Holder), then the Company shall
pay Holders of the Preferred Stock a cash penalty at
the rate of one percent of the Shareholders' aggregate
investment paid to the Company for each month (or a
portion thereof) that such Registration Statement has
not been declared effective.
3. Obligations of the Company. Whenever required under Section
2 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as possible:
(a) prepare and file with the Commission such
amendments and supplements to such Registration Statement (and
any prospectus used in connection therewith) as may be
necessary to keep such Registration Statement effective for a
period of not less than one year, or such shorter period which
will terminate when all Registrable Securities covered by such
Registration Statement have been sold (the "Registration
Period"), and comply with the provisions of the 1933 Act with
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respect to the disposition of all Securities covered by such
Registration Statement during such period in accordance with
the intended methods of disposition by the sellers thereof set
forth in such Registration Statement;
(b) furnish to each Holder of Registrable Securities to
be included in the Registration Statement copies of such
Registration Statement as filed and each amendment and
supplement thereto, and such other documents as such Holder
may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such Holder;
(c) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky
laws of such jurisdictions as any selling Holder of
Registrable Securities reasonably requests, and do any and all
other acts which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such
Holder; 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
Section 3(c) hereof, (ii) subject itself to taxation in any
such jurisdiction, or (iii) consent to general service of
process in any such jurisdiction;
(d) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably
practicable, but not later than 90 days after the close of the
period covered thereby, an earnings statement covering the
period of at least twelve (12) months beginning not later than
the first day of the Company's fiscal quarter next following
the effective date of the Registration Statement;
(e) notify each selling Holder of such Registrable
Securities, at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act (even if such time
is after the period referred to in Section 3(a)), of the
happening of any event as a result of which the prospectus
included in such Registration Statement contains an untrue
statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein in light of the circumstances being made
not misleading, and prepare a supplement or amendment to such
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 material fact required to be stated therein or
necessary to make the statements therein in light of the
circumstances being made not misleading;
(f) use its best efforts to cause all such Registrable
Securities to be listed on the Nasdaq SmallCap Market and/or
any other securities exchange or quotation system on which
similar securities issued by the Company are then listed or
traded.
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The Company may require each selling Holder of Registrable
Securities as to which any registration is being effected to furnish to the
Company such information regarding the distribution of such Registrable
Securities as the Company may from time to time reasonably request in writing.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(e)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(e) hereof, and, if so directed by
the Company, such Holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Holder's possession,
of the prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
Company shall extend the Registration Period by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 3(e) hereof to and including the date when each selling Holder of
Registrable Securities covered by such Registration Statement shall have
received the copies of the supplemented or amended prospectus contemplated by
Section 3(e) hereof.
4. Expenses of Registration. The Company agrees to pay all
expenses incurred in connection with the registration pursuant to Section 2 of
this Agreement including, without limitation, all registration, filing and
qualification fees, word processing, duplicating, printers' and accounting fees
(including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance), exchange listing fees or
National Association of Securities Dealers fees, messenger and delivery
expenses, all fees and expenses of complying with securities or blue sky laws,
and fees and disbursements of counsel for the Company. The selling Holders shall
bear and pay the underwriting commissions and discounts and broker commissions
applicable to the Registrable Securities offered for their account in connection
with any registrations, filings and qualifications made pursuant to this
Agreement.
5. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees
to indemnify, to the full extent permitted by law, each
Holder, its officers, directors and agents and each Person who
controls such Holder (within the meaning of the 0000 Xxx)
against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material
fact contained in the Registration Statement, prospectus or
preliminary prospectus or any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statement therein (in case of a
prospectus or preliminary prospectus, in the light of the
circumstances under which they were made) not misleading.
(b) Indemnification by Holders. In connection with the
Registration Statement in which a Holder is participating,
each such Holder will furnish to the Company in writing such
information with respect to such Holder as the Company
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reasonably requests for use in connection with such
Registration Statement or prospectus and agrees to indemnify,
to the extent permitted by law, the Company, its directors and
officers and agents and each Person who controls the Company
(within the meaning of the 0000 Xxx) against any losses,
claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact or any
omission or alleged omission of a material fact required to be
stated in the Registration Statement, prospectus or
preliminary prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein (in the
case of a prospectus or preliminary prospectus, in the light
of the circumstances under which they were made) not
misleading, to the extent, but only to the extent, that such
untrue statement or omission was made in reliance upon and in
conformity with any information with respect to such Holder so
furnished in writing by such Holder.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder agrees to give prompt
written notice to the indemnifying party after the receipt by
such Person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof
made in writing for which such Person will claim
indemnification or contribution pursuant to this Agreement
and, unless in the reasonable judgment of such indemnified
party a conflict of interest may exist between such
indemnified party and the indemnifying party with respect to
such claim, permit the indemnifying party to assume the
defense of such claims with counsel reasonably satisfactory to
such indemnified party. Whether or not such defense is assumed
by the indemnifying party, the indemnifying party will not be
subject to any liability for any settlement made without its
consent (but such consent will not be unreasonably withheld).
Failure by such Person to provide said notice to the
indemnifying party shall itself not create liability except to
the extent of any injury caused thereby. No indemnifying party
will consent to entry of any judgment or enter into any
settlement which 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
of such claim or litigation. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim,
it will not be obligated to pay the fees and expenses of more
than one (1) counsel with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any
other such indemnified parties with respect to such claim, in
which event the indemnifying party shall be obligated to pay
the fees and expenses of such additional counsel or counsels.
(d) Contribution. If for any reason the indemnity
provided for in this Section 5 is unavailable to, or is
insufficient to hold harmless, an indemnified party, then the
indemnifying party shall contribute to the amount paid or
payable by the indemnified party 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
indemnified party on
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the other, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, or provides a lesser
sum to the indemnified party 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 indemnified party on the other
but also the relative fault of the indemnifying party and the
indemnified party as well as any other relevant equitable
considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to,
among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such
indemnifying party or 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 5(c), any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
If indemnification is available under this Section 5,
the indemnifying parties shall indemnify each indemnified
party to the full extent provided in Sections 5(a) and (b)
without regard to the relative fault of said indemnifying
party or indemnified party or any other equitable
consideration provided for in this Section 5.
6. Rule 144. The Company covenants that it will file the
reports required to be filed by it under the 1933 Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations adopted by the
Commission thereunder; and it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the 1933 Act
within the limitation of the exemptions provided by (a) Rule 144 under the 1933
Act, as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
7. Transfer of Registration Rights. The registration rights of
any Holder under this Agreement with respect to any Registrable Securities may
be transferred to any transferee of such Registrable Securities; provided that
such transfer may otherwise be effected in
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accordance with applicable securities laws; provided further, that such transfer
is in accordance with the terms of the Investor Agreement; provided further,
that the transferring Holder shall give the Company written notice at or prior
to the time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which the rights under this Agreement
are being transferred; provided further, that such transferee shall agree in
writing, in form and substance satisfactory to the Company, to be bound as a
Holder by the provisions of this Agreement; and provided further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by such transferee is restricted under
the 1933 Act. Except as set forth in this Section 7, no transfer of Registrable
Securities shall cause such Registrable Securities to lose such status.
8. Mergers, Etc. The Company shall not, directly or
indirectly, enter into any merger, consolidation or reorganization in which the
Company shall not be the surviving corporation unless the proposed surviving
corporation shall, prior to such merger, consolidation or reorganization, agree
in writing to assume the obligations of the Company under this Agreement, and
for that purpose references hereunder to "Registrable Securities" shall be
deemed to be references to the securities which the Holders would be entitled to
receive in exchange for Registrable Securities under any such merger,
consolidation or reorganization; provided, however, that the provisions of this
Section 8 shall not apply in the event of any merger, consolidation or
reorganization in which the Company is not the surviving corporation if each
Holder is entitled to receive in exchange for its Registrable Securities
consideration consisting solely of (i) cash, (ii) securities of the acquiring
corporation which may be immediately sold to the public without registration
under the 1933 Act, or (iii) securities of the acquiring corporation which the
acquiring corporation has agreed to register within ninety (90) days of
completion of the transaction for resale to the public pursuant to the 1933 Act.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its
securities which is inconsistent with the rights granted to
the Holders in this Agreement.
(b) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written
consent of the Holders of at least a majority of the
Registrable Securities then outstanding affected by such
amendment, modification, supplement, waiver or departure.
(c) Successors and Assigns. Except as otherwise
expressly provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to
confer upon any Person other than the parties hereto or their
respective successors and assigns any
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rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this
Agreement.
(d) Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the
State of Delaware applicable to contracts made and to be
performed wholly within that state, without regard to the
conflict of law rules thereof.
(e) Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
(f) Headings. The headings in this Agreement are used
for convenience of reference only and are not to be considered
in construing or interpreting this Agreement.
(g) Notices. Any notice required or permitted under
this Agreement shall be given in writing and shall be
delivered in person or by telecopy or by overnight courier
guaranteeing no later than second business day delivery,
directed to (i) the Company at the address set forth below its
signature hereof (with a copy, which copy shall not constitute
notice, to Camhy Karlinsky & Xxxxx LLP, 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 Attention Xxxxxx X. XxXxxx, Esq. or (ii)
a Holder at the address set forth below its signature hereof.
Any party may change its address for notice by giving ten (10)
days advance written notice to the other parties. Every notice
or other communication hereunder shall be deemed to have been
duly given or served on the date on which personally
delivered, or on the date actually received, if sent by
telecopy or overnight courier service, with receipt
acknowledged.
(h) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable
in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be
in any way impaired thereby, it being intended that all of the
rights and privileges of the Holders shall be enforceable to
the fullest extent permitted by law.
(i) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises,
warranties or undertakings other than those set forth or
referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect
to such subject matter.
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(j) Recitals. The recitals are hereby incorporated in
the Agreement as if fully set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
INNOPET BRANDS CORP.
By: _________________________________________
Name: Xxxx Xxxx
Title: Chairman and CEO
Xxx Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
EXPLORER PARTNERS LLC
By: _________________________________________
Name: Xxxxxx X. Xxxx
Title:
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
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