Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of June 13, 2003, by and among (a) SmartServ Online, Inc., a
Delaware corporation (the "Company"), and (b) the purchasers of units consisting
of a $100,000 convertible debenture, a warrant to purchase 200,000 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), and a
contingent warrant to purchase 25,000 shares of Common Stock signatory hereto
(individually, a "Purchaser" and collectively, the "Purchasers") pursuant to the
Securities Purchase Agreement of even date herewith (the "Purchase Agreement")
among the Company and the Purchasers.
R E C I T A L S
WHEREAS, in order to induce the Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the Purchasers with the
registration rights set forth in this Agreement; and
WHEREAS, the execution and delivery of this Agreement are
express conditions to the closing under the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
premises contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. DEFINITIONS.
Capitalized terms not otherwise defined herein shall have the
respective meanings ascribed to them in the Purchase Agreement. As used in this
Agreement, the following capitalized terms shall have the following meanings:
"Affiliate" means a person that directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, the Holder and shall include an individual's spouse, parents,
siblings or issue or entity created primarily for the benefit of any such
person.
"Affiliated Group" has the meaning given to it in Section 1504
of the Internal Revenue Code of 1986, as amended, and in addition includes any
analogous combined, consolidated, or unitary group, as defined under any
applicable state, local, or foreign income Tax law.
"Agreement" means this Registration Rights Agreement, as it
hereinafter may be amended from time to time.
"Debenture" or "Debentures" shall have the meaning set forth
in Section 1.1 of the Purchase Agreement.
"Closing Date" shall have the meaning set forth in Section 1.3
of the Purchase Agreement.
"Common Stock" shall have the meaning set forth in the
Preamble hereof.
"Company" shall have the meaning set forth in the Preamble
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
from time to time amended.
"Holder" means a Purchaser or a Permitted Transferee of a
Purchaser.
"Indemnified Company Party" means the Company, its directors,
officers and Affiliates.
"Indemnified Holder Party" means the Holder of Registrable
Securities and any officer, director, member, manager, partner, trustee,
beneficiary or Affiliate of the Holder.
"Losses" means any losses, damages, liabilities or expenses
(including reasonable attorneys' fees and disbursements).
"Misstatement" means an untrue statement of a material fact or
an omission to state a material fact required to be stated in a Registration
Statement or Prospectus or necessary to make the statements in a Registration
Statement, Prospectus or preliminary prospectus not misleading.
"Permitted Transferee" means (i) an Affiliate or member of an
Affiliated Group of the transferor or (ii) with the consent of the Company,
which shall not be unreasonably withheld, delayed, or conditioned, any party
that is an "accredited investor" (as such term is defined in Rule 501 under the
Securities Act).
"Person" means a natural person, partnership, corporation,
limited liability company, business trust, association, joint venture or other
entity or a government or agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Registration
Statement, as supplemented by any and all prospectus supplements and as amended
by any and all post-effective amendments and including all material incorporated
by reference in such prospectus.
"Purchase Agreement" shall have the meaning set forth in the
Preamble hereof.
"Purchaser" shall have the meaning set forth in the Preamble
hereof.
"Registrable Securities" means (a) any Common Stock hereafter
acquired or purchasable on (i) conversion of a Debenture by the Holder (if such
stock is not already registered with the SEC) or (ii) exercise of a Warrant by a
Holder (if such stock is not already registered with the SEC), and (b) any
securities issued or issuable with respect to the Common Stock referred to in
clause (a) above by way of a stock dividend or stock split or in connection
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with a combination of shares, recapitalization, merger, consolidation or
reorganization. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (i) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement, (ii) such securities shall have been sold
pursuant to Rule 144 (or any successor provision) under the Securities Act or
are eligible for sale under Rule 144(k) (or any successor provision) without
being subject to any volume limitation and the Company has removed any
restrictive legend with respect thereto, (iii) such securities shall have been
otherwise transferred to a person who is not a Permitted Transferee, or (iv)
such securities shall have ceased to be outstanding.
"Registration Expenses" means the out-of-pocket expenses of a
Registration Statement, including:
(1) all registration and filing fees (including, without
limitation, fees with respect to filings required to
be made with the National Association of Securities
Dealers, Inc.);
(2) fees and expenses of compliance with securities or
blue sky laws (including, without limitation, state
filing fees and fees and disbursements of counsel for
the underwriters in connection with blue sky
qualifications of the Registrable Securities and
determinations of their eligibility for investment
under the laws of such jurisdictions as the managing
underwriters, if any, may designate);
(3) printing, messenger, telephone and delivery expenses;
(4) fees and disbursements of counsel for the Company;
(5) fees and disbursements of all independent certified
public accountants of the Company incurred in
connection with such Registration Statement;
(6) premiums and other costs of securities acts liability
insurance if the Company so desires; and
(7) fees and expenses of any other Persons retained by
the Company.
"Registration Statement" means any registration statement
under the Securities Act on an appropriate form (to the extent such form shall
be available for the sale of the Registrable Securities in accordance with the
intended method or methods of distribution thereof and shall include all
financial statements required by the SEC to be filed therewith) which covers
Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus included in such registration statement, amendments (including
post-effective amendments) and supplements to such registration statement, and
all exhibits to and all material incorporated by reference in such registration
statement.
"Securities Act" means the Securities Act of 1933, as from
time to time amended.
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"SEC" means the Securities and Exchange Commission.
"Units" means the security comprising Warrants and Debentures
sold pursuant to the Purchase Agreement.
"Warrant" or "Warrants" shall have the meaning set forth in
Section 1.1 of the Purchase Agreement.
2. REGISTRATION.
At any time before the third anniversary of the date of this
Agreement, whenever the Company proposes to file a registration statement
pursuant to the Securities Act with the SEC, other than a registration relating
to the offering or issuance of shares in connection with (i) employee
compensation or benefit plans or (ii) one or more acquisition transactions under
a Registration Statement on Form S-4 or Form S-1 under the Securities Act (or a
successor to Form S-4 or Form S-1), the Company shall give each Holder of
Registrable Securities written notice (the "Company Notice") of the Company's
intention to file a registration statement at least fifteen days prior to the
date the Company proposes to file such registration statement. The Company shall
include in such registration statement the Registrable Securities unless either
(i) the Registrable Securities are included in a Registration Statement that is
effective under the Securities Act, or (ii) a Holder gives the Company notice
not to include such Holder's Registrable Securities in the registration
statement within ten days of such Holder's receipt of the Company Notice.
Each Holder agrees that within five business days of receiving
a written request from the Company for information required by the SEC to be in
a Registration Statement in order for such Registration Statement to be declared
effective (the "Required Information"), such Holder shall provide the Required
Information to the Company. If a Holder does not provide the Required
Information to the Company within five business days of receiving a request from
the Company for the Required Information, the Company shall not be required to
register the Holder's Registrable Securities on such Registration Statement. The
Holder's right to have such Holder's Registrable Securities registered pursuant
to a subsequent registration statement shall not be abridged by such Holder's
failure to provide the Required Information on a previous registration
statement.
3. REGISTRATION PROCEDURES.
In connection with the Company's registration obligations
under Section 2, the Company will effect the registration for resale of the
Registrable Securities in accordance with the intended plan of distribution
thereof. The Company shall provide to each Holder such information and documents
as the Company provides to the other selling stockholders under the Registration
Statement.
4. REGISTRATION EXPENSES.
The Company shall bear all Registration Expenses incurred in
connection with any Registration Statement. The Company also will pay its
internal expenses (including, without
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limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit, the fees and
expenses incurred in connection with any listing of the securities to be
registered on a securities exchange or the National Association of Securities
Dealers, Inc., and the fees and expenses of any Person, including special
experts, retained by the Company.
5. INDEMNIFICATION.
(a) Company Indemnification.
The Company shall indemnify and hold harmless each Indemnified
Holder Party against any Losses to which such Indemnified Holder Party may
become subject under the Securities Act or any other applicable law, insofar as
such Losses (or actions in respect thereof) arise out of or are based upon (i)
any alleged untrue statement of any material fact contained, on the effective
date thereof, in any Registration Statement under which securities were
registered under the Securities Act, any preliminary Prospectus or final
Prospectus contained therein, or any amendment or supplement thereto, or (ii)
any alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, except insofar as such
Losses are directly and primarily caused by any such actual untrue statement or
omission so made in conformity with information furnished in writing to the
Company by such Indemnified Holder Party seeking indemnification expressly for
use therein, or (iii) any violation by the Company of any federal or state rule
or regulation applicable to the Company and relating to action required of or
inaction by the Company in connection with any such registration.; provided,
however, that the Company shall not be liable to an Indemnified Holder Party for
any untrue statement included in any Prospectus, which statement has been
corrected in writing by the Company in an amended or supplemented Prospectus
filed with the SEC before the sale from which such Loss occurred.
(b) Holders' Indemnification.
In connection with any Registration Statement in which the
Holders of Registrable Securities are participating, each Holder so
participating will indemnify and hold harmless each Indemnified Company Party
against any Losses to which the Company or any Indemnified Company Party may
become subject, insofar as such Losses (or actions in respect thereof) arise out
of or are based directly and primarily upon information in writing furnished to
the Company by such Holder of Registrable Securities expressly for use in (and
such information is contained in) any registration statement under which
securities were registered under the Securities Act at the request of the
Holders of Registrable Securities, any preliminary prospectus or final
prospectus contained therein or any amendment or supplement thereto.
Notwithstanding the provisions of this paragraph (b) or paragraph (d) below, no
Holder of Registrable Securities shall be required to indemnify any Person
pursuant to this Section 5 or to contribute pursuant to paragraph (d) below in
an amount in excess of the amount of the aggregate net proceeds received by such
Holder of Registrable Securities in connection with any such Registration
Statement under the Securities Act.
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(c) Procedure.
Promptly after receipt by any indemnified party of a notice of
a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying party pursuant to this Section 5, such
indemnified party shall notify the indemnifying party in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified party and the indemnifying party shall have been notified thereof,
the indemnifying party shall be entitled to participate therein, and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to such indemnified party of the indemnifying party's
election to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof; provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate in the reasonable judgment of the indemnified party for
the same counsel to represent both the indemnified party and such indemnifying
party or any affiliate or associate thereof, the indemnified party shall be
entitled to retain its own counsel at the expense of such indemnifying party.
(d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an indemnified party (by reason of public policy or
otherwise), then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party 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 of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5, any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
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 that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
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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.
The indemnity and contribution agreements contained in this Section are
in addition to any liability that the indemnifying parties may have to the
indemnified parties.
6. EXCHANGE ACT REPORTING REQUIREMENTS.
The Company shall timely file such information, documents and
reports as the SEC may require or prescribe under the Exchange Act. In addition,
the Company shall timely file such other information, documents and reports as
shall hereafter be required by the SEC as a condition to the availability of
Rule 144 under the Securities Act (or any successor provision). The Company
agrees to take no action to deregister its securities under the Exchange Act by
filing of SEC Form 15 or otherwise, nor will it engage in any other "going
private" transaction, in each case, until such time as all Registrable
Securities have been sold by the Holders; provided, however, that the Company
may enter into an arms-length going private transaction with a non-affiliated
third party and, upon consummation thereof, the Company may deregister its
securities.
The Company shall, upon reasonable request, (i) furnish the
Holders of Registrable Securities with (a) a written statement by the Company
that it has complied with such reporting requirements, (b) a copy of the most
recent annual or quarterly report of the Company, and (c) such other reports and
documents filed by the Company with the SEC as the Holders may reasonably
request in availing themselves of an exemption for the sale of Registrable
Securities without registration under the Securities Act pursuant to Rule 144
thereunder and (ii) make such additional filings with the SEC as will enable the
Holders to make sales of the Registrable Securities pursuant to Rule 144.
7. SUSPENSION OF SALES.
Upon receipt of written notice from the Company that a
Registration Statement or Prospectus contains a Misstatement, the selling
Holders of Registrable Securities shall forthwith discontinue disposition of
Registrable Securities until the Holders have received copies of the
supplemented or amended Prospectus required by Section 3 hereof, or until the
Holders are advised in writing by the Company that the use of the Prospectus may
be resumed, and, if so directed by the Company, each Holder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in the Holder's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. The Company shall use
its commercially reasonable best efforts to promptly (and in no event more than
thirty (30) days) update the Registration Statement so that the Misstatement is
corrected.
8. TRANSFER OF REGISTRATION RIGHTS.
Neither this Agreement nor any of the rights or obligations
hereunder may be assigned (excluding any assignment by operation of law) by the
Company without the prior written consent of the Holders, which consent will not
be unreasonably withheld. The Holders
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of Registrable Securities may assign their rights and obligations hereunder to
any Person to which the applicable Registrable Securities are assigned, without
the prior consent of the Company or any other person, provided that such
assignment may only be to a Permitted Transferee who is not a direct competitor
of the Company. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns including any person to whom Registrable Securities are transferred and
any person with whom the Company may merge and no other Person shall have any
right, benefit or obligation hereunder. The Company shall be given written
notice by a Holder of Registrable Securities at the time of any such transfer of
such securities by such Holder stating the name and address of the transferee,
including a writing by such transferee to the effect that such transferee agrees
to be bound by the terms hereof and identifying the securities with respect to
which the rights hereunder are being transferred.
9. MISCELLANEOUS.
(a) Remedies.
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The Holders of Registrable Securities, in addition to being
entitled to exercise all rights provided herein and granted by law, including
recovery of damages, shall be entitled to specific performance of their rights
under this Agreement and reasonable attorneys' fees and expenses in connection
with the exercise of such rights. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements.
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The Company shall not, on or after the date of this Agreement,
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement or conflicts with the provisions hereof.
(c) Amendments and Waivers.
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The provisions of this Agreement, including the provisions of
this sentence, 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 prior written consent of the Holders. The foregoing
notwithstanding, a waiver or consent to departure from the provisions hereof
that relates exclusively to the rights of each Holder of Registrable Securities
whose shares are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by the Holders of a majority of the shares of
Registrable Securities being sold pursuant to such Registration Statement.
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(d) Notices. Any notice or demand which is required or provided to be
given under this Agreement shall be deemed to have been sufficiently given and
received for all purposes when delivered by hand or by telecopy that has been
confirmed as received by 5:00 P.M. on a business day, one (1) business day after
being sent by nationally recognized overnight courier or received by telecopy
after 5:00 P.M. on any day, or five (5) business days after being sent by
certified or registered mail, postage and charges prepaid, return receipt
requested, to the following addresses:
If to the Company: SmartServ Online, Inc.
One Station Place
Stamford, Connecticut 06902
Attn: Chief Financial Officer
Facsimile: (203) 353-5984
With a copy to: SmartServ Online, Inc.
One Station Place
Stamford, Connecticut 06902
Attn: General Counsel
Facsimile: (203) 353-5984
And:
Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: Michael J. Shef, Esq.
Facsimile: (212) 704-6288
If to the Investors:
To their respective
addresses set forth below
their respective signatures
on the signature pages to
the Purchase Agreement.
(e) Counterparts.
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This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(f) Headings.
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The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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s (g) Governing Law.
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This Agreement shall be governed by and construed, interpreted
and the rights of the parties determined in accordance with the internal laws of
the State of Delaware, without regard to the conflict of law principles thereof,
except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party to or the subject of this Agreement,
and as to those matters the law of the jurisdiction under which the respective
entity derives its powers shall govern.
(h) Severability.
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In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(i) Facsimile Signature.
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A facsimile signature on this Agreement shall be considered
the same as an original and a signature to this Agreement may be delivered by
facsimile.
(j) Entire Agreement.
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This Agreement, the Purchase Agreement and the Ancillary
Documents (as defined in the Purchase Agreement) are intended by the parties as
the 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 or therein with respect to the registration rights granted by the Company
with respect to the securities sold pursuant to the Purchase Agreement. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
SMARTSERV ONLINE, INC.
By:______________________________________
Name: Thomas W. Haller
Title: Senior Vice President and
Chief Financial Officer
Purchasers:
If an Individual:
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Name:
If an entity:
Name of entity:____________________________
By:______________________________________
Name:
Title:
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