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EXHIBIT 10.97
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made as of July
____, 1996, by and between DenAmerica Corp., a Georgia corporation (the
"Company") and BEP Holdings, Inc., a Delaware corporation (the "Holder").
WHEREAS
A. The Holder owns all of the outstanding capital stock of Black-eyed
Pea U.S.A., Inc., a Texas corporation ("BEP").
B. The Company and Holder have entered into a Stock Purchase Agreement
dated as of May 31, 1996 (the "Purchase Agreement") pursuant to which the
Company will acquire all of the outstanding capital stock of BEP (the
"Acquisition").
C. Pursuant to the terms of the Purchase Agreement, at the "Closing" of
the Acquisition, as that term is defined in the Purchase Agreement, the Company
will issue to Holder the "Buyer Note" and the "Warrant," as those terms are
defined in the Purchase Agreement, as a portion of the consideration for the
shares of capital stock of BEP to be acquired by the Company.
D. Pursuant to the terms of the Buyer Note, in the event that the Buyer
Note, together with accrued but unpaid interest thereon, has not been paid in
full at or prior to March 31, 1997, the Warrant will become exercisable to
purchase the Company's Common Stock, par value $.10 per share (the "Common
Stock").
E. The Purchase Agreement requires that, as a condition precedent to
the Closing of the Acquisition, the Company and the Holder shall have entered
into this Agreement on or before the "Closing Date" of the Acquisition, as that
term is defined in the Purchase Agreement.
F. The Holder understands that the Company intends to effect one or
more financings, which may include an offering of the Company's Common Stock or
other securities convertible or exercisable into shares of the Company's Common
Stock (each, a "Subsequent Financing"), within 36 months after the Closing Date
of the Acquisition, for the purpose (among others) of redeeming the Buyer Note
and all of the Company's then-outstanding Series B 13% Subordinated Notes due
2003.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto hereby agree as follows:
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I. REGISTRATION RIGHTS
1.1 Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
(a) The term "Act" means the Securities Act of 1933,
as amended.
(b) The term "Blackout Period" means any period (A)
beginning on the date on which the Company notifies the Holders (as defined
below) that (i) the Board of Directors of the Company, in its good faith
judgement, has determined that there are material developments with respect to
the Company such that it would be seriously detrimental to the Company and its
shareholders to utilize a registration statement pursuant to Sections 1.2 or 1.3
below; (ii) the Board of Directors of the Company, in its good faith judgment,
has determined that financial statements with respect to the Company, which may
be required to utilize a registration statement pursuant to Sections 1.2 or 1.3
below, are unavailable; or (iii) the Company has notified the Holders that it
intends to file a registration statement for a Subsequent Financing within 30
days of the mailing of such notice in accordance with Section 2.3 hereof, and
(B) ending on the date (1) with respect to clause (i) above, as soon as
practicable but not more than 90 days after the date on which the Company
notifies the Holders of the Board of Directors' determination; (2) with respect
to clause (ii) above, as soon as financial statements sufficient to enable the
Holders to sell their Registrable Securities under the Act have become
available; and (3) with respect to clause (iii) above, 90 days after the
effective date of the registration statement for the Subsequent Financing.
(c) The term "Holders" means those persons owning or
having the right to acquire Registrable Securities (as defined below).
(d) The term "Maximum Includable Securities" shall
mean the maximum number of shares of each type or class of the Company's
securities that a managing or principal underwriter, in its good faith judgment,
deems practicable to offer and sell at that time in a firm commitment
underwritten offering without materially and adversely affecting the
marketability or price of the securities of the Company to be offered. Where
more than one type or class of the Company's securities are to be included in a
registration, the managing or principal underwriter of the offering shall
designate the maximum number of each such type or class of securities that is
included in the Maximum Includable Securities.
(e) The term "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Act, and the
declaration or ordering of effectiveness of such registration statement or
document.
(f) The term "Registrable Securities" means (i) the
shares of Common Stock issued or issuable upon exercise of the Warrant; and (ii)
any shares of Common Stock or
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other securities of the Company issued as (or issuable on the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to the Common Stock referred to in clause (i)
above, or in exchange for or in replacement of the Warrant or the Common Stock
referred to in clause (i) above.
(g) The number of shares of "Registrable Securities
then outstanding" shall be equal to the sum of the number of shares of Common
Stock outstanding which are Registrable Securities plus the number of shares of
Common Stock issuable upon conversion or exercise of the Warrant (and any other
outstanding Registrable Securities).
(h) "SEC" means the United States Securities and
Exchange Commission.
1.2 Demand Registration Rights.
(a) If the Company shall receive at any time after
the Closing Date of the Acquisition a written request from the Holders of a
majority of the Registrable Securities then outstanding that the Company file a
registration statement under the Act covering the registration of at least 50%
of the Registrable Securities then outstanding (or a lesser percentage if the
anticipated aggregate offering price, net of underwriting discounts and
commissions, would exceed $1,000,000), then the Company shall, within 10 days of
the receipt thereof, give written notice of such request to all Holders and
shall, subject to the limitations of Section 1.2(b), effect as soon as
practicable the registration under the Act of all Registrable Securities which
the Holders request to be registered within 30 days of the mailing of such
notice by the Company in accordance with the notice provisions of Section 2.3
hereof.
(b) If the Holders initiating the registration
request hereunder ("Initiating Holders") intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company of the identity of the proposed managing or principal
underwriter(s) as a part of their request made pursuant to this Section 1.2. The
selection of such managing or principal underwriter(s) shall be subject to the
approval of the Company, such approval not to be unreasonably withheld. The
Company shall include information regarding the identity of the managing or
principal underwriter and the proposed terms of the underwriting in the written
notice to all Holders referred to in Section 1.2(a). The right of any Holder to
include the Holder's Registrable Securities in such underwritten registration
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the Initiating
Holders and such Holder) to the extent provided herein. The Company and all
Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by a majority in interest of the
Initiating Holders and reasonably acceptable to the Company.
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(c) Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Company in writing that marketing
factors require a limitation of the number of shares or other securities to be
underwritten, then the Company shall furnish all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto with a written
statement of the managing or principal underwriter as to the Maximum Includable
Securities, and the number of each type or class of Registrable Securities that
may be included in the underwriting shall be allocated among all Holders
requesting registration on a pro rata basis, with the number of each type or
class of Registrable Securities of each Holder thereof included in the
registration to be that number determined by multiplying the total number of
such type or class of security included in the Maximum Includable Securities by
a fraction, the numerator of which will be the total number of such type or
class of security that such Holder owns, and the denominator of which will be
the total number of such type or class of security owned by all Holders that
have requested inclusion of such type or class of security in the registration.
Any reduction of more than 50% of the Registrable Securities sought to be
registered will not be considered a registration under this Section 1.2 for the
purposes of Section 1.2(d).
(d) The Company shall be obligated to effect only one
such registration pursuant to this Section 1.2.
(e) Notwithstanding the foregoing, if the Company
shall furnish to Holders requesting a registration statement pursuant to this
Section 1.2 a certificate signed by the President of the Company stating that a
Blackout Period is in effect, the Company shall have the right to defer such
filing during the term of such Blackout Period; provided, however, that the
Company may not utilize this right more than twice in any 12-month period or in
a manner that results in Blackout Periods pursuant to any and all provisions of
this Agreement aggregating more than 180 days during any 12-month period.
(f) If the Holders give written notice requesting
registration of their Registrable Securities pursuant to this Section 1.2, and
if the Company at that time is not eligible to register its securities on Form
S-3, the Company shall prepare and file a registration statement on Form S-1 or
S-2 (or other appropriate form for the general registration of securities) as
may be appropriate in accordance with the terms and conditions set forth in this
Section 1.2.
(g) The Company may propose to include additional
shares ("Additional Shares") of Common Stock or other securities to be sold by
the Company and/or by other holders of Common Stock or other securities in any
registration statement to be filed pursuant to this Section 1.2. The Holders
shall have the right to reduce the number of Additional Shares requested to be
registered by the Company pursuant to this Section 1.2(g) (including, if
necessary, to zero) if, in the good faith opinion of the underwriter or
underwriters of such offering, the inclusion of such Additional Shares would
materially and adversely affect the marketability or price of the Registrable
Securities to be offered by the Holders in such registration.
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(h) From and after the date hereof, the Company shall
not, without the prior written consent of the Holders of a majority of the
Registrable Securities, enter into any agreement with any holder or prospective
holder of any securities of the Company that would allow such holder or
prospective holder to require the Company to include shares or securities in any
registration initiated under Section 1.2 of this Agreement, unless under the
terms of such agreement such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion of
such securities is subject to the cutback contained in Section 1.2(g) above.
1.3 Registration on Form S-3.
(a) In addition to the registration rights provided
pursuant to Section 1.2 hereof, if at any time that the Company is eligible to
register its securities on Form S-3 (or any successor to Form S-3) the Company
shall receive a written request from the Holders of a majority of the
Registrable Securities then outstanding that the Company file a registration
statement under the Act on Form S-3 to register for resale at least 50% of the
Registrable Securities then outstanding (or a lessor percentage if the
anticipated aggregate offering price, net of underwriting discounts and
commissions, would exceed $1,000,000), then the Company shall, within 10 days of
the receipt thereof, give written notice of such request to all Holders and
shall, effect as soon as practicable, the registration on Form S-3 under the Act
of all Registrable Securities which the Holders request to be registered within
30 days of the mailing of such notice by the Company in accordance with the
notice provisions of Section 2.3 hereof.
(b) The Company shall be obligated to effect only one
such registration pursuant to this Section 1.3.
(c) Notwithstanding the foregoing, if the Company
shall furnish to Holders requesting a registration statement pursuant to this
Section 1.3 a certificate signed by the President of the Company stating that a
Blackout Period is in effect, the Company shall have the right to defer such
filing during the term of such Blackout Period; provided, however, that the
Company may not utilize this right more than twice in any 12-month period or in
a manner that results in Blackout Periods pursuant to any and all provisions of
this Agreement aggregating more than 180 days during any 12-month period.
(d) If the Company shall furnish to Holders whose
Registrable Securities have been registered pursuant to this Section 1.3 a
certificate signed by the President of the Company stating that a Blackout
Period is in effect, the Holders shall not sell any Registrable Securities
during such Blackout Period, notwithstanding the fact that such Registrable
Securities may otherwise be sold pursuant to the effective registration
statement or otherwise.
(e) The Company may include Additional Shares of
Common Stock or other securities to be sold by the Company and/or by other
holders of Common Stock or other securities in any registration statement to be
filed pursuant to this Section 1.3.
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1.4 Piggy-Back Registration Rights.
(a) Except as provided in Section 1.4(e), if at any
time the Company proposes to file on its behalf and/or on behalf of any of its
securityholders a registration statement under the Act on Form S-1, S-2 or S-3
(or any other appropriate form for the general registration of securities) with
respect to any of its capital stock or other securities, the Company shall give
each Holder written notice at least 20 days before the filing with the SEC of
such registration statement. If any Holder desires to have Registrable
Securities registered pursuant to this Section 1.4, such Holder shall so advise
the Company in writing within 15 days after the date of mailing of such notice
from the Company. The Company shall thereupon include in such filing the number
of Registrable Securities for which registration is so requested, subject to its
right to reduce the number of Registrable Securities as hereinafter provided,
and shall use its best efforts to effect registration under the Act of such
Registrable Securities. Notwithstanding the foregoing, the Company shall not be
required to provide notice of filing of a registration statement and to include
therein any Registrable Securities if the proposed registration is:
(1) a registration of stock options, stock
purchases or compensation or incentive plans, or of
securities issued or issuable pursuant to any such
plan or a dividend reinvestment plan on Form S-8 or
other comparable form then in effect; or
(2) a registration of securities proposed to
be issued in exchange for securities or assets of, or
in connection with, a merger or consolidation with
another corporation.
(b) In the event the offering in which any Holder's
Registrable Securities are to be included pursuant to this Section 1.4 is to be
underwritten on a firm commitment basis, the Company shall furnish the Holders
with a written statement of the managing or principal underwriter as to the
Maximum Includable Securities as soon as practicable after the expiration of the
15 day period provided for in Section 1.4(a). If the total number of securities
proposed to be included in such registration statement is in excess of the
Maximum Includable Securities, the number of securities to be included within
the coverage of such registration statement shall be reduced to the Maximum
Includable Securities as follows:
(1) no reduction shall be made in the number
of shares of capital stock or other securities to be
registered for the account of the Company; and
(2) the number of Registrable Securities and
other securities that may be included in the
registration, if any, shall be allocated among the
Holders of Registrable Securities and holders of
other securities (the "Other Holders") requesting
inclusion on a pro rata basis, with the number of
each type or class of securities of each Holder and
Other Holder thereof included in the registration to
be that number determined by
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multiplying (A) the total number of such type or
class of security included in the Maximum Includable
Securities less (B) the number of such type or class
of security to be registered for the account of the
Company, by a fraction, the numerator of which will
be the total number of such type or class of security
that such Holder or Other Holder owns, and the
denominator of which will be the total number of such
type or class of security owned by all Holders and
Other Holders that have requested inclusion of such
type or class of security in the registration.
(c) To the extent that the offering of Registrable
Securities proposed to be included in a registration statement is not to be
underwritten on a firm commitment basis, then there shall be no reduction in the
number of Holders' Registrable Securities to be registered in such registration
statement. If such offering is to be underwritten on a best efforts basis, the
shares of Common Stock or other securities of all participants, including the
Company and the Holders, shall be sold in a proportionate basis, based upon the
number of shares of Common Stock or other securities registered on their behalf.
(d) The Company shall, in its sole discretion, select
the underwriter or underwriters, if any, who are to undertake the sale and
distribution of the Registrable Securities to be included in a registration
statement filed under the provisions of this Section 1.4.
(e) At such time that the Company intends to effect a
Subsequent Financing, it shall notify the Holders of such intent and shall
designate the proposed offering as a Subsequent Financing. Except to the extent
that the Company, in its sole discretion, may otherwise permit, the Holders
shall have no right to have any Registrable Securities registered pursuant to
this Section 1.4 in any Subsequent Financing.
(f) The right to registration provided in this
Section 1.4 is in addition to and not in lieu of the demand registration rights
provided in Section 1.2. The provisions of this Section 1.4 shall apply even
though the Holders requesting registration pursuant to this Section 1.4 are or
may be free, at the time, to sell any or all of the Registrable Securities with
respect to which such registration was requested in accordance with Rule 144 (or
any similar rule or regulation) promulgated under the Act.
1.5 Obligations of the Company. Whenever required under
Section 1.2, Section 1.3, or Section 1.4 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a registration
statement on such form as the Company deems appropriate with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to become effective. With respect to registration statements filed
pursuant to Section 1.2 or Section 1.4 hereof, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder the Company
shall keep such registration statement effective for up to 180 days, or such
shorter period as is required to
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dispose of all securities covered by such registration statement. With respect
to the registration statement filed pursuant to Section 1.3 hereof, the Company
shall keep such registration statement effective for two years, or such shorter
period as is required to dispose of all securities covered by such registration
statement; provided, however, that the two-year period shall be extended by that
number of days equal to the number of days that the Holders were prohibited from
selling any Registrable Securities as a result of any Blackout Period.
(b) Notify the Holders promptly after it has received
notice of the time when such registration statement has become effective or any
supplement to any prospectus forming a part of such registration statement has
been filed.
(c) Notify the Holders promptly of any request by the
SEC for the amending or supplementing of such registration statement or
prospectus or of additional information.
(d) Prepare and file with the SEC, and promptly
notify the Holders of the filing of, such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(e) Prepare and file with the SEC promptly upon the
request of any such Holders, any amendments or supplements to such registration
statement or prospectus which, in the reasonable opinion of special counsel for
such Holders, is required under the Act or the rules and regulations thereunder
in connection with the distribution of the Registrable Securities by such
Holders.
(f) Not file any amendment or supplement to the
registration statement or prospectus to which any Holders shall reasonably
object after having been furnished a copy a reasonable time prior to the filing
thereof.
(g) Advise each Holder promptly after it has received
notice or obtained knowledge thereof of the issuance of any stop order by the
SEC suspending the effectiveness of any 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.
(h) Furnish to the Holders such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(i) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as
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shall be reasonably requested by the Holders, provided that the Company shall
not be required in connection therewith or as a condition thereto to qualify to
do business, to file a general consent to service of process, or to become
subject to tax liability in any such states or jurisdictions or to agree to any
restrictions as to the conduct of its business in the ordinary course thereof.
(j) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering, together
with each Holder participating in such underwritten offering, as provided in
Section 1.6(c).
(k) Notify each Holder of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be delivered under
the Act, of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
(l) Prepare and promptly file with the SEC, and
promptly notify such Holders or their special counsel of the filing of, any
amendment or supplement 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
Act, any event has occurred as the result of which any such prospectus must be
amended in order that it does not make any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, not
misleading, in light of the circumstances in which they were made.
(m) In case any of such Holders or any underwriter
for any such Holders is required to deliver a prospectus at a time when the
prospectus then in effect may no longer be used under the Act, prepare promptly
upon request such amendment or amendments to such registration statement and
such prospectus as may be necessary to permit compliance with the requirements
of the Act.
(n) If any of the Registrable Securities are then
listed on any securities exchange or the Nasdaq Stock Market, the Company will
cause all such Registrable Securities covered by such registration statement to
be listed on such exchange or the Nasdaq Stock Market.
1.6 Obligations of Holders. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to this Agreement
that each of the selling Holders shall:
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(a) Furnish to the Company such information regarding
themselves, the Registrable Securities held by them, the intended method of sale
or other disposition of such securities, the identity of and compensation to be
paid to any underwriters proposed to be employed in connection with such sale or
other disposition, and such other information as may reasonably be required to
effect the registration of their Registrable Securities.
(b) Notify the Company, at any time when a prospectus
relating to Registrable Securities covered by a registration statement is
required to be delivered under the Act, of the happening of any event with
respect to such selling Holder as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(c) In the event of any underwritten public offering,
each Holder participating in such underwriting shall enter into and perform its
obligations under the underwriting agreement for such offering, and, if
requested to do so by the underwriters managing such offering, each Holder shall
enter into a customary holdback agreement.
1.7 Expenses of Demand Registration and Registration on Form
S-3. The Company shall bear and pay all expenses incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2 or Section 1.3
(other than underwriting discounts and commissions with respect to Registrable
Securities included in such registration), including (without limitation) all
registration, filing, and qualification fees, Blue Sky fees and expenses,
printers' and accounting fees, costs of listing on any exchange or the Nasdaq
Stock Market, costs of furnishing such copies of each preliminary prospectus,
final prospectus, and amendments thereto as each Holder may reasonably request,
fees and disbursements of counsel for the Company; provided, however, that the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 or Section 1.3 if the registration
request is subsequently withdrawn at the request of the Holders of a majority of
the Registrable Securities to be registered (in which case the Holders
participating in such offering and favoring such withdrawal shall bear such
expenses); provided further, however, that if such registration request has been
withdrawn by virtue of a material adverse change in the condition, business, or
prospects of the Company from that known to the Holders at the time of their
request, then the Holders shall not be required to pay any of such expenses and
shall retain their rights pursuant Section 1.2 and Section 1.3.
1.8 Expenses of Piggy-Back Registration. The Company shall
bear and pay all expenses incurred in connection with any registration, filing
or qualification of Registrable Securities with respect to each of the
registrations pursuant to Section 1.4 (other than underwriting discounts and
commissions with respect to Registrable Securities included in such
registration) for each Holder, including (without limitation) all registration,
filing, and qualification fees, Blue Sky fees and expenses, printers' and
accounting fees relating or apportionable thereto, costs of listing on any
exchange or the Nasdaq Stock Market, costs of
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furnishing such copies of each preliminary prospectus, final prospectus, and
amendments thereto as each Holder may reasonably request.
1.9 Limitations on Registration Rights. Notwithstanding any
other provision of this Agreement, with respect to any other securities of the
Company for which the Company has granted registration rights prior to the date
of this Agreement, the Registrable Securities shall not be registered and sold
at the same time as such other securities are being sold pursuant to an
underwritten offering if the managing underwriter of such offering believes that
the sale of the Registrable Securities could have a material adverse effect on
the amount of, or price at which, such other securities being registered can be
sold.
1.10 Indemnification. In the event any Registrable Securities
are included in a registration statement under this Agreement:
(a) The Company will indemnify and hold harmless each
Holder, the officers and directors of each Holder, any underwriter (as defined
in the Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the Securities Exchange Act of
1934, as amended (the "1934 Act"), against any losses, claims, damages, or
liabilities (joint or several) to which such person or persons may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) 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, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, the 1934 Act or any state
securities law; and the Company will reimburse each such Holder, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by such person or persons in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 1.10(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon (i) a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by such Holder, underwriter or
controlling person, or (ii) the failure of such Holder, underwriter, or
controlling person to deliver a copy of the registration statement or the
prospectus, or any amendments or supplements thereto, after the Company has
furnished such person with a sufficient number of copies of the same.
(b) Each selling Holder will indemnify and hold
harmless the Company, each of its officers and directors, and each person, if
any, who controls the Company within the
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meaning of the Act, any underwriter and any other Holder selling securities in
such registration statement or any of its directors or officers or any person
who controls such Holder, against any losses, claims, damages, or liabilities
(joint or several) to which the Company or any such officer, director,
controlling person, or underwriter or controlling person may become subject,
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereto) arise
out of or are based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such officer, director,
controlling person, underwriter or controlling person, other Holder, officer,
director, or controlling person in connection with investigating or defending
any such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 1.10(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld. Notwithstanding anything to the contrary herein
contained, a Holder's indemnity obligation, in such person's capacity as a
Holder, shall be limited to the net proceeds received by such Holder from the
offering out of which the indemnity obligation arises.
(c) Promptly after receipt by an indemnified party
under this Section 1.10 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.10,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnified party, except that such fees and expenses shall be paid by
the indemnifying party if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.10, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
1.10.
(d) The indemnification provided by this Section 1.10
shall be a continuing right to indemnification and shall survive the
registration and sale of any of the Registrable Securities hereunder and the
expiration or termination of this Agreement.
1.11 Reports Under Securities Exchange Act of 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Act, the Company agrees to use its best efforts to:
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(a) make and keep public information available, as
those terms are understood and defined in SEC Rule 144;
(b) file with the SEC in a timely manner all reports
and other documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC Rule
144, the Act and the 1934 Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.12 Amendment and Waiver. Any amendment or waiver of any
provision under this Agreement may be effected only with the written consent of
the Company and the holders of at least a majority of the Registrable Securities
then outstanding.
1.13 Remedies. The parties hereto acknowledge and agree that
the breach of any part of this Agreement may cause irreparable harm and that
monetary damages alone may be inadequate. The parties hereto therefore agree
that either party shall be entitled to injunctive relief or such other
applicable remedy as a court of competent jurisdiction may provide. Nothing
contained herein will be construed to limit any party's right to any remedies at
law, including recovery of damages for breach of any part of this Agreement.
II. MISCELLANEOUS
2.1 Notification for Benefit of Holders. In the event that (i)
the Company is actively pursuing the preparation and filing of a registration
statement for an underwritten offering in which it may be possible for the
Holders to participate pursuant to Section 1.4 of this Agreement, and (ii) the
Holders are not actively pursuing an underwritten offering or selling
Registrable Securities pursuant to an underwritten offering at that time, the
Company shall promptly notify the Holders of such activity. Upon receipt of such
notice, the Holders shall cease any sales of Registrable Securities pursuant to
any registration statement or otherwise until the earlier of (a) 90 days after
receipt of such notice; (b) two trading days after the Company files such
registration statement or publicly announces its intention to file such
registration statement (subject to the restrictions on any such sales provided
for elsewhere in this Agreement); or (c) the Company notifies the Holder that it
no longer is actively pursuing such underwritten offering. The Company shall
promptly notify the Holders of any changes in its plans for or active pursuit of
such underwritten offering.
2.2 Cancellation of Warrant. In the event that the Warrant
does not become exercisable, this Agreement shall be null and void and of no
further force or effect.
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2.3 Controlling Law. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement, shall be governed
by and construed in accordance with the laws of the State of Delaware,
notwithstanding any Delaware or other conflict-of-law provisions to the
contrary.
2.4 Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received when delivered
against receipt, upon receipt of a facsimile transmission or when deposited in
the United States mails, first class postage prepaid, addressed as set forth
below:
(a) If to the Company:
7373 North Scottsdale Road
Suite D-120
Scottsdale, Arizona 85253
Facsimile: (602) 230-9592
Attention: President
with a copy given in the manner
prescribed above, to:
O'Connor, Cavanagh, Anderson,
Killingsworth & Beshears, P.A.
One East Camelback Road
Phoenix, Arizona 85012
Facsimile: (602) 263-2900
Attention: Robert S. Kant, Esq.
(b) If to any Holder, to the address of such Holder
as it appears in the stock or warrant ledger of
the Company.
Any party may alter the address to which communications or
copies are to be sent by giving notice of such change to each of the other
parties hereto of address in conformity with the provisions of this paragraph
for the giving of notice.
2.5 Binding Nature of Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors, and assigns, including any
subsequent Holders of the Warrant or any Registrable Securities.
2.6 Entire Agreement. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied,
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oral or written, except as herein contained. The express terms hereof control
and supersede any course of performance and/or usage of the trade inconsistent
with any of the terms hereof. This Agreement may not be modified or amended
other than by an agreement in writing.
2.7 Section Headings. The section headings in this Agreement
are for convenience only; they form no part of this Agreement and shall not
affect its interpretation.
2.8 Gender. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context requires.
2.9 Indulgences, Not Waivers. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
2.10 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories. Any photographic or xerographic copy of this Agreement, with all
signatures reproduced on one or more sets of signature pages, shall be
considered for all purposes as of it were an executed counterpart of this
Agreement.
2.11 Provisions Separable. The provisions of this Agreement
are independent and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be invalid or unenforceable in whole or
in part.
2.12 Number of Days. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday or holiday, then the final day shall be
deemed to be the next day which is not a Saturday, Sunday or holiday.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
DENAMERICA CORP., a Georgia corporation
By:
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Jack M. Lloyd
Chief Executive Officer
BEP HOLDINGS, INC., a Delaware corporation
By:
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Name:
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Its:
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