EXHIBIT 10.15
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of
October 11, 1996 between The Right Start, Inc., a California corporation (the
"Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Strategic Partners, L.P., a limited partnership
organized under the laws of the State of Delaware ("Purchaser").
WHEREAS, the Company and Purchaser have entered into a Securities
Purchase Agreement dated as of October 11, 1996 (the "Purchase Agreement")
WHEREAS, pursuant to the Purchase Agreement, the Company and Purchaser
desire to enter into this Agreement to provide Purchaser with certain
registration rights and to address related matters;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, the parties agree as follows:
1. Registration Rights.
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1.1 Demand Registration Rights.
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(a) Subject to the provisions of this Section 1.1, at any
time after the date hereof, Purchaser may request registration for sale under
the Act of all or part of the Common Stock, no par value, of the Company
("Common Stock") then held by Purchaser or issuable to Purchaser pursuant to
conversion of the Convertible Debenture of even date herewith, issued by the
Company to Purchaser pursuant to the Purchase Agreement (the "Debenture"). The
Company shall thereafter, as expeditiously as practicable, use its best efforts
(i) to file with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act"), a registration statement on the
appropriate form (using Form S-3 or other "short form," if available) covering
all the shares of Common Stock specified in the demand request and (ii) to cause
such registration statement to be declared effective. The Company shall use its
best efforts to cause each offering pursuant to this Section 1.1 to be managed,
on a firm commitment basis, by a recognized regional or national underwriter.
The Company shall not be required to comply with more than two (2) requests by
Purchaser for demand registration pursuant to this Section 1.1(a).
(b) The Company shall not be required to effect a demand
registration under the Act pursuant to Section 1.1(a) above if (i) the Company
receives such request for registration within 120 days preceding the anticipated
effective
date of a proposed underwritten public offering of securities of the Company
approved by the Company's Board of Directors prior to the Company's receipt of
such request; (ii) within 6 months prior to any such request for registration ,
a registration of securities of the Company has been effected in which Purchaser
had the right to participate pursuant to Section 1.2 hereof; or (iii) the Board
of Directors of the Company reasonably determines in good faith that effecting
such a demand registration at such time would have a material adverse effect
upon a proposed sale of all (or substantially all) the assets of the Company, or
a merger, reorganization, recapitalization, or similar transaction materially
affecting the capital structure or equity ownership of the Company; provided,
however, that the Company may only delay a demand registration pursuant to this
Section 1.1(b)(iii) for a period not exceeding 3 months (or until such earlier
time as such transaction is consummated or no longer proposed). The Company
shall promptly notify Purchaser in writing of any decision not to effect any
such request for registration pursuant to this Section 1.1(b), which notice
shall set forth in reasonable detail the reason for such decision and shall
include an undertaking by the Company promptly to notify Purchaser as soon as a
demand registration may be effected.
(c) Purchaser may withdraw a request for demand
registration at any time before a registration statement is declared effective,
in which event the Company shall withdraw such registration statement (and
Purchaser shall not be deemed to have requested a demand registration for
purposes of Section 1.1(a) hereof). If the Company withdraws a registration
statement under this Section 1.1(c) in respect of a registration for which the
Company would otherwise be required to pay expenses under Section 1.4(b) hereof,
Purchaser shall be liable to the Company for all expenses of such registration
specified in Section 1.4(b) hereof in proportion to the number of shares
Purchaser shall have requested to be registered, and Purchaser shall not be
deemed to have requested a demand registration for purposes of Section 1.1(a)
hereof.
1.2 Piggyback Registration Rights.
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(a) If at any time or times after the date hereof, the
Company proposes to make a registered public offering of any of its securities
under the Act (whether to be sold by it or by one or more third parties), other
than an offering pursuant to a demand registration under Section 1.1(a) hereof
or an offering registered on Form ▇-▇, ▇▇▇▇ ▇-▇, or comparable forms, the
Company shall, not less than 45 days prior to the proposed filing date of the
registration form, give written notice of the proposed registration to
Purchaser, and at the written request of Purchaser delivered to the Company
within 20 days after the
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receipt of such notice, shall include in such registration and offering, and in
any underwriting of such offering, all shares of Common Stock that may have been
designated in Purchaser's request.
(b) If a registration in which Purchaser has the right to
participate pursuant to this Section 1.2 is an underwritten offering for the
account of the Company or for the account of a security holder (other than
Purchaser) pursuant to the exercise of a demand registration right, and the
managing underwriters advise the Company or such security holder, as the case
may be, in writing that in their opinion the number of securities requested to
be included in such registration, together with the securities being offered by
the Company or such security holder, as the case may be, exceeds the number
which can be effectively sold in such offering, the Company shall include in
such registration (i) first, the securities of the Company or such security
holder proposed to be sold, and (ii) second, to the extent possible, the Common
Stock proposed to be sold by Purchaser and any other selling stockholders, in
proportion to the number of shares of Common Stock with respect to which they
have requested registration.
1.3 Registration Procedures. The Company shall have no obligation to
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file a registration statement pursuant to Section 1.1 hereof, or to include
shares of Common Stock owned by or issuable to Purchaser in a registration
statement pursuant to Section 1.2 hereof, unless and until Purchaser shall have
furnished the Company with all information and statements about or pertaining to
Purchaser in such reasonable detail and on such timely basis as is reasonably
required by the Company in connection with the preparation of the registration
statement. Whenever Purchaser has requested that any shares of Common Stock be
registered pursuant to Section 1.1 or 1.2 hereof, the Company shall, as
expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with
respect to such shares and use its best efforts to cause such registration
statement to become effective as soon as reasonably practicable thereafter
(provided that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall furnish counsel for
Purchaser with copies of all such documents proposed to be filed);
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and prospectus used in connection therewith as
may be necessary to keep such registration statement effective for a period of
not less than nine months (or two years, if the provisions of Rule
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415 under the Act are available with respect thereto) or until Purchaser has
completed the distribution described in such registration statement, whichever
occurs first;
(c) furnish to Purchaser such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus), and such
other document as Purchaser may reasonably request;
(d) use its best efforts to register or qualify such shares under
such other securities or blue sky laws of such jurisdictions as Purchaser
requests (and to maintain such registrations and qualifications effective for a
period of nine months or until Purchaser has completed the distribution of such
shares, whichever occurs first), and to do any and all other acts and things
which may be necessary or advisable to enable Purchaser to consummate the
disposition in such jurisdictions of such shares (provided that the Company will
not be required to (i) qualify generally to do business in any jurisdiction
where it would not be required but for this Section 1.3(d), (ii) subject itself
to taxation in any such jurisdiction, or (iii) file any general consent to
service of process in any such jurisdiction);
(e) notify Purchaser, at any time during which a prospectus relating
thereto is required to be delivered under the Act within the period that the
Company is required to keep a registration statement effective, 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 any fact
necessary to make the statements therein not misleading, and prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such shares, such prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading;
(f) use its best efforts to cause all such shares to be listed on
securities exchanges or interdealer quotation systems (including NASDAQ National
or Small-Cap Market), if any, on which similar securities issued by the Company
are then listed;
(g) enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other actions as Purchaser
reasonably requests (and subject to Purchaser's reasonable approval) in order to
expedite or facilitate the disposition of such shares; and
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(h) make reasonably available for inspection by Purchaser, by
any underwriter participating in any distribution pursuant to such registration
statement, and by any attorney, accountant or other agent retained by Purchaser
or by any such underwriter, all relevant financial and other records, pertinent
corporate documents, and properties (other than confidential intellectual
property) of the Company; provided, however, that any information that is
designated in writing by the Company, in good faith, as confidential at the time
of delivery of such information shall be kept confidential by Purchaser or any
such underwriter, attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality.
1.4 Registration Expenses.
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The Company will pay all Registration Expenses of all registrations
under this Agreement, provided, however, that if a registration under Section
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1.1 is withdrawn at the request of Purchaser (other than as a result of
information concerning the business or financial condition of the Company that
is made known to the Purchaser after the date on which such registration was
requested) and if the requesting Purchaser elects not to have such registration
counted as a registration requested under Section 1.1, the Purchaser shall pay
the Registration expenses of such registration. For purposes of this Section,
the term "Registration Expenses" means all expenses incurred by the Company in
complying with this Section, including, without limitation, all registration and
filing fees (other than National Association of Securities Dealers, Inc. filing
fees pursuant to an underwritten offering), exchange listing fees, printing
expenses, fees, and expenses of counsel for the Company and the reasonable fees
and expenses of one firm or counsel selected by the Purchaser to represent it,
state Blue Sky fees and expenses, and the expense of any special audits incident
to or required by any such registration, but excluding underwriting discounts
and selling commissions.
1.5 Indemnity.
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(a) In the event that any shares of Common Stock owned by
Purchaser are sold by means of a registration statement pursuant to Section 1.1
or 1.2 hereof, the Company agrees to indemnify and hold harmless Purchaser, each
of its partners and their officers and directors, and each person, if any, who
controls Purchaser within the meaning of the Act (Purchaser, its partners and
their officers and directors, and any such other persons being hereinafter
referred to individually
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as an "Indemnified Person" and collectively as "Indemnified Persons") from and
against all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs, and expenses, including, without limitation,
interest, penalties, and reasonable attorneys' fees and disbursements, asserted
against, resulting to, imposed upon or incurred by such Indemnified Person,
directly or indirectly (hereinafter referred to in this Section 1.5 in the
singular as a "claim" and in the plural as "claims"), based upon, arising out of
or resulting from any untrue statement of a material fact contained in the
registration statement or any omission to state therein a material fact
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading, except insofar as such claim is
based upon, arises out of or result from information furnished to the Company in
writing by Purchaser for use in connection with the registration statement.
(b) Purchaser agrees to indemnify and hold harmless the Company, its
officers and directors, and each person, if any, who controls the Company within
the meaning of the Act (the Company, its officers and directors, and any such
other persons also being hereinafter referred to individually as an "Indemnified
Person" and collectively as "Indemnified Persons") from and against all claims
based upon, arising out of or resulting from any untrue statement of a material
fact contained in the registration statement or any omission to state therein a
material fact necessary in order to make the statement made therein, in the
light of the circumstances under which they were made, not misleading, to the
extent that such claim is based upon, arises out of or result from information
furnished to the Company in writing by Purchaser for use in connection with the
registration statement.
(c) The indemnification set forth herein shall be in addition to any
liability the Company or Purchaser may otherwise have to the Indemnified
Persons. Promptly after actually receiving definitive notice of any claim in
respect of which an Indemnified Person may seek indemnification under this
Section 1.5, such Indemnified Person shall submit written notice thereof to
either the Company or Purchaser, as the case may be (sometimes being hereinafter
referred to as an "Indemnifying Person"). The failure of the Indemnified Person
so to notify the Indemnifying Person of any such claim shall not relieve the
Indemnifying Person from any liability it may have hereunder except to the
extent that (a) such liability was caused or materially increased by such
failure, or (b) the ability of the Indemnifying Person to reduce such liability
was materially adversely affected by such failure. In addition, the failure of
the Indemnified Person so to notify the Indemnifying Person of any such claim
shall not relieve the Indemnifying Person from any
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liability it may have otherwise than hereunder. The Indemnifying Person shall
have the right to undertake, by counsel or representatives of its own choosing,
the defense, compromise or settlement (without admitting liability of the
Indemnified Person) of any such claim asserted, such defense, compromise or
settlement to be undertaken at the expense and risk of the Indemnifying Person,
and the Indemnified Person shall have the right to engage separate counsel, at
such Indemnified Person's own expense, whom counsel for the Indemnifying Person
shall keep informed and consult with in a reasonable manner. In the event the
Indemnifying Person shall elect not to undertake such defense by its own
representatives, the Indemnifying Person shall give prompt written notice of
such election to the Indemnified Person, and the Indemnified Person may
undertake the defense, compromise or settlement (without admitting liability of
the Indemnified Person) thereof on behalf of and for the account and risk of the
Indemnifying Person by counsel or other representatives designated by the
Indemnified Person. Notwithstanding the foregoing, no Indemnifying Person shall
be obligated hereunder with respect to amounts paid in settlement of any claim
if such settlement is effected without the consent of such Indemnifying Person
(which consent shall not be unreasonably withheld).
(d) If for any reason the foregoing indemnity is unavailable to,
or is insufficient to hold harmless, an Indemnified Person, then the
Indemnifying Person shall contribute to the amount paid or payable by the
Indemnified Person as a result of such claims, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Person and the
Indemnified Person as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
1.6 Subsequent Registration Statements. The Company shall not cause
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or permit any new registration statements (except registration statements on
Form ▇-▇, ▇-▇, or comparable forms) to become effective during the 90 days after
the effective date of a registration statement covering shares of Common Stock
owned by Purchaser.
2. Miscellaneous.
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2.1 Additional Actions and Documents. Each of the parties hereto
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hereby agrees to use its good faith best efforts to bring about the consummation
of this Agreement, and to take or cause to be taken such further actions, to
execute, deliver and file or cause to be executed, delivered and filed such
further documents and instruments, and to obtain such
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consents, as may be necessary or as may be reasonably requested in order to
fully effectuate the purposes, terms and conditions of this Agreement.
2.2 Assignment. Purchaser may assign its rights under this Agreement
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to any assignee of the Debenture or the shares of Common Stock issuable
thereunder.
2.3 Entire Agreement; Amendment. This Agreement, including the other
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writings referred to herein or delivered pursuant hereto, constitutes the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, and it supersedes all prior oral or written agreements, commitments or
understandings with respect to the matters provided for herein. No amendment,
modification or discharge of this Agreement shall be valid or binding unless set
forth in writing and duly executed by a party against whom enforcement of the
amendment, modification, or discharge is sought.
2.4 Limitation on Benefits. It is the explicit intention of the
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parties hereto that no person or entity other than the parties hereto (and their
respective successors and assigns) is or shall be entitled to bring any action
to enforce any provision of this Agreement against any of the parties hereto,
and the covenants, undertakings and agreements set forth in this Agreement shall
be solely for the benefit of, and shall be enforceable only by, the parties
hereto or their respective successors and assigns.
2.5 Binding Effect. This Agreement shall be binding upon and shall
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inure to the benefit of the parties hereto and their respective successors and
assigns.
2.6 Governing Law. This Agreement, the rights and obligations of
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the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of Delaware (excluding the
choice of law rules thereof).
2.7 Notices. All notices, demands, requests, or other communications
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which may be or are required to be given, served, or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be mailed
by first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery (including delivery by courier),
telegram, telex, or facsimile transmission, addressed as follows:
(a) If to the Company:
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The Right Start, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile:
with a copy (which shall not constitute notice) to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Strategic Partners, L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: 410/347-2963
with a copy (which shall not constitute
notice) to:
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 410/986-2828
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be mailed, delivered
or transmitted in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, the affidavit of
messenger or (with respect to a telex) the answer back being deemed conclusive
(but not exclusive) evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.
2.8 Headings. Article and Section headings contained in this
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Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
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2.9 Execution in Counterparts. To facilitate execution, this
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Agreement may be executed in as many counterparts as may be required; and it
shall not be necessary that the signatures of each party appear on each
counterpart; but it shall be sufficient that the signature of each party appear
on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of
this Agreement to produce or account for more than a number of counterparts
containing the respective signatures of all of the parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the date first above written.
THE RIGHT START, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
President
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ STRATEGIC
PARTNERS FUND, L.P.
By: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Strategic
Partners, L.P.
its general partner
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
a General Partner
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