EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
DATED AS OF
FEBRUARY 14, 2003
BY AND BETWEEN
SMARTSERV ONLINE, INC.
AND
GLOBAL CAPITAL FUNDING GROUP, L.P.
TABLE OF CONTENTS
1 INTRODUCTION 2
1.1 SECURITIES PURCHASE AGREEMENT 2
1.2 DEFINITION OF SECURITIES 2
2 REGISTRATION UNDER SECURITIES ACT, ETC. 2
2.1 MANDATORY REGISTRATION 2
(A) REGISTRATION OF REGISTRABLE SECURITIES 2
(B) REGISTRATION STATEMENT FORM 3
(C) EXPENSES 3
(D) EFFECTIVE REGISTRATION STATEMENT 3
(E) PLAN OF DISTRIBUTION 3
2.2 INTENTIONALLY OMITTED 3
2.3 REGISTRATION PROCEDURES 3
2.4 PREPARATION; REASONABLE INVESTIGATION 6
2.5 REGISTRATION DEFAULT FEE 6
2.6 INDEMNIFICATION 7
(A) INDEMNIFICATION BY THE COMPANY 7
(B) INDEMNIFICATION BY THE SELLERS 7
(C) NOTICES OF CLAIMS, ETC. 8
(D) OTHER INDEMNIFICATION 8
(E) INDEMNIFICATION PAYMENTS 8
(F) CONTRIBUTION 9
3 DEFINITIONS 10
4 RULE 144 11
5 AMENDMENTS AND WAIVERS 12
6 NOMINEES FOR BENEFICIAL OWNERS 12
7 NOTICES 12
8 ASSIGNMENT 12
9 DESCRIPTIVE HEADINGS 13
10 GOVERNING LAW 13
11 COUNTERPARTS 13
12 ENTIRE AGREEMENT 13
13 SEVERABILITY 13
i
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of February 14,
2003, between SmartServ Online, Inc., a Delaware corporation (the "Company") and
Global Capital Funding Group, L.P. (the "Fund"), a Delaware limited partnership.
1. INTRODUCTION.
1.1 SECURITIES PURCHASE AGREEMENT . The Company and the Fund have today executed
that certain Securities Purchase Agreement (the "Securities Purchase
Agreement"), pursuant to which the Company has agreed, among other things, to
issue a One Million Dollars ($1,000,000.00) (U.S.) principal amount of 10%
Convertible Note of the Company (the "Note") to the Fund or its successors,
assigns or transferees (collectively, the "Holders"). The Note is convertible
into a number of shares (the "Note Conversion Shares") of the Company's common
stock, $0.01 par value per share (the "Common Stock") pursuant to the terms of
the Note. In addition, pursuant to the terms of the Securities Purchase
Agreement and the transactions contemplated thereby, the Company has agreed to
issue to the Fund, Common Stock Purchase Warrants exercisable for 200,000 shares
of the Company's Common Stock, (the "Warrant Shares"). The number of Note
Conversion Shares and Warrant Shares is subject to adjustment upon the
occurrence of stock splits, recapitalizations and similar events occurring after
the date hereof.
1.2 DEFINITION OF SECURITIES . The Note Conversion Shares and the Warrant Shares
are herein referred to as the "Securities."
2. REGISTRATION UNDER SECURITIES ACT, ETC.
2.1 MANDATORY REGISTRATION .
(a) REGISTRATION OF REGISTRABLE SECURITIES . The Company shall prepare and file
within sixty (60) days following the date hereof (the "Filing Date") a
registration statement (the "Registration Statement") covering the resale of the
Registrable Securities; provided, however, in the event the Company files
another Registration Statement following the Closing Date and before the Filing
Date, the Registrable Securities shall be included on such Registration
Statement. The Company shall use its reasonable best efforts to cause the
Registration Statement to be declared effective by the Commission on the earlier
of (i) 120 days following the date hereof with respect to the Registration
Statement, (ii) ten (10) days following the receipt of a "No Review" or similar
letter from the Commission or (iii) the first day following the day the
Commission determines the Registration Statement eligible to be declared
effective (the "Required Effectiveness Date"). Nothing contained herein shall be
deemed to limit the number of Registrable Securities to be registered by the
Company hereunder. As a result, should the Registration Statement not relate to
the maximum number of Registrable Securities acquired by (or potentially
acquirable by) the holders thereof upon conversion of the Note, or
exercise of the Common Stock Purchase Warrants described in Section 1 above, the
Company shall be required to promptly file a separate registration statement
(utilizing Rule 462 promulgated under the Exchange Act, where applicable)
relating to such Registrable Securities which then remain unregistered. The
provisions of this Agreement shall relate to any such separate registration
statement as if it were an amendment to the Registration Statement.
(b) REGISTRATION STATEMENT FORM . Registrations under this Section 2.1 shall be
on Form S-3 or such other appropriate registration form of the Commission as
shall permit the disposition of such Registrable Securities in accordance with
the intended method or methods of disposition specified by the Fund; provided,
however, such intended method of disposition shall not include an underwritten
offering of the Registrable Securities.
(c) EXPENSES . The Company will pay all Registration Expenses in connection with
any registration required by this Section 2.1.
(d) EFFECTIVE REGISTRATION STATEMENT . A registration requested pursuant to this
Section 2.1 shall not be deemed to have been effected (i) unless a registration
statement with respect thereto has become effective within the time period
specified herein, provided that a registration which does not become effective
after the Company filed a registration statement with respect thereto solely by
reason of the refusal to proceed of any holder of Registrable Securities (other
than a refusal to proceed based upon the advice of counsel in the form of a
letter signed by such counsel and provided to the Company relating to a
disclosure matter unrelated to such holder) shall be deemed to have been
effected by the Company unless the holders of the Registrable Securities shall
have elected to pay all Registration Expenses in connection with such
registration, (ii) if, after it has become effective, such registration becomes
subject to any stop order, injunction or other order or extraordinary
requirement of the Commission or other governmental agency or court for any
reason or (iii) if, after it has become effective, such registration ceases to
be effective for more than an aggregate of twenty (20) days.
(e) PLAN OF DISTRIBUTION . The Company hereby agrees that the Registration
Statement shall include a "Plan Of Distribution" section reasonably acceptable
to the Fund.
2.2 INTENTIONALLY OMITTED .
2.3 REGISTRATION PROCEDURES . If and whenever the Company is required to effect
the registration of any Registrable Securities under the Securities Act as
provided in Section 2.1, the Company shall, as expeditiously as possible:
(i) prepare and file with the Commission the Registration Statement,
or amendments thereto, to effect such registration (including such audited
financial statements as may be required by the Securities Act or the rules and
regulations promulgated thereunder) and thereafter use its commercially
reasonable best efforts to cause such registration statement to be
declared effective by the Commission, as soon as practicable, but in any event
no later than the Required Effectiveness Date; provided, however, that before
filing such registration statement or any amendments thereto, the Company will
furnish to the counsel selected by the holders of Registrable Securities which
are to be included in such registration, copies of all such documents proposed
to be filed;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
until the earlier to occur of five (5) years after the date of this
Agreement(subject to the right of the Company to suspend the effectiveness
thereof for not more than 20 consecutive days or an aggregate of 60 days in such
five (5) year period) or such time as all of the securities which are the
subject of such registration statement cease to be Registrable Securities (such
period, in each case, the "Registration Maintenance Period");
(iii) furnish to each seller of Registrable Securities covered by such
registration statement such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act, and
such other documents, as such seller and underwriter, if any, may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities owned by such seller;
(iv) use its reasonable best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities laws or blue sky laws as any seller
thereof shall reasonably request, to keep such registrations or qualifications
in effect for so long as such registration statement remains in effect, and take
any other action which may be reasonably necessary to enable such seller to
consummate the disposition in such jurisdictions of the securities owned by such
seller, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subdivision (iv) be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;
(v) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) Intentionally omitted.
(vii) notify the Sellers' Representative and its counsel promptly and
confirm such advice in writing promptly after the Company has knowledge thereof:
(A) when the Registration Statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
Registration Statement has been filed, and, with respect to the Registration
Statement or any post-effective amendment thereto, when the same has become
effective;
(B) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus or for additional
information;
(C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings by any Person for that purpose; and
(D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable Securities for
sale under the securities or blue sky laws of any jurisdiction or the initiation
or threat of any proceeding for such purpose;
(viii) notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
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 any material facts required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and at the request of any such seller promptly
prepare and furnish to such seller a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit 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;
(ix) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment; and
(x) enter into such agreements and take such other actions as the
Sellers' Representative shall reasonably request in writing (at the expense of
the requesting or benefitting sellers) in order to expedite or facilitate the
disposition of such Registrable Securities.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.
The Company will not file any registration statement pursuant to
Section 2.1, or amendment thereto or any prospectus or any supplement thereto
(including such documents incorporated by reference and proposed to be filed
after the initial filing of the Registration Statement) to which the Sellers'
Representative shall reasonably object, provided that the Company may file such
documents in a form required by law or upon the advice of its counsel.
The Company represents and warrants to each holder of Registrable
Securities that it has obtained all necessary waivers, consents and
authorizations necessary to execute this Agreement and consummate the
transactions contemplated hereby other than such waivers, consents and/or
authorizations specifically contemplated by the Securities Purchase Agreement.
Each Seller agrees that, upon receipt of any notice from the Company
of the occurrence of any event of the kind described in subdivision (viii) of
this Section 2.3, such Seller will forthwith discontinue such Seller's
disposition of Registrable Securities pursuant to the Registration Statement
relating to such Registrable Securities until such Seller's receipt of the
copies of the supplemented or amended prospectus contemplated by subdivision
(viii) of this Section 2.3 and, if so directed by the Company, will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in such Seller's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice.
2.4 PREPARATION; REASONABLE INVESTIGATION . In connection with the preparation
and filing of each registration statement under the Securities Act pursuant to
this Agreement, the Company will give the Holders of Registrable Securities
registered under such registration statement, and their respective counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the reasonable opinion of such Holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
2.5 REGISTRATION DEFAULT FEE . If the Registration Statement contemplated in
Section 2.1 is (x) not filed with the Commission by the Filing Date, (y) not
declared effective by the Required Effectiveness Date or (z) such effectiveness
is not maintained for the Registration Maintenance Period, then the Company
shall pay to the Fund the fees specified in Section 10.4 of the Securities
Purchase Agreement.
2.6 INDEMNIFICATION .
(a) INDEMNIFICATION BY THE COMPANY . In the event of any registration of any
securities of the Company under the Securities Act, the Company will, and hereby
does agree to indemnify and hold harmless the Holder of any Registrable
Securities covered by such registration statement, its directors and officers,
each other Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls such Holder or any
such underwriter within the meaning of the Securities Act against any losses,
claims, damages or liabilities, joint or several, to which such Holder or any
such director or officer or underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such Holder and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability, (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Holder or underwriter stating that it is for use in the preparation thereof and,
provided further that the Company shall not be liable to the Holder, or any
Person who participates as an underwriter in the offering or sale of Registrable
Securities or to any other Person, if any, who controls such underwriter within
the meaning of the Securities Act, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, within the time
required by the Securities Act to the Person asserting the existence of an
untrue statement or alleged untrue statement or omission or alleged omission at
or prior to the written confirmation of the sale of Registrable Securities to
such Person if such statement or omission was corrected in such final prospectus
or an amendment or supplement thereto. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such Holder
or any such director, officer, underwriter or controlling person and shall
survive the transfer of such securities by such Holder.
(b) INDEMNIFICATION BY THE SELLERS . The Company shall receive an undertaking
satisfactory to it from the prospective seller of such Registrable Securities,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section 2.6) the Company, each director of the
Company, each officer of the
Company and each other Person, if any, who controls the Company within the
meaning of the Securities Act, with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by such seller specifically stating that it is for use
in the preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Any such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Company or any such director, officer or controlling person
and shall survive the transfer of such securities by such seller.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified party of
notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 2.6, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 2.6, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability, or a covenant not to ▇▇▇, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
(d) OTHER INDEMNIFICATION . Indemnification similar to that specified in the
preceding subdivisions of this Section 2.6 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities (but
only if and to the extent required pursuant to the terms of Section 2.6(b)) with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other than
the Securities Act.
(e) INDEMNIFICATION PAYMENTS . The indemnification required by this Section 2.6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
(f) CONTRIBUTION . If the indemnification provided for in the preceding
subdivision of this Section 2.6 is unavailable to an indemnified party in
respect of any expense, loss, claim, damage or liability referred to therein,
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 expense, loss, claim, damage or liability (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Holder or underwriter, as the case may be, on the other
from the distribution of the Registrable Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Holder or underwriter, as the case may be, on the other in
connection with the statements or omissions which resulted in such expense,
loss, damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Holder or underwriter, as the case may be, on the other in connection
with the distribution of the Registrable Securities shall be deemed to be in the
same proportion as the total net proceeds received by the Company from the
initial sale of the Registrable Securities by the Company to the purchasers bear
to the gain, if any, realized by all selling Holders participating in such
offering or the underwriting discounts and commissions received by the
underwriter, as the case may be. The relative fault of the Company on the one
hand and of the Holder or underwriter, as the case may be, on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission to state a material fact relates
to information supplied by the Company, by the Holder or by the underwriter and
the parties' relative intent, knowledge, access to information supplied by the
Company, by the Holder or by the underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, provided that the foregoing contribution agreement shall
not inure to the benefit of any indemnified party if indemnification would be
unavailable to such indemnified party by reason of the provisions contained in
the first sentence of subdivision (a) of this Section 2.6, and in no event shall
the obligation of any indemnifying party to contribute under this subdivision
(f) exceed the amount that such indemnifying party would have been obligated to
pay by way of indemnification if the indemnification provided for under
subdivisions (b) of this Section 2.6 had been available under the circumstances.
The Company and the Holders of Registrable Securities agree that it would
not be just and equitable if contribution pursuant to this subdivision (f) were
determined by pro rata allocation (even if the Holders and any underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth in the preceding sentence and subdivision (c) of this
Section 2.6, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subdivision (f), no Holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such Holder, the net
proceeds received by such Holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such Holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. 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.
3. DEFINITIONS. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
"Agreement": As defined in Section 1.
"Commission": The Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"Common Stock": As defined in Section 1.
"Company": As defined in the introductory paragraph of this Agreement.
"Conversion Shares": As defined in Section 1.
"Exchange Act": The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder.
"Note": As defined in Section 1, such term to include any securities
issued in substitution of or in addition to such Note.
"Person": A corporation, association, partnership, organization,
business, individual, governmental or political subdivision thereof or a
governmental agency.
"Registrable Securities": The Securities and any securities issued or
issuable with respect to such Securities by way of stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. Once issued such securities
shall cease to be Registrable Securities when (a) 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, (b) they shall have been distributed to the
public pursuant to Rule 144 (or
any successor provision) under the Securities Act, (c) they shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, (d)
they shall have ceased to be outstanding, (e) on the expiration of the
applicable Registration Maintenance Period or (f) any and all legends
restricting transfer thereof have been removed in accordance with the provisions
of Rule 144(k) (or any successor provision) under the Securities Act.
"Registration Expenses": All expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all registration, filing and NASD fees, all stock exchange or other NASD or
stock exchange listing fees, all fees and expenses of complying with securities
or blue sky laws, all word processing, duplicating and printing expenses,
messenger and delivery expenses, the fees and disbursements of counsel for the
Company and of its independent public accountants, including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance, premiums and other costs of policies of insurance of
the Company against liabilities arising out of the public offering of the
Registrable Securities being registered and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if any, provided
that, in any case where Registration Expenses are not to be borne by the
Company, such expenses shall not include salaries of Company personnel or
general overhead expenses of the Company, auditing fees, premiums or other
expenses relating to liability insurance required by underwriters of the Company
or other expenses for the preparation of financial statements or other data
normally prepared by the Company in the ordinary course of its business or which
the Company would have incurred in any event.
"Registration Maintenance Period": As defined in Section 2.3.
"Required Effectiveness Date": As defined in Section 2.1.
"Securities Act": The Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Securities Purchase Agreement": As defined in Section 1.
"Sellers' Representative": Global Capital Advisors Ltd. or such Person
designated by Global Capital Advisors Ltd. as of the time of disposition of the
last of the Note held by the Fund (or subsequent Sellers' Representative).
"Warrant Shares": As defined in Section 1.
4. RULE 144. The Company shall timely file the reports required to be filed by
it under the Securities Act and the Exchange Act (including but not limited to
the reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted
by the Commission under the Securities Act)
and the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, will, upon the request of any
Holder of Registrable Securities, make publicly available other information) and
will take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder of Registrable Securities, the Company will deliver to such Holder
a written statement as to whether it has complied with the requirements of this
Section 4.
5. AMENDMENTS AND WAIVERS. This Agreement may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company shall have obtained the written consent
to such amendment, action or omission to act, of the Holder or Holders of the
sum of the 51% or more of the shares of (i) Registrable Securities issued at
such time, plus (ii) Registrable Securities issuable upon exercise or conversion
of the Securities then constituting derivative securities (if such Securities
were not fully exchanged or converted in full as of the date such consent if
sought). Each Holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any consent authorized by this Section 5, whether
or not such Registrable Securities shall have been marked to indicate such
consent.
6. NOMINEES FOR BENEFICIAL OWNERS. In the event that any Registrable Securities
are held by a nominee for the beneficial owner thereof, the beneficial owner
thereof may, at its election, be treated as the Holder of such Registrable
Securities for purposes of any request or other action by any Holder or Holders
of Registrable Securities pursuant to this Agreement or any determination of any
number of percentage of shares of Registrable Securities held by a Holder or
Holders of Registrable Securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects, the Company may
require assurances reasonably satisfactory to it of such owner's beneficial
ownership or such Registrable Securities.
7. NOTICES. Except as otherwise provided in this Agreement, all notices,
requests and other communications to any Person provided for hereunder shall be
in writing and shall be given to such Person (a) in the case of a party hereto
other than the Company, addressed to such party in the manner set forth in the
Securities Purchase Agreement or at such other address as such party shall have
furnished to the Company in writing, or (b) in the case of any other Holder of
Registrable Securities, at the address that such Holder shall have furnished to
the Company in writing, or, until any such other Holder so furnishes to the
Company an address, then to and at the address of the last Holder of such
Registrable Securities who has furnished an address to the Company, or (c) in
the case of the Company, at the address set forth on the signature page hereto,
to the attention of its President, or at such other address, or to the attention
of such other officer, as the Company shall have furnished to each Holder of
Registrable Securities at the time outstanding. Each such notice, request or
other communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mail with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means (including, without
limitation, by fax or air courier), when delivered at the address specified
above, provided that any such notice, request or communication shall not be
effective until received.
8. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto. In addition, and whether or not any
express assignment shall have been made, the provisions of this Agreement which
are for the benefit of the parties hereto other than the Company shall also be
for the benefit of and enforceable by any subsequent Holder of any Registrable
Securities. Each of the Holders of the Registrable Securities agrees, by
accepting any portion of the Registrable Securities after the date hereof, to
the provisions of this Agreement including, without limitation, appointment of
the Sellers' Representative to act on behalf of such Holder pursuant to the
terms hereof which such actions shall be made in the good faith discretion of
the Sellers' Representative and be binding on all persons for all purposes.
9. DESCRIPTIVE HEADINGS. The descriptive headings of the several sections and
paragraphs of this Agreement are inserted for reference only and shall not limit
or otherwise affect the meaning hereof.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE
OF DELAWARE WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS.
11. COUNTERPARTS. This Agreement may be executed by facsimile and may be signed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the Company and each other party hereto relating to the
subject matter hereof and supercedes all prior agreements and understandings
relating to such subject matter.
13. SEVERABILITY. If any provision of this Agreement, or the application of such
provisions to any Person or circumstance, shall be held invalid, the remainder
of this Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
SmartServ Online, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Officer
Address: Metro Center
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Tel.: ▇▇▇-▇▇▇-▇▇▇▇
GLOBAL CAPITAL FUNDING GROUP, L.P.
By its General Partner, Global Capital
Management Services, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Address:
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Tel.: ▇▇▇-▇▇▇-▇▇▇▇