Exhibit 10.2
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REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT dated as of March 1, 2003, by and among
HERITAGE WORLDWIDE, INC., a Delaware corporation (the "Company"), GEM GLOBAL
YIELD FUND, a Nevis, West Indies entity ("GEM"), and each of the other entities
listed and identified on Schedule A to this Agreement, as such schedule may be
amended from time to time. For purposes of this Agreement, all investors
identified on Schedule A shall be known as the "Investors."
WHEREAS, the Investors may be entitled to acquire Warrants to purchase up
to an aggregate of one million (1,000,000) shares (the "Shares") of common
stock, par value $.001 per share ("Common Stock"), of the Company pursuant to
the terms of an Acquisition Agreement dated as of February 28, 2003 among the
Company, Milo Finance, S.A., a Luxembourg limited liability entity ("PIP
Holding") and the other parties thereto (the "Acquisition Agreement");
WHEREAS, pursuant to the Acquisition Agreement, the Company has agreed to
provide "piggy-back" registration rights with respect to any shares of Common
Stock received by the Investors upon exercise of the Warrants; and
WHEREAS, the parties hereto desire to enter into this Agreement to evidence
the foregoing agreement of the Company and the mutual covenants of the parties
relating thereto,
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as follows:
1. Definitions. In this Agreement the following terms shall have the
following respective meanings:
"Affiliate" means any Person Controlling, Controlled by or under
common Control with the Person in question.
"Control" means the direct or indirect beneficial ownership of an
equity interest of a Person entitling or enabling the owner of such interest,
under the circumstances, to direct the policies and operations of such Person.
"Holders" means GEM and each of the other entities listed on Schedule
1 hereto, and any Permitted Transferees thereof, who are the record owners of
Registrable Securities that have not been sold to the public.
"Permitted Transferee" means an Affiliate of GEM or any other
Investor.
"Person" means any individual, corporation, partnership, trust or
other entity of any nature whatsoever.
"Registrable Securities" means (i) all of the Shares issued or
issuable upon exercise of the Warrants and (ii) any Common Stock issued in
respect of the shares described in clause (i) upon any stock split, stock
dividend, recapitalization or other similar event.
"Register" means to register under the Securities Act and applicable
state securities laws for the purpose of effecting a public sale of securities.
"Registration Expenses" means all expenses incurred by the Company in
compliance with Sections 2 or 4 hereof, including, without limitation, all
registra-tion and filing fees, printing expenses, transfer taxes, fees and
disbursements of counsel for the Company, blue sky fees and expenses, reasonable
fees and disburse-ments of one counsel for all the selling Holders and other
security holders, and the expense of any special audits incident to or required
by any such registration.
"Selling Expenses" means all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
2. "Piggy Back" Registrations. If the Company shall determine to
register any of its securities under the Securities Act of 1933, as amended (the
"Securities Act"), either for its own account or for the account of another
security holder or holders exercis-ing registration rights, other than a
registration relating solely to one or more employee benefit plans, or a
registration on any registration form which does not permit secondary sales or
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of Registrable
Securities, the Company will:
(a) Promptly give to each Holder of Registrable Securities
written notice thereof (which shall include the number of shares the Company or
other security holder proposes to register and, if known, the name of the
proposed underwriter); and
(b) Use its best efforts to include in such registration all the
Registrable Securities specified in a written request or requests, made by any
Holder within twenty (20) days after the date of delivery of the written notice
from the Company described in clause (i) above. If the underwriter advises the
Company that marketing considerations require a limitation on the number of
shares offered pursuant to any registration statement, then the Company may
offer all of the securities it proposes to register for its own account or the
maximum amount that the underwriter considers saleable and such limitation on
any remaining securities that may, in the opinion of the underwriter, be sold
will be imposed pro rata among all shareholders who are entitled to include
shares in such registration statement according to the number of Registrable
Securities each such shareholder requested to be included in such registration
statement.
3. Expenses of Registration. The Company shall pay all Registration
Expenses (exclusive of underwriting discounts and commissions) incurred in
connection with any registration, qualifica-tion or compliance pursuant to
Section 2 or 4.
4. Registration Procedures. In the case of each registration effected
by the Company pursuant to this Agreement, the Company will keep each Holder of
Registrable Securities included in such registration advised in writing as to
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the initiation of each registration and as to the completion thereof. At its
expense, the Company will do the following for the benefit of such Holders:
(a) Keep such Registration Statement continuously effective under
the Securities Act until the earlier of (i) the date on which all of the Shares
covered by the Registration Statement have been sold or (ii) the date on which
all of such Shares may be sold without restriction pursuant to Rule 144 of the
Securities Act;
(b) Use its best efforts to register or qualify the Registrable
Securities covered by such registration under the applicable securities or "blue
sky" laws of such jurisdictions as the selling shareholders may reasonably
request; provided, that the Company shall not be obligated to qualify to do
business in any jurisdiction where it is not then so qualified or otherwise
required to be so qualified or to take any action which would subject it to the
service of process in suits other than those arising out of such registration;
(c) Furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request;
(e) To the extent then permitted under applicable professional
guidelines and standards, obtain a comfort letter from the Company's independent
public accountants in customary form and covering such matters of the type
custom-arily covered by comfort letters and an opinion from the Company's
counsel in customary form and covering such matters of the type customarily
covered in a public issuance of securities, in each case addressed to the
Holders, and provide copies thereof to the Holders; and
(f) Permit the counsel to the selling shareholders whose
ex-penses are being paid pursuant to Section 2 hereof to inspect and copy such
corporate documents as he may reasonably request.
5. Indemnification.
(a) The Company will, and hereby does, indemnify each Holder,
each of its officers, directors and partners, and each person controlling such
Holder within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, with respect to which registration, qualifi-cation or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls such underwriter within the meaning of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on 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, or any violation by the Company of the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
securities act of any state or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Com-pany in
connection with any such registration, qualification or compliance, and will
reimburse each such Holder, each of its officers, directors and partners, and
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each person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, whether or not resulting in any liability, provided
that the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement (or alleged untrue statement) or omission (or alleged omission)
based upon written information furnished to the Company by any Holder or
underwriter and stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each other Holder and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and the rules and regulations
thereunder, each other such Holder and each of their officers, directors and
partners, and each person controlling such Holder, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omis-sion) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company and such Holder's
directors, officers, partners, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, whether or not
resulting in liability, in each case to the extent, but only to the extent, that
such untrue state-ment (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein; provided, however, that the obligations of each Holder hereunder shall
be limited to an amount equal to the lesser of (i) the net proceeds received by
such Holder upon sale of his securities and (ii) the product of the dollar
amount of such claims, losses, damages and liabilities multi-plied by a
fraction, the numerator of which is the number of shares sold by such Holder in
such offering and the denominator of which is the aggregate number of shares
sold in such offering.
(c) Each party entitled to indemnification under this Section 5
(the "Indemnified Party") shall give notice to the party required to provide
indemni-fication (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, but
the failure of any Indemnifying Party to give such notice shall not relieve the
Indemnifying Party of its obligations under this Section 5 (except and to the
extent the Indemnifying Party has been prejudiced as a consequence thereof). The
Indemnifying Party will be entitled to participate in, and to the extent that it
may elect by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, at its expense to
assume, the defense of any such claim or any litigation resulting therefrom,
with counsel reasonably satisfactory to such Indemnified Party, provided that
the Indemnified Party may participate in such defense at its expense,
notwithstanding the assumption of such defense by the Indemnifying Party, and
provided, further, that if the defendants in any such action shall include both
the Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that there may be legal defenses available to it
and/or other Indemnified Parties which are different from or additional to those
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available to the Indemnifying Party, the Indemnified Party or Parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
Indemnified Party or Parties and the reasonable fees and expenses of such
counsel shall be paid by the Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Each Indemnified Party shall (i) furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom and
(ii) shall reasonably assist the Indemnifying Party in any such defense,
provided that the Indemnified Party shall be entitled to be reimbursed by this
Indemnifying Party for its out-of-pocket expenses paid in connection with such
assistance.
(d) No Holder shall be required to participate in a registration
pursuant to which it would be required to execute an underwriting agreement in
connection with a registration effected under Section 2 that imposes
indemni-fication or contribution obligations on such Holder more onerous than
those imposed hereunder; provided, however, that the Company shall not be deemed
to breach the provisions of Section 2 if a Holder is not permitted to
participate in a registra-tion on account of his refusal to execute an
underwriting agreement on the basis of this subsection (d).
6. Information by Holder. Each Holder of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Agreement or otherwise required by applicable state or federal securities
laws.
7. Limitations on Registration Rights. From and after the date of this
Agreement, the Company shall not enter into any agreement with any holder or
prospective holder of any securities of the Company giving such holder or
prospective holder (a) the right to require the Company, upon any registration
of any of its securities, to include, among the securities which the Company is
then register-ing, securities owned by such holder, 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 its securities
will not limit the number of Registrable Securities sought to be included by the
Holders of Registrable Securities or reduce the offering price thereof; or (b)
the right to require the Company to initiate any registration of any securities
of the Company.
8. Exception to Registration. The Company shall not be required to
effect a registration under this Agreement if (i) in the written opinion of
counsel for the Company, which counsel and the opinion so rendered shall be
reasonably acceptable to the Holders of Registrable Securities, such Holders may
sell without registration under the Securities Act the Registrable Securities
for which they requested registration under the provisions of the Securities Act
and in the manner and in the quantity in which the Registrable Securities were
proposed to be sold, or (ii) the Company shall have obtained from the Commission
a "no-action" letter to that effect.
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9. Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission that may permit the sale of
restricted securities (as that term is used in Rule 144 under the Securities
Act) to the public without registration, the Company agrees to:
(a) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securi-ties Act and the Exchange Act; and
(c) so long as an Investor owns any restricted securities,
furnish to the Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 and of
the Securities Act and Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
as a Investor may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Investor to sell any such securities
without registration.
10. Listing Application. If shares of any class of stock of the
Company shall be listed on a national securities exchange, the Company shall, at
its expense, include in its listing application all of the shares of the listed
class then owned by any Investor, including the Shares.
11. Damages. The Company recognizes and agrees that the holder of
Registrable Securities shall not have an adequate remedy if the Company fails to
comply with the provisions of this Agreement, and that damages will not be
readily ascertainable, and the Company expressly agrees that in the event of
such failure any Holder of Registrable Securities shall be entitled to seek
specific perfor-▇▇▇▇▇ of the Company's obligations hereunder and that the
Company will not oppose an application seeking such specific performance based
on there being an adequate remedy at law.
12. Selection of Underwriter. The managing underwriter of any
underwritten public offering by the Company, including without limitation
pursuant to the provision of this Agreement, shall be selected by the Board of
Directors of the Company.
13. Miscellaneous.
(a) Governing Law. This Agreement shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes
shall be governed by, and construed and enforced in accordance with, the laws of
the State of New York applicable to contracts to be made and performed entirely
within the state and no defense given or allowed by the laws of any other state
or country shall be interposed in any action or proceeding herein, unless such
defense is also given or allowed by the laws of the State of New York and not
waived hereby. The courts of the State of New York shall have exclusive
jurisdiction over all controversies or disputes relating to or arising with
respect to the interpretation, performance or breach of this Agreement. The
parties consent to personal jurisdiction in the courts of such state and agree
that process may be serviced upon them in any such action by registered mail at
the address set forth below its signature hereon as such address may be changed
from time to time in accordance with Section 15(e) or otherwise as permitted by
New York law.
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(b) WAIVER OF TRIAL BY JURY. THE PARTIES HERETO, HAVING FULLY
CONSIDERED THE CONSEQUENCES THEREOF, DO HEREBY WAIVE TRIAL BY JURY IN ANY
PROCEEDING, CONTROVERSY OR DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT.
(c) Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof.
(d) Amendment. No supplement, modification, waiver or termination
of this Agreement shall be binding unless executed in writing by the party to be
bound thereby.
(e) Notices, etc. All notices, requests, demands, consents,
approvals and other communications required or permitted to be given hereunder
shall be in writing and shall be given personally, sent by facsimile
transmission or sent by prepaid air courier to the party at its address or fax
number given below its signature to this Agreement. Any notice so given shall be
deemed to have been given when received. Any notice required to be given
hereunder to an Investor may also be given to the designated representative of
such Investor. A copy of any notice given hereunder shall be simultaneously sent
to counsel for the respective parties, as follows:
If to counsel for the Company:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to counsel for the Investors and GEM:
▇▇▇▇▇▇ Gottbetter & ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto, or counsel for any party hereto, may change the
address and/or fax number for notices intended for it by giving a notice
complying with this paragraph to the parties hereto and to the other counsel,
but such notice shall not be effective until actually received.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by fewer than all of the parties
hereto (provided that each party executes one or more counterparts), each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
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(g) Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision.
(h) Section Titles. Section titles are for descriptive purposes
only and shall not control or alter the meaning of the Agreement as set forth in
the text.
(i) Successors and Assigns. Except as otherwise permitted hereby,
this Agreement shall not be assigned by GEM or any other Investor without the
prior written consent of the Company. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns.
[Balance of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
HERITAGE WORLDWIDE, INC.
By:
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Name:
Title:
On behalf of itself and the Investors
listed on Schedule A:
GEM GLOBAL YIELD FUND LTD.
By:
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Authorized Signatory
Name
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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SCHEDULE A
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GEM GLOBAL YIELD FUND
GEM SINGAPORE, LTD.
OCEAN STRATEGIC HOLDINGS LTD.
GLOBAL STRATEGIC HOLDINGS LTD.
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