EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 1, 1999, between AMRO
International, S.A., a Panama corporation ("Holder"), and HAWAIIAN NATURAL
WATER COMPANY, INC., a corporation incorporated under the laws of the State
of Hawaii (the "Company").
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Holder is purchasing or agreeing to purchase from the Company,
pursuant to a Convertible Preferred Shares and Warrant Purchase Agreement
dated the date hereof (the "Purchase Agreement"), $1,250,000 liquidation
preference amount of Convertible Preferred Shares and a Warrant to purchase
up to 100,000 shares of the Company's Common Stock (terms not defined herein
shall have the meanings ascribed to them in the Purchase Agreement); and
WHEREAS, the Company desires to grant to the Holder the registration
rights set forth herein with respect to the shares of Common Stock issuable
upon conversion of the Preferred Shares and shares of Common Stock issuable
upon exercise of the Warrant (hereinafter referred to as the "Stock" or
"Securities" of the Company).
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. REGISTRABLE SECURITIES. As used herein the term
"Registrable Security" means the Securities until (i) the Registration
Statement has been declared effective by the Commission, and all Securities
have been disposed of pursuant to the Registration Statement, (ii) all
Securities have been sold under circumstances under which all of the
applicable conditions of Rule 144 (or any similar provision then in force)
under the Securities Act ("Rule 144") are met, (iii) all Securities have been
otherwise transferred to holders who may trade such Securities without
restriction under the Securities Act, and the Company has delivered a new
certificate or other evidence of ownership for such Securities not bearing a
restrictive legend or (iv) such time as, in the opinion of counsel to the
Company, all Securities may be sold without any time, volume or manner
limitations pursuant to Rule 144(k) (or any similar provision then in effect)
under the Securities Act. The term "Registrable Securities" means any and/or
all of the securities falling within the foregoing definition of a
"Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure
affecting the Common Stock, such adjustment shall be deemed to be made in the
definition of "Registrable Security" as is appropriate in order to prevent
any dilution or enlargement of the rights granted pursuant to this Agreement.
Section 2. RESTRICTIONS ON TRANSFER. The Holder acknowledges and
understands that prior to the registration of the Securities as provided
herein, the Securities are "restricted securities" as defined in Rule 144
promulgated under the Act. The Holder understands that no disposition or
transfer of the Securities may be made by Holder in the absence of (i) an
opinion of counsel to the Holder that such transfer may be made without
registration under the Securities Act or (ii) such registration.
With a view to making available to the Holder the benefits of
Rule 144 under the Securities Act or any other similar rule or regulation of
the Commission that may at any time permit the Holder to sell securities of
the Company to the public without registration ("Rule 144"), the Company
agrees to:
(a) comply with the provisions of paragraph (c)(1) of Rule 144;
and
(b) file with the Commission in a timely manner all reports and
other documents required to be filed by the Company pursuant to Section 13 or
15(d) under the Exchange Act; and, if at any time it is not required to file
such reports but in the past had been required to or did file such reports,
it will, upon the request of any Holder, make available other information as
required by, and so long as necessary to permit sales of, its Registrable
Securities pursuant to Rule 144.
Section 3. REGISTRATION RIGHTS WITH RESPECT TO THE SECURITIES.
(a) The Company agrees that it will prepare and file with the
Securities and Exchange Commission (the "Commission"), on or before April 15,
1999, a registration statement (on Form S-3, or other appropriate
registration statement) under the Securities Act (the "Registration
Statement"), at the sole expense of the Company (except as provided in
Section 3(c) hereof), in respect of all holders of Securities, so as to
permit a public offering and resale of the Securities under the Act.
The Company shall use its best efforts to cause the
Registration Statement to become effective within ninety (90) days from the
Closing Date (or within 120 days, if the staff of the Commission advises the
Company in writing that it is not eligible to register the Registrable
Securities on Form S-3), or, if earlier, within five (5) days of SEC
clearance to request acceleration of effectiveness. The number of shares
designated in the Registration Statement to be registered shall include all
the Warrant Shares and the number of shares of Common Stock which would be
issued upon conversion of the Preferred Shares assuming a Market Price of
$1.00 per share of Common Stock, and shall include appropriate language
regarding reliance upon Rule 416 to the extent permitted by the Commission.
The Company will notify Holder of the effectiveness of the Registration
Statement within one Business Day of such event.
(b) The Company will maintain the Registration Statement or
post-effective amendment filed under this Section 3 hereof effective under
the Securities Act until the earlier of (i) the date that none of the
Preferred Shares, the Warrant or the Securities are or may become issued and
outstanding, (ii) the date that all of the Securities have been sold pursuant
to the Registration Statement, (iii) the date the holders thereof receive an
opinion of counsel to the Company, which counsel shall be reasonably
acceptable to the Holder, that the Securities may be sold under the
provisions of Rule 144 without limitation as to volume, (iv) all Securities
have been otherwise transferred to Holders who may trade such shares without
restriction under the Securities Act, and the Company has delivered a new
certificate or other evidence of ownership for such securities not bearing a
restrictive legend, or (v) all Securities may be sold without any time,
volume or manner limitations pursuant to Rule 144(k) or any similar provision
then in effect under the Securities Act in the opinion of counsel to the
Company, which counsel shall be reasonably acceptable to the Holder (the
"Effectiveness Period").
(c) All fees, disbursements and out-of-pocket expenses and
costs incurred by the Company in connection with the preparation and filing
of the Registration Statement under subparagraph 3(a) and in complying with
applicable securities and Blue Sky laws (including, without limitation, all
attorneys' fees of the Company) shall be borne by the Company. The Holder
shall bear the cost of underwriting and/or brokerage discounts, fees and
commissions, if any, applicable to the Securities being registered and the
fees and expenses of its counsel. The Holder and its counsel shall have a
reasonable period, not to exceed three (3) Business Days, to review the
proposed Registration Statement or any amendment thereto, prior to filing
with the Commission, and the Company shall provide each Holder with
copies of any comment letters received from the Commission with respect
thereto within two (2) Business Days of receipt thereof. The Company shall
make reasonably available for inspection by Holder, any underwriter
participating in any disposition pursuant to the Registration Statement, and
any attorney, accountant or other agent retained by such Holder or any such
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by such Holder or any such underwriter, attorney,
accountant or agent in connection with the Registration Statement, in each
case, as is customary for similar due diligence examinations; PROVIDED,
HOWEVER, that all records, information and documents that are designated in
writing by the Company, in good faith, as confidential, proprietary or
containing any material non-public information shall be kept confidential by
such Holder and any such underwriter, attorney, accountant or agent (pursuant
to an appropriate confidentiality agreement in the case of any such Holder or
agent), unless such disclosure is made pursuant to judicial process in a
court proceeding (after first giving the Company an opportunity promptly to
seek a protective order or otherwise limit the scope of the information
sought to be disclosed) or is required by law, or such records, information
or documents become available to the public generally or through a third
party not in violation of an accompanying obligation of confidentiality; and
PROVIDED FURTHER that, if the foregoing inspection and information gathering
would otherwise disrupt the Company's conduct of its business, such
inspection and information gathering shall, to the maximum extent possible,
be coordinated on behalf of the Holder and the other parties entitled thereto
by one firm of counsel designed by and on behalf of the majority in interest
of Holder and other parties. The Company shall qualify any of the securities
for sale in such states as such Holder reasonably designates and shall
furnish indemnification in the manner provided in Section 6 hereof. However,
the Company shall not be required to qualify in any state which will require
an escrow or other restriction relating to the Company and/or the sellers, or
which will require the Company to qualify to do business in such state or
require the Company to file therein any general consent to service of
process. The Company at its expense will supply the Holder with copies of the
Registration Statement and the prospectus included therein and other related
documents in such quantities as may be reasonably requested by the Holder.
(d) The Company shall not be required by this Section 3 to
include a Holder's Securities in any Registration Statement which is to be
filed if, in the opinion of counsel for both the Holder and the Company (or,
should they not agree, in the opinion of another counsel experienced in
securities law matters acceptable to counsel for the Holder and the Company)
the proposed offering or other transfer as to which such registration is
requested is exempt from applicable federal and state securities laws and
would result in all purchasers or transferees obtaining securities which are
not "restricted securities", as defined in Rule 144 under the Securities Act.
(e) In the event that the Registration Statement to be filed by
the Company pursuant to Section 3(a) above is not declared effective by the
Commission within ninety (90) days from the Closing Date (or within 120 days
as set forth a Section 3(a)), or the Registration Statement is not maintained
as effective by the Company for the period set forth in Section 3(b) above
(each a "Registration Default") then the Company will pay Holder (pro rated
on a daily basis), as liquidated damages for such failure and not as a
penalty, two percent (2%) of the aggregate market value of all Securities
purchased from the Company and then held by the Investor per month thereafter
until the Registration Statement has been declared effective; provided,
however, that the foregoing liquidated damages provision shall not apply if
the Company has filed the Registration as aforesaid on or before April15,
1999 and thereafter uses best efforts to cause it to become effective within
the time period set forth above, but the Registration Statement does not
become effective within such time period primarily because of issues or
concerns raised by the Commission concerning the structure of the transaction
contemplated by the Purchase Agreement. Only one liquidated
damages amount shall be payable regardless of whether more than one such
Registration Default is then in existence. Such payment of the liquidated
damages shall be made to the Holder in cash, within five (5) calendar days of
demand, provided, however, that the payment of such liquidated damages shall
not relieve the Company from its obligations to register the Securities
pursuant to this Section. The market value of the Common Stock for this
purpose shall be the closing price (or last trade, if so reported) on the
Principal Market for each day during such Registration Default.
Notwithstanding anything to the contrary contained herein, a failure to
maintain the effectiveness of the Registration Statement or the ability of a
Holder to use the Registration Statement to effect resales of Securities
during the period after 45 days and within 90 days from the end of the
Company's fiscal year resulting solely from the need to update the Company's
financial statements contained or incorporated by reference in the
Registration Statement shall not constitute a Registration Default and shall
not trigger the accrual of liquidated damages hereunder.
If the Company does not remit the damages to the Holder as set
forth above, the Company will pay the Holder reasonable costs of collection,
including attorneys' fees, in addition to the liquidated damages. The
registration of the Securities pursuant to this provision shall not affect or
limit Holder's other rights or remedies as set forth in this Agreement.
(f) No provision contained herein shall preclude the Company
from selling securities pursuant to any Registration Statement in which it is
required to include Securities pursuant to this Section 3.
(g) If at any time or from time to time after the effective
date of the Registration Statement, the Company notifies the Holder in
writing of the existence of a Potential Material Event (as defined in Section
3(h) below), the Holder shall not offer or sell any Securities or engage in
any other transaction involving or relating to Securities, from the time of
the giving of notice with respect to a Potential Material Event until such
Holder receives written notice from the Company that such Potential Material
Event either has been disclosed to the public or no longer constitutes a
Potential Material Event; provided, however, that the Company may not so
suspend the right to such holders of Securities for more than twenty (20)
days in the aggregate during any twelve month period, during the periods the
Registration Statement is required to be in effect. If a Potential Material
Event shall occur prior to the date the Registration Statement is filed, then
the Company's obligation to file the Registration Statement shall be delayed
without penalty for not more than twenty (20) days, and such delay or delays
shall not constitute a Registration Default. The Company must give Holder
notice in writing at least two (2) business days prior to the first day of
the blackout period.
(h) "Potential Material Event" means any of the following: (a)
the possession by the Company of material information not ripe for disclosure
in a registration statement, as determined in good faith by the Chief
Executive Officer or the Board of Directors of the Company that disclosure of
such information in the Registration Statement would be detrimental to the
business and affairs of the Company; or (b) any material engagement or
activity by the Company which would, in the good faith determination of the
Chief Executive Officer or the Board of Directors of the Company, be
adversely affected by disclosure in a registration statement at such time,
which determination shall be accompanied by a good faith determination by the
Chief Executive Officer or the Board of Directors of the Company that the
Registration Statement would be materially misleading absent the inclusion of
such information.
Section 4. COOPERATION WITH COMPANY. Holder will cooperate with the
Company in all respects in connection with this Agreement, including timely
supplying all information reasonably requested by the Company (which shall
include all information regarding the Holder and proposed manner of sale of
the Registrable Securities required to be disclosed in the Registration
Statement) and executing and returning all documents reasonably requested in
connection with the registration and sale of the Registrable Securities and
entering into and performing its obligations under any underwriting
agreement, if the offering is an underwritten offering, in usual and
customary form, with the managing underwriter or underwriters of such
underwritten offering. Nothing in this Agreement shall obligate the Holder to
consent to be named as an underwriter in the Registration Statement. The
obligation of the Company to register the Registrable Securities shall be
absolute and unconditional as to those Securities which the Commission will
permit to be registered without naming the Holder as an underwriter,
notwithstanding that such Registrable Securities may be limited to only those
Conversion Shares issuable upon conversion of the Preferred Shares.
Section 5. REGISTRATION PROCEDURES. If and whenever the Company is
required by any of the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Act, the Company
shall (except as otherwise provided in this Agreement), as expeditiously as
possible, subject to the Holder's assistance and cooperation as reasonably
required:
(a) (i) prepare and file with the Commission such amendments
and supplements to the 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 Act with respect to the
sale or other disposition of all securities covered by such registration
statement whenever the Holder of such Registrable Securities shall desire to
sell or otherwise dispose of the same (including prospectus supplements with
respect to the sales of securities from time to time in connection with a
registration statement pursuant to Rule 415 promulgated under the Act) and
(ii) take all lawful action such that each of (A) the Registration Statement
and any amendment thereto does not, when it becomes effective, contain 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 and (B) the Prospectus forming part of the Registration Statement,
and any amendment or supplement thereto, does not at any time during the
Registration Period 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, in light of the circumstances under which they were made,
not misleading.
(b) (i) prior to the filing with the Commission of any
Registration Statement (including any amendments thereto) and the
distribution or delivery of any prospectus (including any supplements
thereto), provide draft copies thereof to the Holders and reflect in such
documents all such comments as the Holders (and their counsel) reasonably may
propose respecting the Selling Shareholders and Plan of Distribution sections
(or equivalents) and (ii) furnish to each Holder such numbers of copies of a
prospectus including a preliminary prospectus or any amendment or supplement
to any prospectus, as applicable, in conformity with the requirements of the
Act, and such other documents, as such Holder may reasonably request in order
to facilitate the public sale or other disposition of the securities owned by
such Holder;
(c) register and qualify the Registrable Securities covered by
the Registration Statement under such other securities or blue sky laws of
such jurisdictions as the Holder shall reasonably request (subject to the
limitations set forth in Section 3(d) above), and do any and all other acts
and things which may be necessary or advisable to enable each Holder to
consummate the public sale or other disposition in such jurisdiction of the
securities owned by such Holder, except that the Company shall not for
any such purpose be required to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified or to file
therein any general consent to service of process;
(d) list such Registrable Securities on the American Stock
Exchange, other national securities exchange, the NASDAQ National Market or
the NASDAQ Small-Cap Market, on which the Common Stock of the Company is then
listed, if the listing of such Registrable Securities is then permitted under
the rules of such exchange or Nasdaq;
(e) notify each Holder of Registrable Securities covered by the
Registration Statement, at any time when a prospectus relating thereto
covered by the Registration Statement is required to be delivered under the
Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in the 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, and the Company shall prepare and file a curative amendment under
Section 5(a) as quickly as commercially possible;
(f) as promptly as practicable after becoming aware of such
event, notify each Holder who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the Commission of any stop order or other suspension of the
effectiveness of the Registration Statement at the earliest possible time and
take all lawful action to effect the withdrawal, recession or removal of such
stop order or other suspension;
(g) cooperate with the Holders who hold Registrable Securities
being offered to facilitate the timely preparation and delivery of
certificates for the Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts, as the case may be, as the
Holders reasonably may request and registered in such names as the Holder may
request; and, within three business days after a Registration Statement which
includes Registrable Securities is declared effective by the Commission,
deliver and cause legal counsel selected by the Company to deliver to the
transfer agent for the Registrable Securities (with copies to the Holders
whose Registrable Securities are included in such Registration Statement) an
appropriate instruction and, to the extent necessary, an opinion of such
counsel;
(h) take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Holders of their Registrable
Securities in accordance with the intended methods therefor provided in the
prospectus which are customary for issuers to perform under the circumstances;
(i) in the event of an underwritten offering, promptly include
or incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the managers reasonably agree
should be included therein and to which the Company does not reasonably
object and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment; and
(j) maintain a transfer agent and registrar for its Common
Stock.
Section 6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Holder and each person, if any, who controls the Holder within the meaning of
the Securities Act ("Distributing Holder") against any losses, claims,
damages or liabilities, joint or several (which shall, for all purposes of
this Agreement, include, but not be limited to, all reasonable costs of
defense and investigation and all reasonable attorneys' fees), to which the
Distributing Holder may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, or any related preliminary prospectus, final prospectus or
amendment or supplement thereto, or arise out of or are based upon 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;
provided, however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, preliminary prospectus,
final prospectus or amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company by the
Distributing Holder, specifically for use in the preparation thereof. This
Section 6(a) shall not inure to the benefit of any Distributing Holder with
respect to any person asserting such loss, claim, damage or liability who
purchased the Registrable Securities which are the subject thereof if the
Distributing Holder failed to send or give (in violation of the Securities
Act or the rules and regulations promulgated thereunder) a copy of the
prospectus contained in such Registration Statement to such person at or
prior to the written confirmation to such person of the sale of such
Registrable Securities, where the Distributing Holder was obligated to do so
under the Securities Act or the rules and regulations promulgated thereunder.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Distributing Holder agrees that it will indemnify and
hold harmless the Company, and each officer, director of the Company or
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages or liabilities (which shall, for all
purposes of this Agreement, include, but not be limited to, all reasonable
costs of defense and investigation and all reasonable attorneys' fees) to
which the Company or any such officer, director or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, or any related
preliminary prospectus, final prospectus or amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, preliminary
prospectus, final prospectus or amendment or supplement thereto in reliance
upon, and in conformity with, written information furnished to the Company by
such Distributing Holder, specifically for use in the preparation thereof.
This indemnity agreement will be in addition to any liability which the
Distributing Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve the indemnifying party from any liability which it may have to any
indemnified party except to the extent of actual prejudice demonstrated by
the indemnifying party. In case any such action is brought against any
indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, assume the defense
thereof, subject to the provisions herein stated and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation, unless the
indemnifying party shall not pursue the action to its final conclusion. The
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses
of such counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel
reasonably satisfactory to the indemnified party; provided that if the
indemnified party is the Distributing Holder, the fees and expenses of such
counsel shall be at the expense of the indemnifying party if (i) the
employment of such counsel has been specifically authorized in writing by the
indemnifying party, or (ii) the named parties to any such action (including
any impleaded parties) include both the Distributing Holder and the
indemnifying party and the Distributing Holder shall have been advised by
such counsel that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any legal defenses
which may be available to the Distributing Holder (in which case the
indemnifying party shall not have the right to assume the defense of such
action on behalf of the Distributing Holder, it being understood, however,
that the indemnifying party shall, in connection with any one such action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable only for the reasonable fees and expenses of one separate firm of
attorneys for the Distributing Holder, which firm shall be designated in
writing by the Distributing Holder). No settlement of any action against an
indemnified party shall be made without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) the
indemnified party makes a claim for indemnification pursuant to Section 6
hereof but is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification
may not be enforced in such case notwithstanding the fact that the express
provisions of Section 6 hereof provide for indemnification in such case, or
(ii) contribution under the Securities Act may be required on the part of any
indemnified party, then the Company and the applicable Distributing Holder
shall contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (which shall, for all purposes of this Agreement,
include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees), in either such case (after
contribution from others) on the basis of relative fault as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand
or the applicable Distributing Holder on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Distributing
Holder agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to in this Section 7. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. 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.
Notwithstanding any other provision of this Section 7, in no event shall any
(i) Holder be required to undertake liability to any person under this
Section 7 for any amounts in excess of the dollar amount of the proceeds to
be received by such Holder from the sale of such Holder's Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Registration Statement under which such Registrable
Securities are to be registered under the Securities Act and (ii) underwriter
be required to undertake liability to any person hereunder for any amounts in
excess of the aggregate discount, commission or other compensation payable to
such underwriter with respect to the Registrable Securities underwritten by
it and distributed pursuant to the Registration Statement.
Section 8. NOTICES. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (iii) delivered by reputable air courier service
with charges prepaid, or (iv) transmitted by hand delivery, telegram, or
facsimile, addressed as set forth below or to such other address as such
party shall have specified most recently by written notice. Any notice or
other communication required or permitted to be given hereunder shall be
deemed effective (a) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile machine, at the
address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business
day during normal business hours where such notice is to be received) or (b)
on the second business day following the date of mailing by reputable courier
service, fully prepaid, addressed to such address, or upon actual receipt of
such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Company: HAWAIIAN NATURAL WATER COMPANY, INC.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Xxxxxxx Xxxxxx, Esq.
(shall not constitute notice) Xxxxxx & Xxxxx, LLP
000 X. Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Investor: AMRO International, S.A.
X/x Xxxxx Xxxxxx
00 Xxxxxxxxxxxxxxxxx
Xxxxxx XX0000, Xxxxxxxxxxx
Telephone:
Fax: 000-000-000-0000
Either party hereto may from time to time change its address or facsimile
number for notices under this Section 8 by giving at least ten (10) days'
prior written notice of such changed address or facsimile number to the other
party hereto.
Section 9. ASSIGNMENT. This Agreement is binding upon and inures to
the benefit of the parties hereto and their respective heirs, successors and
permitted assigns. The rights granted the Holder under this Agreement may be
assigned to any purchaser of substantially all of the Registrable Securities
(or the rights thereto) from Holder, as otherwise permitted by the Purchase
Agreement. In the event of a transfer of the rights granted under this
Agreement, the Holder agrees that the Company may require that the transferee
comply with reasonable conditions as determined in the discretion of the
Company.
Section 10. ADDITIONAL COVENANTS OF THE COMPANY. The Company agrees
that at such time as it meets all the requirements for the use of Securities
Act Registration Statement on Form S-3 it shall file all reports and
information required to be filed by it with the Commission in a timely manner
and take all such other action so as to maintain such eligibility for the use
of such form.
Section 11. COUNTERPARTS/FACSIMILE. This Agreement may be executed
in two or more counterparts, each of which shall constitute an original, but
all of which, when together shall constitute but one and the same instrument,
and shall become effective when one or more counterparts have been signed by
each party hereto and delivered to the other party. In lieu of the original,
a facsimile transmission or copy of the original shall be as effective and
enforceable as the original.
Section 12. REMEDIES. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their best efforts
to find and employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
Section 13. CONFLICTING AGREEMENTS. The Company shall not enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement or
otherwise prevents the Company from complying with all of its obligations
hereunder.
Section 14. HEADINGS. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 15. GOVERNING LAW, ARBITRATION. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York applicable to contracts made in New York by persons domiciled in New
York City and without regard to its principles of conflicts of laws. Any
dispute under this Agreement shall be submitted to arbitration under the
American Arbitration Association (the "AAA") in New York City, New York, and
shall be finally and conclusively determined by the decision of a board of
arbitration consisting of three (3) members (hereinafter referred to as the
"Board of Arbitration") selected as according to the rules governing the AAA.
The Board of Arbitration shall meet on consecutive business days in New York
City, New York, and shall reach and render a decision in writing (concurred
in by a majority of the members of the Board of Arbitration) with respect to
the amount, if any, which the losing party is required to
pay to the other party in respect of a claim filed. In connection with
rendering its decisions, the Board of Arbitration shall adopt and follow the
laws of the State of New York. To the extent practical, decisions of the
Board of Arbitration shall be rendered no more than thirty (30) calendar days
following commencement of proceedings with respect thereto. The Board of
Arbitration shall cause its written decision to be delivered to all parties
involved in the dispute. Any decision made by the Board of Arbitration
(either prior to or after the expiration of such thirty (30) calendar day
period) shall be final, binding and conclusive on the parties to the dispute,
and entitled to be enforced to the fullest extent permitted by law and
entered in any court of competent jurisdiction. The non-prevailing party to
any arbitration (as determined by the Board of Arbitration) shall pay the
expenses of the prevailing party, including reasonable attorneys' fees, in
connection with such arbitration.
Section 16. SEVERABILITY. If any provision of this Agreement shall
for any reason be held invalid or unenforceable, such invalidity or
unenforceablity shall not affect any other provision hereof and this
Agreement shall be construed as if such invalid or unenforceable provision
had never been contained herein.
Section 17. CAPITALIZED TERMS. All capitalized terms not otherwise
defined herein shall have the meaning assigned to them in the Purchase
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, on the day and year first above written.
HAWAIIAN NATURAL WATER CO., INC.
By: /s/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx
Chief Executive Officer and President
AMRO International, S.A.
By: /s/ X. X. XXXXXXXX
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X. X. Xxxxxxxx, Director
