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EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, entered into this ____ day of ________ 1998
between Starbucks Corporation, a Washington corporation (the "COMPANY"), and
certain shareholders of Seattle Coffee Holdings Limited ("SEATTLE") whose names
and addresses are set out in Annex I (the "SHAREHOLDERS") who will be
shareholders of the Company upon the consummation of the transactions described
in the Offer Document dated April 29, 1998 delivered by the Company to the
Shareholders (the "OFFER DOCUMENT").
WITNESSETH:
WHEREAS, pursuant to the Offer Document, the Company is to acquire from the
Shareholders the entire issued and to be issued share capital of Seattle (the
"ACQUISITION");
WHEREAS, pursuant to the terms set out in the Offer Document, the Company will
issue to the Shareholders on the date of the consummation of the Acquisition the
number of shares of common stock of the Company, no par value set forth in the
Offer Document (the "FREE SHARES"), and will issue to the escrow agents the
number of shares of common stock of the Company, no par value, which are to be
held in escrow pursuant to the escrow arrangements set forth in Appendix 4 of
the Offer Document and which are subject to cancellation, in whole or in part,
by the Company until released from escrow (the "HOLD BACK SHARES"); and
WHEREAS, in connection with the consummation of the Acquisition and subject to
the terms of this Agreement, the Company has agreed to provide the Shareholders
with certain rights to require the Company to register the Free Shares and the
Hold Back Shares released from escrow to the Shareholders (collectively, the
"REGISTRABLE SECURITIES") with the Securities and Exchange Commission (the
"COMMISSION") and applicable state securities agencies in order to permit the
free transferability and sale of the Registrable Securities by the Shareholders.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties agree as follows:
1. REGISTRATION RIGHT
1.1 The Company will prepare and file, promptly following the
consummation of the Acquisition, and thereafter use its best
efforts to cause to become effective, on, or as soon as practicable
after, the date on which the Company publicly releases financial
results covering 30 days of post-Acquisition combined operations, a
registration statement on Form S-3 or any equivalent form to be
selected by the Company ("REGISTRATION STATEMENT"). Notwithstanding
the foregoing, if Form S-3 shall be or become unavailable, the
Company shall register the Registrable Securities on Form S-1. The
Registration Statement will (i) incorporate and describe a plan of
distribution acceptable to the Company and the Sellers'
Representative (as such term is defined in the Offer Document) (ii)
be filed under and comply with the Securities Act of 1933, as
amended (the "ACT") and (iii) cover the Registrable Securities. The
Company will use its best efforts to cause the Registration
Statement to remain effective until the three hundred sixty-fifth
day (including any days during which the Company suspends the
Shareholders' right to sell under the Registration Statement
pursuant to Section 1.3 hereof) after the date it is declared
effective the staff of the Commission (the "Effective Date").
1.2 The Company shall be entitled to postpone the filing of any
Registration Statement otherwise required to be prepared and filed
by it pursuant to this Section if, at the time of such registration,
counsel for the Company is reasonably of the opinion that a material
event or pending transaction of the Company or any of its
subsidiaries renders the filing of such Registration Statement
inappropriate at the time; provided, that the Company shall promptly
make such filing as soon as the conditions which permit it to delay
such filing no longer exist.
1.3 At any time and from time to time following the Effective Date, if
the Chief Executive Officer or Chief Financial Officer of the
Company concludes in good faith that the Registration Statement must
be amended or the prospectus included therein must be supplemented
in order to disclose facts required to be disclosed by applicable
securities laws, the Company may notify the Shareholders who are
selling Registrable Securities thereunder (the "SELLING
SHAREHOLDERS") that their right to sell Registrable Securities
pursuant to the Registration Statement has been suspended. Each
Shareholder agrees that, upon receipt of any such notice, such
Shareholder will keep confidential the fact
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that such notification has been given and the content of such
notification and forthwith discontinue disposition of Registrable
Securities until such Shareholder's receipt of a notice terminating
such suspension or containing copies of the supplemented or amended
prospectus contemplated by Section 3.4 hereof, as the case may be. If
so directed by the Company, such Shareholder will deliver to the
Company all copies of the prospectus covering such Registrable
Securities current at the time of receipt of the notice suspending the
Selling Shareholder's rights to sell Registrable Securities.
1.4 No securities to be sold by the Company shall be included in the
Registration Statement. However, the holders of the Registrable
Securities acknowledge that the Company may file other registration
statements registering securities and may also make distributions of
securities (within the meaning of Regulation M under the Securities
Exchange Act of 1934, as amended ("Regulation M")) during the period
the Registration Statement is effective. In the event the Company
files other registration statements or commences distributions of
securities within the meaning of Regulation M during such period, it
will notify the Selling Shareholders and will direct the Selling
Shareholders to suspend any sales under the Registration Statement to
the extent necessary to comply with the provisions of Regulation M.
The Selling Shareholders will suspend sales of Shares to the extent
necessary to comply with the provisions of Regulation M.
2. COVENANTS OF THE SHAREHOLDERS
By execution of this Agreement, the Shareholders hereby undertake to
provide all such information and materials and take all such actions and
execute all such documents as may be required in order to permit the
Company (i) to comply with all applicable requirements of the Commission
and to obtain acceleration of the Effective Date and (ii) to list the
Registrable Securities on the stock exchange or stock market on which the
Company's equity securities are then listed.
3. COVENANTS OF THE COMPANY
So long as the Company is under an obligation pursuant to the provisions of
Section 1, the Company shall:
3.1 prepare and file with the Commission such amendments and supplements
to such Registration Statement and the prospectus forming part of such
Registration Statement as may be necessary to implement the terms of
this Agreement and to keep such Registration Statement effective until
the three hundred sixty-fifth day (including any days during which the
Company suspends the Selling Shareholder's right to sell under the
Registration Statement pursuant to Section 1.3 hereof) after the
Effective Date;
3.2 furnish to the Selling Shareholders such number of copies of a
prospectus, including, without limitation, a preliminary prospectus
(if applicable), in conformity with the requirements of the Act, and
such other documents as the Selling Shareholders may reasonably
request in order to facilitate the public sale or other disposition of
such Registrable Securities;
3.3 use its best efforts to register or qualify, not later than the
Effective Date, the Registrable Securities covered by such
Registration Statement under the securities or "blue sky" laws of such
jurisdictions within the United States as the Selling Shareholders may
reasonably request and do any and all other acts or things which may
be necessary or advisable to enable the Selling Shareholders to
consummate the public sale or other disposition in such jurisdictions
of such Registrable Securities; provided, however, that the Company
shall not be required to qualify as a foreign corporation or to
execute a general service of process in any such jurisdiction;
3.4 promptly notify the Selling Shareholders, at any time when a
prospectus relating to the Registrable Securities being distributed is
required to be delivered under the Act, of the happening of any event
as a result of which the prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing and promptly prepare,
file with the Commission and furnish to the Selling Shareholders a
reasonable number of copies of a supplement to, or an amendment of,
such prospectus as may be necessary, or make any other appropriate
filing with the Commission pursuant to the Securities Exchange Act of
1934, as amended, which will be incorporated by reference into the
Registration Statement so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact
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required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;
3.5 use its best efforts to furnish, at the request of any Selling
Shareholder, an opinion of counsel (which counsel may be the general
counsel of the Company), covering such matters relating to the Company
and the issuance of the Shares as are typically covered by opinions of
issuer's counsel in secondary offerings under the Act; and
3.6 use its best efforts to cause all of the Registrable Securities as to
which the Selling Shareholders shall have requested registration to be
listed on any recognized securities exchange or stock market,
including, without limitation, The Nasdaq Stock Market, Inc., on which
the Company's equity securities are then listed and to maintain the
currency and effectiveness of any such listings.
4. COSTS AND EXPENSES
Except for expenses referred to in the following sentence, the Company
shall bear the entire cost and expense of any registration and listing of
the Registrable Securities, including, without limitation, all registration
and filing fees, printing expenses, the fees and expenses of the Company's
counsel and its independent accountants and all other out-of-pocket
expenses incident to the preparation, printing and filing under the Act of
the Registration Statement and all amendments and supplements thereto, the
cost of furnishing copies of each preliminary prospectus, each final
prospectus and each amendment or supplement thereto to brokers and dealers
and other purchasers of the securities so registered, and the costs and
expenses incurred in connection with the qualification of the securities so
registered under "blue sky" or other state securities laws. Notwithstanding
the foregoing, the Company shall not be liable or responsible for the fees
and expenses of counsel, if any, for the Selling Shareholders, or any
underwriting discounts and commissions attributable to Registrable
Securities registered at the request of the Selling Shareholders. All such
fees and expenses not paid by the Company shall be prorated on the basis of
the number of shares of Registrable Securities and paid by the Selling
Shareholders.
5. INDEMNIFICATION
5.1 Indemnity to the Selling Shareholders. The Company shall indemnify
each Selling Shareholder, its officers and directors, if any, as well
as any person who controls such Selling Shareholder, if any, against
all claims, losses, damages, liabilities and expenses resulting from
any untrue statement or alleged untrue statement of a material fact
contained in a prospectus or in any related Registration Statement,
notification or similar filing under the securities laws of any
jurisdiction or from any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statement therein not misleading, except insofar as the same may have
been based upon information concerning such Selling Shareholder
furnished in writing to the Company by such Selling Shareholder
expressly for use therein and used in accordance with such writing.
5.2 Indemnity to the Company. Each Selling Shareholder, by requesting
registration of his, her or its Registrable Securities, agrees to
furnish to the Company such information as may be requested by the
Company and which is necessary or required by then applicable
securities laws, the rules and regulations thereunder and any stock
exchange or stock market in connection with any registration,
qualification or listing of the Registrable Securities and to
indemnify the Company, its officers, directors, employees and any
person who controls the Company, against all claims, losses, damages,
liabilities and expenses resulting from the utilization of such
information furnished in writing to the Company expressly for use
therein and used in accordance with such writing.
5.3 Indemnification Procedures. If any action is brought or any claim is
made against any party entitled to be indemnified pursuant to this
Section 5 in respect of which indemnity may be sought against the
indemnifying party pursuant to this Section 5, such party shall
promptly notify the indemnifying party in writing of the institution
of such action or the making of such claim and the indemnifying party
shall assume the defense of such action or claim, including the
employment of counsel and payment of expenses. Such indemnified party
shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the
expense of such party unless the employment of such counsel shall have
been authorized in writing by the indemnifying party in connection
with the defense of such action or claim or such indemnified party or
parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to
those available to the indemnifying party or that there otherwise
exists a conflict of interest (in which case the indemnifying party
shall not have the right to direct any
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different or additional defense of such action or claim on behalf of
the indemnified party or parties), in any of which events such fees
and expenses of not more than one additional counsel in each relevant
jurisdiction for the indemnified parties shall be borne by the
indemnifying party. Except as expressly provided above, if the
indemnifying party shall not previously have assumed the defense of
any such action or claim, at such time as the indemnifying party does
assume the defense of such action or claim, the indemnifying party
shall thereafter be liable to any person indemnified pursuant to this
Agreement for any legal or other expenses subsequently incurred by
such person in investigating, preparing or defending against such
action or claim. Anything in this paragraph to the contrary
notwithstanding, the indemnifying party shall not be liable for any
settlement of any claim or action effected without its written
consent.
5.4 If the indemnification provided for in this Section 5 is unavailable
or insufficient to hold harmless an indemnified party under
Subsections 5.1 or 5.2 above, then each indemnifying party shall
contribute in the amount paid or payable by such indemnified party as
a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to in Subsections 5.1 or 5.2 above in such
proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Selling Shareholders on the other in
connection with the misstatement or omission which resulted in such
losses, claims, damages or liabilities (or actions in respect
thereof). The relative fault is determined by reference to, among
other things, whether the misstatement or omission relates to
information prepared by the Company or the Selling Shareholder and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
6. MISCELLANEOUS
6.1 Notices. Notices given under this Agreement shall be deemed received
three business days after mailing to the addresses for the parties set
forth below and may be delivered by telex or other telecommunications
device producing a document setting forth such notices, in which case,
such notices shall be deemed received on the day confirmation of such
transmission is received by the sender.
If to the Company: Starbucks Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Counsel, Securities
Facsimile No.: (000) 000-0000
If to the Shareholders, at the addresses and facsimile numbers (if
any) specified with respect thereto in Annex I.
6.2 Binding Agreement. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective
permitted successors and assigns.
6.3 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of Washington without regard to the choice of
law principles thereof.
6.4 Assignability. The rights of any Shareholder hereunder may be assigned
(without impairing the rights of such Shareholder with respect to
Registrable Securities the Shareholder continues to hold) or
transferred to (i) a member of a Shareholder's immediate family or a
trust for the benefit of a member of a Shareholder's family, (ii) any
affiliate (as defined in Rule 144 under the Act) of a Shareholder,
(iii) any partner of a Shareholder that is a partnership or any
beneficiary of a Shareholder that is a trust, or (iv) any person that
acquires Registrable Securities valued at $50,000 or more in the
Acquisition. Upon any such assignment or transfer, each transferee
shall be deemed to have the accepted rights and obligations of a
Shareholder hereunder on the terms set forth herein and shall be
deemed for all purposes of this Agreement to be a "Shareholder," and
shall be entitled to be included as a Selling Shareholder in the
Registration Statement.
6.5 Succeeding Securities. If the Registrable Securities of the Company
covered by this Agreement are converted into any other security of the
Company or any other corporation, the terms of this Agreement shall
apply with full force and effect to any such other security, and the
obligations of the Company to effect registration shall include such
other filings, qualifications, notices and similar acts as may be
necessary to enable the Shareholders to realize the benefits of
registration provided by this Agreement.
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6.6 Other Registration Rights. Nothing in this Agreement shall prohibit
the company from registering securities other than the Registrable
Securities or from granting registration rights on its securities in
the future which do not conflict with the rights granted under this
Agreement.
6.7 Headings. The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do
not constitute a part of this Agreement.
6.8 Complete Agreement; Severability. The Agreement (including any
schedules, exhibits and annexes attached hereto) constitutes the
entire agreement and understanding among the parties with respect to
the subject matter hereof and supersede all prior agreements and
understandings, written or oral, with respect thereto. If any
provision of this Agreement shall be held to be illegal, invalid or
unenforceable under any applicable law, then such contravention or
invalidity shall not invalidate the entire Agreement. Such provision
shall be deemed to be modified to the extent necessary to render it
legal, valid and enforceable, and if no such modification shall render
it legal, valid and enforceable, then this Agreement shall be
construed as if not containing the provision held to be invalid, and
the rights and obligations of the parties shall be construed and
enforced accordingly.
6.9 Counterparts. This Agreement may be executed in two (2) counterparts,
each of which shall be deemed an original, but both of which together
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
STARBUCKS CORPORATION
BY:
ITS:____________________________________
EXECUTED ON BEHALF OF THE SHAREHOLDERS
BY:
THEIR: Attorney-In-Fact
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