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EXHIBIT 4.3
AMERICAN RESTAURANT GROUP, INC.
$155,000,000 11 1/2 % Senior Secured Notes due 2003
$35,000,000 12 % Senior Pay-In-Kind Exchangeable Preferred Stock
REGISTRATION RIGHTS AGREEMENT
February 25, 1998
XXXXXXXXX & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxxxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
AMERICAN RESTAURANT GROUP, INC., a Delaware corporation (the
"Company"), is issuing and selling to Xxxxxxxxx & Company, Inc. (the
"Purchaser"), upon the terms set forth in a purchase agreement, dated as of
February 25, 1998 (the "Purchase Agreement"), $155,000,000 aggregate principal
amount of its 11 1/2 % Senior Secured Notes due 2003, (the "Notes") and 35,000
units (the "Preferred Stock Units" or the "Units"), each Unit consisting of (i)
$1,000 initial liquidation preference of 12% Senior Pay-In-Kind Exchangeable
Preferred Stock (the "Preferred Stock"), and (ii) one Common Stock Purchase
Warrant (the "Warrants") initially to purchase 2.66143 shares of the common
stock, par value $.01 per share (the "Common Stock"), of the Company at an
initial exercise price of $.01 per share. As an inducement to the Purchaser to
enter into the Purchase Agreement, the Company and each of the guarantors (the
"Guarantors") named in the Indenture (defined below) agrees with the Purchaser,
for the benefit of the holders of the Securities (defined below) (including,
without limitation, the Purchaser), as follows:
1. Definitions
Capitalized terms used herein without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
Advice: See Section 6.
Agreement: This Registration Rights Agreement.
Applicable Period: See Section 2(f).
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Business Days: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to be closed.
Class A Exchange Debentures: The Class A 12% Subordinated Exchange
Debentures due 2003 of the Company issuable in exchange for the Preferred Stock.
Class B Exchange Debentures: The Class B 12% Subordinated Exchange
Debentures due 2003 of the Company issuable in exchange for the Exchange
Preferred Stock, identical in all material respects to the Class A Subordinated
Debentures, except for references to series and restrictive legends.
Closing Date or "Issue Date": February 25, 1998.
Company: American Restaurant Group, Inc.
Confidential Information: See Section 6(a).
Effectiveness Date: The 150th day following the Closing Date.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(a).
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Debenture Indenture: means the indenture to be dated as of
the date of issuance of either the Class A Exchange Debentures or Class B
Exchange Debentures between the Company and the Exchange Debenture Trustee.
Exchange Debenture Trustee: means a bank or trust company, as
trustee under the Exchange Debenture Indenture to be selected by the Company
prior to the Exchange Offer.
Exchange Offer: See Section 2(a).
Exchange Offer Registration Statement: See Section 2(a).
Exchange Notes: The Company's 12% Senior Secured Notes due 2003,
including the guarantees endorsed thereon, identical in all material respects to
the Notes, except for references to series and restrictive legends.
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Exchange Preferred Stock: The Company's 12% Senior Pay-In-Kind
Exchangeable Preferred Stock, identical in all material respects to the
Preferred Stock, except for references to series and restrictive legends.
Exchange Securities: Collectively, the Exchange Notes and the
Exchange Preferred Stock or the Class B Exchange Debentures, as the case may be.
Filing Date: The 90th day following the Closing Date.
Holder: Each holder of Registrable Securities.
Indenture: The Indenture, dated the date hereof, between the Company
and U.S. Trust Company of California, N.A., as trustee, pursuant to which the
Notes are being issued, as amended or supplemented from time to time, in
accordance with the terms thereof.
Initial Shelf Registration: See Section 3(a).
Losses: See Section 8(a).
NASD: The National Association of Securities Dealers, Inc.
Participating Broker-Dealer: See Section 2(f).
Person: Any individual, corporation, partnership, joint stock
company, association joint venture, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any other entity.
Private Exchange Notes: See Section 2(g)
Private Exchange Preferred Stock: See Section 2(g)
Private Exchange: See Section 2(g).
Private Exchange Securities: See Section 2(g).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Securities covered by such Registration
Statement, and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
Registrable Securities: (i) Notes, (ii) Preferred Stock or Class A
Exchange Debentures, as the case may be, and (iii) Private Exchange Securities.
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Registration Statement: Any registration statement of the Company
that covers any of the Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.
Rule 415: Rule 415 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
Securities: The Notes, the Preferred Stock or the Class A
Subordinated Debentures, as the case may be, the Private Exchange Securities and
the Exchange Securities, collectively.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(i).
Shelf Registration Statement: The Initial Shelf Registration
Statement and any Subsequent Shelf Registration Statement.
Special Counsel: Counsel chosen by the holders of a majority in
aggregate principal/liquidation amount of Securities.
Subsequent Shelf Registration Statement: See Section 3(b).
Transfer Agent: U.S. Trust Company of California, NA.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if any, the trustee
under any indenture governing the Exchange Securities or the Private Exchange
Securities.
Underwritten Registration or Underwritten Offering: A registration
in which securities of the Company are sold to an underwriter for reoffering to
the public.
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Weekly Liquidated Damages Amount: See Section 4(a).
2. Exchange Offer
(a) The Company and the Guarantors shall (i) prepare and file with
the SEC promptly after the date hereof, but in no event later than the Filing
Date, a registration statement, or, if applicable, a Shelf Registration
Statement (the "Exchange Offer Registration Statement") on an appropriate form
under the Securities Act with respect to a proposed offer (the "Exchange Offer")
to the Holders to issue and deliver to such Holders, in exchange for the Notes
and the Preferred Stock or Class A Subordinated Debentures, as the case may be,
a like aggregate principal or liquidation amount, as the case may be, of
Exchange Securities, (ii) use their best efforts to cause the Exchange Offer
Registration Statement to become effective as promptly as practicable after the
filing thereof, but in no event later than the Effectiveness Date, (iii) keep
the Exchange Offer Registration Statement effective until the consummation of
the Exchange Offer pursuant to its terms, and (iv) unless the Exchange Offer
would not be permitted by a policy of the SEC, commence the Exchange Offer and
use their best efforts to issue, on or prior to 180 business days after the
Closing Date, Exchange Securities in exchange for all Notes and Preferred Stock
tendered prior thereto in the Exchange Offer. The Exchange Offer shall not be
subject to any conditions, other than that the Exchange Offer does not violate
applicable law or any applicable interpretation of the staff of the SEC.
(b) (i) The Exchange Notes shall be issued under, and entitled to
the benefits of, the Indenture or a trust indenture that is identical to the
Indenture (other than such changes as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification thereof under
the TIA), (ii) the Exchange Preferred shall be issued in accordance with the
Certificate of Designation relating to the Preferred Stock and have the rights,
powers and preferences specified therein and (iii) the Class B Exchange
Debentures shall be issued under, and be entitled to the benefits of, the
Exchange Debenture Indenture.
(c) In connection with the Exchange Offer, the Company and the
Guarantors shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal that is an exhibit to the Exchange Offer Registration
Statement and related documents;
(ii) keep the Exchange Offer open for not less than 30 days
after the date notice thereof is mailed to the Holders (or longer if required by
applicable law);
(iii) utilize the services of a depository for the Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
(iv) permit Holders to withdraw tendered Notes and Preferred
Stock at any time prior to the close of business, New York time, on the last
Business Day on which the Exchange Offer shall remain open; and
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(v) otherwise comply with all laws applicable to the Exchange
Offer.
(d) As soon as practicable after the close of the Exchange Offer,
the Company and the Guarantors shall:
(i) accept for exchange all Notes and Preferred Stock or Class
A Exchange Debentures, as the case may be, validly tendered and not validly
withdrawn pursuant to the Exchange Offer;
(ii) deliver to the Trustee, Transfer Agent or Exchange
Debenture Trustee, as the case may be, for cancellation all Notes and Preferred
Stock or Class A Exchange Debentures, as the case may be, so accepted for
exchange; and
(iii) cause the Trustee promptly to authenticate and deliver
to each Holder of Notes, Exchange Notes equal in aggregate principal amount to
the Notes of such Holder so accepted for exchange and cause the Transfer Agent
to execute and deliver to each Holder of Preferred Stock, Exchange Preferred
Stock equal in aggregate liquidation preference amount to the Preferred Stock of
such Holder so accepted for exchange or, in the event that such Preferred Stock
had previously been exchanged for Class A Exchange Debentures to cause the
Exchange Debenture Trustee to authenticate and deliver, Class B Exchange
Debentures equal in aggregate principal amount to the Class A Exchange
Debentures of such Holder so accepted for exchange.
(e) Interest on each Exchange Note and Private Exchange Note and, if
applicable, each Class B Exchange Debenture and Private Exchange Debenture, will
accrue from the last interest payment date on which interest was paid on the
Notes or Class A Exchange Debentures surrendered in exchange therefor or, if no
interest has been paid on the Notes or Class A Exchange Debentures, from the
date of original issue of the Notes or Class A Exchange Debentures. Each
Exchange Note and Private Exchange Note or Class B Exchange Debenture and
Private Exchange Debenture shall bear interest at the rate set forth thereon;
provided, that interest with respect to the period prior to the issuance thereof
shall accrue at the rate or rates borne by the Notes or Class A Exchange
Debentures from time to time during such period. Dividends on each Exchange
Preferred Stock and Private Exchange Preferred Stock will effectively accrue
from the last dividend payment date on which dividends were paid on the
Preferred Stock surrendered for exchange therefor or, if no dividends had been
paid on the Preferred Stock, from the date of original issue of the Preferred
Stock. The Exchange Preferred Stock and Private Exchange Preferred Stock shall
accrue dividends at the rate set forth thereon; provided, that dividends with
respect to the period prior to the issuance thereof shall accrue at the rate or
rates borne by the Preferred Stock from time to time during such period.
(f) The Company and the Guarantors shall include within the
Prospectus contained in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," containing a summary statement of the positions
taken or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer that is
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the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer"). Such "Plan of Distribution" section shall also
allow the use of the Prospectus by all Persons subject to the prospectus
delivery requirements of the Securities Act, including (without limitation) all
Participating Brokers-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange Securities. The
Company shall use its best efforts to keep the Exchange Offer Registration
Statement effective and to amend and supplement the Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirement of the
Securities Act for such period of time as such Persons must comply with such
requirements in order to resell the Exchange Securities; provided that such
period shall not exceed 90 days after consummation of the Exchange Offer (as
such period may be extended pursuant to the last paragraph of Section 6 hereof
(the "Applicable Period")).
(g) If, prior to consummation of the Exchange Offer, the Purchaser
holds any Notes and/or Preferred Stock or Class A Exchange Debentures, as the
case may be, acquired by it and having the status as an unsold allotment in the
initial distribution, the Company shall, upon the request of the Purchaser,
simultaneously with the delivery of the Exchange Securities in the Exchange
Offer, issue (in the case of debt securities, pursuant to the same indentures as
the Exchange Securities) and deliver to the Purchaser, in exchange for the Notes
and/or Preferred Stock or Class A Exchange Debentures, as the case may be, held
by the Purchaser (the "Private Exchange"), a like principal amount of debt
securities (the "Private Exchange Notes") of the Company and/or a like initial
liquidation preference amount of preferred stock (the "Private Exchange
Preferred Stock") or Exchange Debentures (the "Private Exchange Debentures"), as
the case may be, of the Company that are identical to the Exchange Securities
(collectively, the "Private Exchange Securities") except that such Private
Exchange Securities shall continue to bear thereon the legend restricting
transfer. The Private Exchange Securities shall bear the same respective CUSIP
numbers as the Exchange Securities.
(h) The Company may require each Holder participating in the
Exchange Offer to represent to the Company that at the time of the consummation
of the Exchange Offer (i) any Exchange Securities received by such Holder in the
Exchange Offer will be acquired in the ordinary course of its business, (ii)
such Holder will have no arrangement or understanding with any Person to
participate in the distribution of the Exchange Securities within the meaning of
the Securities Act or resale of the Exchange Securities in violation of the
Securities Act, (iii) if such Holder is not a broker-dealer, that it is not
engaged in and does not intend to engage in, the distribution of the Exchange
Securities, (iv) if such Holder is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Notes and/or Preferred Stock that
were acquired as a result of market-making or other trading activities and that
it will deliver a prospectus, as required by law, in connection with any resale
of such Exchange Securities, and (v) if such Holder is an affiliate of the
Company, that it will comply with the registration and prospectus delivery
requirements of the Securities Act applicable to it.
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(i) If (i) applicable interpretations of the staff of the SEC would
not permit the consummation of the Exchange Offer prior to the Effectiveness
Date, (ii) subsequent to the consummation of the Private Exchange but within 270
days of the Closing Date, the Purchaser so requests with respect to Securities
held by the Purchaser and having the status as an unsold allotment, (iii) the
Exchange Offer is not consummated within 180 days of the Closing Date for any
reason or (iv) in the case of any Holder not permitted to participate in the
Exchange Offer or of any Holder participating in the Exchange Offer that
receives Exchange Securities that may not be sold without restriction under
state and federal securities laws (other than due solely to the status of such
Holder as an affiliate of the Company within the meaning of the Securities Act)
and, in either case contemplated by this clause (iv), such Holder notifies the
Company within six months of consummation of the Exchange Offer, then the
Company shall promptly deliver to the Holders (or in the case of any occurrence
of the event described in clause (iv) hereof, to any such Holder) and the
Trustee, Transfer Agent or Exchange Debenture Trustee notice thereof (the "Shelf
Notice") and shall as promptly as possible thereafter file an Initial Shelf
Registration pursuant to Section 3.
3. Shelf Registration
If a Shelf Notice is required to be delivered pursuant to Section
2(i)(i), (ii) or (iii), then this Section 3 shall apply to all Registrable
Securities. Otherwise, upon consummation of the Exchange Offer in accordance
with Section 2, the provisions of this Section 3 shall apply solely with respect
to (i) Notes and/or Preferred Stock or Class A Exchange Debentures, as the case
may be, held by any Holder thereof not permitted to participate in the Exchange
Offer and (ii) Exchange Securities that are not freely tradeable as contemplated
by Section 2(i)(iv) hereof, provided in each case that the relevant Holder has
duly notified the Company within six months of the Exchange Offer as required by
Section 2(i)(iv).
(a) Initial Shelf Registration Statement. The Company and the
Guarantors shall prepare and file with the SEC a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering all of
the Registrable Securities (the "Initial Shelf Registration Statement"). If the
Company and the Guarantors have not yet filed an Exchange Offer, the Company and
the Guarantors shall file with the SEC the Initial Shelf Registration Statement
on or prior to the Filing Date. Otherwise, the Company and the Guarantors shall
use their best efforts to file the Initial Shelf Registration Statements within
45 days after an obligation to file such Initial Shelf Registration arises. The
Initial Shelf Registration Statement shall be on Form S-1 or another appropriate
form permitting registration of such Registrable Securities for resale by such
Holders in the manner or manners designated by them (including, without
limitation, one or more underwritten offerings). The Company and the Guarantors
shall (i) not permit any securities other than the Registrable Securities to be
included in any Shelf Registration, and (ii) use their best efforts to cause the
Initial Shelf Registration Statement to be declared effective as promptly as
practicable after the filing thereof and to keep the Initial Shelf Registration
Statement continuously effective until the date that is 24 months after the
Effectiveness Date (subject to extension pursuant to the last paragraph of
Section 6 hereof) (the "Effectiveness Period"), or such shorter period ending
when (i) all Registrable Securities covered by the Initial Shelf
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Registration Statement have been sold or (ii) a Subsequent Shelf Registration
Statement covering all of the Registrable Securities has been declared effective
under the Securities Act.
(b) Subsequent Shelf Registrations Statements. If any Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because of the sale of all of the
Registrable Securities registered thereunder), the Company and the Guarantors
shall use their best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within 45 days of
such cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Securities (a "Subsequent
Shelf Registration Statement"). If a Subsequent Shelf Registration Statement is
filed, the Company and the Guarantors shall use their best efforts to cause the
Subsequent Shelf Registration Statement to be declared effective as soon as
practicable after such filing and to keep such Subsequent Shelf Registration
Statement continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the Initial
Shelf Registration Statement, and any Subsequent Shelf Registration Statement,
was previously effective.
(c) Notwithstanding the foregoing provisions of this Section 3 (but
subject to Section 4 below), the Company shall not be required to amend or
supplement a Registration Statement, any related Prospectus or any document
incorporated therein by reference, for a period not to exceed an aggregate of 60
days in any calendar year if, (i) an event occurs and is continued as a result
of which the Shelf Registration Statement would, in the Company's good faith
judgment, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (ii) the
Company determines in its good faith judgment that the disclosure of such event
at such time would have a material adverse effect on (a) the business,
operations or prospects of the Company or (b) a pending material business
transaction that has not yet been publicly disclosed.
4. Liquidated Damages.
(a) The Company and the Guarantors acknowledge and agree that the
holders of Registrable Securities will suffer damages, and that it would not be
feasible to ascertain the extent of such damages with precision, if the Company
and the Guarantors fail to fulfill their obligations hereunder. Accordingly, in
the event of such failure, the Company and the Guarantors jointly and severally
agree to pay liquidated damages to each Holder under the circumstances and to
the extent set forth below:
(i) if neither the Exchange Offer Registration Statement nor the
Initial Shelf Registration Statement is declared effective by the SEC on or
prior to the Effectiveness Date; or
(ii) the Exchange Offer, if permitted, has not been consummated
within 180 days after the Closing Date; or
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(iii) if a Shelf Registration Statement is filed and declared
effective by the SEC but thereafter ceases to be effective without being
succeeded within 45 days by a Subsequent Shelf Registration Statement filed and
declared effective;
(each of the foregoing a "Registration Default," and the date on which the
Registration Default occurs being referred to herein as an "Event Date").
Upon the occurrence of any Registration Default, the Company shall
pay, or cause to be paid (and the Guarantors hereby guarantee the payment of),
in addition to amounts otherwise due under the Indenture, the Exchange Debenture
Indenture and the Registrable Securities, as liquidated damages, and not as a
penalty, to each holder of a Registrable Security to which such Registration
Default is applicable, an additional amount (the "Weekly Liquidated Damages
Amount") equal to (A) for each weekly period beginning on the Event Date for the
first 90-day period immediately following such Event Date, $.05 per week per
$1,000 principal or liquidation amount, as the case may be, of Registrable
Securities held by such holder, and (B) for each weekly period beginning with
the first full week after the 90-day period set forth in the foregoing clause
(A), $.10 per week per $1,000 principal or liquidation amount of Registrable
Securities, as the case may be, held by such holder; provided that such
liquidated damages will, in each case, cease to accrue (subject to the
occurrence of another Registration Default) on the date on which all
Registration Defaults have been cured. A Registration Default under clause (i)
above shall be cured on the date that either the Exchange Offer Registration
Statement or the Initial Shelf Registration Statement is declared effective by
the SEC; a Registration Default under clause (ii) above shall be cured on the
date the Exchange Offer is consummated with respect to all Notes and Preferred
Stock or Class A Exchange Debentures validly tendered; and a Registration
Default under clause (iii) above shall be cured on the earlier of (A) the date
on which the applicable Shelf Registration Statement is no longer subject to an
order suspending the effectiveness thereof or proceedings relating thereto or
(B) a Subsequent Shelf Registration Statement is declared effective.
(b) The Company shall notify the Trustee within five Business Days
after each Event Date. The Company will not be required to pay liquidated
damages in respect of more than the Registration Default in respect of any given
period of time. All accrued liquidated damages in respect of the Notes or Class
A Exchange Debentures will be paid in the same manner as interest payments on
the Notes on semiannual damages payment dates that correspond to interest
payment dates for the Notes. All accrued liquidated damages in respect of the
Preferred Stock will be paid on February 15 and August 15 in the same manner (in
cash or with the issuance of additional shares of Preferred Stock) as dividends
on the Preferred Stock.
5. Hold-Back Agreements
The Company and the Guarantors agree not to effect any public sale
pursuant to Rule 144A sale of any securities the same as or similar to those
covered by a Shelf Registration Statement filed pursuant to Section 3 hereof, or
any securities convertible into or exchangeable or exercisable for such
securities, during the 10 days prior to, and during the
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90-day period beginning on the commencement of a firm commitment underwritten
public distribution of Registrable Securities, where the managing underwriter so
requests.
6. Registration Procedures
In connection with the registration of any Securities pursuant to
Sections 2 or 3 hereof, each of the Company and each Guarantor shall effect such
registrations to permit the sale of such Securities in accordance with the
intended method or methods of disposition thereof, and pursuant thereto the
Company and each Guarantor shall:
(a) Prepare and file with the SEC on or prior to the Filing Date, a
Registration Statement or Registration Statements as prescribed by Section 2 or
3, and use its best efforts to cause each such Registration Statement to become
effective and remain effective as provided herein; provided, that, if (i) such
filing is pursuant to Section 3 or (ii) a Prospectus contained in an Exchange
Offer Registration Statement filed pursuant to Section 2 is required to be
delivered under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Securities during the Applicable Period, before filing any
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company and the Guarantors shall, if requested, furnish to and afford the
Holders of the Registrable Securities covered by such Registration Statement,
their Special Counsel, each Participating Broker-Dealer, the managing
underwriters, if any, and their counsel, a reasonable opportunity to review and
make available for inspection by such Persons copies of all such documents
(including copies of any documents to be incorporated by reference therein and
all exhibits thereto) proposed to be filed, such financial and other information
and books and records of the Company and the Guarantors, and cause the officers,
directors and employees of the Company and the Guarantors, Company counsel and
independent certified public accountants of the Company, to respond to such
inquiries, as shall be necessary, in the opinion of respective counsel to such
holders, Participating Broker-Dealer and underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act (it being understood that
a period of five business days shall be deemed to afford such reasonable
opportunity); provided that the foregoing investigation shall be coordinated on
behalf of the Holders by one representative of the Notes and one representative
of the Preferred Stock or Class A Exchange Debentures designated by and on
behalf of such Holders; provided further that the foregoing investigation shall
be conducted by the Purchaser on behalf of the Holders if the Purchaser has
Registrable Securities covered by such Registration Statement. The Company may
require each Holder to agree to keep confidential any non-public information
relating to the Company ("Confidential Information") received by such Holder and
not disclose such Confidential Information (other than to an Affiliate or
prospective purchaser who agrees to respect the confidentiality provisions of
this Section 6(a)) until such information has been made generally available to
the public, other than as a result of a disclosure by such Holder, its
directors, officers, employees, agents or advisors or by any other person
subject to a confidentiality agreement, unless the release of such Confidential
Information is required by law or necessary to respond to inquiries of
regulatory authorities (including the National Association of Insurance
Commissioners, or similar organizations or their successors). The Company may
also require each Holder to agree (i) to give the Company prompt notice of any
request to disclose any Confidential Information received by such Holder so that
the
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Company may seek appropriate protective orders, (ii) to consult with the Company
with respect to the Company's taking steps to restrict or narrow the scope of
such requests, and (iii) if the release of the Confidential Information is
required by law or necessary to respond to inquiries of regulatory authorities,
to give specific written notice to the Company describing the Confidential
Information to be disclosed (as far in advance of its disclosure as is
practicable) and to use its reasonable best efforts to obtain assurances from
the recipient that confidential treatment will be accorded to the Confidential
Information.
(b) Provide an indenture trustee for each class of the Registrable
Securities as applicable, and cause the Indenture (or other indenture relating
to the Registrable Securities) to be qualified under the TIA not later than the
effective date of the first Registration Statement; and in connection therewith,
to effect such changes to such indenture as may be required for such indenture
to be so qualified in accordance with the terms of the TIA; and execute, and use
its best efforts to cause such trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable such indenture to be so qualified in a timely
manner.
(c) Prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the time periods required
hereby; cause the related Prospectus to be supplemented by any Prospectus
supplement required by applicable law, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply in all material respects with the provisions of the
Securities Act and the Exchange Act applicable thereto with respect to the
disposition of all securities covered by such Registration Statement, as so
amended, or in such Prospectus, as so supplemented, in accordance with the
intended methods of distribution set forth in such Registration Statement or
Prospectus as so amended.
(d) Furnish to such selling Holders and Participating Broker-Dealers
who so request (i) upon the Company's receipt, a copy of the order of the SEC
declaring such Registration Statement and any post-effective amendment thereto
effective and (ii) such reasonable number of copies of such Registration
Statement and of each amendment and supplement thereto (in each case including
any documents incorporated therein by reference and all exhibits), (iii) such
reasonable number of copies of the Prospectus included in such Registration
Statement (including each preliminary Prospectus), and such reasonable number of
copies of the final Prospectus as filed by the Company pursuant to Rule 424(b)
under the Securities Act, in conformity with the requirements of the Securities
Act, and (iv) such other documents (including any amendments required to be
filed pursuant to clause (c) of this Section), as any such Person may reasonably
request. The Company and the Guarantors hereby consent to the use of the
Prospectus by each of the selling Holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, and the underwriters or agents,
if any, and dealers (if any), in connection with the offering and sale of the
Registrable Securities covered by, or the sale by Participating Broker-Dealers
of the Exchange Securities pursuant to, such Prospectus and any amendment
thereto.
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(e) If (A) a Shelf Registration Statement is filed pursuant to
Section 3 or (B) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, notify the selling Holders of
Registrable Securities, their Special Counsel, each Participating Broker-Dealer
and the managing underwriters, if any, promptly (but in any event within two
Business Days), and confirm such notice in writing, (i) when a Prospectus has
been filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act, (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
Prospectus or the initiation of any proceedings for that purpose, (iii) if, at
any time when a Prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Securities, the representations and
warranties of the Company or of any Guarantor contained in any agreement
(including any underwriting agreement) contemplated by Section 6(n) below cease
to be true and correct in any material respect, (iv) of the receipt by the
Company or any Guarantor of any notification with respect to the suspension of
the qualification or exemption from qualification of a Registration Statement or
any of the Registrable Securities or the Exchange Securities to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
contemplation, initiation or threatening of any proceeding for such purpose, (v)
of the happening of any event that makes any statement made in such Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in such Registration Statement, Prospectus or
documents so that it will not contain any untrue statement of a material fact or
omit to state any 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, and (vi) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
(f) Use its reasonable efforts to register or qualify (to the extent
required by applicable law), and, if applicable, to cooperate with the selling
Holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of, Securities to be included
in a Registration Statement for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any selling Holder,
Participating Broker-Dealer or the managing underwriters reasonably request in
writing; and, if Securities are offered other than through an Underwritten
Offering, the Company shall cause its counsel to perform Blue Sky investigations
and file registrations and qualifications required to be filed pursuant to this
Section 6(f) at the expense of the Company; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other
acts or things which may be reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Securities covered by the applicable
Registration Statement, provided, however, that none of the Company nor the
Guarantors shall be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified, (ii) to take action that would
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subject it to general service of process in any jurisdiction where it is not so
subject or (iii) subject it to taxation in any such jurisdiction where it is not
then subject.
(g) Use its reasonable efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Securities for sale in any
jurisdiction, and, if any such order is issued, to use its reasonable best
efforts to obtain the withdrawal of any such order at the earliest possible
time.
(h) If (A) a Shelf Registration Statement is filed pursuant to
Section 3 or (B) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, and if requested by the managing
underwriters, if any, or the Holders of a majority in aggregate
principal/liquidation amount of the Registrable Securities, (i) promptly
incorporate in a Prospectus or post-effective amendment such information as the
managing underwriters, if any, or such Holders reasonably request to be included
therein required to comply with any applicable law and (ii) make all required
filings of such Prospectus or such post-effective amendment as soon as
practicable after the Company has received notification of such matters required
by applicable law to be incorporated in such Prospectus or post-effective
amendment.
(i) If (A) a Shelf Registration Statement is filed pursuant to
Section 3 or (B) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, cooperate with the selling Holders and
the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company ("DTC"); and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriters, if any, or Holders may reasonably request.
(j) If (i) a Shelf Registration Statement is filed pursuant to
Section 3 or (ii) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 6(e)(v) or 6(e)(vi) above, as promptly as practicable
prepare a supplement or post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder or to the purchasers of the Exchange Securities to whom
such Prospectus will be delivered by a Participating Broker-Dealer, such
Registration Statement or Prospectus will not 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, in light of the circumstances under
which they were made, not misleading.
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(k) Prior to the effective date of the first Registration Statement
relating to the Securities, (i) provide the applicable trustee or transfer agent
with printed certificates for the Securities in a form eligible for deposit with
DTC and (ii) provide a CUSIP number for each of the Securities.
(l) If a Shelf Registration Statement is filed pursuant to Section
3, enter into such agreements (including an underwriting agreement in form,
scope and substance as is customary in underwritten offerings of securities
similar to the Notes and the Preferred Stock or the Class A Exchange Debentures,
as the case may be, as may be appropriate in the circumstances) and take all
such other actions in connection therewith (including those reasonably requested
by the managing underwriters, if any, or the Holders of a majority in aggregate
principal/liquidation amount of the Registrable Securities being sold) in order
to expedite or facilitate the registration or the disposition of such
Registrable Securities, and in such connection, if such registration is an
Underwritten Registration, (i) make such representations and warranties to the
Holders and the underwriters, if any, with respect to the business of the
Company and its subsidiaries, and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings of securities similar to the
Notes and the Preferred Stock or the Class A Exchange Debentures, as the case
may be, as may be appropriate in the circumstances, and confirm the same if and
when reasonably requested; (ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the managing underwriters, if any, addressed to
each of the underwriters, if any, covering the matters customarily covered in
opinions of counsel to the Issuer requested in underwritten offerings of
securities similar to the Notes and the Preferred Stock or the Class A Exchange
Debentures, as the case may be, as may be appropriate in the circumstances;
(iii) obtain "cold comfort" letters and updates thereof (which letters and
updates (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters) from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public accountants
of any subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each of the underwriters
and each selling Holder, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in connection
with underwritten offerings of securities similar to the Notes and the Preferred
Stock or the Class A Exchange Debentures, as the case may be, as may be
appropriate in the circumstances, and such other matters as reasonably requested
by underwriters; and (iv) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority in principal/liquidation
amount of the Registrable Securities being sold and the managing underwriters,
if any, to evidence the continued validity of the representations and warranties
of the Company and its subsidiaries made pursuant to clause (i) above and to
evidence compliance with any conditions contained in the underwriting agreement
or other similar agreement entered into by the Company. Nothing contained in
this clause (n) requires the Company or the Guarantors, their counsel or their
accountants to make any representations or warranties, to render any legal
opinion or to deliver any comfort letters that are not true.
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(m) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing on the first day of the
fiscal quarter following each fiscal quarter in which Registrable Securities are
sold to underwriters in a firm commitment or best efforts underwritten offering
and (ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company after the effective date of
a Registration Statement, which statements shall cover said 12-month periods.
(n) If an Exchange Offer or Private Exchange is to be consummated,
upon delivery of the Registrable Securities by such Holders to the Company (or
to such other Person as directed by the Company) in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, the Company
shall mark, or caused to be marked, on such Registrable Securities that such
Registrable Securities are being cancelled in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, and in no
event shall such Registrable Securities be marked as paid or otherwise
satisfied.
(o) Cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD.
(p) Use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company such reasonable information regarding such seller or
Participating Broker-Dealer and the distribution of such Registrable Securities
or Exchange Securities as the Company may, from time to time, reasonably request
in writing. The Company may exclude from such registration the Registrable
Securities of any seller or Exchange Securities of any Participating
Broker-Dealer who fails to furnish such information promptly after receiving
such request.
Each Holder and each Participating Broker-Dealer agrees by
acquisition of such Registrable Securities or Exchange Securities of any
Participating Broker-Dealer that, upon receipt of written notice from the
Company of the happening of any event of the kind described in Section 6(e)(ii),
6(e)(iv), 6(e)(v) or 6(e)(vi), such Holder will forthwith discontinue
disposition (in the jurisdictions specified in a notice of a 6(e)(iv) event, and
elsewhere in a notice of a 6(e)(ii), 6(e)(v) or 6(e)(vi) event) of such
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 6(j), or until it is advised in writing (the "Advice")
by the Company that offers or sales in a particular jurisdiction may be resumed
or that the use of the applicable Prospectus may be resumed, as the case may be,
and
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has received copies of any amendments or supplements thereto. If the Company
shall give such notice, each of the Effectiveness Period and the Applicable
Period shall be extended by the number of days during such periods from and
including the date of the giving of such notice to and including the date when
each seller of such Securities covered by such Registration Statement shall have
received (x) the copies of the supplemented or amended Prospectus contemplated
by Section 6(j) or (y) the Advice.
7. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company and the Guarantors shall be borne
by the Company and the Guarantors whether or not the Exchange Offer or a Shelf
Registration Statement is filed or becomes effective, including, without
limitation:
(i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with the
NASD and (B) fees and expenses of compliance with state securities or Blue
Sky laws (including, without limitation, reasonable fees and disbursements
of counsel in connection with Blue Sky qualifications of the Registrable
Securities or Exchange Securities and determination of the eligibility of
the Registrable Securities or Exchange Securities for investment under the
laws of such jurisdictions (x) where the Holders are located, in the case
of the Exchange Securities, or (y) as provided in Section 6(f), in the
case of Registrable Securities or Exchange Securities to be sold by a
Participating Broker-Dealer during the Applicable Period);
(ii) reasonable printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities
or Exchange Securities in a form eligible for deposit with DTC and of
printing Prospectuses if the printing of Prospectuses is requested by the
managing underwriters, if any, or, in respect of Registrable Securities or
Exchange Securities to be sold by a Participating Broker-Dealer during the
Applicable Period, by the Holders of a majority in aggregate
principal/liquidation amount of the Registrable Securities included in any
Registration Statement or of such Exchange Securities, as the case may
be);
(iii) reasonable messenger, telephone, duplication, word
processing and delivery expenses incurred by the Company in the
performance of its obligations hereunder;
(iv) fees and disbursements of counsel for the Company;
(v) fees and disbursements of all independent certified
public accountants referred to in Section 6(n)(iii) (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance);
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(vi) Securities Act liability insurance, if the Company
so desires such insurance;
(vii) fees and expenses of all other Persons retained by
the Company; internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees of the
Company performing legal or accounting duties); and the expense of any
annual audit; and
(viii) rating agency fees and the fees and expenses
incurred in connection with the listing of the Securities to be registered
on any securities exchange.
(b) The Company and the Guarantors shall reimburse the Holders for
the reasonable fees and disbursements of not more than one counsel (in addition
to appropriate local counsel) chosen by the Holders of a majority in aggregate
principal/liquidation amount of the Registrable Securities to be included in any
Registration Statement. The Company shall pay all documentary, stamp, transfer
or other transactional taxes attributable to the issuance or delivery of the
Exchange Securities or Private Exchange Securities in exchange for the Notes and
Preferred Stock or Class A Exchange Debentures, as the case may be; provided
that the Company shall not be required to pay taxes payable in respect of any
transfer involved in the issuance or delivery of any Exchange Security or
Private Exchange Security in a name other than that of the holder of the Note or
Preferred Stock or Class A Exchange Debenture, as the case may be, in respect of
which such Exchange Security or Private Exchange Security is being issued.
(c) Neither the Company or the Guarantors shall be liable for any
underwriting, brokerage, finder's or similar fees, discounts or commissions, if
any, attributable to the sale of the Registrable Securities which discounts,
commissions or taxes shall be paid by the Holders of such Registrable
Securities.
8. Indemnification
(a) Indemnification by the Company. In the event of a Shelf
Registration Statement or in connection with any prospectus delivery pursuant to
an Exchange Offer Registration Statement by the Purchaser or a Participating
Broker-Dealer, as applicable, the Company shall, without limitation as to time,
indemnify and hold harmless each selling Holder and each Participating
Broker-Dealer selling Exchange Securities during the Applicable Period, each
Person who controls each such selling Holder (within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act) and Participating
Broker-Dealer and controlling person, to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and reasonable attorneys'
fees as provided in this Section 8) and expenses (including, without limitation,
reasonable costs and expenses incurred in connection with investigating,
preparing, pursuing or defending against any of the foregoing) (collectively,
"Losses"), as incurred, directly or indirectly caused by, related to, based
upon, arising out of or in connection with any untrue or alleged untrue
statement of a material fact contained in
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any Registration Statement, Prospectus or form of prospectus, or in any
amendment or supplement thereto, or in any preliminary prospectus, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as such
Losses are based upon information relating to such selling Holder or
Participating Broker-Dealer and furnished in writing to the Company (or reviewed
and approved in writing) by such Holder or Participating Broker-Dealer expressly
for use therein; provided, however, that the Company shall not be liable to any
Indemnified Party to the extent that any such losses arise solely out of an
untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if (i) such Indemnified Party or related
holder of a Registrable Security failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale by
such Indemnified Party or the related holder of a Registrable Security to the
person asserting the claim from which such Losses arise, (ii) the Prospectus
would have corrected such untrue statement or alleged untrue statement or
omission or alleged omission, and (iii) the Company has complied with their
obligations under Section 6(e) hereof.
(b) Indemnification by Holder of Registrable Securities. In
connection with any Registration Statement, Prospectus or form of prospectus,
any amendment or supplement thereto, or any preliminary prospectus in which a
Holder is participating, such Holder shall furnish to the Company in writing
such information as the Company reasonably requests for use in connection with
any Registration Statement, Prospectus or form of prospectus, any amendment or
supplement thereto, or any preliminary prospectus and shall, without limitation
as to time, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person, if any, who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20(a) of the Exchange
Act), and the directors, officers, agents or employees of such controlling
persons, to the fullest extent lawful, from and against all Losses arising out
of or based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or form of prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading to the extent, but only
to the extent, that such untrue statement or alleged untrue statement of a
material fact or omission or alleged omission of a material fact is contained in
or omitted from any information so furnished in writing by such Holder to the
Company expressly for use therein. In no event shall the liability of any
selling Holder be greater in amount than the dollar amount of the proceeds (net
of payment of all expenses) received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such indemnified party.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder (an
"indemnified party"), such indemnified party shall promptly notify the party or
parties from which such indemnity is sought (the "indemnifying parties") in
writing; provided, that the failure to so notify the indemnifying parties shall
not relieve the indemnifying parties from any obligation
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or liability except to the extent (but only to the extent) that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal) that the indemnifying parties have been prejudiced
materially by such failure.
The indemnifying party shall have the right, exercisable by giving
written notice to an indemnified party, within 20 business days after receipt of
written notice from such indemnified party of such Proceeding, to assume, at its
expense, the defense of any such Proceeding, provided, that an indemnified party
shall have the right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless: (1) the
indemnifying party has agreed to pay such fees and expenses; or (2) the
indemnifying party shall have failed promptly to assume the defense of such
Proceeding or shall have failed to employ counsel reasonably satisfactory to
such indemnified party; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such indemnified party and the
indemnifying party or any of its affiliates or controlling persons, and such
indemnified party shall have been advised by counsel that there may be one or
more defenses available to such indemnified party that are in addition to, or in
conflict with, those defenses available to the indemnifying party or such
affiliate or controlling person (in which case, if such indemnified party
notifies the indemnifying parties in writing that it elects to employ separate
counsel at the expense of the indemnifying parties, the indemnifying parties
shall not have the right to assume the defense and the reasonable fees and
expenses of such counsel shall be at the expense of the indemnifying party; it
being understood, however, that, the indemnifying party shall not, in connection
with any one such Proceeding or separate but substantially similar or related
Proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such indemnified party or parties).
No indemnifying party shall be liable for any settlement of any such
Proceeding effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent, or if there be
a final judgment for the plaintiff in any such Proceeding, each indemnifying
party jointly and severally agrees, subject to the exceptions and limitations
set forth above, to indemnify and hold harmless each indemnified party from and
against any and all Losses by reason of such settlement or judgment. The
indemnifying party shall not consent to the entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to each indemnified party of a release, in form and
substance reasonably satisfactory to the indemnified party, from all liability
in respect of such Proceeding for which such indemnified party would be entitled
to indemnification hereunder (whether or not any indemnified party is a party
thereto).
(d) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an indemnified party or is insufficient to hold such
indemnified party harmless for any Losses in respect of which this Section 8
would otherwise apply by its terms (other than by reason of exceptions provided
in this Section 8), then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall have a joint and several obligation
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to contribute to the amount paid or payable by such indemnified party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying party, on the one hand,
and indemnified party, on the other hand, shall be determined by reference to,
among other things, whether any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent any such statement or omission. The amount paid or payable by
an indemnified party as a result of any Losses shall be deemed to include any
legal or other fees or expenses incurred by such party in connection with any
Proceeding, to the extent such party would have been indemnified for such fees
or expenses if the indemnification provided for in Section 8(a) or 8(b) was
available to such party.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8(d), an indemnifying party that
is a selling Holder shall not be required to contribute, in the aggregate, any
amount in excess of such Holder's Maximum Contribution Amount. A selling
Holder's "Maximum Contribution Amount" shall equal the excess of (i) the
aggregate proceeds received by such Holder pursuant to the sale of such
Registrable Securities over (ii) the aggregate amount of damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged 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.
The indemnity and contribution agreements contained in this Section
8 are in addition to any liability that the indemnifying parties may have to the
indemnified parties.
9. Rule 144 and Rule 144A
Each of the Company and each Guarantor covenants that it shall (a)
file the reports required to be filed by it (if so required) under the
Securities Act and the Exchange Act in a timely manner and, if at any time any
such Person is not required to file such reports for so long as the Registrable
Securities are "restricted securities" as defined in Rule 144, it will, upon the
request of any Holder, make publicly available other information necessary to
permit sales pursuant to Rule 144 and Rule 144A and (b) take such further action
as any Holder 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 pursuant to the exemptions provided by Rule 144 and
Rule 144A. Upon the request of any Holder, the Company and the Guarantors shall
deliver to such Holder a written statement as to whether they have complied with
such information and requirements.
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10. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an Underwritten Offering, the
investment banker or investment bankers and manager or managers that will manage
the offering will be selected by the Holders of a majority in aggregate
principal/liquidation amount of such Registrable Securities included in such
offering with the consent of the Company, which consent shall not be reasonably
withheld; it being understood that any Underwritten Offering shall include at
least $10,000,000 principal/liquidation amount of the Registrable Securities.
No Holder may participate in any Underwritten Registration hereunder
unless such Xxxxxx (a) agrees to sell such Xxxxxx's Registrable Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
11. Miscellaneous
(a) Remedies. In the event of a breach by the Company or any of the
Guarantors of any of its respective obligations under this Agreement, each
Holder, in addition to being entitled to exercise all rights provided herein, in
the Indenture or, in the case of the Purchasers, in the Purchase Agreement, or
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each of the
Guarantors agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company has not entered into, as
of the date hereof, and shall not enter into, after the date of this Agreement,
any agreement with respect to any of its securities that is inconsistent with
the rights granted to the holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of at least a majority of the then outstanding aggregate principal/liquidation
amount of Registrable Securities; provided, that Sections 6(a) and 8 shall not
be amended, modified or supplemented, and waivers or consents to departures from
this proviso may not be given, unless the Company has obtained the written
consent of each Holder. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose securities are being sold pursuant to
a Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of at least a majority in
aggregate principal/liquidation amount of the Registrable Securities being sold
by such Holders pursuant to such Registration Statement, provided that the
provisions of this sentence
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may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, certified
first-class mail, return receipt requested, next-day air courier or facsimile:
(i) if to a Holder, at the most current address given by
such holder to the Company in accordance with the provisions of this
Section 11(d), which address initially is, with respect to each holder,
the address of such holder maintained by the Registrar under the
Indenture, with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000
Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, telecopy number (213)
687-5600, Attention: Xxx X. Xxxxxx, Xx., Esq.; and
(ii) if to the Company or any of the Guarantors,
initially 000 Xxxxxxx Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000, telecopy number (000) 000-0000, Attention: Xxxxxxx X. XxXxxxxxx,
and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 11(d), with copies to
Xxxxxxx, Xxxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, telecopy number (000) 000-0000, Attention: Xxxxxx X. Xxxxxxx, III.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF
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THE COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELAT ING TO
THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.
EACH OF THE COMPANY AND EACH GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH OF THE COMPANY AND EACH GUARANTOR IRREVOCABLY CONSENTS,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE COMPANY AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY OR ANY GUARANTOR IN
ANY OTHER JURISDICTION.
(i) Severability. 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.
(j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement, and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company in
respect of securities sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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25
(k) Securities Held by the Company or its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its affiliates (as such term is defined in Rule 405 under the Securities Act)
(other than Holders deemed to be such affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the holders of such required
percentage.
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REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
AMERICAN RESTAURANT GROUP, INC.
By: /s/Xxxxxxx X. XxXxxxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. XxXxxxxxx, Xx.
Title:V.P. & Chief Financial Officer
ARG ENTERPRISES, INC. LOCAL FAVORITE, INC.
By: /s/Xxxxxxx X. XxXxxxxxx, Xx. By: /s/Xxxxxxx X. XxXxxxxxx, Xx.
--------------------------------- ---------------------------------
Name: Xxxxxxx X. XxXxxxxxx, Xx. Name: Xxxxxxx X. XxXxxxxxx, Xx.
Title: V.P. & Chief Financial Officer Title: V.P. & Chief Financial Officer
XXXXXX'X, INC. SPOONS RESTAURANTS, INC.
By: /s/Xxxxxxx X. XxXxxxxxx, Xx. By: /s/Xxxxxxx X. XxXxxxxxx, Xx.
--------------------------------- ---------------------------------
Name: Xxxxxxx X. XxXxxxxxx, Xx. Name: Xxxxxxx X. XxXxxxxxx, Xx.
Title: V.P. & Chief Financial Officer Title: V.P. & Chief Financial Officer
SPECTRUM FOODS, INC.
By: /s/Xxxxxxx X. XxXxxxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. XxXxxxxxx, Xx.
Title: V.P. & Chief Financial Officer
27
ARG PROPERTY MANAGEMENT COR-
PORATION
By: /s/Xxxxxxx X. XxXxxxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. XxXxxxxxx, Xx.
Title: V.P. & Chief Financial Officer
ACCEPTED AND AGREED TO:
XXXXXXXXX & COMPANY, INC.
By: /s/Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
