___________________________________________________________________________
REGISTRATION RIGHTS AGREEMENT
BETWEEN
CREATIVE HOST SERVICES, INC.
AND
ING CAPITAL LLC
Dated as of January 17, 2003
___________________________________________________________________________
TABLE OF CONTENTS
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Page
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Section 1. Definitions 2
Section 2. Registration of Securities by the Company 4
Section 3. Shelf Registration 12
Section 4. Registration Expenses 21
Section 5. Conditions to Registration 22
Section 6. Indemnification 23
Section 7. Exchange Act Registration; Rule 144 Reporting 27
Section 8. Limitation on Registration Rights of Others 29
Section 9. Mergers, etc. 29
Section 10. Notices, etc. 30
Section 11. Entire Agreement 31
Section 12. Waivers and Further Agreements 31
Section 13. Amendments 32
Section 14. Assignment; Successors and Assigns 32
Section 15. Severability 32
Section 16. Counterparts 33
Section 17. Section Headings 33
Section 18. Gender; Usage 33
Section 19. Governing Law 33
Section 20. Termination 33
Section 21. Expenses 33
Section 22. Specific Performance 34
Schedule I Agreements Containing Registration Rights
in Favor of Other Shareholders
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of January 17, 2003 by and between CREATIVE HOST SERVICES, INC., a
California corporation (the "Company"), and ING CAPITAL LLC, a Delaware limited
liability company (the "Purchaser").
W I T N E S S E T H:
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RECITALS.
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1) Simultaneously herewith, Purchaser is entering into a Credit
Agreement, dated of even date herewith (the "Credit Agreement"), by and among
Company, Purchaser as lender (Purchaser and any subsequent lender under the
Credit Agreement, a "Lender" and collectively the "Lenders"), and Purchaser as
agent for the Lenders, pursuant to which Purchaser has agreed, upon the terms
and subject to the conditions set forth therein, to make Loans from time to time
to the Borrower; and
2) It is a condition precedent to the initial extensions of credit by
the Lenders to the Company contemplated by the Credit Agreement that the Company
agree to issue to the Purchaser warrants initially exercisable for 452,050
shares of Common Stock, no par value per share, of the Company for an initial
exercise price of $1.87 per share; and
3) The Purchaser is unwilling to extend credit to the Company pursuant
to the Credit Agreement or to purchase the Warrants pursuant to the Warrant
Agreement (as defined in Section 1) unless it receives the assurances set forth
in this Agreement;
NOW, THEREFORE, in consideration of the recitals, of the Purchaser's
preceding with the consummation of the transactions contemplated by the Warrant
Agreement and the Credit Agreement, and the mutual covenants hereinafter set
forth, the parties, intending to be legally bound, hereby agree as follows:
SECTION 1. Definitions.
i) Defined Terms. The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall, except
where the context otherwise requires, have the following meanings (such meanings
to be equally applicable to the singular and plural forms thereof):
"Agreement" means this Registration Rights Agreement as in effect on the
date hereof and as hereafter amended, supplemented, restated or otherwise
modified.
"Available Securities" is defined in Section 2.
"Business Day" is defined in the Warrant Agreement.
"Common Stock" is defined in the Warrant Agreement.
"Company" is defined in the Preamble.
"Credit Agreement" shall have the meaning set forth in the first preamble
hereto.
"Exchange Act" is defined in the Warrant Agreement.
"Holders" shall mean, collectively, the Purchaser and any subsequent
registered holders, from time to time, of the Common Stock issuable upon
conversion of Warrant Securities. Whenever the phrase "Holder of any
Registrable Securities" or any similar phrase is used herein, it shall also
include any holders of the Warrants.
"Indemnified Person" is defined in Section 6(a).
"Indemnifying Person" is defined in Section 6(c).
"NASD" means the National Association of Securities Dealers, Inc.
"Person" is defined in the Warrant Agreement.
"Prospectus" means each prospectus included as part of any Registration
Statement, as amended or supplemented, including each preliminary prospectus and
all material incorporated by reference in such prospectus.
"Purchaser" is defined in the Preamble.
"Quoted Price" is defined in the Warrant Agreement.
"Registrable Securities" shall mean the shares of Common Stock issued, but
excluding (i) shares that have been disposed of under a Registration Statement,
the Shelf Registration Statement or any other effective registration statement,
and (ii) shares distributed to the public pursuant to Rule 144 under the
Securities Act.
"Registration Expenses" is defined in Section 4(c).
"Registration Statement" means any registration statement of the Company
which covers Registrable Securities pur-suant to Section 2 of this Agreement,
including the Prospectus, amendments, including post-effective amendments, and
supplements to such registration statement and Prospectus and all exhibits and
all material incorporated by reference in such registration statement.
"Required Holders" shall mean the holders of Warrant Securities which when
fully converted would represent at least two-thirds of the voting power of such
securities held by all of the Holders.
"Securities Act" is defined in the Warrant Agreement.
"SEC" is defined in the Warrant Agreement.
"Selling Holder" is defined in Section 19(c).
"Selling Holder Notice" is defined in Section 19(d).
"Selling Holder Offer" is defined in Section 19(d).
"Shelf Prospectus" shall mean the prospectus included in the Shelf
Registration Statement, including any preliminary prospectus, and any amendment
or supplement thereto, including any supplement relating to the terms of the
offering of any portion of the Registrable Securities covered by the Shelf
Registration Statement, and in each case including all material incorporated by
reference therein.
"Shelf Registration" shall mean a registration required to be effected
pursuant to Section 3 hereof.
"Shelf Registration Statement" shall mean a registration statement of the
Company (and any other entity required to be a registrant with respect to such
registration statement pursuant to the requirements of the Securities Act) that
covers all of the Registrable Securities to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, or any similar
rule that may be adopted by the SEC, and all amendments (including
post-effective amendments) to such registration statement, and all exhibits
thereto and materials incorporated by reference therein.
"Specified Registrable Securities" is defined in Section 2(a).
"Stock" is defined in the Warrant Agreement.
"Warrant Agreement" means the Warrant Purchase Agreement, dated of even
date herewith, by and between the Purchaser and the Company, as in effect on the
date hereof and as hereafter amended, supplemented, restated or otherwise
modified.
"Warrant Securities" is defined in the Warrant Agreement.
"Warrants" is defined in the Warrant Agreement.
ii) Cross-References. Unless otherwise specified, references in this
Agreement to any Article or Section are references to such Article or Section
of this Agreement, and unless otherwise specified, references in any Article,
Section, or definition to any clause are references to such clause of such
Section, Article or definition.
SECTION 2. Registration of Securities by the Company.
i) Piggyback Registration. If at any time or from time to time the
Company shall propose to file on its behalf or on behalf of any of its security
holders a registration state-ment under the Securities Act on Form X-0, X-0 or
S-3 (or on any other form for the general registration of securities) with
respect to any class of securities (other than a Shelf Registration Statement
filed pursuant to Section 3), the Company shall in each case:
(1) promptly give written notice to each Holder at least thirty (30)
days before the anticipated filing date, indicating the proposed offering price
and describing the plan of distribution;
(2) include in such registration (and any related qualification under
blue sky or other state securities laws or other compliance) and, at the request
of any Holder, in any underwriting involved therein, all the Registrable
Securities specified by any Holder or Holders of Registrable Securities (the
"Specified Registrable Securities") in a written request (the "Registration
Request") made within twenty (20) days after receipt of such written notice from
the Company; and
(3) use its best efforts to cause the managing underwriter(s) of such
proposed underwritten offering to permit the Specified Registrable Securities to
be included in the Registration Statement for such offering on the same terms
and conditions as any similar securities of the Company included therein.
Notwith-standing the foregoing, if the managing underwriter(s) of such offering
advise(s) the Holders of Specified Registrable Securities in writing that
marketing considerations require a limitation on the securities, other than the
securities the Company intends to sell, to be included in any Registration
Statement filed under this Section 2 to a certain number of shares (the
"Available Securities"), then the Company shall in such case be obligated to
such Holders only with respect to such number of Available Securities. The
limitation on the number of Specified Registrable Securities will be imposed pro
rata (based upon the ratio of the number of shares of Specified Registrable
Securities which the managing underwriter(s) propose to include at the
anticipated initial public offering price to the number of Specified Registrable
Securities owned by each Holder) among all Holders of Specified Registrable
Securities.
Each Registration Request shall set forth the number or amount of Specified
Registrable Securities. Notwith-standing any other provision of this Agreement
to the contrary, neither the delivery of the notice by the Company nor of the
Registration Request by any Holder shall in any way obligate the Company to file
a Registration Statement and, notwithstanding such filing, the Company may, at
any time prior to the effective date thereof, in its sole discretion, determine
not to offer the securities to which the Registration Statement relates without
liability to any of the Holders. No registration of Registrable Securities
effected under this Section 2 shall relieve the Company of its obligation to
effect the registration of Registrable Securities pursuant to Section 3.
ii) Piggyback Registration Procedures. If and when the Company shall
be required by the provisions of this Section 2 to effect the registration of
Registrable Securities under the Securities Act, the Company will use its best
efforts to effect such registration to permit the sale of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and pursuant thereto it will, as expeditiously as possible:
(1) before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to the Holders of the Registrable
Securities covered by such Registration Statement and the underwriter(s), if
any, copies of all such documents proposed to be filed, which documents will be
made available, on a timely basis, for review by such Holders and underwriters;
(2) prepare and file with the SEC such amendments and post-effective
amendments to any Registration Statement, and such supplements to the
Prospectus, as may be reasonably requested by any Holder of Registrable
Securities or the managing underwriter(s), if any, or as may be required by the
Securities Act, the Exchange Act or by the rules, regulations or instructions
applicable to the registration form utilized by the Company or as may otherwise
be necessary to keep such Registration Statement effective until the earlier of
such time as all of the Registrable Securities covered by such Registration
Statement have been disposed of in accordance with the intended method of
disposition set forth in such Registration Statement or Prospectus; and cause
the Prospectus as so supplemented to be filed pursuant to Rule 424 (or any
successor rule) under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement or Prospectus;
(3) promptly notify the selling Holders of Registrable Securities and
the managing underwriter(s), if any, and if requested by any such Person,
confirm such advice in writing:
(a) of the filing of the Prospectus or any supplement to the Prospectus
and of the effectiveness of the Registration Statement and/or any post-effective
amendment,
(b) of any request by the SEC for amendments or supplements to the
Registration Statement or the Prospectus or for additional information,
(c) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose,
(d) of the Company's becoming aware at any time that the
representations and warranties of the Company contemplated by paragraph (xiv)(a)
below have ceased to be true and correct,
(e) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threat of any proceeding for such purpose,
and
(f) of the existence of any fact which, to the knowledge of the
Company, results in the Registration Statement, the Prospectus or any document
incorporated therein by reference containing an untrue statement of material
fact or omitting to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(4) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement or any qualification
referred to in paragraph (iii)(e) at the earliest possible moment;
(5) if reasonably requested by the managing underwriter(s) or the
Required Holders of Registrable Securities being sold in connection with an
underwritten offering, immediately incorporate in a supplement to the
Prospectus or post-effective amendment to the Registration Statement such
information as the managing underwriter(s) or the Required Holders of the
Registrable Securities being sold reasonably request to have included therein
relating to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with respect to the
amount of Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and any other terms of the
underwritten (or best-efforts underwritten) offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
supplement to the Prospectus or post-effective amendment to the Registration
Statement as soon as notified of the matters to be incorporated in such
supplement to the Prospectus or post-effective amendment to the Registration
Statement;
(6) at the request of any selling Holder of Registrable Securities,
furnish to such selling Holder of Registrable Securities and each managing
underwriter, if any, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(7) deliver to each selling Holder of Registrable Securities and the
managing underwriter(s), if any, without charge, as many copies of the
Registration Statement, each Prospectus (including each preliminary prospectus)
and any amendment or supplement thereto (in each case including all exhibits),
as such Persons may reasonably request, together with all documents incorporated
by reference in such Registration Statement or Prospectus, and such other
documents as such selling Holder may reasonably request in order to facilitate
the disposition of its Registrable Securities covered by such Registration
Statement; the Company consents to the use of each Prospectus and any supplement
thereto by each of the selling Holders of Registrable Securities and the
managing underwriter(s), if any, in connection with the offering and sale of the
Registrable Securities covered by each Prospectus or any supplement thereto;
(8) prior to any public offering of Registrable Securities, register or
qualify or reasonably cooperate with the selling Holders of Registrable
Securities, the managing underwriter(s), if any, and their respective counsel in
connection with the registration or qualification of such Registrable Securities
for offer and sale under the securities or blue sky laws of such jurisdictions
as any selling Holder or managing underwriter(s) reasonably request(s) and do
any and all other acts or things necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement;
(9) cooperate with the selling Holders of Registrable Securities and
the managing underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any legends restricting the transfer thereof; and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriters may request at least two Business Days prior to any
sale of Registrable Securities to the underwriters;
(10) use its best efforts to cause the Registrable Securities covered
by the applicable Registration Statement to be registered with or approved by
such United States, state and local governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof or the underwriters, if
any, to consummate the disposition of such Registrable Securities;
(11) if any fact contemplated by paragraph (iii)(b) or (iii)(f) above
shall exist, promptly notify each Holder on whose behalf Registrable Securities
have been registered and promptly prepare and furnish to such Holders a
supplement or post-effective amendment to the Registration Statement or the
related Prospectus or any document incorporated therein by reference and
promptly file any other required document so that, as thereafter delivered to
the purchasers of the Registrable Securities, neither the Registration Statement
nor the Prospectus will contain an 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 not misleading;
(12) if requested by the Required Holders of the Registrable Securities
or by the managing underwriter(s), if any, cause all Registrable Securities
covered by the Registration Statement to be (A) listed on each securities
exchange on which securities of the same class are then listed or (B) admitted
for trading in any inter-dealer quotation system on which securities of the same
class are then traded;
(13) not later than the effective date of the applicable Registration
Statement, provide a CUSIP number for all Registrable Securities covered by the
Registration Statement and provide the applicable transfer agent with printed
certificates for such Registrable Securities which are in a form eligible for
deposit with Depository Trust Company;
(14) enter into agreements (including underwriting agreements) and take
all other reasonable actions in order to expedite or facilitate the disposition
of such Registrable Securities and in such connection, except as otherwise
provided, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration:
(a) make such representations and warranties to the Holders selling
such Registrable Securities and, in connection with any underwritten offering,
to the underwriters, in form, substance and scope as are customarily made by
issuers to underwriters in similar underwritten offerings;
(b) obtain opinions of counsel to the Company and updates thereof
addressed to each selling Holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in similar underwritten
offerings and such other matters as may be reasonably requested by such Holders
and underwriters, which counsel and opinions shall be reasonably satisfactory
(in form, scope and substance) to the managing underwriters, if any, and the
Required Holders of such Registrable Securities;
(c) in connection with any underwritten offering, obtain so-called
"cold comfort" letters and updates thereof from the Company's independent
certified public accountants addressed to the selling Holders of Registrable
Securities and the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters to
underwriters in connection with similar underwritten offerings;
(d) if an underwriting agreement is entered into, cause the same to set
forth in full the indemnification and contribution provisions and procedures of
Section 6 (or such other substantially similar pro-visions and procedures as the
underwriters shall reasonably request) with respect to all parties to be
indemnified pursuant to said Section 6; and
(e) deliver such documents and certificates as may reasonably
be requested by the Required Holders of the Registrable Securities being sold,
or the managing underwriter(s), if any, to evidence compliance with this
paragraph (xiv) and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company;
the foregoing to be done upon each closing under any underwriting or similar
agreement as and to the extent required thereunder and from time to time as may
reasonably be requested by any selling Holder of Registrable Securities in
connection with the disposition of Registrable Securities pursuant to such
Registration Statement, all in a manner consistent with customary industry
practice;
(15) upon execution and delivery of such confidentiality agreements as
the Company may reasonably request, make available to the Holders of the
Registrable Securities being sold, any underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney or
accountant retained by such Holders or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney or accountant in
connection with the registration, at such time or times as the Person requesting
such information shall reasonably determine;
(16) otherwise use its best efforts to comply with the Securities Act,
the Exchange Act, all applicable rules and regulations of the SEC and all
applicable state blue sky and other securities laws, rules and regulations, and
make generally available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act, as soon as
practicable, but in no event later than thirty (30) days after the end of the 12
calendar month period commencing after the effective date of the Registration
Statement;
(17) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD); and
(18) prior to the filing of any document which is being prepared
for incorporation by reference into the Registration Statement or the
Prospectus, upon receipt of such confidentiality agreements as the Company may
reasonably request, provide copies of such document to counsel to the selling
Holders of Registrable Securities, and to the managing underwriter(s), if any,
and make the Company's representatives available for discussion of such
document.
If requested in writing by the Company or the lead underwriter, if any, of any
public offering effected pursuant to this Section 2, the Company and each Holder
owning Registrable Securities exercisable for or evidencing at least 1% of
outstanding Common Stock will execute and deliver an agreement undertaking not
to effect any public sale or distribution, including any sale pursuant to Rule
144 under the Securities Act, of any shares of Common Stock (other than as part
of such underwritten public offering) within 7 days before or 120 days after the
effective date of a registration statement filed pursuant to this Section 2.
SECTION 3. Shelf Registration.
i) Filing of Shelf Registration Statement. Promptly after the date
hereof and in any event on or before the earlier to occur of (i) the 10th
Business Day following the date that the Company's draft Registration Statement
of Form SB-2 currently filed with the SEC is declared effective, and (ii)
January 30, 2003, the Company shall cause to be filed the Shelf Registration
Statement providing for the sale by the Holders of all of the Registrable
Securities in accordance with the terms hereof, and the Company will use its
best efforts to cause such Shelf Registration Statement to be declared effective
by the SEC on or before the 30th day following the date of filing of the Shelf
Registration Statement. The Company agrees to use its best efforts to keep the
Shelf Registration Statement with respect to the Registrable Securities
continuously effective so long as any Holder holds Registrable Securities until
such time as each Holder has sold all of its Registrable Securities pursuant to
such Registration Statement. The Company further agrees to amend the Shelf
Registration Statement if and as required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or any rules and
regulations thereunder; provided, however, that the Company shall not be deemed
to have used its best efforts to keep the Shelf Registration Statement effective
during the applicable period if it voluntarily takes any action that would
result in selling Holders not being able to sell Registrable Securities covered
thereby during that period, unless such action is permitted by this Agreement or
required under applicable law or the Company has filed a post-effective
amendment to the Shelf Registration Statement and the SEC has not declared it
effective.
ii) Shelf Registration Procedures. In connection with the obligations
of the Company with respect to the Shelf Registration Statement contemplated by
this Section 3, the Company shall use its best efforts to effect such
registration to permit the sale of such Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
it will, as expeditiously as possible:
(1) before filing a Shelf Registration Statement or Shelf Prospectus or
any amendments or supplements thereto, furnish to the Holders of the Registrable
Securities covered by such Shelf Registration Statement and the underwriter(s),
if any, copies of all such documents proposed to be filed, which documents will
be made available, on a timely basis, for review by such Holders and
underwriters; and the Company will not file any Shelf Registration Statement or
amendment thereto or any Shelf Prospectus or any supple-ment thereto to which
the Required Holders of the Registrable Securities covered by such Shelf
Registration Statement or the managing underwriter(s), if any, shall reasonably
object;
(2) prepare and file with the SEC, within the time period set forth in
Section 3(a) hereof, the Shelf Registration Statement, which Shelf Registration
Statement (a) shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution by the selling
Holders thereof and (b) shall comply as to form in all material respects with
the requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith;
(3) (a) prepare and file with the SEC such amendments to such Shelf
Registration Statement as may be reasonably requested by any Holder of
Registrable Securities or the managing underwriter(s), if any, or as may be
required by the Securities Act, the Exchange Act or by the rules, regulations or
instructions applicable to the registration form utilized by the Company or as
may otherwise be necessary to keep such Shelf Registra-tion Statement effective
for the applicable period; (b) cause the Shelf Prospectus to be amended or
supplemented as may be reasonably requested by any Holder of Registrable
Securities or the managing underwriter(s), if any, or as may be required by the
Securities Act, the Exchange Act or by the rules, regulations or instructions
applicable to the registration form utilized by the Company or as may otherwise
be necessary to keep such Shelf Registra-tion Statement effective for the
applicable period; (c) cause the Shelf Prospectus as so amended or supplemented
to be filed pursuant to Rule 424 (or any successor rule) under the Securities
Act; (d) respond as promptly as practicable to any comments received from the
SEC with respect to the Shelf Registration Statement or any amendment thereto;
and (e) comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Shelf Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the selling Holders thereof;
(4) promptly notify the selling Holders of Registrable Securities and
the managing underwriter(s), if any, and if requested by any such Person,
confirm such advice in writing:
(a) of the filing of the Shelf Prospectus or any supplement to the
Shelf Prospectus and of the effectiveness of the Shelf Registration Statement
and/or any post-effective amendment,
(b) of any request by the SEC for amendments or supplements to the
Shelf Registration Statement or the Shelf Prospectus or for additional
information,
(c) of the issuance by the SEC of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for that purpose,
(d) of the Company's becoming aware at any time that the
representations and warranties of the Company contemplated by paragraph (xv)(a)
below have ceased to be true and correct,
(e) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threat of any proceeding for such purpose,
and
(f) of the existence of any fact which, to the knowledge of the
Company, results in the Shelf Registration Statement, the Shelf Prospectus or
any document incorporated therein by reference containing an untrue statement of
material fact or omitting to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;
(5) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Shelf Registration Statement or any
qualification referred to in paragraph (iii)(e) at the earliest possible moment;
(6) if reasonably requested by the managing underwriter(s) or the
Required Holders of Registrable Securities being sold in connection with an
underwritten offering, immediately incorporate in a supplement to the Shelf
Prospectus or post-effective amendment to the Shelf Registration Statement such
information as the managing underwriter(s) or the Required Holders of the
Registrable Securities being sold reasonably request to have included therein
relating to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with respect to the
amount of Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and any other terms of the
underwritten (or best-efforts underwritten) offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
supplement to the Shelf Prospectus or post-effective amendment to the Shelf
Registration Statement as soon as notified of the matters to be incorporated in
such supplement to the Shelf Prospectus or post-effective amendment to the Shelf
Registration Statement;
(7) at the request of any selling Holder of Registrable Securities, furnish
to such selling Holder of Registrable Securities and each managing underwriter,
if any, without charge, at least one signed copy of the Shelf Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);
(8) deliver to each Holder of Registrable Securities and the managing
underwriter(s), if any, without charge, as many copies of the Shelf Registration
Statement, each Shelf Prospectus and any amendment or supplement thereto (in
each case including all exhibits), as such Persons may reasonably request,
together with all documents incorporated by reference in such Shelf Registration
Statement or Shelf Prospectus, and such other documents as such selling Holder
may reasonably request in order to facilitate the disposition of its
Registrable Securities; the Company consents to the use of the Shelf Prospectus
and any amendment or supplement thereto by each such Holder of Registrable
Securities and the underwriter(s), if any, in connection with the offering and
sale of the Registrable Securities covered by the Shelf Prospectus or amendment
or supplement thereto;
(9) prior to the time the Shelf Registration Statement is declared
effective by the SEC, register or qualify the Registrable Securities or
reasonably cooperate with the selling Holders, the underwriter(s), if any, and
their respective counsel in connection with the registration or qualification of
such Registrable Securities for offer and sale under the securities or blue sky
laws of such jurisdictions as any selling Holder or managing underwriter(s), if
any, reasonably request(s), keep each such registration or qualification
effective during the period such Shelf Registration Statement is required to be
kept effective, and do any and all other acts or things necessary to enable the
disposition in such jurisdic-tions of the Registrable Securities covered by the
Shelf Registration Statement;
(10) cooperate with the selling Holders of Registrable Securities and
the managing underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any legends restricting the transfer thereof; and enable such
Registrable Securities to be in such denominations and registered in such names
as the selling Holders or the managing underwriters, if any, may request at
least two Business Days prior to any sale of Registrable Securities;
(11) use its best efforts to cause the Registrable Securities covered by
the Shelf Registration Statement to be registered with or approved by such
United States, state and local governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Registrable Securities;
(12) if any fact contemplated by paragraph (iv)(b) or (iv)(f) above shall
exist, promptly notify each Holder on whose behalf Registrable Securities have
been registered and promptly prepare and furnish to such Holders a supplement or
post-effective amendment to the Shelf Registration Statement or the related
Shelf Prospectus or any document incorporated therein by reference and promptly
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, neither the Shelf Registration
Statement nor the Shelf Prospectus will contain an 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 not misleading;
(13) if requested by the Required Holders of the Registrable
Securities or by the managing underwriter(s), if any, cause all Registrable
Securities covered by the Shelf Registration Statement to be (a) listed on each
securities exchange on which securities of the same class are then listed or (b)
admitted for trading in any inter-dealer quotation system on which securities of
the same class are then traded;
(14) not later than the effective date of the Shelf Registration
Statement, provide a CUSIP number for all Registrable Securities covered by the
Shelf Registration Statement and provide the applicable transfer agent with
printed certificates for such Registrable Securities which are in a form
eligible for deposit with Depository Trust Company;
(15) enter into agreements (including underwriting agreements) and take
all other reasonable actions in order to expedite or facilitate the disposition
of such Registrable Securities and in such connection, except as otherwise
provided, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration:
(a) make such representations and warranties to the Holders selling
such Registrable Securities and, in connection with any underwritten offering,
to the underwriters, in form, substance and scope as are customarily made by
issuers to underwriters in similar underwritten offerings;
(b) obtain opinions of counsel to the Company and updates thereof
addressed to each selling Holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in similar underwritten
offerings and such other matters as may be reasonably requested by such Holders
and underwriters, which counsel and opinions shall be reasonably satisfactory
(in form, scope and substance) to the managing underwriters, if any, and the
Required Holders of such Registrable Securities;
(c) in connection with any underwritten offering, to obtain so-called
"cold comfort" letters and updates thereof from the Company's independent
certified public accountants addressed to the selling Holders of Registrable
Securities and the underwriters, if any, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort" letters
to underwriters in connection with similar underwritten offerings;
(d) if an underwriting agreement is entered into, cause the same to set
forth in full the indemnification and contribution provisions and procedures of
Section 6 (or such other substantially similar pro-visions and procedures as the
underwriters shall reasonably request) with respect to all parties to be
indemnified pursuant to said Section 6; and
(e) deliver such documents and certificates as may reasonably be
requested by the Required Holders of the Registrable Securities being sold, or
the managing underwriter(s), if any, to evidence compliance with this paragraph
(xiv) and with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company;
the foregoing to be done upon each closing under any underwriting or similar
agreement as and to the extent required thereunder and from time to time as may
reasonably be requested by any selling Holder of Registrable Securities in
connection with the disposition of Registrable Securities pursuant to such Shelf
Registration Statement, all in a manner consistent with customary industry
practice;
(16) upon execution and delivery of such confidentiality agreements as
the Company may reasonably request, make available to the Holders of the
Registrable Securities being sold, any underwriter participating in any
disposition pursuant to such Shelf Registration Statement, and any attorney or
accountant retained by such Holders or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney or accountant in
connection with the registration, at such time or times as the Person requesting
such information shall reasonably determine;
(17) otherwise use its best efforts to comply with the Securities Act,
the Exchange Act, all applicable rules and regulations of the SEC and all
applicable state blue sky and other securities laws, rules and regulations, and
make generally available to its security holders, as soon as practicable, an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act;
(18) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD); and
(19) prior to the filing of any document which is being prepared for
incorporation by reference into the Registration Statement or the Prospectus,
upon receipt of such confidentiality agreements as the Company may reasonably
request, provide copies of such document to counsel to the selling Holders of
Registrable Securities, and to the managing underwriter(s), if any, and make the
Company's representatives available for discussion of such document.
iii) Covenants of Holders. In connection with and as a condition to
the Company's obligations with respect to the Shelf Registration Statement
pursuant to this Section 3, each Holder covenants and agrees that (i) upon
receipt of any notice from the Company contemplated by Section 3(b)(iv) (in
respect of the occurrence of an event contemplated by clause (f) of Section
3(b)(iv)), such Holder shall not offer or sell any Registrable Securities
pursuant to the Shelf Registration Statement until such Holder receives copies
of the supplemented or amended Shelf Prospectus contemplated by Section
3(b)(xii) hereof and receives notice that any post-effective amendment has
become effective, and, if so directed by the Company, such Holder will deliver
to the Company (at the expense of the Company) all copies in its possession,
other than permanent file copies then in such Holder's possession, of the Shelf
Prospectus as amended or supplemented at the time of receipt of such notice;
(ii) such Holder and any of its officers, directors or affiliates, if any, will
comply with the provisions of Rule 10b-6 and 10b-7 under the Exchange Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Shelf Registration Statement; and (iii) such Holder and any of its
officers, directors or affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to them in connection
with sales of Registrable Securities pursuant to the Shelf Registration
Statement.
iv) Mechanics of Shelf Registration. Each registration effected pursuant
to this Section 3 shall be effected by the filing of a Shelf Registration
State-ment on Form S-1 or Form S-3 (provided that if Form S-3 is used the Shelf
Prospectus shall contain the information that would have been required to be
included therein had Form S-1 been used), unless the use of a different form has
been agreed upon in writing by the Required Holders; provided, however, that if
the intended method of disposition by the requesting Holders is to be an
underwritten offering, the Company shall use such form of Registration
Statement as is acceptable to the underwriter(s). Whenever a registration
requested by one or more Holders pursuant to this Section 3 is for an
underwritten offering, only Registrable Securities which are to be distributed
by the underwriters may be included in such registration, without the written
consent of the Required Holders.
v) Blackout Period. The Company shall be entitled to elect that the Shelf
Registration Statement not be usable, for a reasonable period of time, but not
in excess of 30 days (a "Blackout Period"), if the Company determines in good
faith that the registration and distribution of Registrable Securities (or the
use of the Shelf Registration Statement or related Shelf Prospectus) would
interfere with any pending material financing, acquisition or corporate
reorganization or similar transaction involving the Company or any of its
subsidiaries because it would require premature disclosure thereof and promptly
gives the Holders of Registrable Securities written notice of such
determination, containing a general statement of the reasons for such
postponement or restriction on use and an approximation of the anticipated
delay; provided, however, that the aggregate number of days included in all
Blackout Periods during any consecutive 12 months shall not exceed 60 days and
no financing, acquisition or corporate reorganization that is the basis for any
Blackout Period may be the basis for any subsequent Blackout Period; provided,
further however, that no Blackout Period shall be effective, and the Company
shall not engage in any material financing, acquisition or corporate
reorganization or similar transaction involving the Company or any of its
subsidiaries, at any time prior to the date that is 60 days following the date
on which the Shelf Registration Statement is declared effective by the SEC.
vi) Holdback Agreement. Subject to the provisions of this sentence
becoming effective in accordance with the immediately following sentence, if (i)
the Company shall file a registration statement (other than in connection with
the registration of securities issuable pursuant to an employee stock option,
stock purchase or similar plan or pursuant to a merger, exchange offer or a
transaction of the type specified in Rule 145(a) under the Securities Act) with
respect to its Common Stock and (ii) with reasonable prior notice, the managing
underwriter or underwriters advises the Company in writing (in which case the
Company shall notify the Holders) that a public sale or distribution of
Registrable Securities would adversely impact such offering, then each Holder of
Registrable Securities shall, to the extent not inconsistent with applicable
law, refrain from effecting any public sale or distribution of Registrable
Securities during the 10-day period prior to, and during the 90-day period
beginning on, the effective date of such registration statement. The provisions
set forth in the preceding sentence shall not become effective until the Company
shall have entered into agreements with the holders of at least two-thirds of
the shares entitled to registration rights pursuant to the World Registration
Rights Agreement providing that (i) such holders agree to waive any priority to
which they are entitled over the Holders in connection with the exercise of
incidental or piggyback registration rights and instead agree that in connection
with any reductions in the shares entitled to participate in an underwritten
offering such holders under the World Registration Rights Agreement, the Holders
and any other holders entitled to an equal priority with the Holders will bear
such reductions on a pro rata basis based on the number of shares held by each
such Person, and (ii) such holders agree to a holdback agreement on terms no
less favorable to the Company than set forth in the preceding sentence.
(g) Liquidated Damages. The parties hereto acknowledge and agree that
in the event the Company fails to file the Shelf Registration Statement with the
SEC on or before the date it is required to do so under Section 3(a) or the
Company fails use its best efforts to cause such Shelf Registration Statement to
be declared effective by the SEC on or before the 30th calendar day following
the date of filing of the Shelf Registration Statement as required under Section
3(a), the holders of Registrable Securities will suffer damages that are
substantial but difficult or impracticable to ascertain. Accordingly, the
Company hereby agrees that in the event that the Company fails to file the Shelf
Registration Statement with the SEC on or before the date it is required to do
so under Section 3(a) or the Company fails use its best efforts to cause such
Shelf Registration Statement to be declared effective by the SEC on or before
the 30th calendar day following the date of filing of the Shelf Registration
Statement as required under Section 3(a), in addition and not in lieu of any
right or remedy available to the Holders under this Agreement or under
applicable law, the Company shall pay to the Holders of Registrable Securities
the amount of $1000, such amount to be increased by $1000 for each day
thereafter that such failure continues as liquidated damages for such failure,
and the Company acknowledges and agrees that any such amount, as so increased,
shall constitute a fair and reasonable measure of the damages suffered by such
Holders as a result of such failure.
SECTION 4. Registration Expenses.
i) All expenses incident to the Company's performance of or compliance
with its obligations under this Agreement (excluding underwriting discounts,
selling commissions and brokerage fees, which will be paid by the selling
Holders) will be paid by the Company, regardless of whether Registrable
Securities are sold pursuant to any Registration Statement or Shelf Registration
Statement, including, without limitation:
(1) all registration, filing and listing fees;
(2) fees and expenses of compliance with securities or blue sky laws
(including, without limita-tion, the fees and disbursements of counsel for the
underwriters, if any, or selling Holders in connection with blue sky and state
securities qualifications of Registrable Securities and determination of their
eligibility for investment under the laws of such jurisdictions as the managing
underwriter(s), if any, or the Required Holders of the Registrable Securities
covered by such Registration Statement or Shelf Registration Statement may
reasonably designate);
(3) printing (including, without limitation, expenses of printing or
engraving certificates for the Registrable Securities in a form eligible for
deposit with Depository Trust Company and of printing prospectuses), messenger,
telephone and delivery expenses;
(4) fees and disbursements of counsel for the Company and, subject to
Section 4(b), counsel for the selling Holders of the Registrable Securities;
(5) fees and disbursements of all independent certified public
accountants of the Company (including, without limitation, the expenses of any
special audit and, in connection with any underwritten offering, "cold comfort"
letters required by or incident to such performance);
(6) Securities Act liability insurance if the Company so desires or if
the managing underwriters, if any, so require(s);
(7) fees and expenses of other Persons (including special experts)
retained by the Company; and
(8) fees and expenses associated with any NASD filing required to be made
in connection with any Registration Statement or Shelf Registration Statement,
including, if applicable, the fees and expenses of any "qualified independent
underwriter" (and its counsel) that is required to be retained in accordance
with the rules and regulations of the NASD.
The Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the securities to
be registered on each securities exchange on which securities of the same class
are then listed or the qualification for trading of the securities to be
registered in each inter-dealer quotation system in which securities of the same
class are then traded, and rating agency fees.
ii) In connection with each Registration Statement or Shelf
Registration Statement required hereunder, the Company will reimburse the
Holders of Registrable Securities being registered pursuant to such Registration
Statement or Shelf Registration Statement for the reasonable fees and
disbursements of not more than one counsel chosen by the Required Holders of the
Registrable Securities being sold; the expense of any additional counsel for the
Holders shall be paid by the Holders.
(c) The term "Registration Expenses" shall mean the expenses payable by
the Company pursuant to the provisions of this Section 4.
SECTION 5. Conditions to Registration.
Each Holder's right to have Registrable Securities included in any
Registration Statement or Shelf Registration Statement filed by the Company in
accordance with the provisions of Section 2 or Section 3 shall be subject to the
following conditions:
i) The Holders on whose behalf such Registrable Securities are to be
included shall be required to furnish the Company in a timely manner with all
information required by the applicable rules and regulations of the SEC
concerning the proposed method of sale or other disposition of such securities,
the identity of and compensation to be paid to any proposed underwriters to be
employed in connection therewith, and such other information as may be
reasonably required by the Company properly to prepare and file such
Registration Statement or Shelf Registration Statement in accordance with
applicable provisions of the Securities Act;
ii) If any such Holder desires to sell and distribute Registrable
Securities over a period of time, or from time to time, at then prevailing
market prices, then any such Holder shall execute and deliver to the Company
such written undertakings as the Company and its counsel may reasonably require
in order to assure full compliance with relevant provisions of the Securities
Act and the Exchange Act;
iii) In the case of any registration requested pursuant to the
provisions of Section 2, the offering price for any Registrable Securities to be
so registered shall be no less than for any securities of the same class then to
be registered for sale for the account of the Company or other security holders,
unless such Registrable Securities are to be offered from time to time based on
the prevailing market price;
iv) Upon receipt of any notice from the Company of the happening of any
event of the kind described in paragraph (xi) of Section 2(b) or paragraph (xii)
of Section 3(b), such Holder will forthwith discontinue disposition of
Registrable Securities until such Holder's receipt of the copies of the
supplemented Prospectus contemplated by such paragraph, or until it is advised
in writing by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
by reference in the Prospectus, and, if so directed by the Company, such Holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice; and
v) In the case of any underwritten offering on behalf of the Holders of
Registrable Securities, such Holders will enter into such agreements (including
underwriting agreements and lock-up agreements) as the managing underwriters
shall reasonably request and as are customary in similar circumstances.
SECTION 6. Indemnification.
i) Indemnification by the Company. In the event of the registration of
any Registrable Securities under the Securities Act pursuant to the provisions
hereof, the Company will indemnify and hold harmless the seller of such
Registrable Securities, its partners, directors, officers, employees and agents,
each underwriter, broker and dealer, if any, who participates in the offering or
sale of such securities, and each other Person, if any, who controls such seller
or any such underwriter, broker or dealer within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act (each such Person
being hereinafter sometimes referred to as an "Indemnified Person", provided
that for purposes of clauses (b), (c) and (d) of this Section 6 "Indemnified
Person" shall include the Company, its partners, directors, officers, employees
and agents, and each other Person, if any who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act) from and against any losses, claims, damages, liabilities or expenses,
joint or several, to which such indemnified Person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained or incorporated by reference in any Registration Statement, Shelf
Registration Statement, Prospectus or Shelf Prospectus or any amendment or
supplement thereto, or any document incorporated by reference therein, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such Indemnified Person for any
legal or other expenses reasonably incurred by such Indemnified Person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability (i)
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made or incorporated by reference in the
Registration Statement, Shelf Registration Statement, Prospectus or Shelf
Prospectus or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by such Indemnified
Person for use in preparation thereof or (ii) arises out of the use of any
Prospectus or Shelf Prospectus by an Indemnified Party after the Company has
provided such Indemnified Party with the notice and supplement referred to in
Section 2(b)(xi) or Section 3(b)(xii) if such Prospectus or Shelf Prospectus is
the subject of such notice. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Indemnified
Person and shall survive the transfer of such Registrable Securities by such
seller.
ii) Indemnification by Holders of Registrable Securities. In the
event of the registration of any Registrable Securities under the Securities Act
pursuant to the provisions hereof, each Holder on whose behalf such Registrable
Securities shall have been registered will indemnify and hold harmless each and
every Indemnified Person against any losses, claims, damages or liabilities,
joint or several, to which such Indemnified Person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained or incorporated by reference in any Registration Statement, Shelf
Registration Statement, Prospectus or Shelf Prospectus or any amendment or
supplement thereto or any document incorporated by reference therein, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, which untrue statement or alleged untrue statement or
omission or alleged omission has been made or incorporated therein in reliance
upon and in conformity with written information furnished to the Company by such
Holder specifically stating that it is for use in preparation thereof, and will
reimburse each such Indemnified Person for any legal and other expenses
reasonably incurred by such Indemnified Person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the liability of each Holder hereunder shall be limited to the
proceeds received by such Holder from the sale of Registrable Securities covered
by such Registration Statement or Shelf Registration Statement.
iii) Procedure. Promptly after receipt by an Indemnified Person of
notice of the commencement of any action (including any governmental
investigation or inquiry), such Indemnified Person will, if such Indemnified
Person intends to make a claim in respect thereof against the party agreeing to
indemnify such Indemnified Person pursuant to paragraphs (a) or (b) hereof (each
such Person being hereinafter referred to as an "Indemnifying Person"), give
written notice to such Indemnifying Person of the commencement thereof, but the
omission so to notify the Indemnifying Person shall not relieve the Indemnifying
Person from any of its obligations pursuant to the provisions of this Section 6
except to the extent that the Indemnifying Person is actually prejudiced by such
failure to give notice. In case any such action is brought against any
Indemnified Person and it notifies an Indemnifying Person of the commencement
thereof, the Indemnifying Person shall be entitled to participate in, and to the
extent that it may wish, jointly with any other Indemnifying Person similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such Indemnified Person, and after notice from the Indemnifying Person to such
Indemnified Person, the Indemnifying Person shall not, except as hereinafter
provided, be responsible for any legal or other expenses subsequently incurred
by such Indemnified Person in connection with the defense thereof. No
Indemnifying Person will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Person of a release from all
liability in respect of such claim or litigation.
Such Indemnified Person shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be the expense of such Indemnified Person unless
(a) the Indemnifying Person has agreed to pay such fees and expenses or (b) the
Indemnifying Person shall have failed to assume the defense of such action or
proceeding or has failed to employ counsel reasonably satisfactory to such
Indemnified Person in any such action or proceeding or (c) the named parties to
any such action or proceeding (including any impleaded parties) include both
such Indemnified Person and the Indemnifying Person and such Indemnified Person
shall have been advised by counsel that representation of both parties by the
same counsel would be inappropriate due to actual or potential material
differing interests between them (in which case, if such Indemnified Person
notifies the Indemnifying Person in writing that it elects to employ separate
counsel at the expense of the Indemnifying Person, the Indemnifying Person shall
not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Person). The Indemnifying Person shall not be liable for
any settlement of any such action or proceeding effected without its written
consent, which consent shall not unreasonably be withheld, delayed or
conditioned, but if settled with its written consent, or if there is a final
judgment for the plaintiff in any such action or proceeding, the Company agrees
to indemnify and hold harmless such Indemnified Persons from and against any
loss or liability by reason of such settlement or judgment.
iv) Contribution. If the indemnification provided for in this Section
6 is unavailable to a party that would have been an Indemnified Person under
this Section 6 in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to herein, then each party
that would have been an Indemnifying Person thereunder shall, in lieu of
indemnifying such Indemnified Person, contribute to the amount paid or payable
by such Indemnified Person as a result of such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Person on the one
hand and the Indemnified Person on the other in connection with the statement or
omission which resulted in such losses, claims, damages, liabilities or expenses
(or actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission of a material fact relates to information
supplied by the Indemnifying Person or the Indemnified Person and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 6(c), any legal or other fees or expenses reasonably incurred by such
party in connection with the investigation or defense of any action or claim.
The Company and each Holder of Registrable Securities agrees that it would not
be just and equitable if contribution pursuant to this Section 6 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 6.
Notwithstanding the provisions of this Section 6(d), no Holder of Registrable
Securities shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities sold by it exceeds the
amount of any damages which 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.
Indemnification or, if appropriate, contribution, similar to that specified
in the preceding provisions of this Section 6 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of such securities
under any federal or state law or regulation or governmental authority other
than the Securities Act.
In the event of any underwritten offering of Registrable Securities under
the Securities Act pursuant to the provisions of Section 2 or Section 3, the
Company and each Holder on whose behalf such Registrable Securities shall have
been registered agree to enter into an underwriting agreement, in standard form,
with the underwriters, which underwriting agreement may contain additional
provisions with respect to indemnification and contribution in lieu thereof.
SECTION 7. Exchange Act Registration; Rule 144 Reporting.
The Company covenants and agrees that until such time as the Holders no
longer hold any Registrable Securities it will:
i) if required by law, maintain an effective registration
statement (containing such information and documents as the SEC shall specify)
with respect to the Common Stock of the Company under Section 12(g) of the
Exchange Act;
ii) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act (even if the Company
subsequently ceases to be subject to such reporting requirements);
-iii) file with the SEC in a timely manner all reports and documents
required of the Company under the Securities Act and the Exchange Act;
iv) furnish to any Holder promptly upon request (i) a written statement
by the Company as to its compliance with the reporting requirements of Rule 144
(and any similar or successor rules) and of the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of the Company
(beginning after the Company becomes subject to such reporting requirements),
and (iii) such other reports and documents of the Company and other information
in the possession of or reasonably attainable by the Company as such Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing such Holder to sell any such securities without registration; and
v) take such further action as any Holder of Registrable Securities may
from time to time reasonably request to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
rule may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the SEC.
The Company represents and warrants that such registration statement or any
information, document or report filed with the SEC in connection therewith or
any information so made public shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements contained therein not misleading. The
Company agrees to indemnify and hold harmless (or to the extent the same is not
enforceable, make contribution to) the Holders, their partners, officers,
directors, employees and agents, each broker, dealer or underwriter (within the
meaning of the Securities Act) acting for any Holder in connection with any
offering or sale by such Holder of Registrable Securities or any Person
controlling (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) such Holder and any such broker, dealer or
underwriter from and against any and all losses, claims, damages, liabilities
or expenses (or actions in respect thereof) arising out of or resulting from any
breach of the foregoing representation or warranty, all on terms and conditions
comparable to those set forth in Section 6.
SECTION 8. Limitation on Registration Rights of Others.
The Company represents and warrants that, except as set forth on Schedule I
to this Agreement, it has not granted to any Person the right to request or
require the Company to register any securities issued by the Company. The
Company covenants and agrees that after the date hereof, so long as any Holder
holds any Warrant Securities, the Company will not, directly or indirectly,
grant to any Person (except as provided in Section 3(a) hereof) or agree to or
otherwise become obligated in respect of (a) any registration rights of
securities of the Company upon the demand of any Person (including any shelf
registration) without the prior written consent of the Required Holders; or (b)
rights of registration in the nature or substantially in the nature of those set
forth in Section 2 unless such rights are expressly subject and subordinated to
the rights of registration of the Holders pursuant to Section 2 hereof on terms
reasonably satisfactory to the Required Holders.
SECTION 9. Mergers, etc.
In addition to any other restrictions on mergers, consolidations and
reorganizations contained in the Credit Agreement, the Warrant Agreement or in
the certificate of incorporation, by-laws or agreements of the Company, the
Company covenants and agrees that it shall not, directly or indirectly, enter
into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation and in which the Holders shall not have had the
right to receive cash for all their Registrable Securities, unless the surviving
corporation shall, prior to such merger, consolidation or reorganization, agree
in a writing satisfactory in form, scope and substance to the Required Holders
to assume the obligations of the Company under this Agreement, and for such
purpose references hereunder to "Registrable Securities" shall be deemed to
include the securities which such Holders would be entitled to receive in
exchange for Registrable Securities pursuant to any such merger, consolidation
or reorganization.
If, and as often as, there are any changes in the Registrable Securities by
way of stock split, stock dividend, combination or classification, or through
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustments shall be made in the provisions hereof as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Registrable Securities as so changed.
SECTION 10. Notices, etc.
All notices, consents, approvals, agreements and other communications
provided hereunder shall be in writing or by telex or telecopy and shall be
sufficiently given to the Purchaser, the Holders and the Company if addressed or
delivered to them at the following addresses:
If to the Purchaser: ING Capital
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Credit Officer
Telecopier No.: (000) 000-0000
with copies to: ING Capital LLC
Acquisition Finance Group
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
and a copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Xx., Esq.
Telecopier No.: (000) 000-0000
If to any other At its last known address appearing
Holder: on the books of the Company maintained for such
purpose
If to the Company: Creative Host Services, Inc.
00000 Xxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxx
Telecopier No.: (000) 000-0000
or at such other address as any party may designate to any other party by
written notice. All such notices and communications shall be deemed to have
been duly given: (i) at the time delivered by hand, if personally delivered,
(ii) when received, if deposited in the mail, postage prepaid, (iii) when
transmission is verified, if telecopied, and (iv) on the next Business Day, if
timely delivered to an air courier guaranteeing overnight delivery.
SECTION 11. Entire Agreement.
The parties hereto agree that this Agreement and the agreements
specifically referred to in Section 33 of the Warrant Agreement constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings between them as to such
subject matter; and there are no restrictions, agreements, arrangements, oral or
written, between any or all of the parties relating to the subject matter hereof
which are not fully expressed or referred to herein or therein.
SECTION 12. Waivers and Further Agreements.
Any waiver of any terms or conditions of this Agreement shall not operate
as a waiver of any other breach of such terms or conditions or any other term or
condition, nor shall any failure to enforce any provision hereof operate as a
waiver of such provision or of any other provision hereof; provided, however,
that no such written waiver unless it by its own terms explicitly provides to
the contrary, shall be construed to effect a continuing waiver of the provision
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision. Each of the parties hereto agrees
to execute all such further instruments and documents and to take all such
further action as the other parties may reasonably require in order to
effectuate the terms and purposes of this Agreement.
SECTION 13. Amendments.
This Agreement may not be amended nor shall any waiver, change,
modification, consent or discharge be effected except by an instrument in
writing executed by or on behalf of the party or parties against whom
enforcement of any amendment, waiver, change, modification, consent or discharge
is sought; provided, however, that any waiver sought from the Holders of any
provision of this Agreement which affects the Holders generally, and any action
required to be taken by the Holders as a group pursuant to this Agreement, shall
be given or taken by the Required Holders, and any such waiver or action so
given or taken shall be binding on all Holders. No failure or delay by any
party in exercising any right or remedy hereunder shall operate as a waiver
thereof, and a waiver of a particular right or remedy on one occasion shall not
be deemed a waiver of any other right or remedy or a waiver of the same right or
remedy on any subsequent occasion.
SECTION 14. Assignment; Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, executors, legal representatives,
successors and permitted assigns, including, without limitation, any Holders,
from time to time of the Registrable Securities. Anything in this Agreement to
the contrary notwithstanding, the term "Holders" as used in this Agreement shall
be deemed to include the registered Holders from time to time of the Warrant
Securities.
SECTION 15. Severability.
If any provision of this Agreement shall be held or deemed to be, or shall
in fact be, invalid, inoperative or unenforceable as applied to any particular
case in any jurisdiction or jurisdictions, or in all jurisdictions or in all
cases, because any provision conflicts with any constitution, statute, rule or
public policy, or for any other reason, such circumstance shall not have the
effect of rendering the provision or provisions in question, invalid,
inoperative or unenforceable in any other jurisdiction or in any other case or
circumstance or of rendering any other provision or provisions herein contained
invalid, inoperative or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute, rule or
public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative or unenforceable provision
had never been contained herein and such provision reformed so that it would be
valid, operative and enforceable to the maximum extent permitted in such
jurisdiction or in such case.
SECTION 16. Counterparts.
This Agreement may be executed in two or more counterparts (each of which
need not be executed by each of the parties), each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument, and in pleading or proving any provision of this Agreement, it shall
not be necessary to produce more than one such counterpart.
SECTION 17. Section Headings.
The headings contained in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
SECTION 18. Gender; Usage.
Whenever used herein the singular number shall include the plural, the
plural shall include the singular, and the use of any gender shall include all
genders. The words "hereof," "herein" and "hereunder," and words of similar
import, when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
SECTION 19. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN THE CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 20. Termination.
The rights of any Holder under Sections 2 and 3 of this Agreement shall
terminate as to any Registrable Securities when such Registrable Securities have
been effectively registered under the Securities Act and sold pursuant to a
Registration Statement or Shelf Registration Statement covering such Registrable
Securities. The indemnification and contribution provisions of Sections 6 and 7
shall survive any termination of this Agreement.
SECTION 21. Expenses.
The Company shall be obligated to pay to the Holders, on demand, all costs
and expenses (includ-ing, without limitation, court costs and attorneys' fees
and expenses and interest to the extent permitted by applicable law on overdue
amounts) paid or incurred in collecting any sums due from, or enforcing any
other obligations of, the Company.
SECTION 22. Specific Performance.
The Company recognizes that the rights of the Holders under this Agreement
are unique and, accordingly, the Holders shall, in addition to such other
remedies as may be available to any of them at law or in equity, have the right
to enforce their rights hereunder by actions for injunctive relief and specific
performance to the extent permitted by law. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate. This Agreement is not intended to limit or abridge any rights of the
Holders which may exist apart from this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
CREATIVE HOST SERVICES, INC.
By: /s/ Xxxxx Xxx
---------------
Name: Xxxxx Xxx
Title: President
ING Capital LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Managing Director
