EXHIBIT 99.3
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
December 7, 2001, by and among CSK Auto Corporation, a Delaware corporation,
with headquarters located at 000 X. Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000 (the
"Company"), and the undersigned buyers (each, a "Buyer" and collectively, the
"Buyers").
WHEREAS:
A. In connection with the Securities Purchase Agreement
by and among the parties hereto of even date herewith (the "Securities Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to issue and sell to the Buyers
an aggregate of (i) $50,000,000 of the Company's 7% Convertible Debentures, plus
such additional amount as may be added to such principal amount pursuant to the
second paragraph thereof (the "Convertible Debentures"), which will be
convertible into shares of the Company's common stock, par value $0.01 per share
(the "Common Stock") (as converted, the "Conversion Shares") and (ii) the
Company's Make-Whole Warrants (the "Warrants") to purchase shares of Common
Stock (as exercised collectively, the "Warrant Shares"), or, if required by the
Securities Purchase Agreement, to issue the Break-Up Shares (as defined in the
Securities Purchase Agreement;
B. To induce the Buyers to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws; and
C. The location of defined terms in this Agreement is
set forth on the Index of Terms attached hereto.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
a. "Business Day" means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.
b. "Investor" means a Buyer, any transferee or
assignee thereof to whom a Buyer assigns its rights under this Agreement and who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9 and any transferee or assignee thereof to whom a transferee or
assignee assigns its rights under this Agreement and who agrees to become bound
by the provisions of this Agreement in accordance with Section 9.
c. "Person" means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and governmental or any department or agency
thereof.
d. "register," "registered," and "registration"
refer to a registration effected by preparing and filing one or more
Registration Statements (as defined below) in compliance with the 1933 Act and
pursuant to Rule 415 under the 1933 Act or any successor rule providing for
offering securities on a continuous or delayed basis ("Rule 415"), and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the United States Securities and Exchange Commission (the "SEC").
e. "Registrable Securities" means (i) the
Conversion Shares issued or issuable upon conversion of the Convertible
Debentures, (ii) the Interest Shares (as defined in the Convertible Debentures)
issued or issuable, (iii) the Warrant Shares issued or issuable upon exercise of
the Warrants, (iv) the Break-Up Shares, if any, issued and (v) any shares of
capital stock issued or issuable with respect to the Conversion Shares, the
Convertible Debentures, the Interest Shares, the Warrant Shares, the Warrants or
the Break-Up Shares as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on conversions of the Convertible Debentures.
f. "Registration Statement" means a
registration statement or registration statements of the Company filed under the
1933 Act covering the resale of Registrable Securities.
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Securities Purchase
Agreement.
2. Registration.
a. Mandatory Registration. The Company shall
prepare, and, as soon as practicable but in no event later than thirty (30) days
after the earlier of (i) the Closing Date (as defined in the Securities Purchase
Agreement) or (ii) the Closing Deadline (as defined in the Securities Purchase
Agreement) (the "Closing Filing Deadline"), file with the SEC a Registration
Statement or Registration Statements (as provided for below in this Section
2(a)) on Form S-3 covering the resale of all of the Registrable Securities
(other than the Break-Up Shares) if a closing has occurred on or prior to the
Closing Deadline or the Break-Up Shares if such closing has not occurred. In the
event that Form S-3 is unavailable for such a registration, the Company shall
use such other form as is available for such a registration, subject to the
provisions of Section 2(d). The Registration Statement referenced above shall
register for resale (i) at least 12.7 million shares of Common Stock if a
closing has occurred on or prior to the Closing Deadline or (ii) if Break-Up
Shares are issued, the number of Break-Up Shares. The Company
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shall use its best efforts to have the Registration Statement declared effective
by the SEC as soon as practicable, on or before the date which is one hundred
twenty (120) days after the Closing Filing Deadline (the "Closing Effectiveness
Deadline"). To the extent that a closing occurs during the Post-Closing
Participation Period (as defined in the Securities Purchase Agreement) and the
Registration Statement filed with respect to the Closing Filing Deadline has not
yet been declared effective by the SEC, the Company shall amend such
Registration Statement to include the Convertible Debentures and Warrants be
issued during the Post-Closing Participation Period and at least 125% of the
number of shares then issuable upon conversion of such Convertible Debentures
and exercise of such Warrants assuming a conversion price or exercise price, as
applicable, of 62.5% of the Standard Conversion Price in effect at the time of
issuance (the "Post-Closing Securities"). To the extent that a closing occurs
during the Post-Closing Participation Period and the Registration Statement
filed with respect to the Closing Filing Deadline has already been declared
effective by the SEC without inclusion of the Post-Closing Securities, the
Company shall file a new Registration Statement on Form S-3 covering the resale
of all such securities within thirty (30) days following such closing (the
"Post-Closing Filing Deadline" and collectively with the Closing Filing
Deadline, the "Filing Deadlines"). In the event that Form S-3 is unavailable for
such a registration, the Company shall use such other form as is available for
such a registration, subject to the provisions of Section 2(d). The Company
shall use its best efforts to have such Registration Statement declared
effective by the SEC as soon as practicable, on or before the date which is one
hundred twenty (120) days after the Post-Closing Filing Deadline (the
"Post-Closing Security Effectiveness Deadline" and collectively with the Closing
Effectiveness Deadline, the "Effectiveness Deadlines").
b. Allocation of Registrable Securities. The
initial number of Registrable Securities included in any Registration Statement
and each increase in the number of Registrable Securities included therein shall
be allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time the Registration Statement covering
such initial number of Registrable Securities or increase thereof is declared
effective by the SEC. Any shares of Common Stock included in a Registration
Statement and which remain allocated to any Person which ceases to hold any
Registrable Securities covered by such Registration Statement shall be allocated
to the remaining Investors, pro rata based on the number of Registrable
Securities then held by such Investors which are covered by such Registration
Statement. Without the prior written consent of Buyers holding at least 75% of
the Registrable Securities and LBI Group Inc and its affiliates ("Xxxxxx") for
so long as Xxxxxx holds not less than $10 million in principal amount of
Convertible Debentures (or shares of Common Stock attributable to conversion of
such Convertible Debentures), the Company shall not (i) include on any
Registration Statement required to be filed pursuant to Section 2(a) any
securities other than (A) Registrable Securities and (B) securities held by
Xxxxxxxxxxx Capital Fund ("Xxxxxxxxxxx") and subject to the Registration Rights
Agreement dated August 14, 2001 between the Company and Xxxxxxxxxxx, or (ii)
file any registration statement with the SEC (other than a registration
statement on Form S-8 or Form S-4 or any successor form to such forms or a
registration statement required under the registration rights agreement entered
into in connection with the Company's Senior Notes issued on or about the
Closing Date) prior to the date on which the Registration Statement required to
be filed pursuant to Section 2(a) is declared to be effective.
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c. Legal Counsel. Subject to Section 5 hereof,
the Buyers shall have the right to select one legal counsel to review and
oversee any registration pursuant to this Section 2 ("Legal Counsel"), which
shall be Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx or such other counsel as
thereafter designated by the holders of at least 75% of the Registrable
Securities and Xxxxxx for so long as Xxxxxx holds not less than $10 million in
principal amount of Convertible Debentures (or shares of Common Stock
attributable to conversion of such Convertible Debentures). The Company and
Legal Counsel shall reasonably cooperate with each other in performing the
Company's obligations under this Agreement.
d. Ineligibility for Form S-3. In the event
that Form S-3 is not available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the resale of the
Registrable Securities on another appropriate form unless holders of at least
25% of the Registrable Securities or Xxxxxx for so long as Xxxxxx holds not less
than $10 million in principal amount of Convertible Debentures (or shares of
Common Stock attributable to conversion of such Convertible Debentures)
reasonably object and (ii) undertake to register the Registrable Securities on
Form S-3 as soon as such form is available, provided that, subject to Section
3(r), the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the SEC.
e. Sufficient Number of Shares Registered. In
the event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement or an
Investor's allocated portion of the Registrable Securities pursuant to Section
2(b), the Company shall amend the Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to register at least 150% of the number of such Registrable
Securities as of the trading day immediately preceding the date of the filing of
such amendment or new Registration Statement, in each case, as soon as
practicable, but in any event not later than fifteen (15) Business Days after
the necessity therefor arises. The Company shall use its best efforts to cause
such amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof. For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed "insufficient to cover all of the Registrable Securities" if at any
time the number of Registrable Securities covered by such Registration Statement
is less than 120% of the total number of shares of Common Stock then
constituting Registrable Securities (excluding such shares no longer owned by
the Buyers). The calculation set forth in the foregoing sentence (i) shall be
made without regard to any limitations on the conversion of the Convertible
Debentures or the exercise of the Warrants, (ii) shall assume that the
Convertible Debentures and the Warrants are then convertible into shares of
Common Stock, (iii) shall include a number of Interest Shares equal to the
number that would be issuable in respect of interest payments during a period of
one year on the initial outstanding principal amount of the Convertible
Debentures and (iv) shall assume no redemptions of the Convertible Debentures
prior to the scheduled maturity date. The foregoing calculations shall further
assume that the Registrable Securities are issuable at the then prevailing
Conversion Price (as defined in the Convertible Debentures), Warrant Exercise
Price (as defined in the Warrants) or Interest Share Conversion Rate (as defined
in the Convertible Debentures), as applicable.
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f. Effect of Failure to File and Obtain and
Maintain Effectiveness of Registration Statement. If (i) a Registration
Statement required to be filed by the Company pursuant to this Agreement is (A)
not filed with the SEC on or before the applicable Filing Deadline or (B) not
declared effective by the SEC on or before the applicable Effectiveness Deadline
or (ii) on any day after such Registration Statement has been declared effective
by the SEC sales of all the Registrable Securities required to be included on
such Registration Statement cannot be made (other than during an Allowable Grace
Period (as defined in Section 3(r)) pursuant to such Registration Statement
(including, without limitation, because of a failure to keep such Registration
Statement effective, to disclose such information as is necessary for sales to
be made pursuant to such Registration Statement or to register sufficient shares
of Common Stock), then, as relief for the damages to any holder by reason of any
such delay in or reduction of its ability to sell the underlying shares of
Common Stock (which remedy shall not be exclusive of any other remedies
available at law or equity), the Company shall pay to each holder of Convertible
Debentures relating to such Registration Statement an amount equal to the
product of (i) the Outstanding Principal Amount (as such term is defined in the
Convertible Debentures) multiplied by (ii) the product of (I) 0.0005 multiplied
by (II) the sum of (x) the number of days after the applicable Filing Deadline
that the Registration Statement is not filed with the SEC, plus (y) the number
of days after the applicable Effectiveness Deadline that the Registration
Statement is not declared effective by the SEC, plus (z) the number of days
after the Registration Statement has been declared effective by the SEC that
such Registration Statement is not available (other than during an Allowable
Grace Period) for the sale of all the Registrable Securities required to be
included on such Registration Statement. The payments to which a holder shall be
entitled pursuant to this Section 2(f) are referred to herein as "Registration
Delay Payments." Registration Delay Payments shall be paid in the form of Common
Stock on the earlier of (I) the last day of the calendar month during which such
Registration Delay Payments are incurred and (II) the third Business Day after
the event or failure giving rise to the Registration Delay Payments is cured.
The number of shares of Common Stock to be issued for any Registration Delay
Payment shall be the amount of such Registration Delay Payment divided by the
average Closing Sale Price (as defined in the Debentures) of the Common Stock
for the five (5) trading days immediately preceding the date of payment. In the
event the Company fails to make Registration Delay Payments in a timely manner,
such Registration Delay Payments shall bear interest at the rate of 1.5% per
month (prorated for partial months) until paid in full.
(g) Incidental Registration.
(i) Right to Include Registrable Securities. If,
at any time or from time to time prior to the effectiveness of a Registration
Statement or during the suspension thereof other than an Allowable Grace Period,
the Company proposes to register any of its securities under the 1933 Act (other
than in a registration on Form S-4 or S-8 or any successor form to such forms or
a registration statement required under the registration rights agreement
entered into in connection with the Senior Notes issued on or about the Closing
Date and other than pursuant to Section 2) whether or not pursuant to
registration rights granted to other holders of its securities and whether or
not for sale for its own account, the Company shall deliver prompt written
notice (which notice shall be given at least thirty (30) days prior to the
effectiveness of such proposed registration) to all holders of Registrable
Securities of its intention to undertake such registration, describing in
reasonable detail the proposed registration
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and distribution (including the anticipated range of the proposed offering
price, if known, the class and number of securities proposed to be registered
and the distribution arrangements) and of such holders' right to participate in
such registration under this Section 2(g) as hereinafter provided. Subject to
the other provisions of this paragraph (i) and paragraph (ii), upon the written
request of any holder of Registrable Securities made within ten (10) days after
the receipt of such written notice (which request shall specify the amount of
Registrable Securities to be registered and the intended method of disposition
thereof), the Company shall effect the registration under the 1933 Act of all
Registrable Securities requested by the holders thereof to be so registered (an
"Incidental Registration"), to the extent requisite to permit the disposition
(in accordance with the intended methods thereof as aforesaid) of the
Registrable Securities so to be registered, by inclusion of such Registrable
Securities in the registration statement which covers the securities which the
Company proposes to register (the "Incidental Registration Statement"). If an
Incidental Registration involves an underwritten public offering, promptly upon
notification to the Company from the underwriter of the price at which such
securities are to be sold, the Company shall so advise each participating holder
of Registrable Securities. The holders of Registrable Securities requesting
inclusion in an Incidental Registration may, at any time prior to the effective
date of the Incidental Registration Statement (and for any reason), revoke such
request by delivering written notice to the Company revoking such requested
inclusion.
If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Incidental
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, (A) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the registration expenses
incurred in connection therewith), without prejudice, however, to the rights of
holders to cause such registration to be effected as a registration under
Section 2, and (B) in the case of a determination to delay such registration,
the Company shall be permitted to delay the registration of such Registrable
Securities for the same period as the delay in registering such other
securities; provided, however, that if such delay shall extend beyond one
hundred twenty (120) days from the date the Company received a request to
include Registrable Securities in such Incidental Registration, then the Company
shall again give all holders the opportunity to participate therein and shall
follow the notification procedures set forth in the preceding paragraph. There
is no limitation on the number of such Incidental Registrations pursuant to this
Section 2(g) which the Company is obligated to effect.
The registration rights granted pursuant to the provisions of
this Section 2(g) shall be in addition to the registration rights granted
pursuant to the other provisions of Section 2 hereof.
(ii) Priority in Incidental Registration. If an
Incidental Registration involves an underwritten public offering (on a firm
commitment basis), and the sole or the lead managing underwriter, as the case
may be, of such underwritten public offering shall advise the Company in writing
(with a copy to each holder of Registrable Securities requesting registration)
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on or before the date five (5) days prior to the date then scheduled for such
offering that, in its opinion, the amount of securities (including Registrable
Securities) requested to be included in such registration exceeds the amount
which can be sold in such offering without materially interfering with the
successful marketing of the securities being offered (such writing to state the
basis of such opinion and the approximate number of such securities which may be
included in such offering without such effect), the Company shall include in
such registration, to the extent of the number which the Company is so advised
may be included in such offering without such effect, (i) in the case of a
registration initiated by the Company, (A) first, the Registrable Securities
requested to be included in such registration by the holders, allocated pro rata
in proportion to the number of Registrable Securities requested to be included
in such registration by each of them, (B) second, the securities that the
Company proposes to register for its own account, and (C) third, other
securities of the Company to be registered on behalf of any other Person, (ii)
in the case of a registration initiated by a Person other than the Company, (A)
first, the securities requested to be included in such registration by any
Persons initiating such registration, allocated pro rata in proportion to the
number of securities requested to be included in such registration by each of
them, (B) second, the Registrable Securities requested to be included in such
registration by the holders thereof and other securities of the company to be
registered on behalf of any other Person, allocated pro rata in proportion to
the number of securities requested to be included in such registration by each
of them and (C) third, the securities that the Company proposes to register for
its own account In the event the Company will not, in accordance with the terms
of this Section 2(g)(ii), include in any registration hereunder all of the
securities of any holder requested to be included in such registration, and any
such holder determines not to include any or all of its securities in such
registration, then the holders not so reducing shall be entitled to a
corresponding increase in the amount of securities to be included in such
registration.
3. Related Obligations.
At such time as the Company is obligated to file a
Registration Statement with the SEC pursuant to Section 2(a), 2(d), 2(e) or 2(g)
(subject to the second paragraph of clause 2(g)(i)), the Company will use its
best efforts to effect the registration of the Registrable Securities in
accordance with the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following obligations:
a. The Company shall promptly prepare and file
with the SEC a Registration Statement with respect to the Registrable Securities
(but in no event later than the applicable Filing Deadline) and use its best
efforts to cause such Registration Statement relating to the Registrable
Securities required to be covered thereby to become effective as soon as
practicable after such filing, on or before the applicable Effectiveness
Deadline. The Company shall keep each Registration Statement effective pursuant
to Rule 415 at all times until the earlier of (i) the date as of which the
Investors may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144(k) (or successor
thereto) promulgated under the 1933 Act or (ii) the date on which the Investors
shall have sold all the Registrable Securities covered by such Registration
Statement (the "Registration Period"), which Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a
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material fact required to be stated therein, or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading. The term "best efforts" shall mean, among other things, that the
Company shall submit to the SEC, within two (2) Business Days after the Company
learns that no review of a particular Registration Statement will be made by the
staff of the SEC or that the staff has no further comments on the Registration
Statement, as the case may be, and the approval of Legal Counsel pursuant to
Section 3(c), a request for acceleration of effectiveness of such Registration
Statement to a time and date not later than 48 hours after the submission of
such request.
b. Subject to Section 3(r), the Company shall
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement and the prospectus
used in connection with such Registration Statement, which prospectus is to be
filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary
to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company shall
have incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.
c. The Company shall (A) permit Legal Counsel
to review and comment upon (i) the initial Registration Statement at least five
(5) Business Days prior to its filing with the SEC and (ii) all other
Registration Statements and all amendments and supplements to all Registration
Statements (except for Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K and any similar or successor reports)
within a reasonable number of days prior to their filing with the SEC, and (B)
not file any Registration Statement or amendment or supplement thereto in a form
to which Legal Counsel reasonably objects. The Company shall not submit a
request for acceleration of the effectiveness of a Registration Statement under
Sections 2(a), (d) or (e) or any amendment or supplement thereto without the
prior approval of Legal Counsel, which consent shall not be unreasonably
withheld. The Company shall furnish to Legal Counsel, without charge, (i) copies
of any correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (ii) promptly after the
same is prepared and filed with the SEC, one copy of any Registration Statement
and any amendment(s) thereto, including financial statements and schedules, and
if requested by such Legal Counsel, all documents incorporated therein by
reference and all exhibits and (iii) upon the effectiveness of any Registration
Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto. The Company shall reasonably
cooperate with Legal Counsel in performing the Company's obligations pursuant to
this Section 3.
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d. The Company shall furnish to each Investor
whose Registrable Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules and if requested by an Investor, all
documents incorporated therein by reference all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10)
copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request) and (iii) such other documents, including
copies of any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor.
e. Subject to Section 3(r), the Company shall
use its reasonable best efforts, if reasonably requested by an Investor in
writing, to (i) register and qualify, unless an exemption from registration and
qualification applies, the resale by such Investor of the Registrable Securities
covered by the Registration Statement under such other securities or "blue sky"
laws of applicable jurisdictions in the United States, (ii) prepare and file in
those jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary to qualify the Registrable
Securities for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to (x)
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(e), (y) subject itself to general
taxation in any such jurisdiction, or (z) file a general consent to service of
process in any such jurisdiction. The Company shall promptly notify Legal
Counsel and each Investor who holds Registrable Securities of the receipt by the
Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the
securities or "blue sky" laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threatening of any proceeding for
such purpose.
f. The Company shall notify Legal Counsel and
each Investor in writing of the happening of any event, as promptly as
practicable after becoming aware of such event, as a result of which the
prospectus included in a Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (provided that in
no event shall such notice contain any material, nonpublic information), and,
subject to Section 3(r), promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver
ten (10) copies of such supplement or amendment to Legal Counsel and each
Investor (or such other number of copies as Legal Counsel or such Investor may
reasonably request). The Company shall also promptly notify Legal Counsel and
each Investor in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to Legal Counsel and each Investor by facsimile
on the
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same day of such effectiveness and by overnight mail), (ii) of any request by
the SEC for amendments or supplements to a Registration Statement or related
prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.
g. Subject to Section 3(r), the Company shall
use its reasonable best efforts to prevent the issuance of any stop order or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of the Registrable Securities for sale in any
applicable jurisdiction and, if such an order or suspension is issued, to obtain
the withdrawal of such order or suspension at the earliest practicable moment
and to notify Legal Counsel and each Investor who holds Registrable Securities
being sold of the issuance of such order and the resolution thereof or its
receipt of actual notice of the initiation or threat of any proceeding for such
purpose.
h. At the reasonable request of any Investor in
connection with an underwritten public offering of Registrable Securities by
such Investor, the Company shall furnish to each underwriter in such
underwritten public offering with a copy to each requesting Investor, on such
date as an Investor may reasonably request (i) a letter, dated such date, from
the Company's independent certified public accountants in form and substance as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to such underwriters, and (ii) an
opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to such underwriters.
i. The Company shall make available for
inspection by (i) any Investor, (ii) Legal Counsel and (iii) one firm of
accountants or other agents retained by the Investors (collectively, the
"Inspectors"), all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the "Records")
at the offices where normally kept, during normal business hours, as shall be
reasonably deemed necessary by each Inspector, and cause the Company's officers,
directors and employees to supply all information which any Inspector may
reasonably request; provided, however, that each Inspector shall agree to hold
in strict confidence and shall not make any disclosure (except to an Investor)
or use of any Record or other information which the Company determines in good
faith to be confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the 1933 Act, (b) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement of which the Inspector has knowledge. Each Investor
agrees that it shall, upon learning that disclosure of such Records is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing herein (or in any
other confidentiality agreement between
10
the Company and any Investor) shall be deemed to limit the Investors' ability to
sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.
j. The Company shall hold in confidence and not
make any disclosure of information concerning an Investor provided to the
Company unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other final, non-appealable order from a court or governmental body
of competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement
or any other agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Investor and allow such Investor, at the
Investor's expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.
k. The Company shall use its best efforts
either to (i) cause all the Registrable Securities covered by a Registration
Statement to be listed on each securities exchange on which securities of the
same class or series issued by the Company are then listed, if any, if the
listing of such Registrable Securities is then permitted under the rules of such
exchange, or (ii) if securities of the same class or series issued by the
Company are then quoted on the Nasdaq National Market, list all of the
Registrable Securities covered by the Registration Statement on the Nasdaq
National Market if the listing of such Registrable Securities is then permitted
under the rules of the National Association of Securities Dealers, Inc.
("NASD"), or (iii) if securities of the same class or series issued by the
Company are not listed on any exchange or on the Nasdaq National Market, the
Company shall use its best efforts to secure the inclusion for quotation on The
Nasdaq SmallCap Market for such Registrable Securities and, without limiting the
generality of the foregoing, to use its best efforts to arrange for at least two
market makers to register with the NASD as such with respect to such Registrable
Securities. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(k).
l. The Company shall cooperate with the
Investors who hold Registrable Securities being offered and, to the extent
applicable, facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be
in such denominations or amounts, as the case may be, as the Investors may
reasonably request and registered in such names as the Investors may request.
m. If requested by an Investor, the Company
shall as soon as practicable incorporate in a prospectus supplement or
post-effective amendment by filing such prospectus supplement or post-effective
amendment or by supplementing or making amendments to any Registration Statement
such information as an Investor reasonably requests to be included therein
relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the number of Registrable
Securities being offered or sold, the purchase price being paid therefor and any
other terms of the offering of the Registrable Securities to be sold in such
offering.
11
n. The Company shall use its reasonable best
efforts to cause the Registrable Securities covered by a Registration Statement
to be registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
o. The Company shall make generally available
to its security holders as soon as practical, but not later than ninety (90)
days after the close of the period covered thereby, an earnings statement (in
form complying with, and in the manner provided by, the provisions of Rule 158
under the 0000 Xxx) covering a twelve-month period beginning not later than the
first day of the Company's fiscal quarter next following the effective date of a
Registration Statement.
p. The Company shall use its best efforts to
comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.
q. Within two (2) Business Days after a
Registration Statement which covers Registrable Securities is ordered effective
by the SEC, the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Investors whose Registrable Securities are included in such
Registration Statement) confirmation that such Registration Statement has been
declared effective by the SEC in the form attached hereto as Exhibit A.
r. Notwithstanding anything to the contrary
herein, at any time after the Registration Statement has been declared effective
by the SEC, the Company may (i) suspend the use of the Registration Statement if
an event occurs and is continuing as a result of which the Registration
Statement would, in the good faith opinion of the Board of Directors of the
Company and its counsel, contain an untrue statement of material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading or (ii)
delay the disclosure of material non-public information concerning the Company
the disclosure of which at the time is not, in the good faith opinion of the
Board of Directors of the Company and of counsel to the Company, in the best
interests of the Company (clauses (i) and (ii) together, a "Grace Period");
provided, that the Company shall promptly (i) notify the Investors in writing of
the existence of such event or of such material non-public information giving
rise to a Grace Period (provided that in each notice the Company will not
disclose the content of such material non-public information to the Investors)
and the date on which the Grace Period will begin, and (ii) notify the Investors
in writing of the date on which the Grace Period ends; and, provided further,
that during any three hundred sixty five (365) day period no more than two such
Grace Periods shall be permitted and such Grace Periods shall not exceed an
aggregate of forty-five (45) days (an "Allowable Grace Period"). For purposes of
determining the length of a Grace Period above, the Grace Period shall begin on
and include the date the Investors receive the notice referred to in clause (i)
and shall end on and include the later of the date the Investors receive the
notice referred to in clause (ii) and the date referred to in such notice. The
provisions of Section 3(g) hereof shall not be applicable during the period of
any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) with respect to the
information giving rise thereto unless such material non-public information is
no longer applicable. Each Holder agrees, if timely requested by the Company in
writing in an
12
underwritten sale of securities of the Company, not to make any public sale or
distribution under the 1933 Act of any Registrable Securities (except as part of
such registration), during the time period reasonably requested by the sole or
lead managing underwriter not to exceed ninety (90) days (the "Black-out
Period"); provided, that all officers and directors of the Company and
beneficial owners of 1% or more of the Company's Common Stock are bound by the
same restriction and no such officer, director or owner is treated more
favorably than the holders of the Registrable Securities with respect to said
lock-up. Notwithstanding the foregoing, in no event shall all Grace Periods
and/or Black-out Periods in any three hundred sixty five (365) day period exceed
a total of ninety (90) days.
4. Obligations Of The Investors.
a. On or before the later to occur of two (2)
Business Days following the Company's receipt of an Investor's written request
to have its Registrable Securities included in a Registration Statement pursuant
to this Agreement in accordance with section 2(g)(i) and seven (7) Business Days
prior to the first anticipated filing date of a Registration Statement, the
Company shall notify each such requesting Investor in writing of the information
the Company requires from each such Investor if such Investor elects to have any
of such Investor's Registrable Securities included in such Registration
Statement. It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company at least three (3) Business Days prior to the anticipated filing
date such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it
as shall be reasonably required to effect the effectiveness of the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.
b. Each Investor, by such Investor's acceptance
of the Registrable Securities, agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation and
filing of any Registration Statement hereunder, unless such Investor has
notified the Company in writing of such Investor's election to exclude all of
such Investor's Registrable Securities from such Registration Statement.
c. Each Investor agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in the first sentence of Section 3(f) or Section 3(g), such Investor will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended prospectus
contemplated by the first sentence of Section 3(f) or receipt of notice that no
supplement or amendment is required or, in the case of Section 3(g), the
withdrawal of such stop order or other suspension. Notwithstanding anything to
the contrary, the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of an Investor in accordance with the
terms of the Securities Purchase Agreement in connection with any sale of
Registrable Securities with respect to which an Investor has entered into a
contract for sale prior to the Investor's receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f) and for which the Investor has not yet settled.
13
5. Expenses Of Registration.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.
The Company shall also reimburse the Investors for the fees and disbursements of
Legal Counsel in connection with registration, filing or qualification pursuant
to Sections 2 and 3 of this Agreement which amount shall be limited to $20,000.
In addition, the Company shall pay all of the Investors' reasonable costs
(including legal fees) incurred in connection with the successful enforcement of
the Investors' rights hereunder.
6. Indemnification.
In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the
Company will, and hereby does, indemnify, hold harmless and defend each
Investor, the directors, officers, partners, employees, agents, representatives
of, and each Person, if any, who controls any Investor within the meaning of the
1933 Act or the 1934 Act (each, an "Indemnified Person"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
several, (collectively, "Claims") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto ("Indemnified
Damages"), to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other "blue sky" laws of any jurisdiction
in which Registrable Securities are offered ("Blue Sky Filing"), or the omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any material violation
of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, "Violations"). Subject to Section 6(c), the Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such
14
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply to
a Claim by an Indemnified Person arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company by such Indemnified Person for such Indemnified Person expressly
for use in connection with the preparation of the Registration Statement or any
such amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d); (ii) with respect to any
preliminary prospectus, shall not inure to the benefit of any such person from
whom the person asserting any such Claim purchased the Registrable Securities
that are the subject thereof (or to the benefit of any person controlling such
person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then amended or
supplemented, if such prospectus was timely made available by the Company
pursuant to Section 3(d), and the Indemnified Person was promptly advised in
writing not to use the incorrect prospectus prior to the use giving rise to a
violation and such Indemnified Person, notwithstanding such advice, used it or
failed to deliver the correct prospectus as required by the 1933 Act and such
correct prospectus was timely made available pursuant to Section 3(d); (iii)
shall not be available to the extent such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by
the Company, including a corrected prospectus, if such prospectus or corrected
prospectus was timely made available by the Company pursuant to Section 3(d);
and (iv) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
b. In connection with any Registration
Statement in which an Investor is participating, each such Investor agrees to
severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 6(a), the Company, each
of its directors, each of its officers who signs the Registration Statement and
each Person, if any, who controls the Company within the meaning of the 1933 Act
or the 1934 Act (each, an "Indemnified Party"), against any Claim or Indemnified
Damages to which any of them may become subject, under the 1933 Act, the 1934
Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or
are based upon any Violation, in each case to the extent, and only to the
extent, that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement; and, subject to Section 6(c),
such Investor will reimburse any legal or other expenses reasonably incurred by
an Indemnified Party in connection with investigating or defending any such
Claim; provided, however, that the indemnity agreement contained in this Section
6(b) and the agreement with respect to contribution contained in Section 7 shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Investor, which consent shall
not be unreasonably withheld or delayed; provided, further, however, that the
Investor shall be liable under this Section 6(b) for only that amount of a Claim
or Claims or Indemnified Damages as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable
15
Securities by the Investors pursuant to Section 9. Notwithstanding anything to
the contrary contained herein, the indemnification agreement contained in this
Section 6(b) with respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented.
c. Promptly after receipt by an Indemnified
Person or Indemnified Party under this Section 6 of notice of the commencement
of any action or proceeding (including any governmental action or proceeding)
involving a Claim, such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses of not more than one counsel
for such Indemnified Person or Indemnified Party to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred to in
the immediately preceding sentence shall be selected by the Investors holding at
least 75% in interest of the Registrable Securities included in the Registration
Statement to which the Claim relates and, if Xxxxxx is one of such Investors,
Xxxxxx for so long as Xxxxxx holds not less than $10 million in principal amount
of Debentures (or shares of Common Stock attributable to such Debentures). The
Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this
16
Section 6, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action.
d. The indemnification required by this Section
6 shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or Indemnified
Damages are incurred.
e. The indemnity agreements contained herein
shall be in addition to (i) any cause of action or similar right of the
Indemnified Party or Indemnified Person against the indemnifying party or
others, and (ii) any liabilities the indemnifying party may be subject to
pursuant to the law.
7. Contribution.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no person involved in the sale of Registrable Securities which person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 0000 Xxx) in connection with such sale shall be entitled to contribution
from any person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution or contributions
by any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities pursuant to such Registration Statement.
8. Reports Under The 1934 Act.
With a view to making available to the Investors the benefits
of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration ("Rule 144"), the
Company agrees during the Registration Period to:
a. make and keep public information available,
as those terms are understood and defined in Rule 144;
b. file with the SEC in a timely manner all
reports and other documents required of the Company under the 1933 Act and the
1934 Act so long as the Company remains subject to such requirements (it being
understood that nothing herein shall limit the Company's obligations under
Section 4(c) of the Securities Purchase Agreement) and the filing of such
reports and other documents is required for the applicable provisions of Rule
144; and
c. furnish to each Investor so long as such
Investor owns Registrable Securities, promptly upon request, (i) a written
statement by the Company, if true, that it has complied with the reporting
requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
17
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Investors to sell such securities pursuant to
Rule 144 without registration.
9. Assignment of Registration Rights.
The rights under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of such
Investor's Registrable Securities if: (i) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein,
evidenced by signing a signature page to this Agreement in its then current
form; and (v) such transfer shall have been made in accordance with the
applicable requirements of the Securities Purchase Agreement.
10. Amendment of Registration Rights.
Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investors who then hold at least 75% of the Registrable Securities and
Xxxxxx for so long as Xxxxxx holds not less than $10 million in principal amount
of Convertible Debentures (or shares of Common Stock attributable to conversion
of such Convertible Debentures). Any amendment or waiver effected in accordance
with this Section 10 shall be binding upon each Investor and the Company. No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Registrable Securities unless such amendment is not
adverse to the remaining holders. No consideration shall be offered or paid to
any Person to amend or consent to a waiver or modification of any provision of
any of this Agreement unless the same consideration also is offered to all of
the parties to this Agreement. Notwithstanding any other provision in this
Agreement, at the election of the Company on or prior to Closing Date, this
Agreement shall be amended to add one or more parties as parties hereto that may
be added as parties to the Securities Purchase Agreement.
11. Miscellaneous.
a. A Person is deemed to be a holder of
Registrable Securities whenever such Person owns or is deemed to own of record
such Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the such record owner of such Registrable
Securities.
18
b. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
CSK Auto Corporation
000 X. Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxxx
With a copy to:
Xxxxxx Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
If to Legal Counsel:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
19
c. Failure of any party to exercise any right
or remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.
d. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the non- exclusive jurisdiction of the state and federal courts
sitting the City of New York, borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. The Transaction Documents (as defined in the
Securities Purchase Agreement) and the documents referenced herein and therein
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. The Transaction Documents supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.
f. Subject to the requirements of Section 9,
this Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.
g. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
h. This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by
20
facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.
i. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
j. All consents and other determinations
required to be made by the Investors pursuant to this Agreement shall be made,
unless otherwise specified in this Agreement, by Investors holding at least 75%
of the Registrable Securities and Xxxxxx for so long as Xxxxxx holds not less
than $10 million in principal amount of Convertible Debentures (or shares of
Common Stock attributable to conversion of such Convertible Debentures),
determined as if all of the Convertible Debentures held by Investors then
outstanding have been converted into Registrable Securities and all Warrants
then outstanding have been exercised for Registrable Securities without regard
to any limitations on conversion of the Convertible Debentures or on exercise of
the Warrants.
k. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent
and no rules of strict construction will be applied against any party.
l. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other Person.
* * * * * *
21
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: BUYERS:
CSK AUTO CORPORATION LBI GROUP INC.
By: /s/ Xxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
----------------------------- --------------------------
Name: Xxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Its: Senior Vice President Title: Vice President
22
[Additional Buyers Signature Page to Registration Rights Agreement]
INVESTCORP CSK HOLDINGS L.P.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Representative
SCHEDULE OF BUYERS
Investor Investor Address Investor's Representative's Address
-------- and Facsimile Number and Facsimile Number
-------------------- --------------------
LBI Group Inc. Xxxxxx Brothers Inc. Xxxxxx Brothers Inc.
x/x Xxxxxxxx Xxxxxxxxx Xxxxx x/x Xxxxxxxx Xxxxxxxxx Hotel
000 0xx Xxxxxx 000 0xx Xxxxxx
Room 809 Room 809
NY, NY 10019 XX, XX 00000
Fax: (000)-000-0000 fax: (000)-000-0000
Attention: Xxxxx Xxxxxx, LBI Group phone: (000)-000-0000
Inc. Attention: Xxxxx Xxxxxx, LBI Group Inc.
Investcorp CSK Holdings L.P. Investcorp Bank E.C. Investcorp Bank E.C.
Investcorp House Investcorp House
X.X. Xxx 0000 X.X. Xxx 0000
Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx
Fax: 000-000-000-000 Fax: 000-000-000-000
Attention: Xxxx X. Xxxx Attention: Xxxx X. Xxxx
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[-------------]
Attn:
Re: CSK Auto Corporation
Ladies and Gentlemen:
We are counsel to CSK Auto Corporation, a Delaware corporation
(the "Company"), and have represented the Company in connection with that
certain Securities Purchase Agreement (the "Purchase Agreement") entered into by
and among the Company and the named buyers therein on the Schedule of Buyers
(collectively, the "Buyers") pursuant to which the Company issued to the Buyers
its 7% Convertible Debentures due December __, 2006 (the "Debentures")
convertible into shares of the Company's Common Stock, par value $0.01 per share
(the "Common Stock"), warrants exercisable for shares of its Common Stock (the
"Warrants"), shares of Common Stock issued as Interest Shares (as defined in the
Debentures) and shares of Common Stock issued pursuant to Section 1(d) of the
Purchase Agreement (the "Break-up Shares"). Pursuant to the Purchase Agreement,
the Company also has entered into a Registration Rights Agreement with the
Buyers (the "Registration Rights Agreement") pursuant to which the Company
agreed, among other things, to register the Registrable Securities (as defined
in the Registration Rights Agreement), including the Break-up Shares, the
Interest Shares and shares of Common Stock issuable upon conversion of the
Debentures and exercise of the Warrants, under the Securities Act of 1933, as
amended (the "1933 Act"). In connection with the Company's obligations under the
Registration Rights Agreement, on ____________ ___, 200_, the Company filed a
Registration Statement on Form S-3 (File No. 333-_____________) (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") relating to the Registrable Securities which names each of the Buyers as
a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member
of the SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS], and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC, and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
By:_____________________
CC: [LIST NAMES OF BUYERS]
A-1
INDEX OF TERMS
Page
----
1933 Act ............................................................... 1
1934 Act ............................................................... 8
Agreement .............................................................. 1
Allowable Grace Period ................................................. 13
Best efforts ........................................................... 8
Black-out Period ....................................................... 13
Blue Sky Filing ........................................................ 15
Business Day ........................................................... 1
Buyer .................................................................. 1
Claims ................................................................. 14
Closing Effectiveness Deadline ......................................... 3
Closing Filing Deadline ................................................ 2
Common Stock ........................................................... 1
Company ................................................................ 1
Conversion Shares ...................................................... 1
Convertible Debentures ................................................. 1
Effectiveness Deadlines ................................................ 3
Filing Deadlines ....................................................... 3
Grace Period ........................................................... 12
Incidental Registration ................................................ 6
Incidental Registration Statement ...................................... 6
Indemnified Damages .................................................... 14
Indemnified Party ...................................................... 15
Indemnified Person ..................................................... 14
Inspectors ............................................................. 10
Interest Shares ........................................................ 2
Investor ............................................................... 2
Legal Counsel .......................................................... 4
Xxxxxx ................................................................. 3
NASD ................................................................... 11
Xxxxxxxxxxx ............................................................ 3
Person ................................................................. 2
Post-Closing Filing Deadline ........................................... 3
Post-Closing Securities ................................................ 3
Post-Closing Security Effectiveness Deadline ........................... 3
Records ................................................................ 10
Register ............................................................... 2
Registrable Securities ................................................. 2
Registration Delay Payments ............................................ 5
Registration Period .................................................... 8
Registration Statement ................................................. 2
Rule 144 ............................................................... 17
Rule 415 ............................................................... 2
SEC .................................................................... 2
Securities Purchase Agreement .......................................... 1
Violations ............................................................. 15
Warrant Shares ......................................................... 1
Warrants ............................................................... 1
