Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENt"), dated as of June 18,
1997, between Xxxxxxx'x Food Markets, Inc., a Texas corporation (the "COMPANY"),
and RFM Acquisition LLC, a Delaware limited liability company ("BUYER"). *
W I T N E S S E T H :
WHEREAS, Buyer, the Company and Xxxxxx X. Xxxxxxx have entered into a
Subscription Agreement dated as of April 1, 1997 (as such agreement may be
amended from time to time, the "SUBSCRIPTION AGREEMENT") which contemplates
certain transactions, including (i) the Company's issuance to Buyer of
18,579,686 newly-issued shares (the "SHARES") of Common Stock and the Option
(collectively, the "PURCHASE"), (ii) the Company's incurrence of indebtedness
and repayment of indebtedness as further described in the Subscription
Agreement, and (iii) the Company's repurchase of up to 1,104,336 shares of
Common Stock from the Company's Employee Stock Ownership Plan (the "ESOP"), up
to 200,435 Putable Shares (as defined in the Subscription Agreement) and up to
4,280,415 Non-ESOP shares (as defined in the Subscription Agreement) pursuant to
a tender offer and, if fewer than 4,280,415 Non-ESOP Shares (as such number may
be reduced pursuant to Section 5.06(c) of the Subscription Agreement) shall be
purchased in the tender offer, the Company's repurchase of the balance of such
4,280,415 Non-ESOP Shares pursuant to the conditional repurchase commitment of
certain shareholders of the Company;
WHEREAS, it is a condition and inducement to Buyer's willingness to
consummate the Purchase that the Company execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. For purposes of this Agreement:
"COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act or the Exchange Act
and other federal securities laws.
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* May include one or more affiliates.
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"DEMAND PARTY" shall mean (a) Buyer or (b) any other Holder or
Holders, including any current or future general or limited partner of Buyer or
any current or future general or limited partner of any such partner that may
become a Holder; PROVIDED, that to be a Demand Party under this clause (b), a
Holder or Holders must either individually or in the aggregate with all other
Holders with whom it is acting together to demand registration own at least 10%
of the Registrable Securities.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"HOLDER" shall mean Buyer and any other holder of Registrable
Securities (including any direct or indirect transferees of Buyer) who agrees in
writing to be bound by the provisions of this Agreement as a "Holder" hereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"OPTION" shall mean the option to purchase 3,606,881 shares of Common
Stock (subject to adjustment as provided therein) issued to Buyer as of the date
hereof and all options issued upon transfer, division or combination of, or in
substitution for, any thereof.
"REGISTRABLE SECURITIES" shall mean (i) any Common Stock (including
the Shares) held by any Holder, including shares issued or issuable upon the
conversion, exchange or exercise of any security convertible, exchangeable or
exercisable into Common Stock (including the Option), (ii) any security of the
Company held by any Holder which is convertible, exchangeable or exercisable
into Common Stock (including the Option) and (iii) any Common Stock or any
security convertible, exchangeable or exercisable into Common Stock which may be
issued or distributed in respect thereof by way of stock dividend or stock split
or other distribution, recapitalization or reclassification. As to any
particular Registrable Securities, once issued, such Registrable Securities
shall cease to be Registrable Securities when (a) a registration statement with
respect to the sale by the Holder of such securities shall have become effective
under the Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (b) such securities shall have been
distributed to the public pursuant to Rule 144 (or any successor provision)
under the Securities Act, or (c) such securities shall have ceased to be
outstanding. For purposes of this Agreement, any required calculation of the
amount of, or percentage of, Registrable Securities shall be based on the number
of shares of Common Stock which are Registrable Securities, including shares
issuable upon the conversion, exchange or exercise of any security convertible,
exchangeable or exercisable into Common Stock (including the Option).
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"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including (a) all Commission
and stock exchange or NASD registration and filing fees (including, if
applicable, the fees and expenses of any "qualified independent underwriter," as
such term is defined in Schedule E to the Bylaws of the NASD, and of its
counsel), (b) all fees and expenses of complying with securities or blue sky
laws (including fees and disbursements of counsel for the underwriters in
connection with blue sky qualifications of the Registrable Securities), (c) all
printing, messenger and delivery expenses, (d) all fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange pursuant to Section 4.01(h) and all rating agency fees, (e) the fees
and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits and/or "cold comfort"
letters required by or incident to such performance and compliance, (f) the
reasonable fees and disbursements of counsel selected pursuant to Article VII,
(g) any fees and disbursements of underwriters customarily paid by the issuers
or sellers of securities, including liability insurance if the Company so
desires or if the underwriters so require, and the reasonable fees and expenses
of any special experts retained in connection with the requested registration,
but excluding underwriting discounts and commissions and transfer taxes, if any,
and (h) other reasonable out-of-pocket expenses of Holders.
SECTION 1.02. OTHER DEFINED TERMS. The following terms shall have
the meanings defined for such terms in the Sections set forth below:
TERM SECTION
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"AAA" 8.10
"Agreement" Recitals
"Buyer" Recitals
"Company" Recitals
"Indemnified Parties" 5.01
"Majority Holders 8.04
"Purchase" Recitals
"Shares" Recitals
"Subscription Agreement" Recitals
"Supplemental Agreements" 8.02
SECTION 1.03. OTHER DEFINITIONAL PROVISIONS.(a) Capitalized terms
used but not defined herein shall have the meanings set forth in the
Subscription Agreement.
(b) 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, and Article, Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
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(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE II
INCIDENTAL REGISTRATIONS
SECTION 2.01. RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the
Company at any time after the date hereof proposes to register Common Stock (or
any security which is convertible, exchangeable or exercisable into Common
Stock) under the Securities Act (other than a registration on Form S-4 or S-8,
or any successor or other forms promulgated for similar purposes), whether or
not for sale for its own account, in a manner which would permit registration of
Registrable Securities for sale to the public under the Securities Act, it will,
at each such time, give prompt written notice to all Holders of its intention to
do so and of such Holders' rights under this Article II. Upon the written
request of any such Holder made within 30 days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such Holder), the Company will use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the Holders thereof; PROVIDED, that
(a) if, at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to proceed with the proposed registration of the securities to be sold by
it, the Company may, at its election, give written notice of such determination
to each Holder and, thereupon, 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 in connection therewith), and
(b) if such registration involves an underwritten offering, all Holders
requesting to be included in the Company's registration must sell their
Registrable Securities to the underwriters selected by the Company on the same
terms and conditions as apply to the Company, with such differences, including
any with respect to indemnification and liability insurance, as may be customary
or appropriate in combined primary and secondary offerings. If a registration
requested pursuant to this Section involves an underwritten public offering, any
Holder requesting to be included in such registration may elect, in writing
prior to the effective date of the registration statement filed in connection
with such registration, not to register such securities in connection with such
registration. Nothing in this Section shall operate to limit the right of any
Holder to (i) request the registration of Common Stock issuable upon conversion,
exchange or exercise of securities held by such Holder notwithstanding the fact
that at the time of request such Holder does not hold the Common Stock
underlying such securities or (ii) request the
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registration at one time of both securities convertible, exchangeable or
exercisable into Common Stock and the Common Stock underlying any such
securities.
SECTION 2.02. EXPENSES. The Company will pay all Registration
Expenses in connection with each registration of Registrable Securities
requested pursuant to this Article II.
SECTION 2.03. PRIORITY IN INCIDENTAL REGISTRATIONS. If a
registration pursuant to this Article II involves an underwritten offering and
the managing underwriter advises the Company in writing that, in its opinion,
the number of Registrable Securities requested to be included in such
registration would be likely to have an adverse effect on the price, timing or
distribution of the securities to be offered in such offering as contemplated by
the Company (other than the Registrable Securities), then the Company shall
include in such registration (a) first, 100% of the securities the Company
proposes to sell, (b) second, to the extent of the amount of Registrable
Securities requested to be included in such registration which, in the opinion
of such managing underwriter, can be sold without having the adverse effect
referred to above, the amount of Registrable Securities which the Holders have
requested to be included in such registration, such amount to be allocated pro
rata among all requesting Holders on the basis of the relative amount of
Registrable Securities then held by each such Holder (PROVIDED, that any such
amount thereby allocated to any such Holder that exceeds such Holder's request
shall be reallocated among the remaining requesting Holders in like manner) and
(c) third, shares of Common Stock of other Persons who have registration rights
with respect to the Common Stock held by such Persons, to the extent of the
number of shares requested by such Persons to be included in such registration
which, in the opinion of such managing underwriter, can be sold without having
the adverse effect referred to above, such amount to be allocated pro rata among
all such requesting Persons on the basis of the relative number of shares of
Common Stock then held by each such Person.
ARTICLE III
REGISTRATION ON REQUEST
SECTION 3.01. REQUEST BY THE DEMAND PARTY. At any time after the
date hereof, upon the written request of the Demand Party requesting that the
Company effect the registration under the Securities Act of all or part of such
Demand Party's Registrable Securities and specifying the amount and intended
method of disposition thereof, the Company will promptly give written notice of
such requested registration to all other Holders, and thereupon will, as
expeditiously as possible, use its best efforts to effect the registration under
the Securities Act of:
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(a) the Registrable Securities which the Company has been so
requested to register by the Demand Party (including, if such request relates to
a security which is convertible, exchangeable or exercisable into shares of
Common Stock, and if the Demand Party so requests, the shares of Common Stock
issuable upon such conversion, exchange or exercise); and
(b) all other Registrable Securities of the same class(es) or series
as are to be registered at the request of a Demand Party and which the Company
has been requested to register by any other Holder thereof by written request
given to the Company within 15 days after the giving of such written notice by
the Company (which request shall specify the amount and intended method of
disposition of such Registrable Securities),
all to the extent necessary to permit the disposition (in accordance with the
intended method thereof as aforesaid) of the Registrable Securities so to be
registered; PROVIDED, that with respect to any Demand Party other than Buyer,
the Company shall not be obligated to effect any registration of Registrable
Securities under this Section unless such Demand Party requests that the Company
register at least 10% of the Registrable Securities; and PROVIDED, FURTHER,
that, unless Holders of a majority of the Registrable Securities consent thereto
in writing, the Company shall not be obligated to file a registration statement
relating to any registration request under this Article III (x) (other than a
registration statement on Form S-3 or any successor or similar short-form
registration statement) within a period of nine months after the effective date
of any other registration statement relating to any registration request under
this Article III or to any registration effected under Article II, in either
case which was not effected on Form S-3 (or any successor or similar short-form
registration statement) or (y) if with respect thereto the managing underwriter,
the Commission, the Securities Act, or the form on which the registration
statement is to be filed, would require the conduct of an audit other than the
regular audit conducted by the Company at the end of its fiscal year, in which
case the filing may be delayed until the completion of such regular audit
(unless the Holders of the Registrable Securities to be registered agree to pay
the expenses of the Company in connection with such an audit other than the
regular audit). Nothing in this Article III shall operate to limit the right of
any Holder to (i) request the registration of Common Stock issuable upon
conversion, exchange or exercise of securities held by such Holder
notwithstanding the fact that at the time of request such Holder does not hold
the Common Stock underlying such securities (ii) request the registration at one
time of both securities convertible, exchangeable or exercisable into Common
Stock and the Common Stock underlying any such securities.
SECTION 3.02. REGISTRATION STATEMENT FORM. The Company shall select
the registration statement form for any registration pursuant to this Article
III; PROVIDED, that if any
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registration requested pursuant to this Article III which is proposed by the
Company to be effected by the filing of a registration statement on Form S-3 (or
any successor or similar short-form registration statement) shall be in
connection with an underwritten public offering, and if the managing underwriter
shall advise the Company in writing that, in its opinion, the use of another
form of registration statement is of material importance to the success of such
proposed offering, then such registration shall be effected on such other form.
SECTION 3.03. EXPENSES. The Company will pay all Registration
Expenses in connection with the first six registrations of each class or series
of Registrable Securities pursuant to this Article III; PROVIDED, that for
purposes hereof, a request to register Common Stock into which a security is
convertible, exchangeable or exercisable in conjunction with a registration of
such security shall be deemed to be one request for registration of a class or
series of Registrable Securities. All expenses for any subsequent registrations
of Registrable Securities pursuant to this Article III shall be paid pro rata by
the Company and all other Persons (including the Holders) participating in such
registration on the basis of the relative number of shares of Common Stock
(including shares underlying any securities convertible, exchangeable or
exercisable into Common Stock) of each such Person included in such
registration.
SECTION 3.04. EFFECTIVE REGISTRATION STATEMENT. A registration
requested pursuant to this Article III will not be deemed to have been effected
unless it has become effective and all of the Registrable Securities registered
thereunder have been sold; PROVIDED, that if within 180 days after it has become
effective, the offering of Registrable Securities pursuant to such registration
is interfered with by any stop order, injunction or other order or requirement
of the Commission or other Governmental Entity, such registration shall be
deemed not to have been effected.
SECTION 3.05. SELECTION OF UNDERWRITERS. If a requested registration
pursuant to this Article III involves an underwritten offering, the investment
banker(s), underwriter(s) and manager(s) for such registration shall be selected
by the Holders of a majority of the Registrable Securities which are held by
Holders and which the Company has been requested to register; PROVIDED, HOWEVER,
that such investment banker(s), underwriter(s) and manager(s) shall be
reasonably satisfactory to the Company.
SECTION 3.06. PRIORITY IN REQUESTED REGISTRATIONS. If a requested
registration pursuant to this Article III involves an underwritten offering and
the managing underwriter advises the Company in writing that, in its opinion,
the number of securities to be included in such registration (including
securities of the Company which are not Registrable Securities) would be likely
to have an adverse effect on the price, timing or distribution of
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the securities to be offered in such offering as contemplated by the Holders,
then the Company shall include in such registration only the Registrable
Securities requested to be included in such registration. In the event that the
number of Registrable Securities requested to be included in such registration
exceeds the number which, in the opinion of such managing underwriter, can be
sold without having the adverse effect referred to above, the number of such
Registrable Securities to be included in such registration shall be allocated
pro rata among all requesting Holders on the basis of the relative number of
shares of Registrable Securities then held by each such Holder (PROVIDED, that
any shares thereby allocated to any such Holder that exceed such Holder's
request shall be reallocated among the remaining requesting Holders in like
manner). In the event that the number of Registrable Securities requested to be
included in such registration is less than the number which, in the opinion of
the managing underwriter, can be sold, the Company may include in such
registration the securities the Company proposes to sell up to the number of
securities that, in the opinion of such managing underwriter, can be sold
without having the adverse effect referred to above.
SECTION 3.07. ADDITIONAL RIGHTS. If the Company at any time grants
to any other holders of Common Stock (or securities that are convertible,
exchangeable or exercisable into Common Stock) any rights to request the Company
to effect the registration under the Securities Act of any such shares of Common
Stock (or any such securities) on terms more favorable to such holders than the
terms set forth in this Article III, the terms of this Article III shall be
deemed amended or supplemented to the extent necessary to provide the Holders
such more favorable rights and benefits.
ARTICLE IV
REGISTRATION PROCEDURES
SECTION 1.041. REGISTRATION PROCEDURES. If and whenever the Company
is required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
the Company will, as expeditiously as possible:
(a) prepare and, in any event within 120 days after the end of the
period within which a request for registration may be given to the Company, file
with the Commission a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective; PROVIDED, HOWEVER, that the Company may discontinue any
registration of its securities which is being effected pursuant to Article II at
any time prior to the effective date of the registration statement relating
thereto;
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(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period not in excess of 180 days and to comply with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement; PROVIDED, that before filing a
registration statement or prospectus, or any amendments or supplements thereto,
the Company will furnish to counsel selected pursuant to Article VII hereof
copies of all documents proposed to be filed, which documents will be subject to
the review of such counsel;
(c) furnish to each seller of such Registrable Securities such number
of copies of such registration statement and of each amendment and supplement
thereto (in each case including all exhibits filed therewith, including any
documents incorporated by reference), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and summary prospectus), in conformity with the requirements of the Securities
Act, and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities covered by such registration in such jurisdictions as each seller
shall reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this subsection (d), it would not be
obligated to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(e) use its best efforts to cause such Registrable Securities covered
by such registration statement to be registered with or approved by such other
Governmental Entities as may be necessary to enable the seller or sellers
thereof to consummate the disposition of such Registrable Securities;
(f) notify each seller of any such Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the Company's becoming
aware that the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or
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omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing, and at the request of any such seller, prepare and furnish to
such seller a reasonable number of copies of an amended or supplemental
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;
(g) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable (but not more than 18 months) after
the effective date of the registration statement, an earnings statement which
shall satisfy the provisions of Section 11(a) of the Securities Act;
(h) (i) if such Registrable Securities are Common Stock (including
Common Stock issuable upon conversion, exchange or exercise of another
security), use its best efforts to list such Registrable Securities on any
securities exchange on which the Common Stock is then listed if such Registrable
Securities are not already so listed and if such listing is then permitted under
the rules of such exchange; (ii) if such Registrable Securities are convertible,
exchangeable or exercisable into Common Stock, upon the reasonable request of
sellers of a majority of such Registrable Securities, use its best efforts to
list such securities and, if requested, the Common Stock underlying such
securities, notwithstanding that at the time of request such sellers hold only
such securities, on any securities exchange so requested, if such Registrable
Securities are not already so listed and if such listing is then permitted under
the rules of such exchange; and (iii) use its best efforts to provide a transfer
agent and registrar for such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;
(i) enter into such customary agreements (including an underwriting
agreement in customary form), which may include indemnification provisions in
favor of underwriters and other Persons in addition to, or in substitution for
the provisions of Article V hereof, and take such other actions as sellers of a
majority of shares of such Registrable Securities or the underwriters, if any,
reasonably requested in order to expedite or facilitate the disposition of such
Registrable Securities;
(j) obtain a "cold comfort" letter or letters from the Company's
independent public accounts in customary form and covering matters of the type
customarily covered by "cold comfort" letters as the seller or sellers of a
majority of shares of such Registrable Securities shall reasonably request;
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(k) make available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(l) notify counsel (selected pursuant to Article VII hereof) for the
Holders of Registrable Securities included in such registration statement and
the managing underwriter or agent, immediately, and confirm the notice in
writing (i) when the registration statement, or any post-effective amendment to
the registration statement, shall have become effective, or any supplement to
the prospectus or any amendment prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request of the
Commission to amend the registration statement or amend or supplement the
prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the registration
statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the registration
statement for offering or sale in any jurisdiction, or of the institution or
threatening of any Actions for any of such purposes;
(m) make every reasonable effort to prevent the issuance of any stop
order suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the withdrawal of any such order at the earliest
possible moment;
(n) if requested by the managing underwriter or agent or any Holder
of Registrable Securities covered by the registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or agent or such Holder reasonably
requests to be included therein, including, with respect to the number of
Registrable Securities being sold by such Holder to such underwriter or agent,
the purchase price being paid therefor by such underwriter or agent and with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
being notified of the matters incorporated in such prospectus supplement or
post-effective amendment;
(o) cooperate with the Holders of Registrable Securities covered by
the registration statement and the managing
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underwriter or agent, if any, to facilitate the timely preparation and delivery
of certificates (not bearing any restrictive legends) representing securities to
be sold under the registration statement, and enable such securities to be in
such denominations and registered in such names as the managing underwriter or
agent, if any, or such Holders may request;
(p) obtain for delivery to the Holders of Registrable Securities
being registered and to the underwriter or agent an opinion or opinions from
counsel for the Company in customary form and in form, substance and scope
reasonably satisfactory to such Holders, underwriters or agents and their
counsel;
(q) cooperate with each seller of Registrable Securities and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD; and
(r) use its best efforts to make available the executive officers of
the Company to participate with the Holders of Registrable Securities and any
underwriters in any "road shows" or other selling efforts that may be reasonably
requested by the Holders in connection with the methods of distribution for the
Registrable Securities.
SECTION 4.02. INFORMATION SUPPLIED. The Company may require each
seller of Registrable Securities as to which any registration is being effected
to furnish the Company with such information regarding such seller and pertinent
to the disclosure requirements relating to the registration and the distribution
of such securities as the Company may from time to time reasonably request in
writing.
SECTION 4.03. RESTRICTIONS ON DISPOSITION. Each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 4.01(f), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 4.01(f), 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. In the event the Company shall
give any such notice, the period mentioned in Section 4.01(b) shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 4.01(f) and including the date when
each seller of Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 4.01(f).
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ARTICLE V.
INDEMNIFICATION
SECTION 5.01. INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any securities of the Company under the Securities Act pursuant
to Article II or Article III, the Company shall, and it hereby does, indemnify
and hold harmless, to the extent permitted by law, the seller of any Registrable
Securities covered by such registration statement, each Affiliate of such seller
and their respective directors and officers or general and limited partners (and
any director, officer, Affiliate, employee, agent and controlling Person of any
of the foregoing), each Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who controls
such seller or any such underwriter within the meaning of the Securities Act
(collectively, the "INDEMNIFIED PARTIES"), against any and all Actions (whether
or not an Indemnified Party is a party thereto), losses, damages or liabilities,
joint or several, and expenses (including reasonable attorney's fees and
reasonable expenses of investigation) to which such Indemnified Party may become
subject under the Securities Act, common law or otherwise, insofar as such
Actions, losses, damages, liabilities or expenses arise out of, relate to or are
based upon (a) any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto, or (b) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they were made) not
misleading; PROVIDED, that the Company shall not be liable to any Indemnified
Party in any such case to the extent that any such Action, loss, damage,
liability or expense arises out of, relates to or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by such seller specifically stating that it is for use in the preparation
thereof; and, PROVIDED, FURTHER, that the Company will not be liable to any
Person who participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within the
meaning of the Securities Act, under the indemnity agreement in this Section
with respect to any preliminary, final or summary prospectus, or any amendment
or supplement thereto, to the extent that any such Action, loss, damage,
liability or expense of such underwriter or controlling Person results from the
fact that such underwriter sold Registrable Securities to a Person to whom there
was not sent or
14
given, at or prior to the written confirmation of such sale, a copy of the final
prospectus (including any documents incorporated by reference therein) or of the
final prospectus, as then amended or supplemented (including any documents
incorporated by reference therein), whichever is most recent, if the Company has
previously furnished copies thereof to such underwriter. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Indemnified Party and shall survive the transfer of securities by
any seller.
SECTION 5.02. INDEMNIFICATION BY THE SELLER. The Company may
require, as a condition to including any Registrable Securities in any
registration statement filed in accordance with Article III or Article IV
herein, that the Company shall have received an undertaking reasonably
satisfactory to it from the prospective seller of such Registrable Securities or
any underwriter to indemnify and hold harmless (in the same manner and to the
same extent as set forth in Section 5.01) the Company and all other prospective
sellers or any underwriter, as the case may be, with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, if such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller or underwriter
specifically stating that it is for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement,
or a document incorporated by reference into any of the foregoing. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any of the prospective sellers, or any of
their respective Affiliates, directors, officers or controlling Persons and
shall survive the transfer of securities by any seller. In no event shall the
liability of any selling Holder of Registrable Securities hereunder be greater
in amount than the dollar amount of the proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation.
SECTION 5.03. NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any Action
with respect to which a claim for indemnification may be made pursuant to this
Article V, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party, give written notice to the latter of the
commencement of such Action; PROVIDED, that the failure of the indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under Article V, except to the extent that the indemnifying
party is materially prejudiced by such failure to give notice. In case any such
Action is brought against an
15
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such Action, the indemnifying party will be entitled to
participate in and to assume the defense thereof (at its expense), jointly with
any other indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such Indemnified Party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party will settle any Action or consent to the
entry of any judgment without the prior written consent of the indemnified
party, unless such settlement or judgment (i) includes as an unconditional term
thereof the giving by the claimant or plaintiff of a release to such Indemnified
Party from all liability in respect of such Action and (ii) does not involve the
imposition of equitable remedies or the imposition of any obligations on such
indemnified party and does not otherwise adversely affect such indemnified
party, other than as a result of the imposition of financial obligations for
which such indemnified party will be indemnified hereunder.
SECTION 5.04. CONTRIBUTION. (a) If the indemnification provided for
in this Article V from the indemnifying party is unavailable to an indemnified
party hereunder in respect of any Actions, losses, damages, liabilities or
expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Actions, losses, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in connection
with the actions which resulted in such Actions, losses, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party under this Section
5.04 as a result of the Actions, losses, damages, liabilities and expenses
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with any Action.
(b) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5.04 were determined by pro rata
allocation or by any other method of
16
allocation which does not take account of the equitable considerations referred
to in Section 5.04(a). 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.
SECTION 5.05. OTHER INDEMNIFICATION. Indemnification similar to that
specified in this Article V (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 securities under any Law or with
any Governmental Entity other than as required by the Securities Act.
SECTION 5.06. NON-EXCLUSIVITY. The obligations of the parties under
this Article V shall be in addition to any liability which any party may
otherwise have to any other party.
ARTICLE VI.
RULE 144
SECTION 6.01. RULE 144. If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the
Securities Act, the Company covenants that it will file the reports required to
be filed by it under the Securities Act and the Exchange Act (or, if the Company
is not required to file such reports, it will, upon the request of any Holder,
make publicly available such information), and it will take such further action
as any Holder may reasonably request, all to the extent required from time to
time to enable such Holder to sell shares of Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of any Holder, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements. Notwithstanding anything contained in this Article VI, the
Company may deregister under Section 12 of the Exchange Act if it then is
permitted to do so pursuant to the Exchange Act.
ARTICLE VII.
SELECTION OF COUNSEL
SECTION 7.01. SELECTION OF COUNSEL. In connection with any
registration of Registrable Securities pursuant to Articles II and III hereof,
the Holders of a majority of the Registrable Securities covered by any such
registration may
17
select one counsel to represent all Holders of Registrable Securities covered by
such registration; PROVIDED, HOWEVER, that in the event that the counsel
selected as provided above is also acting as counsel to the Company in
connection with such registration, the remaining Holders shall be entitled to
select one additional counsel to represent all such remaining Holders.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01. "TAG-ALONG" RIGHTS. Those Persons who have been
granted "tag-along" rights pursuant to Section 5.02(b) of the Shareholders
Agreement shall be permitted to participate in any registration pursuant to
Article II or Article III hereof in accordance with the terms of such
agreement. In respect of any registration in which such Person shall
participate, such Person shall have the rights and obligations of a Holder
hereunder.
SECTION 8.02. OTHER INVESTORS. The Company may enter into
agreements with other purchasers of Common Stock who are then employees of
the Company (or its successor) or any of the Subsidiaries, making them
parties hereto (and thereby giving them all, or a portion, of the rights,
preferences and privileges of a "Holder" hereunder) with respect to
additional shares of Common Stock (the "SUPPLEMENTAL AGREEMENTS"); PROVIDED,
HOWEVER, that pursuant to any such Supplemental Agreement, each such
purchaser shall have expressly agreed to be bound by all of the terms of this
Agreement as if such purchaser were a "Holder" hereunder. All shares of
Common Stock issued or issuable pursuant to such Supplemental Agreements
shall be deemed to be Registrable Securities.
SECTION 8.03. HOLDBACK AGREEMENT. If any registration hereunder
shall be in connection with an underwritten public offering, each Holder
agrees not to effect any public sale or distribution, including any sale
pursuant to Rule 144 under the Securities Act, of any equity securities of
the Company, or of any security convertible, exchangeable or exercisable into
any equity security of the Company (in each case, other than as part of such
underwritten public offering), within 7 days before, or 180 days (or such
lesser period as the managing underwriters may permit) after, the effective
date of such registration (except as part of such registration), and the
Company hereby also so agrees and agrees to cause each other holder of any
equity security, or of any security convertible, exchangeable or exercisable
into any equity security, of the Company purchased from the Company (at any
time other than in a public offering) to so agree.
SECTION 8.04. AMENDMENTS AND WAIVERS. This Agreement may not be
amended except by an instrument in writing signed on behalf of the Company
and the Holders of a majority of the
18
Registrable Securities (the "MAJORITY HOLDERS"); PROVIDED, HOWEVER, that no
such amendment that is adverse to Buyer or any of its successors and assigns
shall be effective as against any such Person for so long as such Person
holds any Registrable Securities unless agreed to in writing by such Person.
Each Holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any amendment authorized by this Section,
whether or not such Registrable Securities shall have been marked to indicate
such amendment.
SECTION 8.05. SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and assigns. In addition, and whether or not
any express assignment shall have been made, the provisions of this Agreement
which are for the benefit of the parties hereto other than the Company shall
also be for the benefit of and enforceable by any subsequent Holder.
SECTION 8.06. NOTICES. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Buyer, to
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co. L.P.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
(b) if to the Company, to
Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
(c) if to any other Holder, to the address of such other Holder as
shown in the stock record books of the Company, or to such other address as any
of the above shall have designated in writing to all of the other above.
SECTION 8.07. INTERPRETATION. The headings contained in this
Agreement are for reference purposes only and shall not
19
affect in any way the meaning or interpretation of this Agreement. Whenever the
words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
SECTION 8.08. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 8.09. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement and the other agreements referred to herein constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter of this
Agreement. Except for the indemnification provisions of Article V and as
provided in Section 8.05, this Agreement is not intended to confer upon any
Person other than the parties any rights or remedies.
SECTION 8.10. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY WITHIN
THAT STATE. ANY CONTROVERSY, DISPUTE, OR CLAIM OF WHATEVER NATURE ARISING OUT
OF, IN CONNECTION WITH, OR RELATING TO THIS AGREEMENT, INCLUDING THE EXISTENCE,
VALIDITY, INTERPRETATION OR BREACH THEREOF AND ANY CLAIM BASED ON CONTRACT, TORT
OR STATUTE, SHALL BE RESOLVED AT THE REQUEST OF EITHER THE COMPANY OR THE
MAJORITY HOLDERS, BY FINAL AND BINDING ARBITRATION CONDUCTED IN WASHINGTON, D.C.
PURSUANT TO THE FEDERAL ARBITRATION ACT AND IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION (THE "AAA").
ARBITRATION HEREUNDER SHALL BE CONDUCTED BY A SINGLE ARBITRATOR SELECTED JOINTLY
BY THE COMPANY AND THE MAJORITY HOLDERS. IF WITHIN 30 DAYS AFTER A DEMAND FOR
ARBITRATION IS MADE, THE COMPANY AND THE MAJORITY HOLDERS ARE UNABLE TO AGREE ON
A SINGLE ARBITRATOR, THREE ARBITRATORS SHALL BE APPOINTED. THE COMPANY AND THE
MAJORITY HOLDERS SHALL EACH SELECT ONE ARBITRATOR AND THOSE TWO ARBITRATORS
SHALL THEN SELECT WITHIN 30 DAYS A THIRD NEUTRAL ARBITRATOR. IF THE ARBITRATORS
SELECTED BY THE COMPANY AND THE MAJORITY HOLDERS CANNOT AGREE ON THE THIRD
ARBITRATOR, THE SELECTION SHALL BE IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION
RULES OF AAA. THE COMPANY AND THE MAJORITY HOLDERS AGREE TO SHARE EQUALLY THE
FEES AND EXPENSES OF THE ARBITRATOR(S) HEREUNDER. ANY DISCOVERY IN CONNECTION
WITH ARBITRATION HEREUNDER SHALL BE LIMITED TO INFORMATION DIRECTLY RELEVANT TO
THE CONTROVERSY OR CLAIM IN ARBITRATION. JUDGMENT UPON ANY ARBITRATION AWARD
RENDERED MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION. THE COMPANY AND
THE MAJORITY HOLDERS EACH UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT.
20
SECTION 8.11. ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement.
SECTION 8.12. NO RECOURSE. Notwithstanding anything that may be
expressed or implied in this Agreement, the Company and each Holder covenant,
agree and acknowledge that no recourse under this Agreement or any documents or
instruments delivered in connection with this Agreement or any of the
Transactions shall be had against any current or future director, officer,
employee, general or limited partner, member, Affiliate (including KKR) or
assignee of Buyer or of any of the foregoing, whether by the enforcement of any
assessment or by any legal or equitable proceeding, or by virtue of any statute,
regulation or other applicable law, it being expressly agreed and acknowledged
that no personal liability whatsoever shall attach to, be imposed on or
otherwise be incurred by any current or future officer, agent or employee of
Buyer or any current or future member of Buyer or any current or future
director, officer, employee, partner, member, Affiliate (including KKR) or
assignee of any of the foregoing, as such for any obligation of Buyer under this
Agreement or any documents or instruments delivered in connection with this
Agreement or any of the Transactions for any claim based on, in respect of or by
reason of such obligations or their creation.
21
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed and delivered as of the date first written above.
XXXXXXX'X FOOD MARKETS, INC.
By:/s/ R. XXXXXXX XXXXXXX, XX.
--------------------------------------
Name: R. Xxxxxxx Xxxxxxx, Xx.
Title: Chief Executive Officer
RFM ACQUISITION LLC
By:/s/ XXXX X. XXXXX
--------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President, Secretary
and Treasurer
