EXHIBIT 10.27
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of June 29, 1999 (this
"Agreement"), by and among THE PENN TRAFFIC COMPANY, a Delaware corporation (the
"Company"), and the Holders (as hereinafter defined) of Registrable Securities
(as hereinafter defined) who are parties to this Agreement.
This Agreement is being entered into in accordance with the Plan (as
hereinafter defined) in connection with the acquisition of Securities (as
hereinafter defined) by certain holders named on the signature page to this
Agreement (the "Original Holders") pursuant to the Plan. Each Original Holder
owns the aggregate amounts of Securities specified with respect to such Original
Holder in Schedule A hereto as such Schedule A may be amended from time to time.
To induce the holders of Registrable Securites (as hereinafter defined)
to vote in favor of the Plan, the Company has undertaken to register the
Registrable Securities under the Securities Act (as hereinafter defined) and to
take certain other actions with respect to the Registrable Securities. This
Agreement sets forth the terms and conditions of such undertaking.
In consideration of the premises and the mutual agreements set forth
herein, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein and in the recitals above shall have the following meanings:
"Affiliate" of a Person means any Person that controls, is under common
control with, or is controlled by, such other Person. For purposes of this
definition, "control" means the ability of one Person to direct the management
and policies of another Person.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to be
closed.
"Commission" means the United States Securities and Exchange
Commission, or any successor agency.
"Common Stock" means the Common Stock, $0.01 par value, of the Company,
to
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be issued pursuant to the Plan, and includes any securities of the Company
issued or issuable with respect to such securities by way of a stock split,
recapitalization, merger, consolidation or other reorganization or otherwise.
"Effective Date" means the effective date of the Plan pursuant to the
terms thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder, or any similar or successor statute.
"Expenses" means all expenses incident to the Company's performance of
or compliance with its obligations under this Agreement, including, without
limitation, all registration, filing, listing, securities exchange and NASD
fees, all fees and expenses of complying with state securities or blue sky laws
(including fees, disbursements and other charges of counsel for the underwriters
in connection with blue sky filings), all word processing, duplicating and
printing expenses, messenger and delivery expenses, all rating agency fees, the
fees, disbursements and other charges of counsel for the Company and of its
independent public accountants, including the expenses incurred in connection
with "comfort" letters required by or incident to such performance and
compliance, any fees and disbursements of underwriters customarily paid by
issuers and sellers of securities and the reasonable fees and disbursements of
one firm of counsel (per registration prepared) chosen by the Holders of a
majority of the outstanding Registrable Securities included in such Registration
Statement with respect to disclosure matters, but excluding underwriting
discounts and commissions and applicable transfer taxes, if any, which
discounts, commissions and transfer taxes shall be borne by the seller or
sellers of Registrable Securities in all cases.
"Holders" means (i) the Original Holders and (ii) any transferees of
the Registrable Securities whose Securities continue to be Registrable
Securities, each of whom will be bound by the terms of this Agreement.
"Initial Shelf Registration" has the meaning set forth in Section 2
hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint stock company, trust,
unincorporated organization, governmental or regulatory body or subdivision
thereof or other entity.
"Plan" means the Joint Plan of Reorganization of The Penn Traffic
Company, Dairy Dell, Inc., Big M Supermarkets, Inc. and Xxxxx Xxxxxxx Baking
Company, Inc. under Chapter 11 of the United States Bankruptcy Code filed with
the United States Bankruptcy Court for the District of Delaware and confirmed by
such court on May 27, 1999, as the same may be
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amended, modified or supplemented from time to time in accordance with the terms
thereof.
"Public Offering" means a public offering and sale of securities
pursuant to an effective registration statement under the Securities Act.
"Registrable Securities" means the Securities held by the Original
Holders (and Transferees of such Securities which are "Holders" hereunder);
provided, however , that Registrable Securities shall cease to be Registrable
Securities (i) upon any sale or distribution thereof pursuant to a registration
statement; (ii) if the Holder thereof is permitted to sell such securities
without volume restriction under the Securities Act and any state securities
laws; or (iii) upon the receipt by a Holder of Securities of an opinion,
reasonably satisfactory in form and substance to such Holder, by legal counsel
reasonably acceptable to such Holder, to the effect that the public sale of such
Securities without restriction under the Securities Act and any state securities
laws does not require the registration of such Securities under the Securities
Act and any state securities laws.
"Registration Statement" means a registration statement filed with the
Commission under the Securities Act.
"Securities" means each of the following: (1) a class comprising shares
of Common Stock held as of the date hereof by the stockholders party hereto; (2)
a class comprising (a) Senior Notes held as of the date hereof by the
noteholders party hereto and (b) securities issued or issuable in respect of the
Senior Notes issued, issuable or held pursuant to clause (2)(a) above by way of
interest payments or otherwise; and (3) a class comprising (a) Warrants held as
of the date hereof by the warrantholders party hereto and (b) securities issued
or issuable in respect of the Warrants issued, issuable or held pursuant to
clause (3)(a) above by way of exercise or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar or successor statute.
"Senior Notes" means the 11% Senior Notes due June 29, 2009 of the
Company.
"Subsequent Shelf Registration" has the meaning set forth in Section 2
hereof.
"Transfer" means any transfer, sale, assignment, pledge, hypothecation
or other disposition of any interest. "Transferor" and "Transferee" have
correlative meanings.
"Warrants" means the Warrants of the Company with an exercise price of
$18.30 per share of Common Stock issued pursuant to the Warrant Agreement dated
as of the date
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hereof between the Company and Xxxxxx Trust and Savings Bank, as warrant agent.
2. Registration Under the Securities Act.
(a) Initial Shelf Registration. The Company shall (i) cause to
be filed as soon as practicable, but not later than 45 days after the
Effective Date (or such longer time up to 90 days after the Effective
Date as may be required for the Company to prepare the necessary
financial statements), a Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 under the Securities
Act (the "Initial Shelf Registration") covering all of the Registrable
Securities and providing for the sale of the Registrable Securities by
the Holders thereof and (ii) use its commercially reasonable best
efforts to have such Initial Shelf Registration declared effective by
the Commission as promptly as practicable thereafter.
(b) Subsequent Shelf Registrations. If the Company determines
to terminate the effectiveness of the Initial Shelf Registration prior
to the end of the Effectiveness Period (as defined in Section 2(d)
hereof), then, subject to the provisions of this Agreement, prior to
such termination the Company shall file, and shall use its commercially
reasonable best efforts to cause the Commission to declare effective, a
subsequent Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (a
"Subsequent Shelf Registration") covering all of the Registrable
Securities which then remain outstanding. The Subsequent Shelf
Registration shall be filed by the Company at such time, subject to the
provisions of this Agreement, prior to the termination of the
effectiveness of the Initial Shelf Registration which is reasonably
calculated to cause the Subsequent Shelf Registration to become
effective on or before the date on which the effectiveness of the
Initial Shelf Registration terminates.
(c) Amendments to Initial Shelf Registration or Subsequent
Shelf Registrations. If the Initial Shelf Registration (except as
provided in Section 2(b)) or any Subsequent Shelf Registration ceases
to be effective for any reason at any time during the Effectiveness
Period (as defined in Section 2(d) hereof) for any reason (other than
because of the sale of all of the Registrable Securities covered
thereby or all of such Securities no longer constituting Registrable
Securities), the Company shall use its commercially reasonable best
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof or take such other actions as may be necessary to
reinstate the effectiveness thereof, and in any event shall, within 60
days of such cessation of effectiveness, either (i) amend such Initial
Shelf Registration or Subsequent Shelf Registration in a manner
reasonably calculated to obtain the withdrawal of the order suspending
the effectiveness thereof, or (ii) file a Subsequent Shelf Registration
covering all Registrable Securities which remain unsold. (Each of the
Initial Shelf Registration
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and any Subsequent Shelf Registration filed pursuant to paragraph 2(b)
or this paragraph 2(c) are referred to individually herein as a "Shelf
Registration" and collectively as the "Shelf Registrations").
(d) Effectiveness Period. Subject to Section 3 hereof, the
Company shall use its best efforts to keep the Shelf Registration
(including the Initial Shelf Registration and/or any Subsequent Shelf
Registration) continuously effective under the Securities Act for a
period of five (5) years following the date on which the Initial Shelf
Registration became effective (the "Effectiveness Period"), or such
shorter period ending when all Registrable Securities covered by the
Initial Shelf Registration have been sold; provided, however , that the
Effectiveness Period shall be extended by any period during which a
Shelf Registration is not in effect or during which sales have been
suspended, whether pursuant to Section 3, Section 5(g) hereof or
otherwise. If a Subsequent Shelf Registration is filed, pursuant to
Section 2(b) or 2(c) hereof, the Company shall use its commercially
reasonable best efforts to cause the Subsequent Shelf Registration to
be declared effective as soon as practicable after such filing and to
keep such Registration Statement continuously effective for a period
after such effectiveness equal to the Effectiveness Period, less the
aggregate number of days during which the Initial Shelf Registration or
any Subsequent Shelf Registration was previously in effect. The intent
of this provision is that the Shelf Registration (including the Initial
Shelf Registration and/or any Subsequent Shelf Registration) shall be
in effect for a number of days, in aggregate, equal to five (5) years;
provided, however, that a Shelf Registration shall not be required to
be maintained in effect after none of the Securities eligible to be
included in a Shelf Registration are Registrable Securities.
(e) Supplements and Amendments. The Company shall supplement
or amend the Shelf Registration if (i) required by the rules,
regulations or instructions applicable to the registration form used
for such Shelf Registration, (ii) otherwise required by the Commission,
or (iii) requested to do so in writing by any Holder of Registrable
Securities to the extent necessary to list such Holder as a selling
securityholder in such registration statement.
3. Blackout Periods. With respect to a Shelf Registration filed or to
be filed pursuant to Section 2 hereof, if a majority of the Board of Directors
of the Company shall determine, in its good faith reasonable judgment, that to
maintain the continued effectiveness of such Shelf Registration or to permit
such Shelf Registration to become effective (or if a Subsequent Shelf
Registration is otherwise required to be filed, to file such Shelf Registration)
would be significantly disadvantageous to the Company's financial condition,
business, operations or prospects (a "Disadvantageous Condition") in light of
the existence, or in anticipation, of (i) any acquisition or financing activity
involving the Company, or any subsidiary of the Company, including a proposed
public offering of debt or equity securities, (ii) an
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undisclosed material event, the public disclosure of which would have a material
adverse effect on the Company, (iii) a proposed material transaction involving
the Company or a substantial amount of its assets, or (iv) any other
circumstance or condition the disclosure of which would materially disadvantage
the Company, and the existence of which renders a Subsequent Shelf Registration
to be filed, or any Shelf Registration then filed or effective, inadequate as
failing to include material information, then the Company may, until such
Disadvantageous Condition no longer exists (but not with respect to more than
four occasions nor for more than 180 days in the aggregate nor involving more
than 60 days in the aggregate during any continuous 12-month period) cause such
Shelf Registration to be withdrawn and/or cause the right of Holders to make
dispositions of Registrable Securities pursuant to such Shelf Registration to be
suspended, or, in the case of a Subsequent Shelf Registration that has not yet
been filed, elect not to file such Subsequent Shelf Registration; provided,
however, that the Company may not take any such action until the elapse of 120
days following the commencement of the Effectiveness Period; and provided,
further, that the Company may not take any such action unless it simultaneously
takes similar action with respect to any other Registration Statements of the
Company that are then effective or that are contemplated or required to be
filed. If the Company determines to take any action pursuant to the preceding
sentence, the Company shall deliver a notice to each Holder of Registrable
Securities covered or to be covered under such Shelf Registration, which
indicates that the Shelf Registration is no longer effective or usable or will
not be filed. Upon the receipt of any such notice, such Persons shall forthwith
discontinue any sale of Registrable Securities pursuant to such Shelf
Registration and any use of the prospectus contained in such Shelf Registration.
If any Disadvantageous Condition shall cease to exist, the Company shall
promptly notify any Holders who shall have ceased selling Registrable Securities
pursuant to an effective Shelf Registration as a result of such Disadvantageous
Condition, indicating such cessation and disclosing in reasonable detail the
nature and outcome of such Disadvantageous Condition. The Company shall, if any
Shelf Registration required to be filed or maintained under this Agreement has
been withdrawn or not filed, file promptly, at such time as it in good xxxxx
xxxxx the earliest practicable time, a new Shelf Registration covering the
Registrable Securities that were covered by such withdrawn Shelf Registration or
to be covered by such unfiled Shelf Registration.
4. Expenses. The Company shall promptly pay all Expenses in connection
with any registration initiated pursuant to Section 2 or Section 3 hereof,
whether or not such registration becomes effective.
5. Registration Procedures. If and whenever the Company is required to
effect any registration under the Securities Act as provided in Section 2
hereof, the Company shall, as expeditiously as possible (subject to Section 3
hereof):
(a) promptly prepare and file with the Commission the
requisite registration statement to effect such registration and,
subject to the provisions of this Agreement, thereafter use its
commercially reasonable best efforts to cause such registration
statement
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to become effective; provided, however, that the Company may
discontinue any registration of its securities that are not Registrable
Securities at any time prior to the effective date of the registration
statement relating thereto;
(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 and to comply with the provisions of the Securities
Act with respect to the offering of all Registrable Securities covered
by such registration statement until the end of the Effectiveness
Period, subject to the provisions of this Agreement, or, if earlier,
such time as all of such Registrable Securities have been disposed of
in accordance with the method of disposition set forth in such
registration statement;
(c) furnish to each seller of Registrable Securities covered
by such registration statement such number of copies of such
registration statement and of each amendment and supplement thereto (in
each case including all exhibits and any documents incorporated by
reference), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus, each
final prospectus and any supplement to any prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents,
as such seller may reasonably request in writing;
(d) use its commercially reasonable best efforts (i) to
register or qualify all Registrable Securities and other securities
covered by such registration statement under such other securities or
blue sky laws of such states or other jurisdictions of the United
States of America as the Holders of a majority of the Registrable
Securities covered by such registration statement shall reasonably
request in writing, (ii) to keep such registration or qualification in
effect for so long as such registration statement remains in effect and
(iii) to take any other action that may be reasonably necessary or
advisable to enable the sellers of Registrable Securities to consummate
the disposition in such jurisdictions of the securities to be sold by
such sellers, 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 wherein it would not but for the requirements of
this subsection (d) be obligated to be so qualified, to subject itself
to taxation in such jurisdiction or to consent to general service of
process in any such jurisdiction;
(e) use its commercially reasonable best efforts to cause all
Registrable Securities covered by such registration statement to be
registered with or approved by such other federal or state governmental
agencies or authorities as may be necessary in the opinion of counsel
to the Company and counsel to the sellers of Registrable Securities to
enable such sellers to consummate the offering of such Registrable
Securities;
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(f) use its good faith efforts to obtain and, if obtained,
furnish a copy to each seller of Registrable Securities of
(i) an opinion of counsel for the Company,
dated the effective date of such registration statement,
reasonably satisfactory in form and substance to counsel to
the Holders chosen by Holders of a majority of the Registrable
Securities being registered, and
(ii) a "comfort" letter, dated the effective
date of such registration statement, signed by the independent
public accountants who have certified the Company's financial
statements included or incorporated by reference in such
registration statement, reasonably satisfactory in form and
substance to counsel to the Holders chosen by Holders of a
majority of the Registrable Securities being registered,
in each case, covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and,
in the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements and matters
contained in such registration statement, as are customarily covered in
opinions of issuer's counsel and in accountants' comfort letters
delivered to selling securityholders in connection with the sale of
securities pursuant to "shelf" registration statements;
(g) notify the sellers of Registrable Securities under the
Shelf Registration (providing, if requested by any such Persons,
confirmation in writing) as soon as practicable after becoming aware
of: (A) the filing of any prospectus or prospectus supplement or the
filing or effectiveness (or anticipated date of effectiveness) of such
registration statement or any post-effective amendment thereto; (B) any
request by the Commission for amendments or supplements to such
registration statement or the related prospectus or for additional
information; (C) the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the
initiation of any proceedings for the purpose; (D) the receipt by the
Company of any notification with respect to the suspension of the
qualification or registration (or exemption therefrom) of any
Registrable Securities for sale in any jurisdiction in the United
States or the initiation or threatening of any proceeding for such
purposes; or (E) the happening of any event that makes any statement
made in such registration statement or in any related prospectus,
prospectus supplement, amendment or document incorporated therein by
reference untrue in any material respect or that requires the making of
any changes in such registration statement or in any such prospectus,
supplement, amendment or other such document so that it will not
contain any untrue statement of a material fact or omit to state any
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material fact required to be stated therein or necessary to make the
statements therein (in the case of any prospectus in the light of the
circumstances under which they were made) not misleading;
(h) otherwise comply with all applicable rules and regulations
of the Commission and any other governmental agency or authority having
jurisdiction over the offering, and make available to its security
holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than
eighteen months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder;
(i) enter into customary agreements and take all such other
reasonable actions in connection therewith in order to expedite or
facilitate the disposition of the Registrable Securities included in
such registration statement;
(j) make every reasonable effort to obtain the withdrawal of
any order or other action suspending the effectiveness of any such
registration statement or suspending the qualification or registration
(or exemption therefrom) of the Registrable Securities for sale in any
jurisdiction;
(k) if any event described in subsection (g) hereof occurs,
use its best efforts (subject to Section 3 hereof) to cooperate with
the Commission to prepare, as soon as practicable, any amendment or
supplement to such registration statement or such related prospectus in
order that such registration statement and prospectus, as so amended or
supplemented, shall not include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or to take other action
that may have been requested by the Commission; and
(l) use its commercially reasonable best efforts to cause all
such Registrable Securities covered by such registration statement to
be listed on any national securities exchange or included in any
automated quotation system on which securities of the same class issued
by the Company are then listed or included (if the listing or inclusion
of such Registrable Securities is then permitted under the rules of
such exchange or interdealer quotation system).
It shall be a condition precedent to the obligations of the Company to
take action pursuant to this Agreement that the selling Holders shall furnish to
the Company in writing such information regarding themselves and the Registrable
Securities held by them, and the intended method of disposition of such
securities, as shall be required to effect the registration of their Registrable
Securities.
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Following a registration pursuant to Section 2 hereof, each Holder
agrees that as of the date that a final prospectus is made available to it for
distribution to prospective purchasers of Registrable Securities it shall cease
to distribute copies of any preliminary prospectus prepared in connection with
the offer and sale of such Registrable Securities. Each Holder further agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in subsection (g) of this Section 5, such Holder shall
forthwith discontinue such Holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by subsection (k) of this Section 5 and, if so directed
by the Company, shall 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 relating to such Registrable Securities current at the time of
receipt of such notice.
6. Preparation; Reasonable Investigation.
(a) Registration Statements. In connection with the
preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company shall give a
representative designated by Holders of a majority of the Registrable
Securities registered under such registration statement (the
"Representative"), the underwriters, if any, and its respective counsel
and accountants the reasonable opportunity to participate in the
preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or
supplement thereto, and shall give each of them such reasonable access
to its books and records and such reasonable opportunities to discuss
the business of the Company with its officers and the independent
public accountants who have certified its financial statements as shall
be necessary, in the reasonable opinion of any such Representative's
and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
(b) Confidentiality. Each Holder of Registrable Securities
shall maintain the confidentiality of any confidential information
received from or otherwise made available by the Company to such Holder
of Registrable Securities pursuant to this Agreement and identified in
writing by the Company as confidential and shall enter into such
confidentiality agreements as the Company shall reasonably request.
Information that (i) is or becomes available to a Holder of Registrable
Securities from a public source, (ii) is disclosed to a Holder of
Registrable Securities by a third-party source whom the Holder of
Registrable Securities reasonably believes has the right to disclose
such information or (iii) is or becomes required to be disclosed by a
Holder of Registrable Securities by law, including, but not limited to,
administrative or court orders, shall not be deemed to be confidential
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information for purposes of this Agreement; provided, however, that to
the extent sufficient time is available prior to such disclosure being
required to be made pursuant to clause (iii) hereof, the Holders of
Registrable Securities shall (to the extent not legally prohibited from
doing so) promptly notify the Company of any request for disclosure and
any proposed disclosure pursuant to such clause (iii). The Holders of
Registrable Securities shall not grant access, and the Company shall
not be required to grant access, to information under this Section 6 to
any Person who will not agree to maintain the confidentiality (to the
same extent a Holder is required to maintain the confidentiality) of
any confidential information received from or otherwise made available
to it by the Company or the holders of Registrable Securities under
this Agreement and identified in writing by the Company as
confidential.
7. Indemnification.
(a) Indemnification by the Company. In connection with any
registration statement filed by the Company pursuant to Section 2
hereof, the Company shall, and hereby agrees to, indemnify and hold
harmless, each Holder and seller of any Registrable Securities covered
by such registration statement and each other Person, if any, who
controls such Holder or seller for purposes of the Securities Act or
the Exchange Act, and their respective directors, officers, partners,
agents and Affiliates (each, a "Company Indemnitee" for purposes of
this Section 7(a)), against any losses, claims, damages, liabilities
(or actions or proceedings, whether commenced or threatened, in respect
thereof and whether or not such Company Indemnitee is a party thereto),
joint or several, and expenses, including, without limitation, the
reasonable fees, disbursements and other charges of legal counsel and
reasonable out-of-pocket costs of investigation, to which such Company
Indemnitee may become subject under the Securities Act or otherwise
(collectively, a "Loss" or "Losses"), insofar as such Losses arise out
of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under
which Registrable Securities were registered pursuant to this
Agreement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto,
including any documents incorporated by reference in any of the
foregoing (collectively, "Offering Documents"), or any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein in the light of the
circumstances in which they were made not misleading; provided,
however, that the Company shall not be liable in any such case to the
extent that any such Loss arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in such Offering Documents in reliance upon and in conformity with
written information furnished to the Company in writing by or on behalf
of such Company
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Indemnitee specifically stating that it is expressly for use therein.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Company Indemnitee and shall
survive the transfer of such securities by such Company Indemnitee. The
Company shall also indemnify any underwriters of the Registrable
Securities, their officers, directors and employees, and each Person
who controls any such underwriter (within the meaning of the Securities
Act and the Exchange Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable
Securities.
(b) Indemnification by the Sellers. In connection with any
registration statement filed by the Company pursuant to Section 2
hereof in which a Holder has registered for sale Registrable
Securities, each such Holder or seller of Registrable Securities,
severally and not jointly, shall, and hereby agrees to, indemnify and
hold harmless the Company and each of its directors, officers,
employees and agents, each other Person who participates as an
underwriter in the offering or sale of such securities, each other
Person, if any, who controls the Company, any such underwriter and each
other seller (within the meaning of the Securities Act) and such
underwriter's or other seller's directors, officers, stockholders,
partners, employees, agents and affiliates (each a "Holder Indemnitee"
for purposes of this Section 7(b)), against all Losses insofar as such
Losses arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Offering Documents
or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein in the light of circumstances in which they were made not
misleading, 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 by or on
behalf of such Holder or seller of Registrable Securities specifically
stating that it is expressly for use therein; provided, however, that
the liability of such indemnifying party under this Section 7(b) shall
be limited to the amount of the net proceeds received by such
indemnifying party in the offering giving rise to such liability. Such
indemnity shall remain in full force and effect, regardless of any
investigation made by or on behalf of the Holder Indemnitee and shall
survive the transfer of such securities by such Holder.
(c) Notices of Losses, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a Loss referred to in the preceding subsections of
this Section 7, 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,
however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its
obligations under the preceding subsections of this Section 7, except
to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. In case any such action is brought against
an indemnified party, the indemnifying party shall be entitled to
participate in and, unless in such indemnified party's counsel's
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reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such Loss, to assume and
control the defense thereof, in each case at its own 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 such indemnifying party of its
assumption of the defense thereof, the indemnifying party shall 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 shall be liable for any settlement of any such action or
proceeding effected without its written consent, which shall not be
unreasonably withheld, delayed or conditioned. No indemnifying party
shall, without the consent of the indemnified party, consent to entry
of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect of
such Loss or which requires action on the part of such indemnified
party or otherwise subjects the indemnified party to any obligation or
restriction to which it would not otherwise be subject.
(d) Contribution. If the indemnification provided for in this
Section 7 shall for any reason be unavailable to an indemnified party
under subsection (a) or (b) of this Section 7 in respect of any Loss,
then, in lieu of the amount paid or payable under subsection (a) or (b)
of this Section 7, the indemnified party and the indemnifying party
under subsection (a) or (b) of this Section 7 shall contribute to the
aggregate Losses (including legal or other expenses reasonably incurred
in connection with investigating the same) in such proportion as is
appropriate to reflect the relative fault of the Company and the
sellers of Registrable Securities covered by the registration statement
which resulted in such Loss or action in respect thereof, with respect
to the statements, omissions or action which resulted in such Loss or
action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue
statement or omission. The parties hereto agree that it would not be
just and equitable if contributions were to be determined by any method
of allocation which does not take account of the equitable
considerations referred to in this paragraph. The amount paid by an
indemnified party as a result of the Losses referred to in the first
sentence of this paragraph shall be deemed to include any legal and
other expenses reasonably incurred by such indemnified party in
connection with investigation or defending any Loss which is the
subject of this paragraph. 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
13
misrepresentation. In addition, no Person shall be obligated to
contribute hereunder any amounts in payment for any settlement of any
action or Loss effected without such Person's consent.
(e) Indemnification Payments. The indemnification and
contribution required by this Section 7 shall be made by periodic
payments of the amount thereof during the course of any investigation
or defense, as and when bills are received or any Loss is incurred.
8. Registration Rights to Others. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act or the
Exchange Act, such rights shall not be in conflict with or adversely affect any
of the rights provided in this Agreement to the holders of Registrable
Securities.
9. Adjustments Affecting Registrable Securities.
The Company shall not effect or permit to occur any combination,
subdivision or reclassification of Registrable Securities that would materially
adversely affect the ability of the Holders to include such Registrable
Securities in any registration of its securities under the Securities Act
contemplated by this Agreement or the marketability of such Registrable
Securities under any such registration or other offering.
10. Rule 144 and Rule 144A. Prior to the expiration of the
Effectiveness Period, the Company shall take all actions reasonably necessary to
enable Holders to sell 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, (b)
Rule 144A under the Securities Act, as such Rule may be amended from time to
time, or (c) any similar rules or regulations hereafter adopted by the
Commission, including, without limiting the generality of the foregoing, filing
on a timely basis all reports required to be filed under the Exchange Act. Upon
the request of any Holder, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements. This paragraph
is in addition to and not in derogation of any rights the Holders may have under
any other agreement.
11. Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company shall have obtained the prior written consent of the Holders
of at least a majority of the Registrable Securities affected by such amendment,
modification or waiver.
14
12. Nominees for Beneficial Owners. In the event that any Registrable
Security is held by a nominee for the beneficial owner thereof, the beneficial
owner thereof may, at its election in writing delivered to the Company, be
treated as the Holder of such Registrable Security for purposes of any request
or other action by any Holder or Holders pursuant to this Agreement or any
determination of the number or percentage of Registrable Securities held by any
Holder or Holders contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
13. Assignment. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns including any successor by merger to the Company. Any
Holder may assign to any permitted Transferee of its Registrable Securities
holding Registrable Securities its rights and obligations under this Agreement,
provided that such Transferee shall deliver to the Company prior to such
assignment a written instrument in which such Transferee agrees to be bound by
this Agreement as if it were an original party hereto, whereupon such Transferee
shall for all purposes be deemed to be a Holder under this Agreement.
14. Calculation of Percentage of Outstanding Registrable Securities.
For purposes of this Agreement, all references to an aggregate number of
Registrable Securities or a percentage thereof shall be calculated based upon
the aggregate number of Registrable Securities of such class outstanding at the
time such calculation is made and shall exclude any Registrable Securities or
shares of Common Stock, as the case may be, owned by the Company or any
subsidiary of the Company.
15. Miscellaneous.
(a) Further Assurances. Each of the parties hereto shall
execute such documents and other papers and perform such further acts
as may be reasonably required or desirable to carry out the provisions
of this Agreement and the transactions contemplated hereby.
(b) Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the
meaning or construction of any provisions hereof.
(c) Remedies. Each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Agreement.
The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and the Company hereby agrees to waive the
defense in any
15
action for specific performance that a remedy at law would be adequate.
(d) Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the
subject matter contained herein, and there are no restrictions,
promises, representations, warranties, covenants, or undertakings with
respect to the subject matter hereof, other than those expressly set
forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties hereto with respect
to the subject matter hereof.
(e) Notices. Any notices or other communications to be given
hereunder by any party to another party shall be in writing, shall be
delivered personally, by telecopy, by certified or registered mail,
postage prepaid, return receipt requested, or by Federal Express or
other comparable delivery service, to the address of the party set
forth on Schedule B hereto or to such other address as the party to
whom notice is to be given may provide in a written notice to the other
parties hereto, a copy of which shall be on file with the Secretary of
the Company. Notice shall be effective when delivered if given
personally, when receipt is acknowledged if telecopied, three days
after mailing if given by registered or certified mail as described
above, and one business day after deposit if given by Federal Express
or comparable overnight delivery service.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE TO BE PERFORMED ENTIRELY IN SUCH STATE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY AND THE
PARTIES EACH HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW
YORK STATE COURT SITTING IN THE CITY OF NEW YORK OR ANY FEDERAL COURT
SITTING IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND EACH
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS, IN EACH CASE SOLELY IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
(g) Severability. If one or more of the provisions contained
herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any
16
respect, for any reason, the validity, legality and enforceability of
the remaining provisions contained herein shall not be in any way
affected or impaired thereby, and the provision held to be invalid,
illegal or unenforceable shall be reformed to the minimum extent
necessary, and in a manner as consistent with the purposes thereof as
is practicable, so as to render it valid, legal and enforceable, it
being intended that all rights and obligations of the parties hereunder
shall be enforceable to the fullest extent permitted by law.
(h) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE PENN TRAFFIC COMPANY
By: /s/ Xxxxxx X. Xxx
-----------------
Name:
Title:
HOLDERS:
QUANTUM PARTNERS LDC
By: /s/ Xxxx Xxxxxxx
----------------
Name:
Title:
QUOTA FUND NV
By: /s/ Xxxx Xxxxxxx
----------------
Name:
Title:
17
SCHEDULE A
----------
Number of
Shares of Principal Amount Number of
Name Common Stock of Senior Notes Warrants
---- ------------ --------------- --------
Quantum Partners LDC 7,854,032 41,335,109 0
Quota Fund NV 1,178,736 6,203,607 0
18
SCHEDULE B
----------
To the Company:
The Penn Traffic Company
0000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxx, Xx.
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
To the Holders:
c/o Satellite Fund Management, LLC
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention : Xx. Xxxx Xxxxxxx
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
