Exhibit 10.11
REGISTRATION RIGHTS AGREEMENT
AMONG
XXXXXX'X GRAND ICE CREAM, INC.,
GENERAL ELECTRIC CAPITAL CORPORATION,
TRUSTEES OF GENERAL ELECTRIC PENSION TRUST,
AND
GE INVESTMENT PRIVATE PLACEMENT PARTNERS, I
DATED AS OF JUNE 30, 1993
REGISTRATION RIGHTS AGREEMENT, dated as of June 30, 1993, among
XXXXXX'X GRAND ICE CREAM, INC. a Delaware corporation (the "Company"), GENERAL
ELECTRIC CAPITAL CORPORATION ("GE Capital"), TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST ("GEPT") and GE INVESTMENT PRIVATE PLACEMENT PARTNERS, I
("GEIPPP") (collectively, the "Investors").
1. Background. Pursuant to a Securities Purchase Agreement dated as of
June 24, 1993 (the "Purchase Agreement"), among the Company and the Investors,
the Investors have purchased from the Company $100,752,163 principal amount of
the Company's 6.25% Subordinated Convertible Notes due June 30, 2001 (the
"Notes"). Subject to the terms and conditions set forth in the Purchase
Agreement and certain related documents, the Notes are convertible into shares
of Series B Convertible Preferred Stock, par value $1.00 per share ("Series B
Preferred Stock"), the Notes and the Series B Preferred Stock are convertible
into shares of Series A Convertible Preferred Stock, par value $1.00 per share
("Series A Preferred Stock"), and the Notes, the Series B Preferred Stock and
the Series A Preferred Stock are convertible into shares of Common Stock, par
value $1.00 per share ("Common Stock"), of the Company. The shares of Common
Stock are referred to herein as the "Registrable Securities."
2. Registration Under Securities Act, etc.
2.1 Registration on Request.
(a) Request. Subject to Section 2.8 hereof, at any time and from
time to time, upon the written request of holders (the "Initiating Holders") of
Registrable Securities representing not less than 600,000 shares of Common Stock
that the Company effect the registration under the Securities Act of all or part
of such Initiating Holders' Registrable Securities, provided that in no event
shall the Company be obligated to register fewer than 600,000 shares of Common
Stock pursuant to such request, the Company will promptly give written notice of
such requested registration to all registered holders of Registrable Securities,
and thereupon the Company will use its best efforts to effect the registration
under the Securities Act of
(i) the Registrable Securities (representing not less
than 600,000 shares of Common Stock of the Company)
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which the Company has been so requested to register by such Initiating
Holders, and
(ii) all other Registrable Securities which the Company
has been requested to register by the holders thereof (such holders
together with the Initiating Holders are hereinafter referred to as the
"Selling Holders") by written request given to the Company within 30
days after the giving of such written notice by the Company, all to the
extent requisite to permit the disposition of the Registrable Securities
so to be registered.
(b) Registration of Other Securities. Whenever the Company shall
effect a registration pursuant to this Section 2.1 in connection with an
underwritten offering by one or more Selling Holders of Registrable Securities,
no securities other than Registrable Securities shall be included among the
securities covered by such registration unless (a) the managing underwriter of
such offering shall have advised each Selling Holder of Registrable Securities
to be covered by such registration in writing that the inclusion of such other
securities would not adversely affect such offering or (b) the Selling Holders
of not less than 66-2/3% of all Registrable Securities to be covered by such
registration shall have consented in writing to the inclusion of such other
securities.
(c) Registration Statement Form. Registrations under this
Section 2.1 shall be on such appropriate registration form of the Commission as
shall be selected by the Company.
(d) Expenses. The Company will pay the Registration Expenses in
connection with any registration requested pursuant to this Section 2.1.
(e) Effective Registration Statement. A registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective, (ii)
if after it has become effective, such registration is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to the Selling
Holders and has not thereafter become effective, or (iii) if the conditions to
closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived, other than by
reason of a failure on the part of the Selling Holders.
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(f) Selection of Underwriters. The underwriter or underwriters
of each underwritten offering of the Registrable Securities so to be registered
shall be selected by the mutual agreement of the Company and the Selling Holders
of more than 50% of the Registrable Securities so to be registered; provided,
however, that if GEPT or GEIPPP should be participating in such offering and
such underwriter or underwriters are affiliated with GEPT or GEIPPP, GEPT or
GEIPPP shall have the absolute right to disapprove such underwriter or
underwriters.
(g) Priority in Requested Registration. If the managing
underwriter of any underwritten offering shall advise the Company in writing
(with a copy to each Selling Holder of Registrable Securities requesting
registration) that, in its opinion, the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering within a price range acceptable to the Selling Holders of 66-2/3% of
the Registrable Securities requested to be included in such registration, the
Company will include in such registration, to the extent of the number which the
Company is so advised can be sold in such offering, Registrable Securities
requested to be included in such registration, pro rata among the Selling
Holders requesting such registration on the basis of the percentage of the
Registrable Securities of such Selling Holders requested so to be registered. In
connection with any such registration to which this Section 2.1(g) is
applicable, no securities other than Registrable Securities shall be covered by
such registration.
(h) Limitations on Registration on Request. Notwithstanding
anything in this Section 2.1 to the contrary, in no event will the Company be
required to effect, in the aggregate pursuant to this Section 2.1, without
regard to the holder of Registrable Securities making such request, (1) more
than four registrations during the term of this Agreement or (2) more than one
registration in any twelve month period. GEPT and GEIPPP, on the one hand, and
GE Capital, on the other hand, shall each be entitled to initiate two
registrations under Section 2.1(a), provided that each of the Investors shall be
entitled to participate in any such registration.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company
proposes to register any of its securities under the Securities Act by
registration on Forms X-0, X-0 or S-3 or any successor or similar form(s)
(except registrations on such Forms or similar form(s) solely for registration
of securities
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in connection with an employee benefit plan or dividend reinvestment plan or a
merger or consolidation), whether or not for sale for its own account, it will,
subject to Section 2.8 hereof, each such time give prompt written notice to all
registered holders of Registrable Securities of its intention to do so and of
such holders' rights under this Section 2.2. Upon the written request of any
such holder (a "Requesting Holder") made as promptly as practicable and in any
event within 30 days after the receipt of any such notice (10 days if the
Company states in such written notice or gives telephonic notice to all
registered holders of Registrable Securities, with written confirmation to
follow promptly thereafter, that (i) such registration will be on Form S-3 and
(ii) such shorter period of time is required because of a planned filing date)
(which request shall specify the Registrable Securities intended to be disposed
of by such Requesting Holder), the Company will, subject to Section 2.8 hereof,
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 Requesting Holders thereof; provided, however, that 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 register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to each Requesting Holder of Registrable
Securities and (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from any obligation of the Company to pay the
Registration Expenses in connection therewith), without prejudice, however, to
the rights of any holder or holders of Registrable Securities entitled to do so
to request that such registration be effected as a registration under Section
2.1 and (ii) in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities, for the same period
as the delay in registering such other securities. No registration effected
under this Section 2.2 shall relieve the Company of its obligation to effect any
registration upon request under Section 2.1. The Company will pay all
Registration Expenses in connection with registration of Registrable Securities
requested pursuant to this Section 2.2. If securities in such registration are
to be offered through a firm of underwriters and if GEPT or GEIPPP shall be
participating in such offering, the Company will not engage Xxxxxx, Xxxxxxx &
Co. Incorporated as underwriters for such offering.
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(b) Priority in Incidental Registrations. If the managing
underwriter of any underwritten offering shall inform the Company by letter of
its belief that the number or type of Registrable Securities requested to be
included in such registration would materially adversely affect such offering,
then the Company will include in such registration, to the extent of the number
and type which the Company is so advised can be sold in (or during the time of)
such offering, first, all securities proposed by the Company to be sold for its
own account, second, such Registrable Securities and all other registered
securities of the Company requested to be included in such registration pro rata
among such holders on the basis of the estimated gross proceeds of the
securities of such holders requested to be so included, and third, any other
securities of the Company requested to be included in such registration.
2.3 Registration Procedures. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Section 2.1 and 2.2, the
Company will as expeditiously as possible:
(i) prepare and (as soon as practicable, and in any
event within 60 days in the case of Forms S-1 or S-2 and 30 days in the
case of a registration requested on Form S-3 after the end of the period
within which requests for registration may be given to the Company) file
with the Commission the requisite registration statement to effect such
registration and thereafter 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 are not
Registrable Securities (and, under the circumstances specified in
Section 2.2(a), its securities which are Registrable Securities) at any
time prior to the effective date of the registration statement relating
thereto;
(ii) 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 disposition of all Registrable
Securities covered by such registration statement for such period as
shall be required for the disposition of all of such Registrable
Securities, provided, that such period need not exceed 45 days;
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(iii) furnish to each seller of Registrable Securities
covered by such registration statement, such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary 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;
(iv) use its best efforts (x) 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 of
the United States of America where an exemption is not available and as
the sellers of Registrable Securities covered by such registration
statement shall reasonably request, (y) to keep such registration or
qualification in effect for so long as such registration statement
remains in effect, and (z) to take any other action which may be
reasonably necessary or advisable to enable such sellers 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
subdivision (iv) be obligated to be so qualified or to consent to
general service of process in any such jurisdiction;
(v) use its 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 seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) furnish to each seller of Registrable Securities a
signed counterpart of
(x) an opinion of counsel for the Company, and
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(y) a "comfort" letter signed by the independent
public accountants who have certified the Company's financial
statements included or incorporated by reference in such
registration statement
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the
case of the accountant's comfort letter, with respect to events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountant's comfort
letters delivered to the underwriters in underwritten public offerings
of securities (and dated the dates such opinions and comfort letters are
customarily dated) and, in the case of the accountant's comfort letter,
such other financial matters, and in the case of the legal opinion, such
other legal matters, as the sellers of more than 50% of the Registrable
Securities covered by such registration statement, or the underwriters,
may reasonably request;
(vii) notify each seller of Registrable Securities
covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act,
upon discovery that, or upon the happening of any event as a result of
which, in the judgment of the Company, the prospectus included in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, in the light of the circumstances under which they were
made, and at the request of any such seller promptly prepare and furnish
to it a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, in the judgment of the
Company, as thereafter delivered to the purchasers of such 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 under which they were made;
(viii) 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, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first full
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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, and promptly
furnish to each such seller of Registrable Securities a copy of any
amendment or supplement to such registration statement or prospectus;
(ix) provide and cause to be maintained a transfer agent
and registrar (which, in each case, may be the Company) for all
Registrable Securities covered by such registration statement from and
after a date not later than the effective date of such registration; and
(x) use its best efforts to list all Registrable
Securities covered by such registration statement on any national
securities exchange on which Registrable Securities of the same class
and, if applicable, series, covered by such registration statement are
then listed.
The Company may require each seller of Registrable Securities as
to which any registration is being effected to furnish the Company such
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that upon receipt of any notice from the Company of
the happening of any event of the kind described in subdivision (vii) of this
Section 2.3, such holder will 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 subdivision (vii) of this
Section 2.3 and, if so directed by the Company, 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 relating to such Registrable
Securities current at the time of receipt of such notice.
2.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under Section 2.1, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form
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to the Company, each such holder and the underwriters and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.7. The holders
of the Registrable Securities proposed to be distributed by such underwriters
will cooperate with the Company in the negotiation of the underwriting agreement
and will give consideration to the reasonable suggestions of the Company
regarding the form thereof. Such holders of Registrable Securities to be
distributed by such underwriters shall be parties to such underwriting agreement
and may, at their option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such holders of
Registrable Securities. Any such holder of Registrable Securities shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
regarding such holder, such holder's Registrable Securities, such holder's
intended method of distribution and any other representations required by law.
(b) Incidental Underwritten Offerings. If the Company proposes
to register any of its securities under the Securities Act as contemplated by
Section 2.2 and such securities are to be distributed by or through one or more
underwriters, the Company will, subject to Section 2.8 hereof, if requested by
any Requesting Holder of Registrable Securities arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such Requesting
Holder among the securities of the Company to be distributed by such
underwriters. The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such Requesting Holder of Registrable
Securities shall not be required to make any representations or warranties to or
agreements with the Company or the
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underwriters other than representations, warranties or agreements regarding such
Requesting Holder, such Requesting Holder's Registrable Securities and such
Requesting Holder's intended method of distribution or any other representations
required by law. Notwithstanding the foregoing provisions of this Section
2.4(b), the Company need not include any Registrable Securities of any Such
Requesting Holder in an underwritten offering of the Company's securities if the
inclusion of such Requesting Holder's securities, in the opinion of the managing
underwriter for such offering by the Company, might adversely affect such
offering by the Company.
(c) Holdback Agreements. (i) If any registration of Registrable
Securities shall be in connection with an underwritten public offering, each
holder of Registrable Securities agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144 under the Securities Act,
of any Registrable Securities, and not to effect any such public sale or
distribution of any other equity security of the Company or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (in each case, other than as part of such underwritten public offering)
during the 15 days prior to, and during the 90-day period (or such longer period
as may be reasonably requested by the underwriter of such offering) beginning
on, the effective date of such registration statement (except as part of such
registration) provided that each holder of Registrable Securities has received
written notice of such registration at least 15 days prior to such effective
date.
(ii) If any registration of Registrable Securities shall be in
connection with an underwritten public offering, the Company agrees (i) not to
effect any public sale or distribution of any of its equity securities or of any
security convertible into or exchangeable or exercisable for any equity security
of the Company (other than any such sale or distribution of such securities in
connection with any merger or consolidation by the Company or any subsidiary of
the Company of the capital stock or substantially all the assets of any other
person or in connection with an employee stock option or other benefit plan)
during the 15 days prior to, and during the 60-day period beginning on, the
effective date of such registration statement (except as part of such
registration) and (ii) that any agreement entered into after the date of this
Agreement pursuant to which the Company issues or agrees to issue any privately
placed equity securities shall contain a provision under which holders of such
securities agree not to effect any public sale or distribution of any such
securities during the period referred to in the foregoing clause (i),
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including any sale pursuant to Rule 144 under the Securities Act (except as part
of such registration, if permitted).
2.5 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and their respective counsel and accountants the opportunity to participate
in the preparation of such registration statement, each prospectus included
therein or filed with the Commission, and, to the extent practicable, each
amendment thereof or supplement thereto, and give each of them such access to
its books and records (to the extent customarily given to underwriters of the
Company's securities) and such 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 opinion of such
holders' and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
2.6 Limitations, Conditions and Qualifications to Obligations
under Registration Covenants. The obligation of the Company to use its best
efforts to cause the Registrable Securities to be registered under the
Securities Act is subject to the following limitations, conditions and
qualifications.
(a) The Company shall be entitled to postpone for a reasonable
period of time (but not exceeding 90 days and no more than once in any twelve
month period) the filing of any registration statement otherwise required to be
prepared and filed by it pursuant to Section 2.1 if the Company determines, in
its reasonable judgment, that such registration and offering would interfere
with any financing, acquisition, corporate reorganization or other material
transaction involving the Company or any of its Affiliates or would require
premature disclosure thereof and promptly gives the holders of Registrable
Securities requesting registration thereof pursuant to Section 2.1 written
notice of such delay. If the Company shall so postpone the filing of a
registration statement, such holders of Registrable Securities requesting
registration thereof pursuant to Section 2.1 shall have the right to withdraw
the request for registration by giving written notice to the Company within 30
days after receipt of the notice of postponement and, in the event of such
withdrawal, such request shall not be counted for purposes of the requests for
registration to which holders of Registrable Securities are entitled pursuant to
Section 2.1 hereof.
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(b) So long as the provisions of Section 7.2 of the Purchase
Agreement remain in effect, holders of Registrable Securities shall use their
reasonable best efforts to effect as wide a distribution of such Registrable
Securities as reasonably practicable, and in no event shall any sale of
Registrable Securities be made knowingly to any Person (including its
Affiliates) and any Person or entities which are to the knowledge of such
holders (or to the knowledge of any underwriter for such holders) part of any
13D Group (as defined in the Purchase Agreement) which includes such purchaser
or any of its Affiliates) that, after giving effect to such sale, would
Beneficially Own (as defined in the Purchase Agreement) Voting Securities (as
defined in the Purchase Agreement) representing more than 3% of the voting power
of all outstanding Voting Securities of the Company. The holders of such
Registrable Securities shall secure the agreement of their underwriter or
underwriters, if any, for such offering to comply with the foregoing.
2.7 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act, the
Company will, and hereby does, indemnify and hold harmless, in the case of any
registration statement filed pursuant to Section 2.1 or 2.2, each seller of any
Registrable Securities covered by such registration statement, its directors,
officers, partners, agents and affiliates and each other 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, insofar as losses, claims, damages or liabilities
(or actions or proceedings, whether commenced or threatened, in respect thereof)
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 such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, 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 light of the circumstances in which they were made not misleading,
and the Company will reimburse such seller and each such director, officer,
partner, agent or affiliate, underwriter and controlling Person for any legal or
any other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, liability, action or proceeding; provided,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage,
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liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company through an instrument executed by or on behalf of such seller or
underwriter, as the case may be, specifically stating that it is for use in the
preparation thereof; and provided, further, that the Company shall 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, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus so long as such final prospectus, and any
amendments or supplements thereto, have been furnished to such underwriter. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such seller or any such director, officer, partner,
agent or affiliate or controlling Person and shall survive the transfer of such
securities by such seller.
(b) Indemnification by the Sellers. As a condition to including
any Registrable Securities in any registration statement, the Company shall have
received an undertaking satisfactory to it from the prospective seller of such
Registrable Securities, to indemnify and hold harmless (in the same manner and
to the same extent as set forth in subdivision (a) of this Section 2.7) the
Company, and each director of the Company, each officer of the Company and each
other Person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged 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 specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement;
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provided, however, that the liability of such indemnifying party under this
Section 2.7(b) shall be limited to the amount of 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 Company or any such director, officer or controlling Person
and shall survive the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 2.7,
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 subdivisions of this Section 2.7, 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,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties is reasonably likely to exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and, to assume the defense thereof, 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 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 unless in such indemnified party's reasonable judgment a conflict
of interest between such indemnified and indemnifying parties arises in respect
of such claim after the assumption of the defense thereof and the indemnified
party notifies the indemnifying party of such indemnified party's judgment and
the basis therefor. No indemnifying party shall be liable for any settlement of
any action or proceeding effected without its written consent, which consent
shall not be unreasonably withheld. 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 claim or litigation.
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(d) Contribution. If the indemnification provided for in this
Section 2.7 shall for any reason be held by a court to be unavailable to an
indemnified party under subparagraph (a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under subparagraph (a) or (b) hereof, the indemnified
party and the indemnifying party under subparagraph (a) or (b) hereof shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating the
same), (i) in such proportion as is appropriate to reflect the relative fault of
the Company and the prospective sellers of Registrable Securities covered by the
registration statement which resulted in such loss, claims, damage or liability,
or action in respect thereof, with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company and such prospective sellers from the offering of the securities
covered by such registration statement. 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. Such prospective sellers' obligations to
contribute as provided in this subparagraph (d) are several in proportion to the
relative value of their respective Registrable Securities covered by such
registration statement and not joint. In addition, no Person shall be obligated
to contribute hereunder any amounts in payment for any settlement of any action
or claim effected without such Person's consent, which consent shall not be
unreasonably withheld.
(e) Other Indemnification. Indemnification and contribution
similar to that specified in the preceding subdivisions of this Section 2.7
(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 federal or state law or regulation of any
governmental authority other than the Securities Act.
(f) Indemnification Payments. The indemnification and
contribution required by this section 2.7 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
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2.8 Limitations on Registrations of Registrable Securities. The
Company shall not be required to effect any registration of Registrable
Securities pursuant to Section 2.1 or 2.2 hereof if it shall deliver to the
holder or holders requesting such registration an opinion of counsel (which
opinion and counsel shall be reasonably satisfactory to such holder or holders)
to the effect that all Registrable Securities held by such holder may be sold in
the public market without registration under the Securities Act and any
applicable state Securities laws.
3. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
"Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Exchange Act of 1934, as amended,
shall include a reference to the comparable section, if any, of any such similar
Federal statute.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with Section 2, including, without
limitation, all registration, filing and NASD fees, all listing fees, all fees
and expenses of complying with securities or blue sky laws (including, without
limitation, reasonable fees and disbursements of counsel for the underwriters in
connection with blue sky qualifications of the Registrable Securities), all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of "cold comfort" letters required by
or incident to such performance and compliance, any fees and disbursements of
underwriters (including, without limitation, fees and expenses of counsel to the
underwriters) customarily paid by issuers or sellers of securities and the
reasonable fees and expenses of one counsel to the Selling Holders (selected by
Selling Holders representing at least 50% of the Registrable Securities covered
16
by such registration); provided, however, that Registration Expenses shall
exclude, and the sellers of the Registrable Securities being registered shall
pay, underwriters' fees and underwriting discounts and commissions, expenses
incurred in connection with promotional efforts or "roadshows" and transfer
taxes in respect of the Registrable Securities being registered.
"Registrable Securities" has the meaning set forth in Section 1
hereof. As to any particular Registrable Securities, once issued such securities
shall cease to be Registrable Securities when (a) a registration statement with
respect to the sale 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) they shall have been sold as permitted by,
and in compliance with, Rule 144 (or successor provision) promulgated under the
Securities Act, (c) they shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer under the Securities
Act shall have been delivered by the Company and subsequent public distribution
of them shall not require registration of them under the Securities Act, or (d)
they shall have ceased to be outstanding.
"Securities Act" means the Securities Act of 1933, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933 shall include a reference to
the comparable section, if any, of any such similar Federal statute.
4. Rule 144. The Company shall take all actions reasonably necessary to
enable holders of Registrable Securities to sell such 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 including, without limiting the generality of the foregoing,
filing on a timely basis all reports required to be filed by the Exchange Act.
Upon the request of any holder of Registrable Securities, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.
5. Amendments and Waivers. This Agreement may be amended with the
consent of the Company and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of the beneficial owner or owners of at least 66-2/3% of the
Registrable Securities. Each beneficial owner
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of any Registrable Securities at the time or thereafter outstanding shall be
bound by any consent authorized by this Section 5, whether or not such
Registrable Securities shall have been marked to indicate such consent.
6. Nominees for Beneficial Owners. In the event that any Registrable
Securities are 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 Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
Registrable Securities held by any holder or holders of Registrable Securities
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.
7. Notices. All communications provided for hereunder shall be sent by
courier or other overnight delivery service, shall be effective upon receipt,
and shall be addressed as follows:
(a) if to the Investors, addressed to each of them in the manner
set forth in the Purchase Agreement, or at such other address as any Investor
shall have furnished to the Company in writing;
(b) if to any other holder of Registrable Securities, at the
address that such holder shall have furnished to the Company in writing, or,
until any such other holder so furnishes to the Company an address, then to and
at the address of the last holder of such Registrable Securities who has
furnished an address to the Company; or
(c) if to the Company, addressed to it in the manner set forth
in the Purchase Agreement, or at such other address as the Company shall have
furnished to each holder of Registrable Securities at the time outstanding.
8. Assignment; Calculation of Percentage Interests in Registrable
Securities.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and, with respect to the
Company, its respective successors and assigns and, with respect to the
Investors, any beneficial owner of any Registrable Securities, subject to the
provisions respecting the minimum numbers of percentages of shares of
18
Registrable Securities required in order to be entitled to certain rights, or
take certain actions, contained herein. The Investors named in the first
paragraph of this Agreement (and not any other holder of Registrable Securities
or any other Person) shall be permitted, in connection with a transfer or
disposition of Registrable Securities permitted by the Purchase Agreement, to
impose conditions or constraints on the ability of the transferee, as a holder
of Registrable Securities, to request a registration pursuant to Section 2.1 and
shall provide the Company with copies of such conditions or constraints and the
identity of such transferees.
(b) For purposes of this Agreement, all references to a
percentage of the Registrable Securities shall be calculated based upon the
number of Registrable Securities outstanding at the time such calculation is
made, assuring the conversion of all Notes and shares of Preferred Stock into
shares of Common Stock.
9. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
10. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware.
11. No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement. The
Company has not previously entered into any agreement with respect to any of its
equity securities granting any registration rights to any person.
12. Recapitalizations, etc. In the event that any capital stock or other
securities are issued in respect of, in exchange for, or in substitution of, any
Registrable Securities by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the shares of Registrable Securities or any other
change in the Company's capital structure, appropriate adjustments shall be made
in this Agreement so as to fairly and equitably preserve, as far as practicable,
the original rights and obligations of the parties hereto under this Agreement.
19
13. Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party to such action or proceeding shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
XXXXXX'X GRAND ICE CREAM, INC.
By
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Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By
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Name:
Title:
TRUSTEES OF GENERAL ELECTRIC PENSION
TRUST
By
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Name:
Title:
GE INVESTMENT PRIVATE PLACEMENT
PARTNERS, I
By: GE INVESTMENT MANAGEMENT
INCORPORATED, its General
Partner
By
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Name:
Title:
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