1
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of
this ___ day of _________, 199_, by and between Gart Sports Company, a Delaware
corporation (the "Company"), and Green Equity Investors, L.P., a Delaware
limited partnership (the "Initial Holder").
WHEREAS, the Initial Holder owns beneficially and of record
approximately 85% of the outstanding shares of common stock, par value $.01 per
share (the "Common Stock"), of the Company; and
WHEREAS, the Company desires to grant certain registration rights to
the Initial Holder.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the parties hereto agree as follows:
1. General. The provisions of Section 2 of this Agreement shall be
binding upon, and shall inure to the benefit of, the Initial Holder and all
subsequent holders of the Stock who are Affiliates of the Initial Holder at the
time of acquisition of any of the Stock and acquired the same directly or
indirectly from the Initial Holder in a transaction or series of transactions
not involving any public offering (collectively with the Initial Holder,
"Holders"). As used in this Agreement, (a) the term "Stock" includes the shares
of Common Stock currently held by the Initial Holder, and all shares of capital
stock of the Company issued as a result of any stock dividend on, or stock split
or reclassification or conversion of, any such shares of Common Stock currently
held by the Initial Holder, or issued with respect to such shares in connection
with any merger or reorganization involving the Company. and (b) the term
"Affiliate" means a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Initial Holder. The Initial Holder understands that (i) the shares of Common
Stock currently owned by it have not been registered under the Securities Act of
1933, as amended (the "Act"), or any other applicable securities laws and that
the transfer of such shares may only be made pursuant to an effective
registration statement under the Act or an available exemption from registration
and (ii) that the certificates representing such shares will bear a legend to
that effect. The Company agrees that it will not transfer on its books any
certificate for the Stock in violation of the provisions of this Agreement or
applicable securities laws.
2. Registration Rights. (a) If the Company receives a request signed by
one or more Holders that collectively own at least 20% of the Stock (all such
persons making such request being hereinafter referred to in this Section 2 as
the "Initiating Holders") stating that such Initiating Holders propose to sell
or distribute publicly not less than 20% of the Stock and that such Initiating
Holders desire to have such Stock registered under the Act, in connection with
such proposed sale or distribution, the Company shall as soon as practicable use
its best efforts to file an appropriate registration statement under the Act
covering the Stock and the proposed sale or
2
distribution referred to in such notice and to cause such registration to become
effective under the Act as soon as practicable after the filing thereof. Within
10 days after receipt of such request, the Company shall give written notice
thereof to all Holders other than Initiating Holders and such other Holders
shall, by notice to the Company given within 20 days after the receipt by such
Holders of the Company's notice required by this paragraph, be entitled to have
any Stock which they then propose to sell or distribute publicly registered
under such registration statement as if they were Initiating Holders. The
Company may include in any such registration statement other shares of Common
Stock. The Holders shall not be entitled to make a request pursuant to this
subsection (a) on more than two occasions, provided that the registrations so
requested are actually effected. With the exception of the initial registration
of Common Stock pursuant to the Act, the Company shall not be required to effect
a registration pursuant to this subsection (a) (other than on Form S-3 or a
similar short form if then permitted) until a period of twelve months shall have
elapsed from the effective date of the most recent previous registration which
was not effected on Form S-3 or similar short form, unless in the case of a
registration, notice of which shall have been given pursuant to subsection (b),
any Holder shall have been prevented from including in such previous
registration at least 50% of the Common Stock which such Holder requested to
have included, in which case such period shall be six months. The Company may
postpone for up to 60 days (but no more than 90 days in any 365 day period) the
filing or the effectiveness (which may include the withdrawal of an effective
registration statement) of a registration statement pursuant to this subsection
(a) if the Company's board of directors reasonably determines in its good faith
judgment that, because of the existence of any proposal or plan by the Company
or any of its subsidiaries to engage in any acquisition or financing activity
(other than in the ordinary course of business) or the unavailability for
reasons beyond the Company's control of any required financial statements, or
any other event or condition of similar significance to the Company, it would be
disadvantageous to the Company for such a registration statement to be
maintained effective, or to be filed and become effective; provided that in such
event, the Initial Holders requesting such registration will be entitled to
withdraw such request and, if such request is withdrawn, such registration will
not count as one of the permitted registrations hereunder. The right of the
Initiating Holders to request a registration of Common Stock pursuant to this
subsection (a) shall not apply to any Holder to whom the Company shall deliver
an opinion of its counsel that all of the Common Stock which such Holder
proposes to sell may lawfully be sold or distributed publicly without
registration within a period of six months commencing on the date which is sixty
days after the date of such Holder's registration request.
(b) Subject to the provisions herein, if the Company at any time
proposes to register Common Stock under the Act, whether or not for sale for its
own account, on a form and in a manner which would permit registration of Common
Stock for a public offering under the Act (other than registration on Form S-4
or Form S-8 or any successor form thereto), the Company shall give written
notice of the proposed registration to each Holder at least 30 days prior to the
filing thereof, and each Holder shall have the right to request that all or any
part of its Common Stock be included in such registration by giving written
notice to the Company within fifteen (15) days after the giving of such notice
by the Company (any Holder giving the Company a notice requesting that Common
Stock owned by it be included in such proposed registration being
2
3
hereinafter referred to in this Section 4 as a "Registering Holder"); provided,
however, that (i) if the registration is an underwritten primary registration,
in whole or in part, on behalf of the Company and the managing underwriters of
such offering determine that the aggregate amount of securities of the Company
which all Registering Holders and all other security holders of the Company,
pursuant to contractual rights to participate in such registration ("Other
Holders"), propose to include in such registration statement exceeds the maximum
amount of securities that should be included therein, the Company will include
in such registration, first, the shares which the Company proposes to sell and,
second, the Common Stock proposed to be sold by such Registering Holders and
Other Holders, pro rata among all such Registering Holders and Other Holders,
taken together, on the basis of the number of securities requested to be
included in such registration statement (it being agreed and understood,
however, that such underwriters shall have the right to eliminate entirely the
participation in such registration of all Registering Holders and Other
Holders), and (ii) if the registration is solely an underwritten secondary
registration on behalf of any of the Other Holders pursuant to demand
registration rights and the managing underwriters determine that the aggregate
amount of securities which all Registering Holders and all Other Holders propose
to include in such registration exceeds the maximum amount of securities that
should be included therein, the Company will include in such registration,
first, the securities to be sold for the account of the Other Holders demanding
registration (but only to the extent such Other Holders are entitled to demand
inclusion thereof), and second, the Common Stock of such Registering Holders and
Other Holders electing to include (but not being entitled to demand inclusion
of) securities in such registration, pro rata among all such Registering Holders
and Other Holders, taken together, on the basis of the relative equity interests
in the Company of all Registering Holders and such Other Holders who have
requested that securities owned by them be included (it being agreed and
understood, however, that such underwriters shall have the right to eliminate
entirely the participation therein of all such Registering Holders and Other
Holders not entitled to demand inclusion of securities in such registration).
Common Stock proposed to be registered and sold for the account of any
Registering Holder shall be sold to prospective underwriters selected or
approved by the Company and on the terms and subject to the conditions of one or
more underwriting agreements negotiated between the Company and/or Other Holders
demanding registration and the prospective underwriters. The Registering Holders
shall be permitted to withdraw all or a part of the shares of Common Stock held
by such Registering Holders which were to be included in such registration
statement for such registration at any time prior to the effective date of such
registration. The Company shall not be required to maintain the effectiveness of
the registration statement for such registration beyond the earlier to occur of
120 days after the effective date thereof or consummation of the distribution by
the Registering Holders included in such registration statement. The Company may
withdraw any registration statement at any time before it becomes effective, or
postpone the offering of securities, without obligation or liability to any
Holder.
(c) In connection with any registration of Common Stock under the
Act pursuant to this Agreement, the Company will furnish each Holder whose
Common Stock is registered thereunder with a copy of the registration statement
and all amendments thereto and will supply each such Holder with copies of any
prospectus included therein (including a preliminary
3
4
prospectus and all amendments and supplements thereto), in such quantities as
may be reasonably necessary for the purposes of the proposed sale or
distribution covered by such registration. The Company shall not, however, be
required to maintain the registration statement and to supply copies of a
prospectus for a period beyond 120 days after the effective date of such
registration statement and, at the end of such period, the Company may
deregister any Common Stock covered by such registration statement and not then
sold or distributed. In connection with any such registration of Common Stock,
the Company will, at the request of the managing underwriters with respect
thereto, use its best efforts to qualify such registered shares for sale under
the securities laws of such states as is reasonably required to permit the
distribution of such registered shares, provided that the Company shall not be
required in connection therewith or as a condition thereof to qualify to do
business in any state where it is not then qualified or to take any action that
would subject it to tax or to the general service of process in any state where
it is not then subject.
(d) Notwithstanding any other provision of this Section 2, each
Holder agrees that in the event of an underwritten public offering of Common
Stock for the account of the Company, such Holder will not (and it shall be a
condition to the rights of each Holder and the obligations of the Company under
this Section 4 that such Holder does not) offer for public sale (other than as
part of such underwritten public offering) any Common Stock during the 10 days
prior to and 75 days after the effective date of the registration statement
without the consent of the underwriters. Notwithstanding the foregoing, no
Holder will be subject to the foregoing holdbacks for any period or periods in
aggregate which are in excess of 150 days during any 365 day period.
(e) All expenses, disbursements and fees incurred by the Company in
connection with carrying out its obligations under this Section 4 shall be borne
by the Company; however, each Holder shall pay (i) all costs and expenses of
counsel for such Holder, if such counsel is not also counsel for the Company,
(ii) all underwriting discounts, commissions and expenses and all transfer taxes
with respect to the Common Stock sold by such Holder, and (iii) all other
expenses incurred by such Holder and incidental to the sale and delivery of the
Common Stock to be sold by such Holder.
(f) It shall be a condition of each Holder's rights hereunder to
have Common Stock owned by such Holder registered that:
(i) such Holder shall cooperate with the Company by
supplying information and executing documents relating to such
Holder or the securities of the Company owned by such Holder in
connection with such registration;
(ii) such Holder shall enter into any undertakings and take
such other action relating to the conduct of the proposed
offering which the Company or the underwriters may reasonably
4
5
request as being necessary to insure compliance with federal and
state securities laws and the rules or other requirements of The
National Association of Securities Dealers, Inc. or otherwise to
effectuate the offering; and
(iii) such Holder shall execute and deliver an agreement to
indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement,
any underwriter (as defined in the Act), and each person, if any,
who controls the Company or such underwriter within the meaning
of the Act, against such losses, claims, damages or liabilities
(including reimbursement for legal and other expenses) to which
the Company or any such director, officer, underwriter or
controlling person may become subject under the Act or otherwise,
in such manner as is customary for registrations of the type then
proposed and, in any event, equivalent in scope to indemnities
given by the Company in connection with such registration, but
only with respect to information furnished by such Holder in
writing in connection with such registration (and provided
further that the foregoing indemnities shall be limited to the
aggregate amount of proceeds received by such Holder pursuant to
the sale of shares in such registration).
(g) In the event of any registration under the Act of any Common
Stock pursuant to this Section 2, the Company hereby agrees to indemnify and
hold harmless each Holder disposing of such Common Stock against such losses,
claims, damages or liabilities (including reimbursement for legal and other
expenses) to which such Holder may become subject under the Act or otherwise, in
such manner as is customary for registrations of the type then proposed, but not
with respect to information furnished by such Holder in writing in connection
with such registration.
3. Notices. All notices or other communications under this Agreement
shall be given in writing and shall be deemed duly given and received on the
third full business day following the day of the mailing thereof by registered
or certified mail, return receipt requested, or when delivered personally or
sent by facsimile transmission (if a confirmation of transmission is retained)
as follows:
(a) if to the Company, at its principal executive offices at
the time of the giving of such notice, or at such other place as
the Company shall have designated by notice as herein provided to
the Initial Holder;
5
6
(b) if to the Initial Holder, at its address at the time of
the giving of such notice, or at such other place as the
Purchaser shall have designated by notice as herein provided to
the Company; and
(c) if to any other Holder, at such Holder's last address
appearing in the Company's stock transfer records.
4. Specific Performance. Due to the fact that the securities of the
Company cannot be readily purchased or sold in the open market, and for other
reasons, the parties will be irreparably damaged in the event that this
Agreement is not specifically enforced. In the event of a breach or threatened
breach of the terms, covenants and/or conditions of this Agreement by any party
hereto, the other party shall, in addition to all other remedies, be entitled
(without any bond or other security being required) to a temporary and/or
permanent injunction, without showing any actual damage or that monetary damages
would not provide an adequate remedy, and/or a decree for specific performance,
in accordance with the provisions hereof.
5. Miscellaneous.
(a) This writing constitutes the entire agreement of the parties
with respect to the subject matter hereof and may not be modified or amended
except by a written agreement signed by the Company and the Initial Holder.
Anything in this Agreement to the contrary notwithstanding (and without limiting
the rights of the owners of all of the then outstanding Stock acquired hereunder
to amend, modify or terminate this Agreement), any modification or amendment of
this Agreement by a written agreement signed by, or binding upon, the Initial
Holder shall be valid and binding upon any and all persons or entities who may,
at any time, have or claim any rights under or pursuant to this Agreement
(including all Holders hereunder) in respect of the Stock originally acquired by
the Initial Holder.
(b) No waiver of any breach or default hereunder shall be considered
valid unless in writing, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or similar nature. Anything in this
Agreement to the contrary notwithstanding, any waiver, consent or other
instrument under or pursuant to this Agreement signed by, or binding upon, the
Initial Holder shall be valid and binding upon any and all persons or entities
(other than the Company) who may, at any time, have or claim any rights under or
pursuant to this Agreement (including all Holders hereunder) in respect of the
Stock originally acquired by the Initial Holder.
(c) Except as otherwise expressly provided herein, this Agreement
shall be binding upon and inure to the benefit of the Company and the Initial
Holder and their respective successors and assigns; provided, however, that (i)
nothing contained herein shall be construed as granting to the Initial Holder
the right to transfer any of its Stock except in accordance with
6
7
this Agreement, and (ii) the Initial Holder shall no longer be deemed the
Initial Holder or Holder hereunder after it ceases to own any Stock.
(d) If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceable shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
(e) Should any party to this Agreement be required to commence any
litigation concerning any provision of this Agreement or the rights and duties
of the parties hereunder, the prevailing party in such proceeding shall be
entitled, in addition to such other relief as may be granted, to the attorneys'
fees and court costs incurred by reason of such litigation.
(f) The section headings contained herein are for the purposes of
convenience only and are not intended to define or limit the contents of said
sections.
(g) Each party hereto shall cooperate and shall take such further
action and shall execute and deliver such further documents as may be reasonably
requested by any other party on order to carry out the provisions and purposes
of this Agreement.
(h) This Agreement may be executed in counterparts, all of which
taken together shall be deemed one original.
(i) This Agreement shall be deemed to be a contract under the laws
of the State of Colorado and for all purposes shall be construed and enforced in
accordance with the internal laws of said state without regard to the principles
of conflicts of law.
7
8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
GART SPORTS COMPANY
a Delaware corporation
By
-------------------------------------
Its
------------------------------------
GREEN EQUITY INVESTORS, L.P.
By Xxxxxxx Xxxxx & Partners, L.P.,
Its General Partner
By
---------------------------------
Its
---------------------------------
8
