NOTEHOLDER REGISTRATION RIGHTS AGREEMENT
NOTEHOLDER REGISTRATION RIGHTS AGREEMENT, dated as of
August 2, 1996 (this "Agreement"), by Homeland Holding Corporation,
a Delaware corporation ("Holding"), and Homeland Stores, Inc. ("Homeland"),
for the benefit of the beneficial owners as of the Confirmation Date
(as such term and other capitalized terms are defined in Section 1.1) of
Old Notes (the "Old Debt Holders").
WHEREAS, Holding and Homeland filed a Joint Plan of
Reorganization with the United States Bankruptcy Court, District of
Delaware (the "Bankruptcy Court") on May 13, 1996 (the "Plan");
WHEREAS, the Plan was accepted by, among others, the
holders of the requisite percentage and amount of claims designated as
"Class 5 Claims" under the Plan (including claims in respect of the
Old Notes), and the Bankruptcy Court entered an order
confirming the Plan on July 19, 1996;
WHEREAS, the Plan became effective on August 2, 1996 (the
"Effective Date"); and
WHEREAS, pursuant to the Plan, (i) the Old Debt Holders are
to receive, among other things, approximately 2,827,972 shares of Common
Stock in the aggregate (the "Original Shares") and $60,000,000
aggregate principal amount of Senior Subordinated Notes (the "Original
Notes" and, collectively with the Original Shares, the "Original
Securities") and (ii) registration rights are to be granted to the Old
Debt Holders with respect to such Original Securities on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements contained herein, Holding and Homeland agree, and each Old
Debt Holder by receipt of its Original Securities pursuant to the Plan
is deemed to agree, as follows:
DEFINITIONS
SECTION 1.1 Definitions. As used herein, the following
terms shall have the meanings indicated:
"Bankruptcy Court" shall have the meaning given in
the recitals to this Agreement.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in the City of New York
are authorized or obligated by law or executive order to close.
Unless specifically stated as a Business Day, all days referred to herein
shall mean calendar days.
"Common Stock" shall mean the common stock, par value
$.01 per share, of Holding after Holding's Amended and Restated
Certificate of Incorporation is filed with the Secretary of State of
the State of Delaware pursuant to the Plan and any and all securities of
any kind whatsoever of Holding which may be issued after such filing with
respect to, or in exchange for, shares of Common Stock pursuant to a
merger, consolidation, reclassification, stock split, stock dividend,
rights offering, combination, recapitalization of Holding or otherwise.
"Complying Response" shall mean, with respect to any
Registration, each written request (other than an Initial Request)
submitted by a Remaining Class 5 Holder in connection with such
Registration that (i) complies with Section 2.1(c) and (ii) is received
by the Registrant(s) within 15 Business Days from the date on which
the Registrant(s) shall have given notice of the Initial Request for such
Registration pursuant to Section 2.1(a).
"Confirmation Date" shall have the meaning given in
the Plan.
"Designated Notes" shall mean, with respect to any
Participating Holder in connection with any Registration, the
Registrable Notes of such Participating Holder requested for inclusion
in such Registration in compliance with Section 2.1(c).
"Designated Securities" shall mean, collectively, the
Designated Notes and the Designated Shares.
"Designated Shares" shall mean, with respect to any
Participating Holder in connection with any Registration, the
Registrable Shares of such Participating Holder requested for inclusion
in such Registration in compliance with Section 2.1(c).
"Effective Date" shall have the meaning given in the
recitals to this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Included Notes" shall mean, with respect to any
Registration, all of the Designated Notes requested for inclusion in such
Registration or, in the case of a Registration in connection with an
Underwritten Offering, any lesser amount of securities to which such
Registration may be limited pursuant to Section 2.1(h).
"Included Securities" shall mean, collectively, the
Included Notes and the Included Shares.
"Included Shares" shall mean, with respect to any
Registration, all of the Designated Shares requested for inclusion in
such Registration or, in the case of a Registration in connection with an
Underwritten Offering, any lesser number of shares to which such
Registration may be limited pursuant to Sec tion 2.1(h).
"Initial Request" shall have the meaning given in Section
2.1(a).
"Managing Underwriter" shall have the meaning given in
Section 2.1(g).
"NASD" shall mean the National
Association of Securities Dealers, Inc.
"Old Debt Holders" shall have the meaning given in the
recitals of this Agreement.
"Old Notes" shall mean, collectively, Homeland's Series A
Senior Secured Floating Rate Notes due 1997, Series C Senior Secured Fixed
Rate Notes due 1999 and Series D Senior Secured Floating Rate Notes
due 1997.
"Original Notes" shall have the meaning given in the
recitals to this Agreement.
"Original Securities" shall have the meaning given in
the recitals to this Agreement.
"Original Shares" shall have the meaning given in the
recitals to this Agreement.
"Participating Holder" shall mean, with respect to any
Registration, each Remaining Class 5 Holder that shall have submitted the
Initial Request or a Complying Response in connection with such Registration.
"Permitted Transferee" shall mean a Transferee that
satisfies the eligibility, notice and other requirements set forth in
Section 2.1(b)(ii).
"Person" shall mean any individual, partnership,
limited liability company, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, or
other entity of whatever nature.
"Plan" shall have the meaning given in the recitals of
this Agreement.
"Qualifying Old Debt Holder" shall mean an Old Debt
Holder that satisfies the notice requirements set forth in Section
2.1(b)(i).
"Registrable Notes" shall mean, at any time, all
Original Notes owned beneficially by either Qualifying Old Debt Holders or
Permitted Transferees.
"Registrable Securities" shall mean,
collectively, the Registrable Notes and the Registrable
Shares.
"Registrable Shares" shall mean, at any time, (i) all
Original Shares owned beneficially by either Old Debt Holders or Permitted
Transferees and (ii) all securities that at the time of issuance were
issued in respect of Registrable Shares to the Remaining Class 5
Holder of such Registrable Shares by way of a stock dividend or stock split
or in connection with a combination of shares, reclassification, rights
offering, recapitalization, merger, consolidation, other reorganization
or otherwise, provided that such securities are owned beneficially by
either Qualifying Old Debt Holders or Permitted Transferees.
"Registrant(s)" shall mean (i) Holding, in the case of a
Registration of Registrable Shares only and (ii) Holding and Homeland, in
the case of a Registration of Registrable Shares and Registrable
Notes.
"Registration" shall mean any registration of
Registrable Securities by the Registrant(s) with the SEC under the
Securities Act pursuant to Section 2.1(a).
"Registration Document" means any Registration
Statement and any prospectus included therein (including any preliminary
prospectus) and any amendment or supplement to such Registration Statement
or prospectus, in each case, including all exhibits thereto and
documents incorporated by reference therein.
"Registration Expenses" shall mean all expenses incident to
any Registration, whether or not such Registration shall become effective
and whether or not all or a portion of the Registrable Securities
originally requested to be included in such Registration are
ultimately included in such Registration, including, but not limited
to: (i) all SEC and stock exchange or NASD registration and filing
fees and expenses; (ii) all fees and expenses of compliance with
applicable state securities or "blue sky" laws (including, but not
limited to, reasonable fees and disbursements of counsel for the Managing
Underwriter, if any, in connection with "blue sky" qualifications of the
Included Securities); (iii) all word processing, duplicating, printing
expenses, messenger and delivery expenses; (iv) all fees and expenses
incurred in connection with the listing of the Included Securities on each
securities exchange or national market system on which such securities are
then listed; (v) all fees and disbursements of counsel for the
Registrant(s) and all independent certified public accountants (including
the expenses of any annual audit and "cold comfort" letters required by or
incident to such performance and compliance); (vi) all fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (including the fees and expenses of any "qualified independent
underwriter" required by the NASD); (vii) the reasonable fees and
expenses of one counsel retained by Participating Holders owning not
less than the Required Included Securities (which counsel shall be
reasonably satisfactory to the Registrant(s)); (viii) the reasonable
fees and expenses of any special experts or other Persons retained
by the Registrant(s)); and (ix) premiums and other costs of policies
of insurance against liabilities arising out of the public offering
of the Included Securities. The foregoing shall not include any
underwriting discounts or commissions or transfer taxes, if any,
attributable to the sale of Included Securities by Participating Holders.
"Registration Statement" shall mean a registration
statement under the Securities Act.
"Registration Trigger Amount" shall mean 470,000 Original
Shares.
"Remaining Class 5 Holder" shall mean, at any time (i)
each Qualifying Old Debt Holder that is at such time the beneficial owner
of any Registrable Securities and (ii) each Permitted Transferee that is
at such time the beneficial owner of any Registrable Securities.
"Required Included Securities" shall mean, at any time,
a majority of the Included Shares.
"Revocation Notice" shall have the meaning given in
Section 2.1(j).
"Rule 144" shall mean Rule 144 of the General Rules and
Regulations promulgated under the Securities Act, or any successor
rule to similar effect.
"Rule 144A" shall mean Rule 144A of the General Rules and
Regulations promulgated under the Securities Act, or any successor
rule to similar effect.
"SEC" shall mean the Securities and Exchange Commission
and any successor commission or agency having similar powers.
"Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
"Senior Subordinated Notes" shall mean the 10% Senior
Subordinated Notes Due 2003 of Homeland.
"Transferee" shall mean any beneficial owner of Registrable
Securities other than an Old Debt Holder.
"Underwritten Offering" shall mean a sale of securities of
the Company to an underwriter or underwriters for reoffering to the public.
"Warrants" shall mean warrants to purchase Common
Stock, including, without limitation, the Warrants of Holding issued
pursuant to the Plan.
SECTION 1.2 Construction. Unless the context otherwise
requires, words in the singular include the plural, and in the plural include
the singular and "or" is not exclusive.
ARTICLE II
SECTION 2.1 Demand Registration.
(a) Demand Registration Rights. Subject to the terms and
conditions of this Agreement (including, without limitation, Sections
2.1(b), (c), (d) and (j)), at any one time after the second
anniversary of the Effective Date, one or more Remaining Class 5
Holders owning Registrable Shares at such time equal to or
exceeding the Registration Trigger Amount may make a written
request, which shall comply with Section 2.1(c) (an "Initial
Request"), for Registration of (i) all of their Registrable
Shares or any portion thereof that at such time constitutes in
the aggregate not less than the Registration Trigger Amount
and/or (ii) all of their Registrable Notes or any portion thereof
that at such time constitutes in the aggregate not less
$6,000,000 aggregate principal amount. Within 10 Business Days
after receipt of such Initial Request, the Registrant(s) shall
give written notice thereof (in the form attached hereto as
Exhibit A) to all other Remaining Class 5 Holders and, subject to
Section 2.1(c), such other Remaining Class 5 Holders may request
the inclusion of their Registrable Securities in such Registration.
Thereafter, the Registrant(s) shall, in accordance with
Section 2.4, file a Registration Statement covering the Included
Securities and use all reasonable efforts to cause such
Registration Statement to become effective.
(b) Limitation on Registration Rights.
(i) Notwithstanding any other provision of this
Agreement, the Registrant(s) shall have no obligations hereunder to any
Old Debt Holder and no Old Debt Holder shall have any rights hereunder
unless and until such Old Debt Holder shall have established to the
reasonable satisfaction of the Registrant(s) (A) that such Old Debt
Holder was the beneficial owner as of the Confirmation Date of Old
Notes and (B) the series and principal amount thereof, which facts such
Old Debt Holder can so establish by (1) delivering to Holding within
90 days of the Effective Date the written certification as to such
facts of the record holder as of the Confirmation Date of such Old Debt
Holder's Old Notes or (2) such other proof as shall be reasonably
satisfactory to Holding.
(ii) Notwithstanding any other provision of this
Agreement, the Registrant(s) shall have no obligations hereunder to any
Transferee and no Transferee shall have any rights hereunder unless (A)
the Original Securities held by such Transferee were originally owned by
a Qualifying Old Debt Holder and each subsequent Transferee of such
Original Securities (including, without limitation, the Person from whom
such Transferee purchased or acquired such Original Securities) has
complied timely with the requirements set forth in clauses (B) and (C)
of this Section 2.1(b)(ii), (B) within 30 days of such Transferee's
acquisition or purchase of such Original Securities, such Transferee
delivers to Holding a written certification (signed by an authorized
representative of such Transferee) certifying (1) the date of such
Transferee's acquisition or purchase of such Original Securities and the
number of Original Shares and/or the principal amount of Original Notes
acquired or purchased by such Transferee, (2) the identity
(including record and beneficial owner) and mailing address of such
Transferee and the Person from whom such Transferee purchased or acquired
such Original Securities, (3) the certificate number(s) and/or serial
number(s) of the Original Securities transferred (if reasonably
available), (4) to the knowledge of such Transferee, that the Person
from whom such Transferee purchased or acquired such Original Securities
was, at the time of such purchase or transfer, a Remaining
Class 5 Holder (it being understood that such Transferee shall
be entitled to rely on a certificate or written representation of such
Person in making such certification), and (5) that such securities
transferred constitute Registrable Securities and (C) within 30 days of
such Transferee's acquisition or purchase of such Original Securities,
such Transferee executes and delivers to Holding a supplement, in form
and substance reasonably satisfactory to Registrant(s), pursuant to which
such Transferee shall agree to be bound by the terms of this
Agreement, including, without limitation, Section 2.5.
(c) Form of Request. Any Remaining Class 5 Holder's request
for Registration pursuant to this Section 2.1 shall (i) state the
number of Registrable Shares and the aggregate principal amount
of Registrable Notes to be included in such Registration,
(ii) contain reasonably detailed information as to prior sales of
Original Securities by or on behalf of such Remaining Class 5
Holder, (iii) contain an undertaking to (1) furnish all such
information and materials and take all such action as may be
reasonably required in order to permit the Registrant(s) to
comply with all applicable requirements of the SEC and to obtain
acceleration of the effective date of the Registration Statement
filed in connection with such Registration, (2) update, to the
extent required by applicable law, any information about such
Remaining Class 5 Holder contained in such Registration Statement
during the period such Registration Statement is effective,
(3) indemnify and hold harmless each of the parties specified in
Section 2.5(b) to the extent provided in such Section 2.5(b) and
to comply with the other provisions of Section 2.5 and (4) comply
with all other provisions of this Agreement, (iv) in the case of
an Initial Request, indicate whether an Underwritten Offering is
requested in connection with such Registration and (v) contain a
certification of such Remaining Class 5 Holder that, as of the
date of delivery of such Remaining Class 5 Holder's request
pursuant to this paragraph (c), (1) such Remaining Class 5 Holder
is a "Remaining Class 5 Holder" as defined in Section 1.1, and
(2) the securities identified in such request as Registrable
Securities are "Registrable Securities" as defined in Section 1.1.
(d) Limitations on Filings. Notwithstanding Section
2.1(a), the Registrant(s) shall not be obligated to file a
Registration Statement pursuant to this Section 2.1 (i) other
than pursuant to the first Initial Request received by the
Registrant(s) and any Complying Responses in connection therewith
(except as otherwise provided in Section 2.1(i)), (ii) with
respect to any Designated Securities excluded from a Registration
pursuant to Section 2.1(h), (iii) with respect to any Designated
Securities with respect to which the Company shall not have
received the undertaking referred to in Section 2.5(b), (iv) with
respect to any Designated Securities that shall have ceased to be
Registrable Securities, (v) after such time as Designated Shares
that continue to be Registrable Shares no longer represent the
Registration Trigger Amount or (vi) during the 180 day period
following the date on which an earlier filed Registration
Statement (other than a Registration Statement on Form S-8)
relating to shares of Common Stock, Warrants or other securities
shall have become effective.
(e) Registration Form. In the case of a Registration in
connection with an Underwritten Offering that is a firm
commitment underwriting, if the Registrant(s) propose or proposes
to file a Registration Statement on Form S-3 (or any similar
short-form Registration Statement), the Registrant(s) will comply
with any request by the Managing Underwriter to use another per
mitted form of Registration Statement if such Managing
Underwriter advises the Company in writing that, in its opinion,
the use of another form of Registration Statement is of material
importance to the success of the offering, in which case such
Registration shall be effected on the form recommended by the
Managing Underwriter.
(f) Expenses. All Registration Expenses shall be paid by
the Registrant(s).
(g) Underwritten Offering; Managing Underwriter. If the
Initial Request shall so request, the offering of Registrable
Securities pursuant to any Registration shall be an Underwritten
Offering, in which event the Registrant(s) shall have the right
to select a nationally recognized investment banker (or
investment bankers) reasonably acceptable to the holders of the
Required Included Securities that shall manage the offering (collectively,
the "Managing Underwriter"). If requested by the
Managing Underwriter for any Underwritten Offering, the
Registrant(s) shall enter into an underwriting agreement with the
underwriters for such offering, such agreement to contain such
representations and warranties by the Registrant(s) and such
other terms and provisions as are customarily contained in
agreements of this type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.5.
The Participating Holders shall be parties to such
underwriting agreement and the representations and warranties by,
and the other agreements on the part of, the Registrant(s) to and
for the benefit of such underwriters shall also be made to and
for the benefit of such Participating Holders and the conditions
precedent to the obligations of such Participating Holders under
such underwriting agreement shall be satisfactory to such
Participating Holders. Such Participating Holders shall not be
required to make any representations or warranties to the
Registrant(s) or its underwriters other than representations or
warranties regarding such Participating Holder and such
Participating Holder's intended method of distribution.
(h) Priority. In the case of a Registration in connection
with an Underwritten Offering, if the Managing Underwriter shall
advise the Registrant(s) in writing that, in its opinion, due to
market conditions, the number of shares of Common Stock included
in such Underwritten Offering should be limited to fewer than the
aggregate number of Designated Shares, or the amount of Senior
Subordinated Notes included in such Underwritten Offering should
be limited to less than the aggregate amount of Designated Notes,
then (i) the Registration shall be limited to such aggregate
number of shares of Common Stock and such aggregate amount of
Senior Subordinated Notes as the Managing Underwriter shall
advise and (ii) the Registrant(s) will promptly give written
notice of such fact to each Participating Holder, indicating the
number of Designated Securities of such Participating Holder that
will be included in the Registration as so limited; provided that
exclusions of Designated Securities shall be on a pro rata basis
among all Participating Holders on the basis of the number of
Designated Shares (in the case of Designated Shares) and the
aggregate principal amount of Designated Notes (in the case of
Designated Notes) of each such Participating Holder (treating the
Designated Notes and the Designated Shares as separate classes
for purposes of such pro rata treatment).
(i) Delay of Filing. The Registrant(s) shall be entitled
to postpone for a reasonable period of time, not to exceed 180
days from the date of receipt of an Initial Request, the filing
of the Registration Statement otherwise required to be filed by
it pursuant to this Section 2.1 if the Board(s) of Directors of
the Registrant(s) (i) in good faith determines at such time that
such Registration and related offering would materially adversely
affect or interfere with any proposed or pending financing,
acquisition, corporate reorganization or other transaction or the
conduct or outcome of any litigation, in each case, that involves
the Registrant(s) or any subsidiary thereof and is material to
the Registrant(s) and its subsidiaries, taken as a whole, and
(ii) as promptly as practicable gives all Participating Holders
written notice of such postponement, setting forth the duration
of and reasons for such postponement; provided, however, that the
Registrant(s) shall not effect such a postponement more than once
in any 360 day period.
(j) Revocation of Request. In any Registration,
Participating Holders owning the Required Included Securities
may, on behalf of all Participating Holders, revoke the request
for such Registration, without incurring any liability to the
Registrant(s) or to any other Participating Holder, by providing
written notice (a "Revocation Notice") to the Registrant(s) at
any time prior to the initial filing with the SEC of a
Registration Statement in such Registration. A request for
Registration that is revoked pursuant to this Section 2.1(j)
shall not constitute a request pursuant to Section 2.1(a) and the
Remaining Class 5 Holders shall continue to have the right to
make one request for Registration pursuant to Section 2.1(a) if
such revocation is pursuant to (i) a Revocation Notice that is
received by the Registrant(s) within 10 Business Days of the date
on which the Registrant(s) shall have given written notice of
postponement of the filing of the Registration Statement in such
Registration pursuant to Section 2.1(i) or (ii) the first
Revocation Notice to have been received by the Registrant(s) in
circumstances other than as described in the preceding
clause (i).
(k) Effectiveness. A registration requested
pursuant to Section 2.1(a) shall not be deemed to have been effected:
(i) unless a Registration Statement with
respect thereto has been declared effective by the SEC and
remains effective in compliance with the provisions of the Securities
Act and the laws of any state or other jurisdiction applicable to
the disposition of all Included Securities covered by such Registration
Statement until such time as all of such Included Securities have been
disposed of in accordance with such Registration Statement;
(ii) if, after it has become effective, such
Registration is interfered with by any stop order, injunction or other order
or requirement of the SEC or other governmental or regulatory agency or
court for any reason other than a violation of applicable law
solely by the holders of Included Securities and has not thereafter
become effective; or
(iii) if, in the case of an Underwritten
Offering, the conditions to closing specified in the underwriting
agreement to which the Registrant(s) are party are not satisfied other than by
reason of any breach or failure by the holders of the Included Securities,
or are not otherwise waived.
SECTION 2.2 Limitations on Registration Rights.
(a) No Incidental Registrations. The Registrant(s) shall
not be entitled to include in a Registration any shares of Common
Stock or any Senior Subordinated Notes other than the Designated
Securities, nor shall any Participating Holder have the right to
include any of its Registrable Securities in any Registration
Statement other than pursuant to a Registration hereunder.
(b) No Other Registration Rights. The Company will not
hereafter enter into any agreement with respect to any shares of
Common Stock or Warrants that grants to any Person incidental
registration rights with respect to any Registration Statement
pursuant to a Registration hereunder.
SECTION 2.3 Holdback Agreements. In the case of a
Registration in connection with an Underwritten Offering, each
Remaining Class 5 Holder and the Registrant(s) agree not to
effect any sale or distribution, including any private placement
or any sale pursuant to Rule 144, of any shares of Common Stock
or any Senior Subordinated Notes (other than the Included
Securities pursuant to such Underwritten Offering) during the
seven-day period prior, and the 180-day period following, the
effective date of the Registration Statement in such
Registration.
SECTION 2.4 Registration Procedures. If and whenever the
Registrant(s) is or are required to effect a Registration, the
Registrant(s) shall, except as provided in Section 2.1(i), as
expeditiously as possible:
(a) prepare and file with the SEC as promptly as
practicable, but in any event not later than 45 days after
receipt of an Initial Request, a Registration Statement on any
form for which the Registrant(s) then qualifies which counsel for
the Company shall deem appropriate, subject to Section 2.1(e),
and which form shall be available for the sale of the Included
Securities in accordance with the intended methods of
distribution thereof, and use all reasonable efforts to cause
such Registration Statement to become effective; provided that as
promptly as practicable, but in any event not later than four
Business Days before filing any Registration Document with the
SEC, the Registrant(s) shall furnish to each Participating
Holder, the Managing Underwriter, if any, and one counsel
selected by Participating Holders owning not less than the
Required Included Securities copies of such Registration
Document, which shall be subject to review by such Persons; the
Registrant(s) shall not file any Registration Document to which
the Managing Underwriter, if any, or Participating Holders owning
not less than the Required Included Securities or such counsel of
such Participating Holders shall have reasonably objected within
three Business Days after receipt of such Registration Document
(provided that the foregoing shall not limit the right of any
Participating Holder identified in such Registration Document
reasonably to object, within three Business Days after receipt of
such Registration Document, to any particular information
contained therein relating specifically to such Participating
Holder, including any information describing the manner in which
such Participating Holder acquired its Included Securities and
the intended method of distribution thereof) and if the
Registrant(s) is or are unable to file any such Registration
Document due to any objection as provided herein, use its best
efforts to cooperate with the Managing Underwriter, if any, and
the Participating Holders to prepare, as promptly as reasonably
practicable, a document that is satisfactory to the
Registrant(s), the Managing Underwriter, if any, and the
Participating Holders; provided further that if such Registration
Document refers to any Participating Holder by name or otherwise
as the holder of any Included Securities, then such Participating
Holder shall have the right to require (i) the insertion therein
of language, in form and substance satisfactory to such
Participating Holder, to the effect that the the Registrant(s) by
such Participating Holder of such securities does not necessarily
make such Participating Holder a "Controlling Person" of the
Registrant(s) within the meaning of the Securities Act and is not
to be construed as a recommendation by such Participating Holder
of the investment quality of the securities covered thereby and
that such holding does not imply that such Participating Holder
will assist in meeting any future financial requirements of the
Registrant(s), or (ii) in the event that such reference to such
Participating Holder by name or otherwise is not required by the
Securities Act or any rules and regulations promulgated
thereunder, the deletion of the reference to such Participating
Holder; and the Registrant(s) shall notify each Participating
Holder of any stop order issued or threatened by the SEC and take
all reasonable actions required to prevent the entry of such stop
order or to remove it if entered;
(b) prepare and file with the SEC such additional
Registration Documents as may be necessary to keep the
Registration Statement in such Registration effective until the
earlier of (i) such time as all Included Securities have been
sold and (ii) 90 days from the effective date of such
Registration Statement or such longer period as may be required
by the Securities Act, and comply with the provisions of the
Securities Act with respect to the disposition of all Included
Securities during such period in accordance with the intended
methods of disposition thereof set forth in such Registration
Statement;
(c) furnish to each Participating Holder and the Managing
Underwriter, if any, copies of such Registration Documents in
such Registration and in such numbers as may be required by the
Securities Act or as any of the foregoing may reasonably request;
(d) use all reasonable efforts to register or qualify the
Included Securities under such other state securities or "blue
sky" laws of such jurisdictions as any Participating Holder or
the Managing Underwriter, if any, reasonably requests and do any
and all other acts and things that may be reasonably necessary or
advisable to enable the Participating Holders and the Managing
Underwriter, if any, to consummate the disposition in such
jurisdictions of the Included Securities; provided that the
Registrant(s) will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 2.4(d), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction;
(e) use all reasonable efforts to cause the Included
Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by
virtue of the business and operations of the Registrant to enable
each Participating Holder to consummate the disposition of its
Included Securities;
(f) at any time when a prospectus relating to the Included
Securities is required to be delivered under the Securities Act,
immediately notify each Participating Holder and the Managing
Underwriter, if any, of the happening of any event that comes to
the attention of the Registrant(s) if as a result of such event
the prospectus included in such Registration Statement contains
any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading,
and the Registrant(s) will promptly prepare and furnish to each
Participating Holder and the Managing Underwriter, if any, a
supplement or amendment to such prospectus so that, as thereafter
delivered to purchasers of Included Securities, such prospectus
will not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading;
(g) use all reasonable efforts to cause the Included
Securities to be listed on each securities exchange or national
market system on which such securities are then listed, if any,
and enter into such customary agreements including a listing application
and indemnification agreement in customary form,
provided that the applicable listing requirements are satisfied,
and to provide a transfer agent and registrar for the Included
Securities no later than the effective date of Registration
Statement in such Registration;
(h) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
actions as Participating Holders owning the Required Included
Securities or the Managing Underwriter, if any, reasonably
request in order to expedite or facilitate the disposition of the
Included Securities, including customary indemnification;
(i) make available for inspection by any Participating
Holder, the Managing Underwriter, if any, and any attorney,
accountant or other agent retained by any Participating Holder or
the Managing Underwriter, if any, all financial and other
records, pertinent corporate documents and properties of the
Registrant(s) and its subsidiaries as shall be reasonably necessary
to enable such Persons to exercise their due diligence
responsibility, and cause the Registrant(s) and its or their
subsidiaries' officers, directors and employees to supply all
information and respond to all inquiries reasonably requested by
any such Person in connection with the Registration Statement in
such Registration;
(j) deliver an opinion of counsel for the Registrant(s) and
a "cold comfort" letter from the independent public accountants
of the Registrant(s) in customary form and covering such matters
of the type customarily covered by opinions of issuer's counsel
and "cold comfort" letters and such other matters as
Participating Holders owning the Required Included Securities or
the Managing Underwriters, if any, reasonably request; and
(k) otherwise use all reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an
earnings statement no later than 60 days after the end of the 12-
month period commencing at the end of the fiscal quarter of the
Registrant(s) in which the effective date of the Registration
Statement shall have occurred (as the term "effective date" is
defined in Rule 158(c) under the Securities Act), which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.
Each Participating Holder agrees that, upon receipt
of any notice from the Registrant(s) of the happening of any event of the
kind described in Sec tion 2.4(f), such Participating Holder will forthwith
discontinue disposition of its Included Securities until such
Participating Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 2.4(f), and, if so directed by
the Registrant(s) such Participating Holder will deliver to the Registrant(s)
(at the expense of the Registrant(s)) all copies (including, but not limited
to, any and all drafts), other than permanent file copies, then in such
Participating Holder's possession, of the prospectus covering the Included
Securities current at the time of receipt of such notice. In the event the
Registrant(s) shall give any such notice, the period mentioned in Section
2.4(b) shall be extended by the greater of (i) 90 days and (ii) the number
of days during the period from and including the date of the giving of
such notice pursuant to Section 2.4(f) to and including the date
when each Participating Holder shall have received the copies of the
supplemented or amended prospectus contemplated by Section 2.4(f).
SECTION 2.5 Indemnification.
(a) Indemnification by the Registrant(s). In any
Registration, each Registrant will, and it hereby does, indemnify
and hold harmless, to the full extent permitted by law, each
Participating Holder, its directors and officers, general
partners, limited partners and managing directors, agents and
representatives and each other Person who participates as an
underwriter in the offering or sale of such securities and each
affiliate of such Participating Holder or underwriter (and
directors, officers, controlling Persons, partners, managing
directors, agents and representatives of any of the foregoing),
against any and all losses, claims, damages or liabilities, joint
or several, and expenses (including any amounts paid in any
settlement) to which such Participating Holder or underwriter, or
any such director, officer, controlling person, partner, managing
director, agent or representative may become subject under the
federal securities laws, state securities or "blue sky" laws,
common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) or
expenses arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in any
Registration Document in such Registration, (ii) any omission or
alleged omission to state therein a material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading, or (iii) any violation or
alleged violation by the Registrant(s) of any federal, state or
common law rule or regulation applicable to the Registrant(s) and
relating to action required of or inaction by the Registrant(s)
in connection with such Registration, and the Registrant(s) will
reimburse each Participating Holder or underwriter and each such
director, officer, controlling person, partner, managing
director, agent or representative for any legal or any other
expenses reasonably incurred by them, as and when incurred, in
connection with investigating or defending such loss, claim,
damage, liability, action or proceeding; provided that the
Registrant(s) shall not be liable 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 or is
based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such Registration Document
in reliance upon and in conformity with written information
furnished to the Registrant(s) through an instrument duly executed
by such Participating Holder in such Participating Holder's
capacity as a stockholder or debt holder of the Registrant(s) or
any such director, officer, controlling Person, partner, managing
director, agent, representative or underwriter specifically
stating that it is for use in the preparation thereof; provided
further that the Registrant(s) shall not be liable to any Participating
Holder, any Person, if any, who participates as an
underwriter in the offering or sale of Included Securities or any
other Person, if any, who controls such underwriter within the
meaning of the Securities Act, pursuant to this Section 2.5 with
respect to any Registration Document, to the extent that any such
loss, claim, damage or liability of such underwriter or controlling
Person results from the fact that such underwriter sold
Included Securities to a Person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a
copy of the final prospectus or of the final prospectus as then
amended or supplemented, whichever is most recent, covering such
Included Securities if the Registrant(s) had previously furnished
copies thereof to such underwriter and such final prospectus, as
then amended or supplemented, had corrected any such misstatement
or omission. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of
such Participating Holder or underwriter or any such director,
officer, controlling person, partner, managing director, agent or
representative and shall survive the transfer by such
Participating Holder of its Included Securities.
(b) Indemnification by the Participating Holders and Under
writers. As a condition to including any Designated Securities
in any Registration, each Registrant shall have received an
undertaking reasonably satisfactory to it from each Participating
Holder or any underwriter, to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 2.5(a))
each Registrant and its or their directors,
officers, controlling Persons and all other prospective sellers
(including, but not limited to, all other Participating Holders)
and their respective directors, officers, general and limited
partners, managing directors, and their respective controlling
Persons with respect to any statement or alleged statement in or
omission or alleged omission from any Registration Document in
such Registration, 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
Registrant(s) or its or their representatives through an
instrument duly executed by or on behalf of such Participating
Holder or underwriter specifically stating that it is for use in
the preparation of such Registration Document. Such indemnity
shall remain in full force and effect regardless of any inves
tigation made by or on behalf of the Registrant(s) or any
Participating Holder, underwriter or any of their respective
directors, officers, general or limited partners, managing
directors or controlling Persons and shall survive the transfer
by such Participating Holder of its Included Securities; provided,
however, that no such Participating Holder shall be liable
under Section 2.5 for any amounts exceeding the amount of
proceeds (net of any underwriting commissions, discounts and the
like) to be received by such Participating Holder in connection
with the sale of its Included Securities.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party hereunder of, written notice of the
commencement of any action or proceeding with respect to which a
claim for indemnification may be made pursuant to this Section 2.5,
such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, promptly
give written notice to the indemnifying party of the commencement
of such action; provided, 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 2.5, except to the extent that the
indemnifying party is actually materially 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 may exist in respect of such
claim, the indemnifying party will be entitled to participate in
and, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, to the extent that it
may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party
to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to
such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense
thereof, 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. No indemnifying party will 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. An
indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel in any single
jurisdiction for all parties indemnified by such indemnifying
party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event
the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels as may be
reasonably necessary. Notwithstanding anything to the contrary
set forth herein, and without limiting any of the rights set
forth above, in any event each Participating Holder will have the
right to retain at its own expense, counsel with respect to the
defense of a claim.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding subsections of this Section 2.5 (with
appropriate modifications) shall be given by the Registrant(s)
and each Participating Holder with respect to any required
registration or other qualification of securities under any
federal or state law or regulation or governmental authority
other than the Securities Act.
(e) Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity
agreement provided for in this Section 2.5 is for any reason held
to be unavailable to an indemnified party in accordance with its
terms, the Registrant(s) and each Participating Holder shall
contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by said indemnity agree
ment incurred by Registrant(s) and the Participating Holder
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Registrant(s), on the one hand, and the
Participating Holder in question, on the other hand, or (ii) if
the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the benefits referred to in clause (i), but also the
relative fault of the Registrant(s) and each Participating Holder
in question in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages and
expenses, as well as any other relevant equitable considerations.
The relative fault of the Registrant(s), on the one hand, and of
the Participating Holder, on the other hand, shall, be determined
by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by each
Registrant(s), on the one hand, or by the Participating Holder,
on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of subsection 11(f) of the
Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation. The
foregoing contribution agreement shall in no way affect the contribution
liabilities of any Person having liability under Section 11 of
the Securities Act other than the Registrant(s) and
the Participating Holders.
ARTICLE II
MISCELLANEOUS
SECTION 3.1 Effectiveness. The terms of this Agreement
shall be effective as of the Effective Date.
SECTION 3.2 Amendments. This Agreement cannot be amended,
modified or supplemented except (a) as contemplated by Section
2.1(b)(ii)(C) and (b) by a written instrument signed by Holding,
Homeland and the Remaining Class 5 Holders owning at the time of
execution thereof not less than a majority in number of the
Registrable Shares and a majority in aggregate principal amount
of Registrable Notes, provided, however, that without the written
consent of each such holder affected thereby no amendment,
modification or supplement pursuant to clause (b) above may make
a change that (i) increases the obligations of such holder or
(ii) adversely affects the rights of such holder under Section 2.5.
SECTION 3.3 Term of Agreement. This Agreement shall
commence on the Effective Date and shall terminate, except for
the provisions of Section 2.5 which shall survive such
termination, on the earliest to occur of (i) the seventh anniversary
of the Effective Date, (ii) the date on which the
effectiveness of a Registration Statement that has become
effective (within the meaning of Section 2.1(k)) in a
Registration shall have been terminated and (iii) such time as
the Registrable Shares and the Registrable Notes no longer
represent the Registration Trigger Amount.
SECTION 3.4 Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
SECTION 3.5 Specific Performance. Irreparable damage would
occur in the event any of the provisions of this Agreement were
not to be performed in accordance with the terms hereof and the
Registrant(s) and the Remaining Class 5 Holders, as the case may
be, shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
SECTION 3.6 Complete Agreement. This Agreement contains the
entire agreement of Holding, Homeland and the Old Debt Holders in
respect of the subject matter contained herein and the
transactions contemplated hereby. There are no restrictions,
agreements, 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.
SECTION 3.7. Assignment. The
registration and other rights provided in this
Agreement, and the obligations of Holding and Homeland
hereunder, are not assignable to any Person (including,
without limitation, any Transferee) except to the
extent expressly provided in Section 2.1(b)(ii).
SECTION 3.8. Notices. Any notice, request, instruction
or other document to be given hereunder shall be in writing, shall
be delivered personally or sent by Federal Express or other
overnight delivery service, (a) if to Holding or Homeland, to
Homeland Holding Corporation, 0000 Xxxxxxxxx Xxxxxxxxxx, Oil Center
East, 11th Floor, Oklahoma city, OK 73112, Attention: Secretary, or to
such other address as Holding or Homeland shall specify by written notice,
and (b) if to any Old Debt Holder or Permitted Transferee, to such address
(which shall not be a post office box, but shall be an address to which
overnight delivery services will deliver) as such Old Debt Holder or
Permitted Transferee shall have specified in a written notice to Holding
(which may be amended by subsequent written notice), a copy of which
written notice shall be on file with the Secretary of Holding.
Notwithstanding any other provision of this Agreement, unless and until
Holding shall have received such notice of address from an Old Debt
Holder or Permitted Transferee, the Registrant(s) shall have no
obligation to such Old Debt Holder with respect to the giving of any
notice otherwise required hereunder. Notice shall be effective when sent in
the manner, and directed as, provided above or, if delivered per
sonally, when received.
SECTION 3.9. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York, without regard to applicable principles of conflicts of
laws.
SECTION 3.10. Severability. Whenever possible, each
provision of this Agreement will be interpreted in such a manner as to
be effective and valid under applicable law, but if any provision of
this Agreement is held to be prohibited by or invalid under applicable
law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this
Agreement, except to the extent that such prohibition or invalidity would
constitute a material change in the terms of this Agreement taken as a whole.
SECTION 3.11. Rule 144 and Rule 144A. The Registrant(s)
shall take all actions reasonably necessary to enable the Remaining Class
5 Holders to sell their Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided
by (i) Rule 144, (ii) Rule 144A, or (iii) any similar rules or
regulations hereafter adopted by the SEC, including, without limitation,
filing on a timely basis all reports required to be filed under the
Exchange Act. Upon the request of any such holder, the Registrant(s) shall
deliver to such holder a written statement as to whether they have
complied with such requirements.
IN WITNESS WHEREOF, each of Holding and Homeland has
executed, and each Old Debt Holder by receipt of its Original Shares
is deemed to have executed, this Agreement as of the date first above
written.
HOMELAND STORES, INC. HOMELAND HOLDING CORPORATION
By: _____________________ By:___________________________
Name: Name:
Title: Title:
175446
