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EXHIBIT 4.17
WARRANT PURCHASE AGREEMENT
This warrant purchase agreement (the "Agreement") is made and entered
into as of July 18, 1996 by and between Boston Chicken, Inc., a Delaware
corporation (the "Seller"), and Market Partners, L.L.C., a Delaware limited
liability company (the "Purchaser").
SECURITIES LAW NOTICES
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, THEREFORE, CANNOT BE SOLD OR
TRANSFERRED UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
RECITALS
The Seller desires to sell to the Purchaser, and the Purchaser desires to
purchase from the Seller, on the terms and conditions hereinafter set forth, a
warrant to purchase a certain number of shares of common stock, $.01 par
value, of the Seller, which number will be determined on the Issue Date (as
hereafter defined).
COVENANTS
In consideration of the mutual representations, warranties and covenants,
and subject to the conditions contained herein, the parties hereto agree as
follows:
1.0 PURCHASE AND SALE OF WARRANT
1.1 The Seller agrees to sell to the Purchaser, and the Purchaser
agrees to purchase and accept from the Seller, on the terms and subject to the
conditions set forth in this Agreement, a warrant (the "Warrant") to purchase
up to a certain number of shares of common stock, $.01 par value, of the Seller
(the "Shares") at an exercise price of $25.00 per Share. The number of Shares
to be included in the Warrant, which shall not exceed 750,000 Shares, shall be
determined by the Purchaser as provided herein. The terms and conditions of the
Warrant are set forth in the form of Warrant attached hereto as Exhibit A.
1.2 As consideration for the Warrant, the Purchaser agrees, on the
terms and subject to the conditions set forth in this Agreement, to pay to or
for the account of Seller, in cash, a purchase price equal to $9.77 per Share
for each Share included in the Warrant (the "Purchase Price").
1.3 Purchaser shall notify Seller in writing of (a) the date on which
the Warrant is to be issued pursuant to this Agreement (the "Issue Date"),
which Issue Date shall be on or before
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October 6, 1996, and (b) the number of Shares to be included in the Warrant.
Such notice shall be delivered to Seller no later than five business days prior
to the Issue Date. On the Issue Date, (I) Seller shall deliver to Purchaser the
Warrant and Purchaser shall pay the Purchase Price to Seller by wire transfer
of immediately available funds, and (II) Seller and Purchaser shall enter into
a Registration Rights Agreement substantially in the form attached hereto as
Exhibit B.
1.4 In the event the Warrant has not been issued and the Purchase Price
has not been paid to Seller on or before October 6, 1996, this Agreement shall
terminate and be of no further force and effect.
2.0 REPRESENTATIONS AND WARRANTIES OF THE SELLER
In order to induce the Purchaser to enter into this Agreement and to
purchase the Warrant, the Seller represents and warrants to the Purchaser as
follows:
2.1 The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Seller has the
requisite power and authority, and all material licenses, permits and
authorizations necessary, to own its property and assets and to transact the
business in which it is engaged or currently proposes to engage. The Seller is
qualified to do business in all states except where the failure to be qualified
would not have a material adverse effect on the business, financial condition,
or results of operations of the Seller.
2.2 Upon approval by the Seller's board of directors, the Seller will
have the power to execute, deliver, and perform its obligations under the terms
of this Agreement, and will have taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Seller and upon approval by the Seller's board of directors,
will be a valid and legally binding obligation of the Seller, enforceable in
accordance with its terms.
2.3 Upon approval by the Seller's board of directors, the Seller will
have taken all necessary corporate action to cause the Shares, when issued upon
exercise of the Warrant, to be validly authorized and issued, fully paid and
non-assessable.
2.4 The Seller has no obligation to pay any fees or commissions to any
investment banker, broker, finder or agent with respect to the transactions
contemplated by this Agreement or by the Warrant.
3.0 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
In order to induce the Seller to enter into this Agreement and to sell
the Warrant, the Purchaser represents and warrants as follows:
3.1 The Purchaser is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Purchaser has the requisite power and authority, and all material licenses,
permits and authorizations necessary, to own its property and assets and to
transact the business in which it is engaged or currently proposes to engage.
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The Purchaser is qualified to do business in all states except where the
failure to be qualified would not have a material adverse effect on the
business, financial condition, or results of operations of the Purchaser.
3.2 The Purchaser has the power to execute, deliver, and perform its
obligations under the terms of this Agreement, and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Purchaser and is a valid and legally binding
obligation of the Purchaser, enforceable in accordance with its terms.
3.3 The Purchaser has no obligation to pay any fees or commissions to
any investment banker, broker, finder or agent with respect to the transactions
contemplated by this Agreement or by the Warrant.
3.4 The Purchaser understands that neither the Warrant nor the Shares
have been registered under the Securities Act of 1933, as amended (the
"Securities Act") and in the absence of such registration may not, therefore,
be sold or transferred unless they are subsequently registered under the
Securities Act (as well as under any applicable state securities laws) or an
exemption from such registration is available. The Purchaser acknowledges and
agrees that the Warrant shall contain the following legend:
"This Warrant has not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or under any applicable
state securities law, and in the absence of such registration may
not be sold or transferred unless the issuer of this Warrant has
received an opinion of its counsel, or of counsel reasonably
satisfactory to it, that the proposed sale or transfer will not
violate the registration requirements of the Securities Act or any
applicable state securities law."
3.5 The Purchaser represents and warrants that it is purchasing the
Warrant for its own account for investment purposes and not with a view to any
public distribution thereof within the meaning of the Securities Act. The
Purchaser is an accredited investor within the meaning of Regulation D under
the Securities Act and has its principal place of business in the state of
Colorado.
4.0 CONDITION PRECEDENT
4.1 Seller's obligations under this Agreement are specifically subject
to approval of this Agreement and the Warrant by Seller's board of directors.
5.0 MISCELLANEOUS
5.1 The representations, warranties and covenants contained herein are
continuing in nature and shall survive the execution and delivery of this
Agreement for one year regardless of any investigation made by or on behalf of
any party to this Agreement.
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5.2 The parties hereto may amend, modify and supplement this Agreement
only in writing.
5.3 Each party to this Agreement shall pay all of the expenses incurred
by it in connection with this Agreement, including without limitation its legal
and accounting fees and expenses, and the commissions, fees and expenses of any
person employed or retained by it to bring about, or to represent it in, the
transactions contemplated hereby.
5.4 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that notwithstanding anything herein to the contrary, Purchaser may
not assign or transfer this Agreement, or the Warrant, or any of its rights or
obligations hereunder, without the prior written consent of the Seller in its
sole discretion.
5.5 This instrument and the exhibits and schedules attached hereto
contain the entire agreement of the parties hereto with respect to the purchase
of the Warrant, and supersede any prior understandings and agreements of the
parties with respect to the subject matter hereof. Any reference herein to
this Agreement shall be deemed to include the exhibits attached hereto.
5.6 The descriptive headings in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
5.7 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
5.8 All notices provided for in this Agreement shall be in writing,
duly signed by the party giving such notice, and shall be sent by reliable
overnight courier, sent by fax or mailed by registered or certified mail,
return receipt requested, postage pre-paid, as follows:
If to the Seller, addressed to such party at:
Boston Chicken, Inc.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Fax: (000)000-0000
If to the Purchaser, addressed to:
Market Partners, L.L.C.
c/o Boston Chicken, Inc.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: M. Xxxxx Xxxxx
Fax: (000) 000-0000
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Each notice shall be deemed to have been given upon the earlier of the receipt
of such notice by the intended recipient thereof, two business days after it is
sent by reliable overnight courier or sent by fax, or five business days after
it is mailed by registered or certified mail, return receipt requested.
5.9 This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts made and to be
performed therein without regard to the conflicts of law principles thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
BOSTON CHICKEN, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Its: Vice President
MARKET PARTNERS, L.L.C.
By: /s/ M. Xxxxx Xxxxx
--------------------------------
Its: Manager
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EXHIBIT A
This Warrant has not been registered under the Securities Act of 1933, as
amended (the "Securities Act") or under any applicable state
securities law, and in the absence of such registration may not be
sold or transferred unless the issuer of this Warrant has received
an opinion of its counsel, or of counsel reasonably satisfactory to
it, that the proposed sale or transfer will not violate the
registration requirements of the Securities Act or any applicable
state securities law
BOSTON CHICKEN, INC.
WARRANT CERTIFICATE TO PURCHASE
SHARES OF COMMON STOCK
Date of Issuance: ______________, 1996 Certificate W-____
FOR VALUE RECEIVED, Boston Chicken, Inc., a Delaware corporation (the
"Company"), hereby grants to Market Partners, L.L.C. or its permitted
registered assigns (the "Registered Holder") the right to purchase from the
Company __________ shares of the Company's Common Stock, $.01 par value, at a
price per share of $25.00 (as adjusted from time to time in accordance
herewith, the "Exercise Price").
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
1A. Exercise Period. The Registered Holder may exercise, in whole or
in part, the purchase rights represented by this Warrant at any time and from
time to time during the period commencing on Date of Issuance of this Warrant
set forth above and ending on the fifth annual anniversary of the Date of
Issuance (the "Exercise Period").
1B. Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the "Exercise Time"):
(a) a completed Exercise Agreement, as described in paragraph 1C
below, executed by the person exercising all or part of the purchase
rights represented by this Warrant (the "Purchaser");
(b) this Warrant;
(c) if this Warrant is not registered in the name of the
Purchaser, an Assignment or Assignments in the form set forth in Exhibit
I hereto evidencing
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the permitted assignment of this Warrant to the Purchaser, in which case
the Registered Holder shall have complied with the provisions set forth
in Section 5 hereof; and
(d) cash (payable by wire transfer of same day funds or a
certified or bank cashier's check) in an amount equal to the product of
the Exercise Price multiplied by the number of shares of Company Common
Stock being purchased upon such exercise (the "Aggregate Exercise
Price").
(ii) Certificates for shares of Common Stock, if any, purchased
upon exercise of this Warrant shall be delivered by the Company to the
Purchaser as soon as reasonably practicable after the Exercise Time. Unless
this Warrant has expired or all of the purchase rights represented hereby have
been exercised, the Company shall prepare a new Warrant, substantially
identical hereto, representing the rights formerly represented by this Warrant
which have not expired or been exercised and shall, as soon as reasonably
practicable, deliver such new Warrant to the person designated for delivery in
the Exercise Agreement.
(iii) The shares of Common Stock issuable upon the exercise
of this Warrant shall be deemed to have been issued to the Purchaser at the
Exercise Time, and the Purchaser shall be deemed for all purposes to have
become the record holder of such shares of Common Stock at the Exercise Time.
(iv) The issuance of certificates for shares of Common Stock, if
any, upon exercise of this Warrant shall be made without charge to the
Registered Holder or the Purchaser for any issuance tax in respect thereof or
other cost incurred by the Company in connection with such exercise and the
related issuance of shares of Common Stock (other than the Purchase Price).
Each share of Common Stock issuable upon exercise of this Warrant shall, when
issued, be duly and validly issued and free from all taxes, liens and charges.
(v) The Company shall reasonably assist and cooperate with any
Registered Holder or Purchaser required to make any governmental filings or
obtain any governmental approvals prior to or in connection with any exercise
of this Warrant (including, without limitation, making any reasonable filings
required to be made by the Company), provided, however, that the Company will
not be required to (A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this subparagraph
(v), (B) subject itself to taxation in any such jurisdiction, (C) consent to
general service of process in any such jurisdiction, or (D) incur costs or fees
which are inordinate to the value of the securities sought to be sold in such
jurisdiction.
(vi) The Company shall take all such actions as may be reasonably
necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which shares of Common
Stock of the Company or their equivalents may be
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listed (except for official notice of issuance which shall be immediately
delivered by the Company upon such issuance).
(vii) Notwithstanding any other provision hereof, if an
exercise of any portion of this Warrant is to be made in connection with a
registered public offering of the Company or the sale of the Company or
pursuant to Section 3 hereof, the exercise of any portion of this Warrant may,
at the election of the Registered Holder hereof, be conditioned upon the
consummation of the public offering, the sale or the event referred to in the
notice described in Section 2C, in which case such exercise shall not be deemed
to be effective until the consummation of such transaction.
(viii) Unless the shares of Common Stock to be issued upon
exercise of this Warrant have been registered under the Securities Act of 1933,
as amended, the certificates for such shares shall contain the following
legends:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Securities Act"), or under any
applicable state securities law, and may not be resold or transferred unless
registered under the Securities Act or unless the Company has received an
opinion of counsel, or of counsel reasonably satisfactory to it, that the
proposed transfer will not violate the registration requirements of the
Securities Act or any applicable state securities law."
1C. Exercise Agreement. Upon any exercise of this Warrant, the
Exercise Agreement shall be substantially in the form set forth in Exhibit II
hereto, except that if the shares of Common Stock are not to be issued in the
name of the person in whose name this Warrant is registered, the Exercise
Agreement shall also state the name of the person to whom the shares of Common
Stock are to be issued, and if the number of shares of Common Stock to be
issued does not include all the shares of Common Stock purchasable hereunder,
it shall also state the name of the permitted person to whom a new Warrant for
the unexercised portion of the rights hereunder is to be delivered. Such
Exercise Agreement shall be dated the actual date of execution thereof.
Section 2. Adjustment of Exercise Price and Number of Shares. The
Exercise Price and the number of shares of Common Stock (or other securities)
obtainable upon exercise of this Warrant shall be subject to adjustment from
time to time as provided in this Section 2.
2A. Subdivision or Combination of Shares of Common Stock. If the
Company at any time subdivides (by any split, dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to
such subdivision shall be proportionately reduced and the number of shares of
Common Stock obtainable upon exercise of this Warrant shall be proportionately
increased. If the Company at any time combines (by reverse split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased and the number of shares of
Common Stock obtainable upon exercise of this Warrant shall be proportionately
decreased.
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2B. Reorganization, Reclassification, Consolidation or Merger. The
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
as follows: (a) in the event of any merger, consolidation or reorganization of
the Company with any other corporation or corporations, there shall be
substituted, on an equitable basis, for each such share of Common Stock the
number and kind of shares of stock or other securities to which the holders of
each share of Common Stock of the Company will be entitled pursuant to the
transaction; and (b) in the event of any other substantially similar change in
the capitalization of the Company (other than cash dividends in the ordinary
course of business), an equitable adjustment shall be provided in the number of
shares of Common Stock. In the event of any such adjustment the purchase price
per share shall be proportionately adjusted.
2C. Notice of Adjustment. Promptly upon any adjustment of the Exercise
Price or the number of shares of Common Stock issuable upon exercise of this
Warrant, the Company shall give written notice thereof to the Registered
Holder, setting forth in reasonable detail and certifying the calculation of
such adjustment.
Section 3. No Voting Rights; Limitations of Liability. This Warrant
shall not entitle the holder hereof to any voting rights or other rights as a
holder of shares of Common Stock in the Company. No provision hereof, in the
absence of affirmative action by the Registered Holder to purchase shares of
Common Stock, and no enumeration herein of the rights or privileges of the
Registered Holder shall give rise to any liability of such holder for the
Exercise Price of Shares of Common Stock acquirable by exercise hereof or as a
holder of shares of Common Stock in the Company.
Section 4. Warrant Not Transferable. This Warrant and all rights
hereunder are not transferable, in whole or in part, without the prior written
consent of the Company in its sole discretion.
Section 5. Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Registered Holder at
the principal office of the Company, for new Warrants of like tenor
representing in the aggregate the purchase rights hereunder, and each of such
new Warrants shall represent such portion of such rights as is designated by
the Registered Holder at the time of such surrender. The date the Company
initially issues this Warrant shall be deemed to be the "Date of Issuance"
hereof regardless of the number of times new certificates representing the
unexpired and unexercised rights formerly represented by this Warrant shall be
issued. All Warrants representing portions of the rights hereunder are
referred to herein as the "Warrants."
Section 6. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company of the ownership and the loss, theft, destruction
or mutilation of any certificate evidencing this Warrant, and in the case of
any such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Company, or, in the case of any such mutilation upon
surrender of such certificate, the Company shall (at its expense) execute and
deliver in lieu of such certificate a new certificate of like kind representing
the same rights represented by such
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lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate.
Section 7. Notices. Except as otherwise expressly provided herein, all
notices referred to in this Warrant shall be in writing and shall be delivered
personally, sent by reputable overnight courier service (charges prepaid), sent
by fax or sent by registered or certified mail, return receipt requested,
postage prepaid, as follows: (i) if given to the Company, at its principal
executive offices and (ii) if given to the Registered Holder of this Warrant,
at such holder's address as it appears in the records of the Company. Each
such notice shall be deemed to have been given upon the earlier of the receipt
of such notice by the intended recipient thereof, two business days after it is
sent by reliable overnight courier or sent by fax, or five business days after
it is mailed by registered or certified mail, return receipt requested.
Section 8. Amendment and Waiver. Except as otherwise provided herein,
the provisions of the Warrants may be amended 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 has obtained the written consent of the
Registered Holders of Warrants representing a majority of the shares of Common
Stock obtainable upon exercise of the Warrants; provided that no such action
may change the Exercise Price of the Warrants or the number or class of shares
of Common Stock obtainable upon exercise of each Warrant without the written
consent of all of the Registered Holders of Warrants.
Section 9. Descriptive Headings; Governing Law. The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted
for convenience only and do not constitute a part of this Warrant. The laws of
the State of Delaware shall govern all issues concerning the relative rights of
the Company and the Registered Holder of this Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and
attested by its duly authorized officers under its corporate seal and to be
dated the Date of Issuance hereof.
BOSTON CHICKEN, INC.
By:
------------------------------------
Name:
Its:
[Corporate Seal]
Attest:
----------------------------------
Secretary
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ASSIGNMENT
FOR VALUE RECEIVED, _________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (Certificate No. W-_____________) with respect to the number of shares
of Common Stock covered thereby set forth below, unto:
Names of Assignee Address Number of Units
----------------- ------- ---------------
Dated: Signature
-------------------------------
Witness
---------------------------------
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EXERCISE AGREEMENT
To: Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. W-___________), hereby agrees to purchase __________
shares of Common Stock covered by such Warrant and makes payment herewith in
full therefor at the price per share provided by such Warrant.
Signature
------------------------------
Address
--------------------------------
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EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This registration rights agreement (the "Agreement") is entered
into as of this ___ day of _________, 1996, between Boston Chicken, Inc., a
Delaware corporation ("BCI"), and Market Partners, L.L.C., a Delaware limited
liability company ("MP").
SECTION 1. DEMAND REGISTRATION.
(a) Registrable Securities. "Registrable Securities" shall mean
those restricted shares of BCI common stock, $.01 par value, acquired by MP
pursuant to warrants issued under that certain Warrant Purchase Agreement dated
as of July 18, 1996, by and between BCI and MP (the "BCI Warrant Purchase
Agreement").
(b) Request for Registration. At any time after May 2, 1997, the
holders of at least 66 2/3% of the Registrable Securities may request
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of all or part of their Registrable Securities on Form S-2 or S-3 or any
similar short-form registration then available to BCI (the "Demand
Registration"). The request for a Demand Registration shall specify the
approximate number of Registrable Securities requested to be registered.
Within ten days after receipt of any such request, BCI shall give written
notice of such requested registration to all other holders of Registrable
Securities and shall include in such registration all Registrable Securities
with respect to which BCI has received written requests for inclusion therein
within 15 days after the date of BCI's notice.
(c) Registration. The holders of Registrable Securities shall be
entitled to request one Demand Registration. A registration shall not count as
the permitted Demand Registration until it has become effective (unless such
Demand Registration has not become effective due solely to the fault of holders
proposed to be included in such registration); provided that a Demand
Registration shall not count as the permitted Demand Registration unless the
holders of Registrable Securities are able to register at least 90% of the
Registrable Securities requested to be included in such registration; provided,
further, that, in any event BCI shall pay all Registration Expenses in
connection with any registration initiated as a Demand Registration whether or
not it has become effective, and whether or not such registration has counted
as the permitted Demand Registration (unless such Demand Registration does not
become effective due solely to the fault of holders proposed to be included in
such registration).
(d) Other Securities. BCI shall include in the Demand
Registration all BCI securities ("Earlier Securities") desired to be registered
by persons or entities having superior registration rights pursuant to that
certain Second Amended and Restated Piggyback Registration Rights Agreement
dated November 8, 1993 (the "Superior Agreement"), in accordance with the terms
and conditions of the Superior Agreement.
(e) Restrictions on Registration. Notwithstanding anything
herein to the contrary, BCI shall not be obligated to effect the Demand
Registration within 180 days after the
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effective date of a previous registration statement in which the holders of
Registrable Securities were given piggyback rights pursuant to paragraph 2 and
in which there was no reduction in the number of Registrable Securities
requested to be included. BCI may postpone for up to 180 days the filing or
the effectiveness of a registration statement for the Demand Registration if
BCI determines in its reasonable good faith judgment that the Demand
Registration would reasonably be expected to have an adverse effect on BCI or
its subsidiaries or on any proposal or plan by BCI or any of its subsidiaries
to engage in any acquisition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer, reorganization or similar
transaction; provided that in such event, the holders of Registrable Securities
initially requesting such Demand Registration shall be entitled to withdraw
such request and, if such request is withdrawn, such Demand Registration shall
not count as the permitted Demand Registration hereunder and BCI shall pay all
Registration Expenses in connection with such abandoned registration.
SECTION 2. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. Commencing on the date on which the
holders of Registrable Securities are first entitled to request the Demand
Registration pursuant to paragraph 1(b) above, whenever BCI proposes to
register any of shares of its Common Stock (other than shares of Common Stock
underlying any option, warrant, or convertible debt or other security) under
the Securities Act (other than pursuant to the Demand Registration) and the
registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), BCI shall give prompt written notice
(in any event within five business days after its receipt of notice of any
exercise of demand registration rights other than under this Agreement) to all
holders of Registrable Securities of its intention to effect such a
registration and shall include in such registration all Registrable Securities
with respect to which BCI has received written requests for inclusion therein
within 15 days after the date of its notice. Notwithstanding anything herein
to the contrary, BCI shall not be required to effect any registration of
Registrable Securities under this paragraph 2: (i) incidental to the
registration of any of its securities in connection with mergers, acquisitions,
exchange offers, subscription offers, dividend reinvestment plans or stock
option or other employee benefit plans, or incidental to the filing of a
registration statement for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act or any similar rule that
may be adopted by the SEC, or (ii) if the Piggyback Registration is a primary
registration on behalf of BCI (whether or not underwritten) and BCI determines
in its reasonable judgment that including any Registrable Securities in such
registration will adversely effect such primary registration or BCI's
objectives in connection therewith.
(b) Piggyback Expenses. The Registration Expenses of the holders
of Registrable Securities shall be paid by BCI in all Piggyback Registrations.
(c) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of BCI, and the
managing underwriters advise BCI in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in an orderly manner in such offering within a price range
acceptable to BCI, BCI will include in such registration (i) first, the
securities BCI proposes to sell, (ii) second, other securities requested to be
included in such registration pursuant to registration
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rights under the Superior Agreement, (iii) third, the Registrable Securities
requested to be included in such registration, pro rata among the holders of
such Registrable Securities on the basis of the number of shares owned by each
such holder, and (iv) fourth, other securities requested to be included in such
registration.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
BCI's securities, and the managing underwriters advise BCI in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the holders initially requesting
such registration, BCI shall include in such registration (i) first, the
securities requested to be included therein by the holders requesting such
registration, (ii) second, other securities requested to be included in such
registration pursuant to registration rights under the Superior Agreement,
(iii) third, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares owned by each such holder, and (iv) fourth, other
securities requested to be included in such registration.
SECTION 3. HOLDBACK AGREEMENT.
No holder of Registrable Securities shall effect any public sale or
distribution (including sales pursuant to Rule 144) of equity securities of
BCI, or any securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and the 180-day period (or such
shorter period as the underwriters managing the registered public offering may
permit) beginning on the effective date of an underwritten Demand Registration
or any underwritten Piggyback Registration in which Registrable Securities are
included (except as part of such underwritten registration), unless the
underwriters managing the registered public offering otherwise agree.
SECTION 4. REGISTRATION PROCEDURES.
(a) Whenever the holders of Registrable Securities have requested
that any Registrable Securities be registered pursuant to this Agreement, BCI
shall use its reasonable best efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto BCI shall as expeditiously as
reasonably practicable:
(i) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement and include
therein the Registrable Securities and such Earlier Securities as
comply with the procedures of the Superior Agreement, prepare and
file all amendments, post-effective amendments and supplements to
such registration statement as may be necessary under the Act and
the regulations thereunder to permit the sale of such Earlier
Securities and Registrable Securities to the public, and use its
reasonable best efforts to cause such registration statement to
become effective and remain effective for a period of not less than
one year or until such earlier time as all of the securities
covered
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by such registration statement have been sold (provided that before
filing such registration statement, BCI will furnish to counsel
selected by the holders of Registrable Securities, if any, copies
of the registration statement for review by such counsel);
(ii) use its reasonable best efforts to (i) register or
qualify such Earlier Securities and Registrable Securities under
such other securities or blue sky laws of such jurisdictions as any
of the sellers of such Earlier Securities and Registrable
Securities (collectively, the "Sellers" and individually, a
"Seller") reasonably request, and (ii) do any and all other acts
and things which may be reasonably necessary to allow Sellers to
consummate the disposition in such jurisdictions of such Earlier
Securities and Registrable Securities owned by such Sellers;
provided, however, that BCI 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 subparagraph (b),
(ii) subject itself to taxation in any such jurisdiction, (iii)
consent to general service of process in any such jurisdiction, or
(iv) incur costs or fees which are inordinate to the value of the
securities sought to be sold in such jurisdiction;
(iii) use its reasonable efforts to cause all such
Earlier Securities and Registrable Securities to be included for
quotation on the Nasdaq National Market;
(iv) furnish to each Seller of Registrable Securities such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other
documents as such Seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by
such Seller;
(v) notify each Seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading,
and, at the request of any such Seller, prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will
not contain an untrue statement of a material fact or omit to state
any fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and
(vi) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of the
registration statement.
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(b) BCI hereby represents and warrants that it is eligible to
file a registration statement on Form S-3 pursuant to the rules and regulations
pertaining thereto under the Securities Act.
(c) Upon the request of BCI, each Seller of Registrable
Securities will promptly furnish to BCI in writing, during the period within
which BCI is required to effect such registration, all information and
affidavits as may be reasonably requested by BCI in connection with items
required to be included in the Registration Statement, or any amendment or
supplement thereto. To the extent BCI reasonably requests such information and
affidavits and the Seller does not provide such information or affidavits in a
timely manner, then, BCI's obligation to register such Seller's Registrable
Securities hereunder shall be null and void.
SECTION 5. REGISTRATION EXPENSES.
The Sellers of Registrable Securities under this Agreement will
bear all underwriting discounts and commissions, if any, and the fees and
disbursements of their legal counsel and accountants. BCI will bear all other
reasonable expenses in connection with any registration or qualification of the
Registrable Securities pursuant to this Agreement.
SECTION 6. INDEMNIFICATION.
(a) BCI agrees to indemnify, to the extent permitted by law, each
Seller of Registrable Securities, and each person, if any, who controls such
Seller within the meaning of the Act, against any and all losses, claims,
damages or liabilities to which the Sellers of Registrable Securities may
become subject under the Act or any other statute or common law by reason of
its offer and sale of Registrable Securities pursuant to the Registration
Statement, and to reimburse the Sellers of Registrable Securities for any
reasonable legal or other expenses actually and reasonably incurred in
connection with investigating any claims and defending any actions, insofar as
such losses, claims, damages, liabilities or actions arise out of, or are based
upon:
(i) any untrue statement of a material fact or any alleged
untrue statement of a material fact contained in or incorporated by
reference in the Registration Statement or any post-effective
amendment thereto, or the 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 under
which they were made, not misleading; or
(ii) any untrue statement of a material fact or any alleged
untrue statement of a material fact contained or incorporated by
reference in the prospectus (as amended or supplemented if BCI
shall have filed with the Commission any amendment or supplement
thereto), if used within the period during which BCI is required to
keep the Registration Statement in which such prospectus is
contained current pursuant to the terms of this Agreement, or the
omission or alleged omission to state therein a material fact
necessary in order to
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make the statements contained therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the indemnification agreement contained herein shall
not apply to losses, claims, damages, liabilities or actions arising out of, or
based upon, any such untrue statement or any such omission or alleged omission,
if such statement or omission was made in reliance upon, and in conformity
with, information furnished to BCI by or on behalf of any Seller of Registrable
Securities for use in connection with the preparation of the Registration
Statement or any prospectus contained in the Registration Statement or any such
amendment or supplement thereto.
(b) The Sellers of Registrable Securities shall (in the same
manner and to the same extent as set forth in Section 4(a)), severally
indemnify, to the extent permitted by law, BCI, each person, if any, who
controls BCI within the meaning of the Act, and their directors and officers,
if such statement or omission was made in reliance upon and in conformity with
information furnished to BCI by or on behalf of any Seller of Registrable
Securities for use in connection with the preparation of the Registration
Statement or any amendment or supplement thereto.
(c) Any person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided, however, that any failure by a
person entitled to indemnification hereunder to give such prompt written notice
shall not adversely affect such person's rights hereunder unless such failure
prejudices the rights of the indemnifying party hereunder) and (ii) unless in
such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be
unreasonably withheld). 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 for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of such counsel a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim.
SECTION 7. REGISTRATION RIGHTS OF OTHER SECURITY HOLDERS.
The registration rights granted pursuant to this Agreement are granted subject
to any and all registration rights granted by the Company to holders of its
securities prior to the date hereof, and no provision herein shall be
interpreted so as to be superior to, inconsistent with, or adversely effect,
any such previously granted registration rights.
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SECTION 8. MISCELLANEOUS.
(a) Amendments. The provisions of this Agreement may be amended
only upon the written consent of BCI and MP, or in the event there is more than
one holder of Registrable Securities, only upon the written consent of BCI and
the holders of a majority of the Registrable Securities.
(b) Assignment. This Agreement is binding upon the parties
hereto and their respective successors and assigns. Subject to compliance with
the Securities Act, MP's rights hereunder shall be assignable to any member of
MP that agrees in writing to be bound by the terms and provisions of this
Agreement; provided, however, that such assignee of MP may not further assign
such rights without the prior written consent of BCI in its sole discretion.
To the extent that MP assigns its rights under this Agreement to more than one
individual, each individual shall have such rights separately from the others
with respect to the Registrable Securities owned by him. Transfer of the
Registrable Securities shall not, in itself, be deemed an assignment of rights
hereunder.
(c) Counterparts. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
will constitute one and the same agreement.
(d) Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered if delivered by hand or by
electronic transmission. If sent by reliable overnight delivery service and
addressed as follows, or at such other addresses as the parties hereto may from
time to time designate in writing, such notices, requests, demands and other
communications shall be deemed delivered upon the earlier of actual receipt or
two business days after being so duly sent.
To BCI:
Boston Chicken, Inc.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Facsimile: (000) 000-0000
To MP:
Market Partners, L.L.C.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Manager
Facsimile: (000) 000-0000
(e) Termination. This Agreement shall automatically terminate
for any Registrable Shares at such time as (1) such Registrable Shares are
publicly traded or (2) such
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