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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of October 14,
1997, by and among Tom's Foods, Inc., a Delaware corporation (the "Company")
and TFH Corp., a Delaware corporation (including its successors by merger,
acquisition, reorganization or otherwise, "TFH").
WHEREAS, in exchange for the satisfaction of certain debt obligations of the
Company, the Company issued to TFH 7,000 shares of Class A Exchangeable
Preferred Stock, $.01 par value per share, of the company (the "Class A
Shares") and 21,737 shares of Class B Preferred Stock, $.01 par value per
share, of the Company (the "Class B Shares"); and
WHEREAS, Class A shares with a liquidation preference of up to $10 million
are exchangeable by TFH for certain senior debt securities of the Company
substantially identical (except for the removal of transfer restrictions) to
the 10 1/2% Senior Secured Notes issued by the Company on the date hereof (the
"Exchange Notes");
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company hereby covenants and agrees with TFH as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or
any similar successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Person" shall mean an individual, a corporation, a partnership, a joint
venture, a trust, an unincorporated organization, a limited liability company
or partnership, a government and any agency or political subdivision thereof.
"Registrable Securities" shall mean (i) the Class A Shares and the Class B
Shares and (ii) the Exchange Notes and any other securities into which or for
which any of the Class A Shares or Class B Shares may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise (it being understood that for purposes of this Agreement, a Person
will be deemed to be a holder of Registrable Securities whenever such Person
has the right to then acquire or obtain from the Company any Registrable
Securities, whether or not such acquisition has actually been effected.
"Registration Expenses" shall mean the expenses so described in Section 4.
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"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
2. Demand Registration.
(a) At any time after the date hereof, the holders of at least twenty five
percent (25%) of the Registrable Securities may request the Company register
under the Securities Act the Registrable Securities held by such requesting
holders in a firm commitment underwritten public offering or any other method
of distribution (including offerings involving a delayed or continuous offering
pursuant to Rule 415 under the Securities Act). Upon receipt of such request,
the Company shall promptly deliver notice of such request to all Persons
holding Registrable Securities who shall then have thirty (30) days to notify
the Company in writing of their desire to be included in such registration.
The right of any Person to participate in such registration shall be
conditioned upon their participation in such underwritten public offering (or
such other method of distribution) and the inclusion of their Registrable
Securities in the underwritten public offering (or such other method of
distribution) to the extent provided herein. The Company will use its best
efforts to expeditiously effect the registration of all Registrable Securities
whose holders request participation in such registration under the Securities
Act and shall keep such registration effective until the Registrable Securities
thereunder shall have been sold, but only to the extent provided for in the
following provisions of this Agreement.
(b) The Company shall have the right to approve the managing underwriter
chosen by the holders of a majority of the Registrable Securities to be sold in
such offering (which approval will not be unreasonably withheld or delayed).
3. Registration Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any of its securities under the Securities Act, the Company will, as
expeditiously as possible:
(i) use its best efforts diligently to prepare and file with the
Commission a registration statement on the appropriate form under the
Securities Act with respect to such securities, which form shall comply as to
form in all material respects with the requirements of the applicable form
and include all financial statements required by the Commission to be filed
therewith, and use its best efforts to cause such registration statement to
become and remain effective until completion of the proposed offering;
(ii) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
and to comply with the provisions of the Securities Act with respect to the
sale or other disposition of all securities covered by such registration
statement whenever the seller or sellers of such securities shall desire to
sell or otherwise dispose of the same, but only to the extent provided in
this Agreement;
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(iii) furnish to each selling holder and the underwriters, if any, such
number of copies of such Registration Statement, any amendments thereto, any
documents incorporated by reference therein, the prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such selling holder may reasonably request
in order to facilitate the public sale or other disposition of the securities
owned by such selling holder;
(iv) use every reasonable effort to register or qualify the securities
covered by such registration statement under such other securities or state
blue sky laws of such jurisdictions as each selling holder shall reasonably
request, and do any and all other acts and things which may be necessary
under such securities or blue sky laws to enable such selling holder to
consummate the public sale or other disposition in such jurisdictions of the
securities owned by such selling holder, except that the Company shall not
for any such purpose be required to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(v) within a reasonable time before each filing of the registration
statement or prospectus or amendments or supplements thereto with the
Commission (or any materials to be provided to the staff of the Commission),
furnish to counsel selected by the holders of Registrable Securities copies
of such documents proposed to be filed (or provided to the staff of the
Commission), which documents shall be subject to the reasonable approval of
such counsel;
(vi) promptly notify each selling holder of Registrable Securities, such
selling holders' counsel and any underwriter and (if requested by any such
Person) confirm such notice in writing, of the happening of any event which
makes any statement made in the registration statement or related prospectus
untrue or which requires the making of any changes in such registration
statement or prospectus so that they will not contain any untrue statement of
a material fact or omit to state any 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; and, as promptly as
practicable thereafter, prepare and file with the Commission and furnish a
supplement or amendment to such prospectus so that, as thereafter deliverable
to the purchasers of such securities covered by such prospectus, such
prospectus will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(vii) use its best efforts to prevent the issuance of any order suspending
the effectiveness of a registration statement, and if one is issued use its
best efforts to obtain the withdrawal of any order suspending the
effectiveness of a registration statement at the earliest possible moment;
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(viii) if requested by the managing underwriter or underwriters (if any),
any selling holder, or such selling holder's counsel, promptly incorporate in
a prospectus supplement or post-effective amendment such information as such
Person requests to be included therein, including, without limitation, with
respect to the securities being sold by such selling holder to such
underwriter or underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other terms of an
underwritten offering of the securities to be sold in such offering, and
promptly make all required filings of such prospectus supplement or
post-effective amendment;
(ix) make available to each selling holder, any underwriter participating
in any disposition pursuant to a registration statement, and any attorney,
accountant or other agent or representative retained by any such selling
holder or underwriter (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information requested by any
such Inspector in connection with such registration statement;
(x) enter into any reasonable underwriting agreement required by the
proposed underwriter(s) for the selling holders, if any, and use its best
efforts to facilitate the public offering of the securities;
(xi) furnish to each prospective selling holder a signed counterpart,
addressed to the prospective selling holder, of (A) an opinion of counsel for
the Company, dated the effective date of the registration statement, and (B)
a "comfort" letter signed by the independent public accountants who have
certified the Company's financial statements included in the registration
statement, covering substantially the same matters with respect to the
registration statement (and the prospectus included therein) and (in the case
of the accountants' letter) with
respect to events subsequent to the date of the financial statements, as are
customarily covered (at the time of such registration) in opinions of the
Company's counsel and in accountants' letters delivered to the underwriters
in underwritten public offerings of securities; and
(xii) otherwise cooperate with the underwriters), the Commission and other
regulatory agencies and take all actions and execute and deliver or cause to
be executed and delivered all documents necessary to effect the registration
of any securities under this Agreement.
3. Expenses. All of the expenses incurred in effecting the registrations
provided for in Section 2, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel for the
Company and fees of one counsel for the selling holders of Registrable
Securities (which counsel shall be selected by the holders of not less than a
majority of the Registrable Securities to be included in any such
registration), underwriting expenses
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(other than fees, commissions or discounts), expenses of any audits incident to
or required by any such registration and expenses of complying with the
securities or blue sky laws of any jurisdictions pursuant to Section 4(iv)
hereof (all of such expenses referred to as "Registration Expenses"), shall be
paid by the Company. .
4. Indemnification. (a) The Company shall indemnify and hold harmless the
selling holder of such securities, each underwriter (as defined in the
Securities Act), and each other Person who participates in the offering of such
securities and each other Person, if any, who controls (within the meaning of
the Securities Act) such seller, underwriter or participating Person
(individually and collectively, the "Indemnified Person") against any losses,
claims, damages or liabilities (collectively the "liability"), joint or
several, to which such Indemnified Person may become subject under the
Securities Act or any other statute or at common law, insofar as such liability
(or action in respect thereof) arises out of or is based upon (i) any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereto,
or (ii) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading. Except as otherwise provided in Section 6(d), the Company shall
reimburse each such Indemnified Person in connection with investigating or
defending any such liability; provided, however, that the Company shall not be
liable to any Indemnified Person in any such case to the extent that any such
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary or final prospectus, or amendment or supplement thereto in reliance
upon and in conformity with information furnished in writing to the Company by
such Person specifically for use therein, or upon such statement or omission
therein based on the authority of an expert within the meaning of that term as
defined in the Securities Act (but only if the Company had no reasonable ground
to believe, and did not believe, that the statements made on the authority of
an expert were untrue or that there was an omission to state a material fact);
and provided further, that the Company shall not be required to indemnify any
Person against any liability arising from any untrue or misleading statement or
omission contained in any preliminary prospectus if such deficiency is
corrected in the final prospectus or for any liability which arises out of the
failure of any Person to deliver a prospectus as required by the Securities Act
regardless of any investigation made by or on behalf of such Indemnified Person
and shall survive transfer of such securities by such seller.
(b) Each selling holder of any securities included in such registration
being effected, shall indemnify and hold harmless each other selling holder of
any securities, the Company, its directors and officers, each underwriter and
each other Person, if any, who controls the Company or such underwriter
(individually and collectively also the "Indemnified Person"), against any
liability, joint or several, to which any such Indemnified Person may become
subject under the Securities Act or any other statute or at common law, insofar
as such liability (or actions in respect thereof) arises out of or is based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which securities were registered under the Securities Act at the request of
such selling holder, any preliminary prospectus or final prospectus contained
therein, or any
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amendment or supplement thereto, or (ii) any omission or alleged omission by
such selling holder to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in the case
of (i) and (ii) to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such registration statement, preliminary or final prospectus, amendment or
supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by such selling holder specifically for use
therein, and then only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission by the selling holder was not
based on the authority of an expert as to which the selling holder had no
reasonable ground to believe, and did not believe, that the statement made on
the authority of such expert was untrue or that there was an omission to state
a material fact. Such selling holder shall reimburse any Indemnified Person
for any legal fees incurred in investigating or defending any such liability;
provided, however, that such selling holder's obligations hereunder shall be
limited to an amount equal to the proceeds to such selling holder of the
securities sold in any such registration; and provided further, however, that
no selling holder shall be required to indemnify any Person against any
liability arising from any untrue or misleading statement or omission contained
in any preliminary prospectus if such deficiency is corrected in the final
prospectus or for any liability which arises out of the failure of any Person
to deliver a prospectus as required by the Securities Act.
(c) Indemnification similar to that specified in Sections 6(a) and (b)
shall be given by the Company and each selling holder (with such modifications
as may be appropriate) with respect to any required registration or other
qualification of their securities under any federal or state law or regulation
of governmental authority other than the Securities Act.
(d) In the event the Company, any selling holder or other Person receives
a complaint, claim or other notice of any liability or action, giving rise to a
claim for indemnification under Sections 6(a), (b) or (c), the Person claiming
indemnification under such paragraphs shall promptly notify the Person against
whom indemnification is sought of such complaint, notice, claim or action, and
such indemnifying Person shall have the right to investigate and defend any
such loss, claim, damage, liability or action. The Person claiming
indemnification shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall not be at the expense of the Person against whom
indemnification is sought (unless the indemnifying party fails to promptly
defend, in which case the fees and expenses of such separate counsel shall be
home by the Person against whom indemnification is sought). In no event shall
a Person against whom indemnification is sought be obligated to indemnify any
Person for any settlement of any claim or action effected without the
indemnifying Person's prior written consent.
5. Compliance with Rule 144. In the event that the Company (i) registers a
class of securities under Section 12 of the Exchange Act or (ii) shall commence
to file reports under Section 13 or 15(d) of the Exchange Act, thereafter, the
Company will use its best efforts thereafter to file with the Commission such
information as is required under the Exchange Act for so long as there are
holders of Registrable Securities; and in such event, the Company shall use its
best efforts to take all action as may be required as a condition to the
availability of Rule 144 under the Securities Act (or any comparable successor
rules).
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6. Amendments. The provisions of this Agreement 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 holders of at least fifty-one percent (51%) of the Registrable
Securities.
7. Transferability of Registration Rights. The registration rights set forth
in this Agreement are transferable to each transferee of Registrable
Securities, other than a transferee whose activities, products or services are
competitive with the activities, products or services of the Company as of the
date of such transfer. Each subsequent holder of Registrable Securities must
consent in writing to be bound by the terms and conditions of this Agreement in
order to acquire the rights granted pursuant to this Agreement.
8. Damages. The Company recognizes and agrees that each holder of
Registrable Securities will not have an adequate remedy if the Company fails to
comply with the terms and provisions of this Agreement and that damages will
not be readily ascertainable, and the Company expressly agrees that, in the
event of such failure, it shall not oppose an application by any holder of
Registrable Securities or any other Person entitled to the benefits of this
Agreement requiring specific performance of any and all provisions hereof or
enjoining the Company from continuing to commit any such breach of this
Agreement.
9. Miscellaneous.
(a) All notices, requests, demands and other communications provided for
hereunder shall be in writing and mailed (by first class registered or
certified mail, postage prepaid), telegraphed, sent by express overnight
courier service or electronic facsimile transmission (with a copy by mail), or
delivered to the applicable party at the addresses indicated below:
If to the Company:
Tom's Foods Inc.
000 0xx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Telecopy No.: (000)000-0000
With a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
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If to TFH:
TFH Corp.
C/o Heico Holding, Inc.
Three First Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: President
If to any other holder of Registrable Securities:
At such Person's address for notice as set forth in the books and records of
the Company
or, as to each of the foregoing, at such other address as shall be designated
by such Person in a written notice to other parties complying as to delivery
with the terms of this subsection (a). All such notices, requests, demands and
other communications shall, when mailed, telegraphed or sent, respectively, be
effective (i) two days after being deposited in the mail or (ii) one day after
being delivered to the telegraph company, deposited with the express overnight
courier service or sent by electronic facsimile transmission, respectively,
addressed as aforesaid.
(b) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
(c) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(d) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed as of the date first set forth above.
TOM'S FOODS INC.
By: ___________
Name:
Title:
TFH CORP.
By: ___________
Name:
Title:
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