1
EXHIBIT 4.18
REGISTRATION RIGHTS AGREEMENT
This registration rights agreement (the "Agreement") is entered
into as of this 27th day of September, 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
2
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
2
3
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
3
4
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.
4
5
(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
5
6
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.
6
7
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
7
8
Registrable Shares may be publicly traded without registration under the
Securities Act or applicable state securities law.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement on the day and year first above written.
BOSTON CHICKEN, INC.
By: /s/ Xxxxxxxxxx X. Xxxxxxx
-------------------------------------
Its: Vice President
MARKET PARTNERS, L.L.C.
By: /s/ J. Xxxxxxxxxxx Xxxxx
-------------------------------------
Its: Manager
8
