REGISTRATION RIGHTS AGREEMENT
This is an agreement dated April 30, 1998 among Family Bargain
Corporation (the "Company"), a Delaware corporation, American Endeavour Fund
Ltd. ("Endeavour"), a Jersey corporation, and London Pacific Life Annuity
Company ("London Pacific"), a North Carolina joint stock life insurer, regarding
registration under the Securities Act of 1933, as amended the "Securities Act,"
of shares of Common Stock of the Company ("Common Stock"), par value $.01 per
share, which may be issued under a Note Exchange Agreement (the "Note Exchange
Agreement") dated the same date as this Agreement, among the Company, Endeavour
and London Pacific, or issued upon exercise of warrants issued by the Company
under the Note Exchange Agreement.
Under the Note Exchange Agreement, the Company will be issuing 75,000
shares of Common Stock to Endeavour and will be issuing warrants (the
"Warrants") to purchase a total of 274,418 shares Common Stock to London
Pacific.
The Company, Endeavour and London Pacific agree as follows regarding
registration under the Securities Act of Common Stock issued under the Note
Exchange Agreement or upon exercise of Warrants:
Registrable Stock. This Agreement relates to Registrable
Stock. As used in this Agreement, the term "Registrable Stock" means (i) Common
Stock issued under the Note Exchange Agreement and (ii) Common Stock and other
securities issued on exercise of Warrants, which, in each case, (x) has not
previously been sold in a transaction registered under the Securities Act or in
a brokers transaction made in accordance with Rule 144 under the Securities Act
and (y) may not be sold in accordance with Rule 144(k) under the Securities Act
(or any successor to that rule) without limitation as to manner of sale or
volume.
Piggy-Back Registration. If, at any time during the period
ending on the second anniversary of the last date on which any Warrants are
exercised (which will not occur later than May 28, 2005) and while any Warrants
or Registrable Stock are or is outstanding, the Company decides to file with the
Securities and Exchange Commission (the "Commission") a registration statement
under the Securities Act (other than on Form ▇-▇, ▇▇▇▇ ▇-▇, or any successor
form), the Company will give all the then holders of Warrants or Registrable
Stock (the "Eligible Holders") at least 45 days' prior written notice of the
Company's intention to file the registration statement. If requested by any
Eligible Holder in writing within 20 days after receipt of a notice of intention
to file a registration statement, the Company will, at the Company's sole
expense (other than the fees and disbursements of counsel for the Eligible
Holders and any underwriting discounts or commissions payable in respect of the
Warrants or Warrant Stock sold by the Eligible Holder), include the shares of
Registrable Stock (and shares of Common Stock which will become Registrable
Stock upon exercise of Warrants) specified in the Eligible Holder's request in
the securities which are the subject of the registration statement, except that
if the registration statement will relate solely to an offering of securities by
the Company for its own account and the managing underwriter of that offering
advises the Company in writing that, in its opinion, including all or a
specified portion of the requested Registrable Securities in the registration
statement would materially adversely affect the distribution of the securities
being offered by the Company for its own account, the Company may elect not to
include all or the specified portion of the requested Registrable Stock in the
registration statement. If it does so, however, the Company will within six
months after the registration statement becomes effective, file at its sole
expense (other than fees and disbursements of counsel for the Eligible Holders
and any underwriting discounts or commissions payable in respect of the
Registrable Stock) a new registration statement relating to the Registrable
Stock which the Company elected not to include in the prior registration
statement and the Company will use its best efforts to cause the registration
statement to become effective as promptly as practicable.
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Demand Registration Rights.
If, at any time during the period ending on the second
anniversary of the last day on which any Warrants are exercised (which will not
occur later than May 28, 2005), Eligible Holders who in aggregate own (or upon
exercise of all the Warrants then outstanding would own) a majority of the total
number of shares of Registrable Stock (including shares which would be
Registrable Stock upon exercise of all the Warrants then outstanding) ("Majority
Holders"), deliver to the Company a written request that it register under the
Securities Act the sale of at least 200,000 shares of Registrable Stock, the
Company will, as promptly as practicable, prepare and file with the Commission a
registration statement sufficient to permit the public offering and sale of the
shares of Registrable Stock specified in the request, will use its best efforts
to cause that registration statement to become effective as promptly as
practicable and will take any actions which are necessary to qualify sales of
that Registrable Stock by the Eligible Holders under applicable state securities
laws; provided, however, that (i) the Company will not be required to file more
than two registration statements under this Section 3, (ii) the Company will not
be required to file a registration statement with regard to Registrable Stock
which, in the reasonable opinion of counsel to the Company, may all be sold to
the public without registration under the Securities Act and after such a sale
will not be restricted securities (as that term is used in Rule 144 under the
Securities Act) and will not otherwise be subject to restrictions on resales,
and (iii) the Company will not be obligated to file a registration statement in
accordance with this Section 3 within six months after the effective date of a
previous registration statement filed in accordance with Section 3 or this
Section 3. The Company will pay all the costs relating to the first registration
statement filed in accordance with this Section 3 (including amendments
necessary to cause the registration statement to become effective), other than
fees and disbursements of counsel for the Eligible Holders and any underwriting
discounts or commissions in respect of the Underwriters' Securities sold by
Eligible Holders. The reasonable costs of any other registration statement filed
in accordance with this 3 will be paid by the Eligible Holders. Within 20 days
after the Company receives a request under this Section 3 to file a registration
statement, the Company will notify all the Eligible Holders who had not joined
in the request that the Company is proceeding with the requested registration
and will offer to include all or any portion of those other Eligible Holders'
Registrable Stock in the registration statement if requested to do so within 20
days after the notice to the other Eligible Holders.
Filing and Effectiveness.
The Company will take all steps, including filing all
amendments and supplements, which are necessary to keep each registration
statement filed in accordance with Section 2 or 3 effective and current until
the Eligible Holders whose Warrant Stock are the subject of the registration
statement have completed the offering of those shares of Warrant Stock, except
that the Company will not be required to keep a registration statement in effect
for more than nine months after it becomes effective.
Copies of Registration Statements and Prospectuses.
The Company will furnish each
Eligible Holder with such number of copies of each registration statement filed
in accordance with Section 2 or 3 which relates to Registrable Stock offered by
that Eligible Holder, and each amendment or supplement to that registration
statement, in each case, including exhibits, and such number of copies of the
prospectus included in that registration statement, and each amendment or
supplement to it, as are reasonably requested by the Eligible Holder to enable
it to complete the sale of the Registrable Stock to which the registration
statement relates.
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Underwriting Agreement.
Ifthe shares of Registrable Stock which are the subject of a registration
statement filed in accordance with Section 2 or 3 are to be sold
in an underwritten offering, the Company and the Eligible Holders of those
shares of Registrable Stock each will enter into a customary
underwriting agreement relating to that underwritten offering, which will
contain customary representations, warranties, provisions regarding
allocations of expenses, closing conditions, and indemnities.
Filings Current.
Until all the Warrants have been exercised or expired and all the Registrable
Stock has been sold in transactions registered under the Securities Act or in
transactions made in accordance with Rule 144 under the Act, the Company will
keep current all the filings it is required to make with the Commission which
are necessary to permit holders of Registrable Stock to sell that stock under
Rule 144.
Indemnification.
The Company will indemnify and hold harmless each officer, director, partner,
employee and agent of each Eligible Holder, and each person, if any, who
controls any Eligible Holder within the meaning of Section 15 of the Securities
Act or of Section 20(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against any losses, liabilities, claims, damages or expenses
(including, but not limited to, attorneys' fees and expenses and costs of
investigation) arising out of, or based upon, any actual or alleged untrue
statements, or omissions of statements necessary in order to make the statements
therein not misleading, in any registration statement relating to Registrable
Stock, any prospectus included in such a registration statement (as from time to
time amended or supplemented), any amendment or supplement to any such
registration statement or prospectus or any application or related document
filed in any jurisdiction in order to qualify Registrable Stock under the
securities laws of that jurisdiction which was executed by the Company or based
upon written information furnished by the Company, unless the statement or
omission is with respect to an Eligible Holder and was made in reliance upon and
in conformity with written information furnished to the Company by that Eligible
Holder.
Each holder which includes Registrable Stock in the securities which are the
subject of a registration statement will indemnify and hold harmless the
Company, each director, officer, employee and agent of the Company, and each
other person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, to the same extent the Company
agrees in Section 8(a) to indemnify and hold harmless each Eligible Holder, but
only with respect to statements or omissions with respect to the holder which
were made in reliance upon and in conformity with written information furnished
to the Company by the holder for inclusion in the registration statement,
prospectus, amendment, supplement or application, as the case may be; provided,
that the obligation of the a holder of Registrable Stock under this Section 8(b)
will be limited to the proceeds received by the holder from the sale of
Registrable Stock which is the subject of a registration statement filed in
accordance with Section 2 or 3.
If an action is brought against a person entitled to indemnification under
Section 8(a) or (b) (an "Indemnified Party") in respect of which that person may
seek indemnity, the indemnified party will promptly notify all the parties (the
"Indemnifying Parties") against whom indemnification may be sought in writing of
the institution of the action (but failure to give the notice will not relieve
the indemnifying parties from any liability they may have other than under this
Section 8), and the Indemnifying Parties will be entitled to assume the defense
of the action on behalf of the Indemnified Parties with counsel selected by the
Indemnifying Parties who are reasonably satisfactory to the Indemnified Parties
(which counsel will not, without the consent of all the Indemnified Parties, be
counsel to any of the Indemnifying Parties). Any Indemnified Party may employ
its own additional counsel with regard to an action, but if one or more
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Indemnifying Parties assumes the defense of the action, the Indemnifying Parties
will not be responsible for the fees and expenses of additional counsel employed
by an Indemnified Party. An Indemnifying Party will not be liable for any
settlement of a claim or action effected without its written consent, which
consent will not be unreasonably withheld or delayed. An Indemnifying Party will
not, without the prior written consent of each Indemnified Party that is not
released as described in this sentence, settle or compromise any action, or
permit a default or consent to the entry of judgment in any action, in respect
of which indemnity may be sought under this Section (whether or not any
Indemnified Party is a party to the action), unless the settlement, compromise
or judgment includes an unconditional release of each Indemnified Party from all
liability in respect of the action.
Rights of Transferees.
If any holder transfers Registerable Stock in a transaction
which does not cause the transferred shares to cease being Registerable Stock
(as that term is defined in Section 1), the person to whom the Registerable
Stock is transferred will be entitled to the benefits of this Agreement if (i)
the Company is notified about the transfer and provided with the name, address
and social security or employer identification number of the person to whom the
Registerable Stock is transferred, and (ii) the person to whom the Registerable
Stock is transferred agrees to be bound by this Agreement (including Section
8(b) of this Agreement) to the same extent as a holder of Warrants or Common
Stock who executed this Agreement. If a holder transfers Registerable Stock to a
person who does not become entitled to the benefits of this Agreement as
provided in the preceding sentence, the shares which are transferred to that
person will cease being Registerable Stock until such, if any, time as the
person to whom the shares are transferred becomes entitled to the benefits of
this Agreement.
Notices.
Notices or other communications under or relating to this Agreement must be in
writing and will be deemed given when they are delivered in person or sent by
facsimile transmission to a number specified by the recipient, or on the third
business day after the day on which they are sent by First Class Mail, addressed
(a) if to a holder of Warrants or Registrable Stock, to the holder's last known
address shown on the Warrant Register or Share Register maintained by the
Company and (b) if to the Company, to ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇,
▇▇▇▇▇-▇▇▇▇, Attention: President, or to such other address as the recipient of
the notice may subsequent by specify in the manner provided in this Section.
Entire Agreement.
This Agreement contains the entire agreement between the Company and the holders
of Warrants or Registerable Stock relating to the registration of stock or
warrants of the Company under the Securities Act.
Captions.
The captions of the Sections of this Agreement are for reference only, and do
not affect the meaning or interpretation of this Agreement.
Governing Law.
This Agreement will be governed by, and construed under, the substantive laws of
the State of New York.
Amendments.
This Agreement may be amended only by a document in writing signed by the
Company and by each holder of Warrants or Registerable Stock which may be
affected by the amendment.
Counterparts.
This Agreement may be executed in two or more counterparts, some of which may be
signed by fewer than all the parties and may be delivered by facsimile
transmission, each of which will be deemed an original, but all of which
together will constitute one and the same agreement.
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IN WITNESS WHEREOF, the Company, Endeavour, and London Pacific
have executed this Agreement, intending to be legally bound by it, on the date
shown on the first page of this Agreement.
FAMILY BARGAIN CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
AMERICAN ENDEAVOUR FUND LTD.
By:
Title:
LONDON PACIFIC LIFE ANNUITY COMPANY
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: V.P. & Treasurer
