Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March 8,
2002, by and among AMF Bowling Worldwide, Inc., a Delaware corporation (the
"Company"), and the Persons identified on Schedule I hereto (the "Initial
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Holders").
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RECITALS
A. Pursuant to the Company's Second Amended Second Modified Joint Plan of
Reorganization dated as of January 31, 2002 (the "Plan"), upon satisfaction of
certain conditions, the Company will issue New Common Stock and/or New Warrants
(both as defined below) to the Initial Holders.
B. In order to induce the Initial Holders to agree to the Plan, the Company
has agreed to grant certain securities registration rights to the Initial
Holders as set forth herein.
AGREEMENTS
In consideration of the premises and the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions and General Interpretive Principles.
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(a) In addition to the capitalized terms defined elsewhere in this
Agreement, the following capitalized terms shall have the following meanings
when used in this Agreement:
"Adverse Disclosure" means public disclosure of material non-public
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information, which disclosure in the good faith judgment of the chief executive
officer or chief financial officer of the Company (i) would be required to be
made in any registration statement filed with the Commission by the Company so
that such registration statement would not be materially misleading; (ii) would
not be required to be made at such time but for the filing of such registration
statement; and (iii) would materially and adversely interfere with any business
combination transaction pursuant to which the Company would issue, in connection
with such transaction, shares of Common Stock in such business combination
transaction, or would result in the premature disclosure of any pending
financing, acquisition, corporate reorganization or any other corporate
development involving the Company or any of its subsidiaries.
"Allocation Percentage" has the meaning set forth in Section 2(e).
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"Commission" means the U.S. Securities and Exchange Commission and any
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agency succeeding to its functions.
"Demand Registration" has the meaning set forth in Section 2(a).
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"Demand Suspension" has the meaning set forth in Section 2(c).
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"Effective Date" means the date on which the reorganization of the Company
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is consummated pursuant to the Plan.
"Holder" means an Initial Holder (including its affiliates) or a successor,
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assignee or transferee of an Initial Holder as contemplated by Section 11
hereof, in each case for so long as such Initial Holder, successor, assignee or
transferee holds Registrable Securities.
"Included Registrable Securities" has the meaning set forth in Section
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3(a)(i).
"Indemnified Party" has the meaning set forth in Section 7(c).
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"Indemnifying Party" has the meaning set forth in Section 7(c).
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"Loss" has the meaning set forth in Section 7(a).
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"NASD" means the National Association of Securities Dealers, Inc.
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"New Common Stock" means the common stock, $.01 par value per share, of the
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Company.
"New Warrant Stock" means any New Common Stock or other security of the
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Company or any successor entity issued or issuable upon exercise of any New
Warrant.
"New Warrants" means the Series A and Series B warrants to purchase shares
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of New Common Stock pursuant to the Series A and Series B Warrant Agreements,
dated as of the date hereof, between the Company and the warrant agent
thereunder.
"Participant" has the meaning set forth in Section 7(a).
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"Person" means a natural person, a partnership, a corporation, a limited
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liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or other entity, or a governmental
entity or any department, agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section 3(a).
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"Registrable Securities" means (i) the New Common Stock issued under the
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Plan to an Initial Holder and any additional New Common Stock acquired by such
Initial Holder within 90 days following the Effective Date and (ii) the New
Warrant Stock issuable upon exercise of the New Warrants, in each case including
any securities
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of the Company or any successor entity that may be issued or distributed in
respect thereof by way of stock dividend, stock split or other distribution,
consolidation, reclassification or any similar transaction; provided, however,
that the foregoing securities shall cease to be "Registrable Securities" to the
extent that (i) a registration statement with respect to the sale of such
securities has been declared effective under the Securities Act and such
securities have been disposed of pursuant to such registration statement, (ii)
such securities have been disposed of (A) pursuant to and in accordance with
Rule 144 (or any similar provision then in force) under the Securities Act or
(B) pursuant to another exemption from the registration requirements of the
Securities Act pursuant to which the securities are thereafter freely tradable
without restriction under the Securities Act, (iii) such securities may be
disposed of pursuant to Rule 144 (or any similar provision then in force) within
the volume limitations thereunder within a 90 day period or pursuant to Rule
144(k) (or any similar provision then in force) under the Securities Act or (iv)
such securities cease to be outstanding. For purposes of this Agreement, any
reference to a percentage (or a majority in number) of Registrable Securities
shall mean that percentage of Registrable Securities, collectively, computed on
the assumption that all such New Warrants were exercised.
"Securities Act" means the Securities Act of 1933, as amended, and the
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rules and regulations of the Commission promulgated thereunder.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
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amended, and the rules and regulations of the Commission promulgated thereunder.
"Shelf Registration Statement" means a registration statement of the
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Company filed with the Commission on Form S-l or, if available, Form S-3 (or any
successors thereto) for an offering to be made on a continuous or delayed basis
pursuant to Rule 415 under the Securities Act (or any similar rule that may be
adopted by the Commission) covering all of the Registrable Securities requested
to be included by the Initial Holders.
"Underwritten Offering" means an offering registered under the Securities
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Act in which securities of the Company are sold to an underwriter on a firm
commitment basis for reoffering to the public.
(b) Whenever used in this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, any noun or pronoun shall be deemed to
include the plural as well as the singular and to cover all genders. The name
assigned this Agreement and the section captions used herein are for convenience
of reference only and shall not be construed to affect the meaning, construction
or effect hereof. Unless otherwise specified, the terms "hereof," "herein,"
"hereunder" and similar terms refer to this Agreement as a whole, and references
herein to Sections refer to Sections of this Agreement.
(c) Each Initial Holder acknowledges that the New Common Stock and the New
Warrants have not been registered under the Securities Act and, because
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such Initial Holder may deemed to be an "underwriter" of such securities or an
"affiliate" of the Company, agrees that it will not sell or otherwise transfer
such securities except pursuant to an effective registration under the
Securities Act or in a transaction which, in the opinion of counsel reasonably
satisfactory to the Company, qualifies as an exempt transaction under the
Securities Act.
2. Demand Registrations.
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(a) Demand by Holders.
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(i) Following the end of the period ending 180 days
following the Effective Date, each Initial Holder or group of Initial Holders
may make a written request to the Company for registration of all or any part of
the Registrable Securities held by such requesting Holder; provided that either:
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(a) the estimated market value of the Registrable Securities to be so registered
is at least $25 million in the aggregate; or (b) the Registrable Securities to
be so registered comprise at least twenty (20) percent of the New Common Stock
issued under the Plan; provided, further, however, that such requested
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registration may involve the registration of less than the amounts specified in
Sections 2(a)(i)(a) and 2(a)(i)(b) above if the Registrable Securities requested
to be registered (x) have an estimated market value of at least $5 million in
the aggregate and (y) constitute all of such requesting Holder's Registrable
Securities. Any such requested registration shall hereinafter be referred to as
a "Demand Registration." Each request for a Demand Registration shall specify
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the aggregate amount of Registrable Securities to be registered and the intended
methods of disposition thereof. Subject to the terms of this Agreement and
applicable law, if the Company meets the requirements for filing a Shelf
Registration Statement on Form S-3 under the Securities Act, the Company, upon
the request of such Initial Holder in its request for a Demand Registration,
shall be required to register the offering of the Registrable Securities so
requested by means of a Shelf Registration Statement.
(ii) Within twenty (20) days following receipt of any
request for a Demand Registration, the Company shall deliver written notice of
such request to all other Holders of Registrable Securities. Thereafter, subject
to Section 2(e), the Company shall include in such Demand Registration any
additional Registrable Securities which the Holder or Holders thereof have
requested in writing be included in such Demand Registration, provided that all
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requests therefor have been received by the Company within twenty (20) days of
the Company's having given the applicable notice to such Holder or Holders. All
such requests shall specify the aggregate amount of Registrable Securities to be
registered and the intended method or methods of distribution of the same. The
Company also may elect to include in such registration additional securities of
the Company to be registered thereunder, including securities to be sold for the
Company's own account or for the account of Persons who are not Holders.
(iii) The Company shall, subject to the terms hereof
and applicable law, use its reasonable best efforts to file a registration
statement relating to a Demand Registration as promptly as practicable following
receipt of a request for a
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Demand Registration in accordance with Section 2(a)(i), but in any case, within
ninety (90) days after receipt of such request, and shall use its reasonable
best efforts to cause such registration statement to be declared effective under
the Securities Act as soon as practicable thereafter and to keep such
registration statement effective for not less than ninety (90) days (or such
shorter period during which a prospectus is required to be delivered under the
Securities Act).
(b) Limitations on Demand Registration; Effective Registration. In no
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event shall the Company be required to effect more than three (3) Demand
Registrations requested by each Initial Holder unless the Company is eligible to
file a registration statement on Form S-3 under the Securities Act (a "Short
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Form Registration Statement"), in which event the Company shall be required to
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effect no more than five (5) Demand Registrations requested by each Initial
Holder in the aggregate, including any Demand Registrations requested by such
Holder before the Company was eligible to file a Short Form Registration
Statement. Notwithstanding anything in this Agreement to the contrary, for
purposes of the foregoing sentence, (i) AMF Debt Investors, LLC and AMF Debt
Investors II, LLC together shall be treated as a single Initial Holder and (ii)
AG Capital Funding Partners, L.P. and Silver Oaks Capital, L.L.C. together shall
be treated as a single Initial Holder.
In addition, the Company shall not be required to file a registration
statement for a Demand Registration (i) at any time during the 120-day period
following the effective date of another such registration statement, or (ii)
during the period commencing on the seventh day prior to the effective date of
an offering by the Company that is registered under the Securities Act and
ending on the ninetieth day after such offering is completed. A registration
will not count as a Demand Registration under this Agreement until the related
registration statement becomes effective and has remained effective for the
period of time specified in Section 2(a)(iii).
(c) Suspension of Registration. If the filing, initial effectiveness
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or continued use of a registration statement in respect of a Demand Registration
at any time would require the Company to make an Adverse Disclosure or would
require the inclusion in such registration statement of audited financial
statements that are unavailable to the Company for reasons beyond the Company's
reasonable control, the Company may, upon giving written notice of such action
to the Holders holding Registrable Securities included or proposed to be
included in such Demand Registration, delay the filing or initial effectiveness
of, or suspend use of, such registration statement for the shortest period of
time determined in good faith by the Company to be necessary for such purpose (a
"Demand Suspension"); provided, however, that the Company shall not be permitted
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to exercise a Demand Suspension (i) more than one time during any twelve (12)
month period or (ii) for a period exceeding ninety (90) days on any one
occasion. In the event of a Demand Suspension, the Holders agree to suspend,
immediately upon their receipt of the notice referred to above, any sale or
offer to sell the Registrable Securities, and the use of the prospectus related
to the Demand Registration in connection with any such sale or offer to sell
Registrable Securities, and agree not to disclose to any other Person the fact
that the Company has exercised a Demand
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Suspension or any related facts. The Company shall promptly notify the Holders
holding Registrable Securities affected by any Demand Suspension upon the
termination of such Demand Suspension.
(d) Underwritten Offering. If the Holders holding not less than a
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majority of the Registrable Securities included in any offering pursuant to a
Demand Registration so elect by written request to the Company, such offering
shall be in the form of an Underwritten Offering. Holders holding a majority of
the Registrable Securities included in such Underwritten Offering shall, after
consulting with the Company, have the right to select the managing underwriter
or underwriters for the offering, subject to the right of the Company to approve
such managing underwriter or underwriters (which approval shall not be
unreasonably withheld) and to select one co-managing underwriter reasonably
acceptable to such Holders.
(e) Priority of Securities Registered Pursuant to Demand
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Registrations. If the managing underwriter or underwriters of a proposed
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offering of Registrable Securities included in a Demand Registration inform the
Holders of such Registrable Securities and the Company in writing that, in its
or their opinion, the number of securities requested to be included in such
Demand Registration (including securities of the Company for its own account or
for the account of other Persons which are not Holders) exceeds the number which
can be sold in such offering without being likely to have an adverse effect on
the price, timing or distribution of the securities offered or the market for
the securities offered, the Company will include in such registration all of the
Registrable Securities sought to be registered therein by the Holders and only
such lesser number of other securities requested to be included for the account
of the Company or for the account of other Persons which are not Holders as
shall not, in the opinion of the managing underwriter or underwriters, be likely
to have such an effect. In the event that, despite the reduction of the number
of securities to be offered for the account of the Company or for the account of
Persons which are not Holders in such registration pursuant to the immediately
preceding sentence, the number of Registrable Securities to be included in such
registration exceeds the number which, in the opinion of the managing
underwriter or underwriters, can be sold without having the adverse effect
referred to above, the number of Registrable Securities that can be included
without having such an adverse effect shall be allocated pro rata among the
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Holders which have requested participation in the Demand Registration (based,
for each such Holder, on the percentage (such Holder's "Allocation Percentage")
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derived by dividing (i) the number of Registrable Securities which such Holder
has requested to include in such Demand Registration by (ii) the aggregate
number of Registrable Securities which all such Holders have requested to
include).
(f) Registration Statement Form. Registrations under this Section 2
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shall be on such appropriate registration form of the Commission (i) as shall be
selected by the Company and as shall be reasonably acceptable to the Holders
holding a majority of Registrable Securities requesting participation in the
Demand Registration and (ii) as shall permit the disposition of the Registrable
Securities in accordance with the intended
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method or methods of disposition specified in the applicable Holders' requests
for such registration.
3. Piggyback Registration.
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(a) Participation.
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(i) If the Company at any time proposes to file a
registration statement with respect to any offering of equity securities for its
own account or for the account of any holders of its securities on Form X-0, X-0
or S-3 or any successor or similar form(s) (other than (A) a registration solely
for registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger or consolidation or incidental to an
issuance of securities under Rule 144A under the Securities Act or (B) a
registration on any registration form which does not permit secondary sales or
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of Registrable Securities
(other than information as to the selling stockholders and their intended method
or methods of disposition)), then, as soon as practicable (but in no event less
than fifteen (15) days prior to the proposed date of filing such registration
statement with the Commission), the Company shall give written notice of such
proposed filing to all Holders of Registrable Securities and such notice shall
offer the Holders the opportunity to register such number of Registrable
Securities as each such Holder may request in writing (a "Piggyback
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Registration"). Subject to Section 3(b), the Company shall include in such
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registration statement all such Registrable Securities with respect to which the
Company has received written requests for inclusion therein within fifteen (15)
days after the Company's notice has been given ("Included Registrable
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Securities"). If at any time after giving written notice of its intention to
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register any equity securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
equity securities, the Company may, at its election, give written notice of such
determination to each Holder holding Included Registrable Securities and, (x) in
the case of a determination not to register, shall be relieved of its obligation
to register any Included Registrable Securities in connection with such
registration, and (y) in the case of a determination to delay registering, shall
be permitted to delay registering any Included Registrable Securities for the
same period as the delay in registering such other equity securities. The
Holders agree not to disclose to any other Person the fact that such
determination of the Company not to register or to delay registration of equity
securities or any related facts.
(ii) If the offering pursuant to a Piggyback Registration
is to be an Underwritten Offering, then each Holder making a request for its
Registrable Securities to be included therein must, and the Company shall use
its reasonable best efforts to make such arrangements with the underwriters so
that each such Holder may, participate in such Underwritten Offering on the same
terms as other Persons selling securities in such Underwritten Offering. If the
offering pursuant to such registration is to be on any other basis, then each
Holder making a request for a Piggyback Registration
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pursuant to this Section 3(a) must participate in such offering on such basis.
Notwithstanding any provision in this Agreement to the contrary, any Holder
participating through a Piggyback Registration shall have no right to change the
intended method or methods of disposition otherwise applicable.
(b) Priority of Piggyback Registration. If the managing
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underwriter or underwriters of any proposed offering of securities included in a
Piggyback Registration informs the Holders holding Included Registrable
Securities in writing that, in its or their opinion, the total number of
securities which such Holders and any other Persons intend to include in such
offering exceeds the number which can be sold in such offering without being
likely to have an adverse effect on the price, timing or distribution of the
securities offered or the market for the securities offered, then the securities
to be included in such registration shall be allocated as follows:
(i) first, one hundred (100) percent of the securities
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that the Company or any Person exercising a contractual right to demand
registration has proposed to sell shall be included therein;
(ii) second, and only if all the securities referenced in
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clause (i) have been included, the number of Included Registrable Securities
that, in the opinion of such underwriter or underwriters, can be sold without
having such adverse effect shall be included therein, with such number to be
allocated pro rata among the Holders of Included Registrable Securities (based,
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for each such Holder, on such Holder's Allocation Percentage); provided,
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however, that if as a result of the provisions of this Section 3(b), any Holder
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shall not be entitled to include at least fifty (50) percent of such Holder's
Included Registrable Securities, such Holder may withdraw such Holder's request
to include all, or any number of such Registrable Securities in such
registration statement no later than twenty (20) days prior to its
effectiveness; and
(iii) third, and only if all of the Registrable Securities
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referenced in clauses (i) and (ii) have been included, any other equity
securities eligible for inclusion in such registration which, in the opinion of
such underwriters, can be sold without having such adverse effect shall be
included therein.
4. Black-out Periods. In the event of (i) a registration by the
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Company involving the offering and sale by the Company of its equity securities
or securities convertible into or exchangeable for its equity securities or (ii)
an Underwritten Offering involving the offering and sale by Holders of
Registrable Securities, the Holders agree, if requested by the Company (or, in
the case of any Underwritten Offering, by the managing underwriter or
underwriters), not to effect any public sale or distribution (including any sale
pursuant to Rule 144 under the Securities Act) of any securities of the Company
(except, in each case, as part of the applicable registration, if permitted)
which securities are the same as or similar to those being registered in
connection with such registration, or which are convertible into or exchangeable
or exercisable for such securities, during the period beginning seven (7) days
before and ending 90 days (or such longer period up to 180 days if so requested
by such managing underwriter or
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underwriters) after, the effective date of the registration statement filed in
connection with such registration, to the extent such Holders are timely
notified in writing by the Company or the managing underwriter or underwriters;
provided, that, in each case, the Company's executive officers and directors
have entered into similar agreements for the same period.
5. Registration Procedures.
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(a) In connection with the Company's registration obligations
pursuant to this Agreement, the Company shall, subject to the limitations set
forth herein, use its reasonable best efforts to effect any such registration so
as to permit the sale of the applicable Registrable Securities in accordance
with the intended method or methods of distribution thereof as expeditiously as
reasonably practicable and, in any event, in conformity with any required time
period set forth herein, and in connection therewith the Company shall:
(i) before filing a registration statement or prospectus
with the Commission, or any amendments or supplements thereto, furnish to the
underwriter or underwriters, if any, and to the Holders holding Registrable
Securities included in such registration statement, copies of all documents
prepared to be filed, which documents shall be subject to the reasonable review
and comment of such Holders, such underwriters, if any, and their respective
counsel;
(ii) prepare and file with the Commission a registration
statement relating to the registration on any appropriate form under the
Securities Act, which form shall be available for the sale of the Registrable
Securities;
(iii) prepare and file with the Commission such amendments
or supplements to the applicable registration statement or prospectus used in
connection therewith as may be (A) reasonably requested by any participating
Holder (to the extent such request relates to information relating to such
Holder), (B) necessary to keep such registration effective for the period of
time required by this Agreement or (C) necessary to comply with the applicable
provisions of Rules 424 and 430A under the Securities Act;
(iv) notify the selling Holders and the managing
underwriter or underwriters, if any, as soon as reasonably practicable after
notice thereof is received by the Company (A) when the applicable registration
statement or any amendment thereto has been filed or becomes effective and when
the applicable prospectus or any amendment or supplement thereto has been filed,
(B) of any written comments by the Commission or any request by the Commission
for amendments or supplements to such registration statement or prospectus or
for additional information, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement or any order
preventing or suspending the use of any preliminary or final prospectus or the
initiation or threat of any proceedings for such purposes and (D) of the receipt
by the Company of any notification with respect to the suspension of the
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qualification of the Registrable Securities for offering or sale in any
jurisdiction or the initiation or threat of any proceeding for such purpose;
(v) promptly notify each selling Holder and the managing
underwriter or underwriters, if any, when the Company becomes aware of the
occurrence of any event as a result of which the applicable registration
statement or prospectus (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein (in the case of the prospectus and any preliminary prospectus, in light
of the circumstances under which they were made) not misleading or, if for any
other reason it shall be necessary to amend or supplement such registration
statement or prospectus in order to comply with the Securities Act and, in
either case as promptly as reasonably practicable thereafter, prepare and file
with the Commission a post-effective amendment or supplement to such
registration statement or prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of Registrable Securities, the prospectus shall not contain an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading;
(vi) use its reasonable efforts to prevent or obtain as
promptly as practicable the withdrawal of any stop order with respect to the
applicable registration statement or other order suspending the use of any
preliminary or final prospectus;
(vii) promptly incorporate in a prospectus supplement or
post-effective amendment to the applicable registration statement such
information as the managing underwriter or underwriters, if any, or the Holders
holding a majority of the Registrable Securities being sold agree should be
included therein relating to the plan of distribution with respect to such
Registrable Securities, the amount of Registrable Securities being distributed
and the purchase price being paid therefor; and make all required filings of
such prospectus supplement or post-effective amendment as soon as reasonably
practicable after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(viii) furnish to each selling Holder and each managing
underwriter, if any, without charge, as many conformed copies as such Holder or
managing underwriter may reasonably request of the applicable registration
statement, including all documents incorporated by reference therein or exhibits
to such registration statement;
(ix) deliver to each selling Holder and each managing
underwriter, if any, without charge, as many copies of the applicable prospectus
(including each preliminary prospectus) as such Holder or managing underwriter
may reasonably request (it being understood that the Company consents to the use
of the prospectus by each of the selling Holders and the underwriter or
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by the prospectus);
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(x) on or prior to the date on which the applicable
registration statement is declared effective, use its reasonable best efforts to
register or qualify such Registrable Securities for offer and sale under the
securities or "Blue Sky" laws of each state and other jurisdiction of the United
States, as any such selling Holder or underwriter, if any, or their respective
counsel reasonably and timely requests in writing, and do any and all other acts
or things reasonably necessary or advisable to keep such registration or
qualification in effect so as to permit the commencement and continuance of
sales and dealings in such jurisdictions for as long as may be necessary to
complete the distribution of the Registrable Securities covered by the
registration statement; provided, that the Company shall not be required (A) to
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qualify generally to do business in any jurisdiction where it is not then so
qualified or (B) to take any action which would subject it to taxation or
general service of process in any such jurisdiction where it is not then so
subject;
(xi) cooperate with the selling Holders and the managing
underwriter, underwriters or agent, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends;
(xii) not later than the effective date of the applicable
registration statement, provide a CUSIP number for all Registrable Securities
included in such registration statement and provide the applicable transfer
agent with printed certificates for the Registrable Securities, which
certificates shall be in a form eligible for deposit with The Depository Trust
Company;
(xiii) in the case of an Underwritten Offering, obtain for
delivery to the underwriter or underwriters with copies to the Holders included
in such registration, an opinion or opinions from counsel for the Company dated
the date of the closing under the underwriting agreement, in customary form,
scope and substance;
(xiv) in the case of an Underwritten Offering, obtain for
delivery to the Company and the underwriter or underwriters, if any, with copies
(subject to the reasonable consent of the certified public accountants referred
to below, determined in accordance with market practice) to the Holders included
in such registration, a comfort letter from the Company's independent certified
public accountants in customary form and covering such matters of the type
customarily covered by comfort letters and as the managing underwriter or
underwriters reasonably request, dated the date of execution of the underwriting
agreement and brought down to the closing under the underwriting agreement;
(xv) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first day of the Company's first full
calendar quarter after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
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Securities Act and Rule 158 thereunder, and will furnish to each selling Holder
at least five business days prior to the filing thereof a copy of any amendment
or supplement to such registration statement or prospectus and shall not file
any thereof to which any selling Holder shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or of the rules or
regulations thereunder;
(xvi) reasonably cooperate with each selling Holder of
Registrable Securities and each underwriter or agent, if any, participating in
the disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(xvii) provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered by the applicable
registration statement from and after a date not later than the effective date
of such registration statement;
(xviii) use its reasonable best efforts to cause all
Registrable Securities covered by the applicable registration statement to be
listed on each securities exchange or market on which any of the Company's
securities of such class are then listed or quoted and quoted on each
inter-dealer quotation system on which any of the Company's securities of such
class are then quoted; and
(xix) make available upon reasonable notice at reasonable
times and for reasonable periods for inspection by each Initial Holder and a
representative appointed by the Holders holding a majority of the Registrable
Securities covered by the applicable registration statement, by any managing
underwriter or underwriters participating in any disposition to be effected
pursuant to such registration statement and by any attorney, accountant or other
agent retained by such Holders or any such managing underwriter, all pertinent
financial and other records, pertinent corporate documents and properties and
officers and employees of the Company as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility (subject to the entry by each party referred to in this clause
(xix) into a customary confidentiality agreement in a form reasonably acceptable
to the Company).
(b) The Company may require each selling Holder as to which any
registration is being effected to furnish to the Company such information
regarding itself, the Registrable Securities held by it, the distribution of
such Holder's Registrable Securities and such other information relating to such
Holder and its ownership of the applicable Registrable Securities as the Company
may from time to time reasonably request, including without limitation
information required under Item 507 of Regulation S-K. Each Holder agrees to
furnish such information to the Company and to cooperate with the Company as
necessary to enable the Company to comply with the provisions of
- 12 -
this Agreement. The Company shall have the right to exclude any Holder that does
not comply with the preceding sentence from the applicable registration.
(c) Each Holder agrees by acquisition of its Registrable
Securities that, upon receipt of any notice from the Company of the occurrence
of any event of the kind described in Section 5(a)(v), such Holder shall
discontinue disposition of its Registrable Securities pursuant to such
registration statement until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5(a)(v) and of any
additional or supplemental filings that are incorporated by reference in the
prospectus, or until such Holder is advised in writing by the Company that the
use of the prospectus may be resumed, and has received copies and, if so
directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
which are current at the time of the receipt of such notice.
6. Registration Expenses. The Company shall pay all expenses
---------------------
incident to its performance or compliance with its obligations under this
Agreement, including without limitation: (i) all registration and filing fees,
and any other fees and expenses associated with filings required to be made with
the Commission or the NASD, (ii) all fees and expenses of compliance with
federal and state securities or "Blue Sky" laws, (iii) all of its printing,
duplicating, word processing, messenger, telephone, facsimile and delivery
expenses (including expenses of printing certificates for the Registrable
Securities in a form eligible for deposit with The Depository Trust Company and
of printing prospectuses), (iv) all fees and disbursements of counsel for the
Company and of all independent certified public accountants of the Company, (v)
all fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange or the quotation of the Registrable
Securities on any inter-dealer quotation system, and (vi) the reasonable fees
and expenses of not more than one counsel for all Holders (selected by the
Holders of a majority of the Registrable Securities included in a registration)
in an amount not to exceed $15,000. In addition, the Company shall pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any audit and the fees and expenses of any Person, including special experts,
retained by the Company. Notwithstanding the foregoing, the Holders requesting
registration of Registrable Securities under Section 2 of this Agreement shall
be required to reimburse the Company for any expense incurred in connection with
such registration if such registration is withdrawn at the request of such
Holders. The Company shall not be required to pay (w) any other costs or
expenses in the course of the transactions contemplated hereby, (x) any expenses
incurred by the Holders (except as provided in clauses (i), (ii) and (vi) of the
preceding sentence), (y) any underwriting discounts or commissions or transfer
taxes attributable to the sale of Registrable Securities or (z) any fees and
expenses of counsel to the underwriters.
- 13 -
7. Indemnification.
---------------
(a) Indemnification by the Company. The Company agrees to indemnify
------------------------------
and hold harmless, to the fullest extent permitted by law, each Holder selling
Registrable Securities and its respective officers, directors, members, partners
and employees and each Person who controls (within the meaning of the Securities
Act and the Securities Exchange Act) such selling Holder (each, a "Participant")
-----------
from and against any and all losses, claims, damages, judgments, liabilities and
reasonable expenses (including reasonable costs of investigation and legal
expenses) caused by, arising out of or based upon (i) any untrue or alleged
untrue statement of a material fact contained in any registration statement
under which such Registrable Securities were registered under the Securities Act
(including any final, preliminary or summary prospectus contained therein or any
amendment thereof or supplement thereto or any documents incorporated by
reference therein) 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 (in the case of a prospectus or preliminary prospectus, in light of the
circumstances under which they were made) not misleading (each, a "Loss" and
----
collectively "Losses"); provided, however, that the Company shall not be liable
------ -------- -------
to any Participant in any such case to the extent that any such Loss is caused
by written information furnished to the Company by such Holder expressly for use
in the preparation thereof, or if such untrue statement or alleged untrue
statement or omission or alleged omission is corrected in an amendment or
supplement to such prospectus which has been made available to the Holders and
the relevant Holder fails to deliver such prospectus as so amended or
supplemented, if such delivery is required under applicable law or the
applicable rules of any securities exchange, prior to or concurrently with the
sales of the Registrable Securities to the Person asserting such Loss.
(b) Indemnification by the Holders. Each selling Holder agrees
------------------------------
(severally and not jointly) to indemnify and hold harmless, to the fullest
extent permitted by law, the Company, its directors, officers and employees and
each Person who controls the Company (within the meaning of the Securities Act
and the Securities Exchange Act) from and against any and all Losses to the
extent, but only to the extent, that any such Loss is caused by, arises out of
or is based upon any information furnished in writing by such selling Holder to
the Company specifically for inclusion in any registration statement under which
such Registrable Securities were registered under the Securities Act (including
any final, preliminary or summary prospectus contained therein or any amendment
thereof or supplement thereto or any documents incorporated by reference
therein) and was not corrected in a subsequent writing prior to or concurrently
with the sale of the Registrable Securities to the Person asserting such Loss.
The liability of any Holder under this paragraph shall in no event exceed the
amount by which proceeds received by such Holder from sales of Registrable
Securities giving rise to such obligations exceeds the amount of any Loss which
such Holder has otherwise been required to pay by reason of such untrue
statement or omission.
(c) Indemnification Proceedings. Any Person entitled to
---------------------------
indemnification hereunder (an "Indemnified Party") shall (i) give prompt written
-----------------
notice to
- 14 -
the Person from whom such indemnification may be sought (the "Indemnifying
------------
Party") of any claim with respect to which it seeks indemnification, provided,
----- --------
however, that the failure to so notify the Indemnifying Party shall not relieve
-------
it of any obligation or liability which it may have hereunder or otherwise
except to the extent it is materially prejudiced by such failure, and (ii)
permit such Indemnifying Party to assume the defense of such claim with counsel
reasonably satisfactory to the Indemnified Party; provided, however, that the
-------- -------
Indemnified Party shall have the right to select and employ separate counsel and
to participate in the defense of such claim, and the fees and expenses of such
counsel shall be at the expense of the Indemnified Party unless (A) the
Indemnifying Party has agreed in writing to pay such fees or expenses, (B) the
Indemnifying Party shall have failed to assume the defense of such claim within
a reasonable time after having received notice of such claim from the
Indemnified Party and to employ counsel reasonably satisfactory to the
Indemnified Party, (C) in the reasonable judgment of the Indemnified Party,
based upon advice of its counsel, a conflict of interest exists between the
Indemnified Party and the Indemnifying Party with respect to such claims or (D)
the Indemnified Party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other Indemnified Parties that
are different from or in addition to those available to the Indemnifying Party
(in which case, if the Indemnified Party notifies the Indemnifying Party in
writing that the Indemnified Party elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such claim on behalf of the Indemnified Party).
If such defense is assumed by the Indemnifying Party, or if such defense is not
assumed by the Indemnifying Party but the Indemnifying Party acknowledges that
the Indemnified Party is entitled to indemnification hereunder, the Indemnifying
Party shall not be subject to any liability for any settlement made without its
consent, which consent shall not be unreasonably withheld; provided, that an
--------
Indemnifying Party shall not be required to consent to any settlement involving
the imposition of equitable remedies or involving the imposition of any material
obligations on such Indemnifying Party other than financial obligations for
which such Indemnified Party will be indemnified hereunder. If the Indemnifying
Party assumes the defense, the Indemnifying Party shall have the right to settle
such action without the consent of the Indemnified Party; provided, that the
--------
Indemnifying Party shall be required to obtain the consent of the Indemnified
Party (which consent shall not be unreasonably withheld) if the settlement
includes any admission of wrongdoing on the part of the Indemnified Party or any
equitable remedies or restriction on the Indemnified Party or its officers,
directors or employees. No Indemnifying Party shall consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to each Indemnified Party
of an unconditional release from all liability in respect of such claim or
litigation. An Indemnifying Party (or, as the case may be, Indemnifying Parties)
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges
of more than one separate firm admitted to practice in such jurisdiction at any
one time from all Indemnified Parties collectively unless (x) the employment of
more than one counsel has been authorized in writing by such Indemnifying Party
(or Indemnifying Parties) or (y) a conflict exists or may exist (based on advice
of counsel to an Indemnified Party) between such Indemnified Party and other
Indemnified Parties, in
- 15 -
each of which cases the Indemnifying party (or Indemnifying Parties) shall be
obligated to pay the reasonable fees and expenses of such additional counsel or
counsels. The indemnification provided for under this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Party or any officer, director or controlling Person of such
Indemnified Party and shall survive the transfer of Registrable Securities.
(d) Contribution. If for any reason the indemnification provided for
------------
in paragraphs (a) and (b) of this Section 7 is unavailable to an Indemnified
Party or is insufficient to hold it harmless as contemplated by paragraphs (a)
and (b) of this Section 7, then the Indemnifying Party shall contribute to the
amount paid or payable by the Indemnified Party as a result of such Loss in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and the Indemnified Party on the other. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Indemnifying
Party or the Indemnified Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. Notwithstanding anything in this Section 7(d) to the
contrary, no Indemnifying Party (other than the Company) shall be required
pursuant to this Section 7(d) to contribute any amount in excess of the amount
by which the proceeds (less underwriting fees and discounts) received by such
Indemnifying Party from the sale of Registrable Securities in the offering to
which the Losses of the Indemnified Parties relate exceeds the amount of any
damages which such Indemnifying Party has otherwise been required to pay by
reason of such untrue statement or omission. The parties hereto agree that it
would not be just and equitable if contribution pursuant to this Section 7(d)
were determined by pro rata allocation or by any other method of allocation that
--- ----
does not take account of the equitable considerations referred to in the
preceding sentences. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. If indemnification is available under this Section 7, the
Indemnifying Parties shall indemnify each Indemnified Party to the fullest
extent provided in Sections 7(a) and 7(b) hereof without regard to the relative
fault of said Indemnifying Parties or Indemnified Party.
8. Compliance with Rule 144. The Company shall use its best efforts to
------------------------
file the reports required to be filed by it under the Securities Act and the
Securities Exchange Act so long as the Company is obligated to file such
reports, and it shall take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time or (b) any similar rules or
regulations hereafter adopted by the Commission. Upon the written request of any
Holder, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.
- 16 -
9. Underwriting Agreements. If requested by the underwriters for any
-----------------------
Underwritten Offering requested by Holders pursuant to Section 2, the Company
and the Holders of Registrable Securities to be included therein shall enter
into an underwriting agreement with such underwriters, such agreement to be
reasonably satisfactory in substance and form to the Company, the Holders
holding a majority of the Registrable Securities to be included in such
Underwritten Offering and the underwriters, and to contain such terms and
conditions as are generally prevailing in agreements of that type (such
agreement, an "Underwriting Agreement"). No Initial Holder shall be required to
----------------------
enter into an Underwriting Agreement unless, at such Initial Holder's request,
any or all of the representations and warranties made by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Initial Holder.
No Holder shall be required to make any representations or warranties to, or
agreements with, the Company or the underwriters other than (i) representations
and warranties contained in a writing furnished by such Holder expressly for use
in such registration statement, (ii) representations, warranties and agreements
regarding such Holder, the Registrable Securities and such Holder's intended
method of distribution and (iii) any other representation, warranty or agreement
required by law. The Holders holding any Registrable Securities to be included
in any Underwritten Offering pursuant to Section 3 shall enter into such an
underwriting agreement at the request of the Company.
10. Amendments and Waivers. Except as otherwise provided in this
----------------------
Agreement, this Agreement may only be amended, modified and supplemented by, and
any waivers or consents to departure from the provisions of this Agreement shall
be effective only upon, receipt of the written consent of: (a)(i) in the case of
an amendment, modification, supplement, consent or waiver that waives a request
for a Demand Registration previously made or reduces the number of Demand
Registrations available, each Initial Holder affected by such amendment,
modification, supplement, consent or waiver, and (ii) in the case of any other
amendment, modification, supplement, consent or waiver, as applicable, each
Initial Holder affected by such amendment, modification, supplement, consent or
waiver, provided, that such Initial Holder owns at least 100,000 Registrable
Securities; (b) the Company; and (c) the Holders holding a majority of the
Registrable Securities. Any amendment, modification, supplement, consent or
waiver must be made in writing and shall be effective only to the extent
specifically set forth in writing. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each Holder and the
Company. Each Holder acknowledges that by operation of this paragraph the
Holders holding a majority of the Registrable Securities, acting in conjunction
with each of the affected Initial Holders and the Company, will have the right
and power to diminish or eliminate all rights pursuant to this Agreement.
11. Successors, Assigns and Transferees.
-----------------------------------
(a) The registration rights of any Holder under this Agreement
with respect to any Registrable Securities may be transferred and assigned;
provided, however, that demand registration rights pursuant to Section 2 hereof
-------- -------
may be transferred only by an Initial Holder in connection with the transfer and
assignment of at least 500,000 shares of
- 17 -
such Initial Holder's Registrable Securities to one entity or one group of
controlled affiliates; and provided further, however, that no such transfer or
---------------- -------
assignment of any registration rights under this Agreement shall be binding upon
or obligate the Company under this Agreement to any such transferee or assignee
unless and until (i) the Company shall have received notice of such transfer or
assignment as herein provided and a written agreement of the transferee or
assignee to be bound by the provisions of this Agreement and (ii) such
transferee or assignee holds Registrable Securities. Any transfer or assignment
of the rights and obligations under this Agreement made other than as provided
in the first sentence of this Section 11 shall be null and void.
(b) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto, and their respective successors and permitted assigns.
12. Final Agreement. This Agreement constitutes the final agreement of the
---------------
parties concerning the matters referred to herein, and supersedes all prior
agreements and understandings.
13. Severability. Whenever possible, each provision of this Agreement will
------------
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
14. Notices. All notices, demands or other communications or documents to
-------
be given or delivered under or by reason of the provisions of this Agreement
shall be made in writing and shall be deemed to have been received (a) when
delivered personally to the recipient; (b) when sent to the recipient by
telecopy (receipt electronically confirmed by sender's telecopy machine) if
during normal business hours of the recipient, otherwise on the next business
day; one business day after the date when sent to the recipient by reputable
express courier service (charges prepaid), or (c) seven business days after the
date when mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the parties at the addresses indicated below, or
to such other address as any party hereto may, from time to time, designate in
writing delivered pursuant to the terms of this Section 14:
If to the Initial Holders, to the addresses set forth on Schedule I
----------
hereto.
If to Holders other than the Initial Holders, to the addresses set
forth on the stock record books of the Company.
If to the Company, to:
AMF Bowling Worldwide, Inc.
0000 XXX Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
- 18 -
Attention: General Counsel and Chief Financial
Officer
Fax: (000) 000-0000
15. Governing Law; Service of Process; Consent to Jurisdiction. (a) THIS
----------------------------------------------------------
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE, IRRESPECTIVE OF ANY CONTRARY RESULT OTHERWISE
REQUIRED BY APPLICABLE CONFLICT OR CHOICE OF LAW RULES.
(b) To the fullest extent permitted by applicable law, each party
hereto (i) agrees that any claim, action or proceeding by such party seeking any
relief whatsoever arising out of, or in connection with, this Agreement or the
transactions contemplated hereby shall be brought only in the U.S. District
Court for the Southern District of New York and in any New York State court
located in the Borough of Manhattan and not in any other State or Federal court
in the United States of America or any court in any other country, (ii) agrees
to submit to the exclusive jurisdiction of such courts located in the State of
New York for purposes of all legal proceedings arising out of, or in connection
with, this Agreement or the transactions contemplated hereby and (iii)
irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
16. Counterparts and Facsimile Execution. This Agreement may be
------------------------------------
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and such counterparts together shall
constitute one instrument. This agreement may be executed by the exchange of
signatures by facsimile transmission. Each party shall receive a duplicate
original of the counterpart copy or copies executed by it and the Company.
17. Securities Held by the Company or its Affiliates. Whenever the consent
------------------------------------------------
or approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or any of its
affiliates (as such term is defined in Rule 405 under the Securities Act, but
excluding any Holders of Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
18. Specific Performance. Without limiting or waiving in any respect any
--------------------
rights or remedies of the parties under this Agreement now or hereinafter
existing at law or in equity or by statute, each of the parties hereto shall be
entitled to seek specific performance of the obligations to be performed by the
other(s) in accordance with the provisions of this Agreement.
19. No Inconsistent Agreements. The Company shall not, on or after the date
--------------------------
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders pursuant to this
Agreement or
- 19 -
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any other
agreement in effect on the date hereof.
20. Third Party Beneficiaries. Holders of Registrable Securities and the
-------------------------
Indemnified Parties are intended third party beneficiaries of this Agreement,
and this Agreement shall inure to the benefit of and may be enforced by, such
Persons. Other than as set forth in the preceding sentence, this Agreement shall
be binding upon and inure solely to the benefit of each party hereto.
[Remainder of page intentionally left blank.
Signature pages follow.]
- 20 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
AMF BOWLING WORLDWIDE, INC.
By:
--------------------------------------------
Name:
Title:
INITIAL HOLDERS:
AMF DEBT INVESTORS, LLC
By:
--------------------------------------------
Name:
Title:
AMF DEBT INVESTORS II, LLC
By:
--------------------------------------------
Name:
Title:
OAKTREE CAPITAL MANAGEMENT,
LLC, as agent and on behalf of
certain funds and accounts
By:
--------------------------------------------
Name:
Title:
SATELLITE ASSET MANAGEMENT,
L.P.
By:
--------------------------------------------
Name:
Title
AG CAPITAL FUNDING PARTNERS, L.P.
By:
--------------------------------------------
Name:
Title
- 21 -
SILVER OAKS CAPITAL, L.L.C.
By:
--------------------------------------------
Name:
Title
- 22 -
