REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of March 11, 1997, by and among Apple South, Inc., a Georgia corporation
(the "Company"), Apple South Financing I, a special purpose business trust
created under the laws of the State of Delaware (the "Trust") and X.X. Xxxxxx
Securities Inc. and Xxxxx Xxxxxx Inc., as the initial purchasers (the "Initial
Purchasers") pursuant to the Purchase Agreement dated as of March 6, 1997 among
the Company, the Trust and the Initial Purchasers (the "Purchase Agreement").
This Agreement is made pursuant to the Purchase Agreement which provides
for the sale by the Trust to the Initial Purchasers of an aggregate of up to
2,000,000 (2,300,000 if the Initial Purchaser's over-allotment option is
exercised in full) of its $3.50 Term Convertible Securities, Series A (together
with all Convertible Subordinated Debentures of the Company distributed to the
Holders (as hereinafter defined), the "Trust Preferred Securities").
In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Trust and the Company have agreed to provide to the Initial
Purchasers and their direct and indirect transferees the registration rights
with respect to the Trust Preferred Securities set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Closing Date" shall mean the Closing Date as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
"Holder" shall mean any of the Initial Purchasers, for so long as it owns
any Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become owners of Registrable Securities.
"Initial Purchasers" shall have the meaning set forth in the preamble.
"Majority Holders" shall mean the Holders of a majority of the aggregate
liquidation preference amount of outstanding Registrable Securities; PROVIDED
that, for purposes of Section 5(b), whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Trust or the Company or any of its affiliates
(as such term is defined in Rule 405 under the 0000 Xxx) shall not be considered
outstanding and shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage or amount.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" shall mean the prospectus included in the Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, and by all other
amendments and supplements to such prospectus, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
"Registrable Securities" shall mean the Trust Preferred Securities;
PROVIDED, HOWEVER, that the Trust Preferred Securities shall cease to be
Registrable Securities when (i) the Registration Statement with respect to such
Trust Preferred Securities shall have been declared effective under the 1933 Act
and such Trust Preferred Securities shall have been disposed of pursuant to such
Registration Statement, (ii) such Trust Preferred Securities have been sold
pursuant to Rule 144(k) (or any similar provision then in force, but not Rule
144A) under the 1933 Act or (iii) such Trust Preferred Securities shall have
ceased to be outstanding.
"Registration Expenses" shall mean any and all expense incident to
performance of or compliance by the Trust and the Company with this Agreement,
including without limitation: (i) all SEC, stock exchange or National
Association of Securities Dealers, Inc. registration and filing fees, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws, (iii) all expenses of any Person in preparing or assisting in
preparing, word processing, printing and distributing, at the request of the
Trust or the Company, the Registration Statement, Prospectus, any
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amendments or supplements thereto, any underwriting agreement, securities sales
agreement and other documents relating to the performance of and compliance with
this Agreement, (iv) the fees and disbursements of counsel for each of the Trust
and the Company and the fees and disbursements of one counsel for the Holders
incurred on or before the initial effectiveness of the Registration Statement,
which counsel shall be counsel for the Initial Purchasers or other counsel
selected by the Trust or the Company and not objected to by the Majority Holders
("counsel for the Holders"), (v) the fees and disbursements of the independent
public accountants of the Company, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance and
compliance, but excluding underwriting discounts, if any, and commissions and
transfer taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder and (vi) the fees and expenses of listing the Registrable
Securities on any securities exchange or quotation system in accordance with
Section 3(n) hereof.
"Registration Statement" shall mean a "shelf" registration statement of the
Company pursuant to the provisions of Section 2(a) of this Agreement which
covers all of the Registrable Securities (except Registrable Securities that the
Holders have elected not to include in such Registration Statement) on an
appropriate form under Rule 415 under the 1933 Act, or any similar rule that may
be adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to Section
2(a) hereof.
"Trust" shall have the meaning set forth in the preamble.
"Trust Preferred Securities" shall have the meaning set forth in the
preamble.
"Underwriters" shall have the meaning set forth in Section 3 hereof.
"Underwritten Offering" shall mean a registration in which Registrable
Securities are sold to an Underwriter for reoffering to the public.
2. REGISTRATION UNDER THE 1933 ACT.
(a) The Trust and the Company shall use their best efforts to cause to be
filed as soon as practicable, and not later than the 90th day after the original
issuance of the Trust Preferred Securities a Registration Statement providing
for the sale of the
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Registrable Securities and to have such Registration Statement declared
effective by the SEC. Each of the Trust and the Company agree to use their best
efforts to keep the Registration Statement continuously effective until the date
that is the third anniversary of the effective date thereof or such shorter
period that will terminate when all of the Registrable Securities covered by the
Registration Statement have been sold pursuant to the Registration Statement.
The Trust and the Company further agree to supplement or amend the Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Trust and the Company for such Registration
Statement or by the 1933 Act or by any other rules and regulations thereunder
for shelf registration or if reasonably requested by a Holder with respect to
information relating to such Holder, and to use their best efforts to cause any
such amendment to become effective and such Registration Statement to become
usable as soon as practicable thereafter.
(b) The Trust and the Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a). Each Holder shall
pay all underwriting discounts, if any, and commissions and transfer taxes, if
any, relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Registration Statement.
(c) The Registration Statement pursuant to Section 2(a) hereof will not be
deemed to have become effective unless it has been declared effective by the
SEC; PROVIDED, HOWEVER, that, if, after it has been declared effective, the
offering of Registrable Securities pursuant to the Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Registration Statement
will be deemed not to have become effective during the period of such
interference until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume.
(d) Without limiting the remedies available to the Holders, the Trust and
the Company acknowledge that any failure by the Trust or the Company to comply
with their obligations under Section 2(a) hereof may result in material
irreparable injury to the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damage for such injuries precisely and
that, in the event of any such failure, any Holder may obtain such relief as may
be required to specifically enforce the Trust's and the Company's obligations
under Section 2(a) hereof.
3. REGISTRATION PROCEDURES.
In connection with the obligations of each of the Trust and the Company
with respect to the Registration Statement pursuant to Section 2(a) hereof, the
Trust and the Company shall reasonably promptly:
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(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form shall (x) be selected by the
Trust and the Company, (y) be available for the sale of the Registrable
Securities by the selling Holders thereof and (z) comply as to form in all
material respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and use its best
efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and cause the
Prospectus to be supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the 1933 Act; and keep the
Prospectus current during the period described under Section 4(3) and Rule 174
under the 1933 Act that is applicable to transactions by brokers or dealers with
respect to the Registrable Securities;
(c) furnish to each Holder of Registrable Securities, to counsel for the
Initial Purchasers and to counsel for the Holders and to each Underwriter of an
Underwritten Offering of Registrable Securities, if any, without charge, as many
copies of the Prospectus, including the preliminary Prospectus and any amendment
or supplement thereto and such other documents as such Holder or Underwriter may
reasonably request, in order to facilitate the public sale or other disposition
of the Registrable Securities; and the Trust and the Company consent to the use
of such Prospectus and any amendment or supplement thereto in accordance with
applicable law by each of the selling Holders of Registrable Securities and any
such Underwriters in connection with the offering and sale of the Registrable
Securities covered by and in the manner described in such Prospectus or any
amendment or supplement thereto in accordance with applicable law;
(d) use its best efforts (i) to register or qualify the Registrable
Securities under all applicable state securities or blue sky laws of such
jurisdictions as any Holder of Registrable Securities covered by the
Registration Statement shall reasonably request in writing a reasonable time
prior to the time the Registration Statement is declared effective by the SEC
and (ii) to cooperate with such Holders in connection with any filings required
to be made with the National Association of Securities Dealers, Inc. and do any
and all other acts and things which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in each such jurisdiction of
such Registrable Securities owned by such Holder; PROVIDED, HOWEVER, that
neither the Trust nor the Company shall be required to (A) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where they would
not otherwise be required to qualify but for this Section 3(d), (B) file any
general consent to service of process or (C) subject themselves to taxation in
any such jurisdiction if they are not so subject;
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(e) notify each Holder of Registrable Securities, counsel for the Holders
and for the Initial Purchasers (or, if applicable, separate counsel for the
Holders) and, if requested by such Persons, confirm such advice in writing, (i)
when the Registration Statement has become effective and when any post-effective
amendment thereto has been filed and becomes effective, (ii) of any request by
the SEC or any state securities authority for amendments and supplements to the
Registration Statement and Prospectus or for additional information after the
Registration Statement has become effective, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of the Registration Statement and
the closing of any sale of Registrable Securities covered thereby, the
representations and warranties of the Trust and the Company contained in any
underwriting agreement, securities sales agreement or other similar agreement,
if any, relating to the offering cease to be true and correct in all material
respects or if the Trust and the Company receive any notification with respect
to the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such purpose, (v) of
the happening of any event during the period the Registration Statement is
effective which makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or which requires the making
of any changes in such Registration Statement or Prospectus in order to make the
statements therein not misleading and (vi) of any determination by the Trust and
the Company that a post-effective amendment to the Registration Statement would
be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment and provide immediate notice to each Holder of the withdrawal of
any such order;
(g) furnish to each Holder of Registrable Securities, without charge, at
least one conformed copy of the Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(h) cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends
(unless required by applicable securities laws) and enable such Registrable
Securities to be in such denominations and registered in such names as the
selling Holders may reasonably request at least two business days prior to the
closing of any sale of Registrable Securities;
(i) upon the occurrence of any event contemplated by Section 3(e)(v)
hereof, use its best efforts to prepare a supplement or post-effective amendment
to the Registration Statement or the related Prospectus or any document
incorporated therein by
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reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Company agrees to notify the
Holders to suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and the Holders hereby agree to suspend use of the
Prospectus until the Trust and the Company have amended or supplemented the
Prospectus to correct such misstatement or omission;
(j) a reasonable time prior to the filing of the Registration Statement,
Prospectus, any amendment to the Registration Statement or amendment or
supplement to the Prospectus, or any document which is to be incorporated by
reference into the Registration Statement or Prospectus after the initial filing
of the Registration Statement, provide copies of such document to the Initial
Purchasers and their counsel and to counsel for the Holders and make such of the
representatives of the Trust and the Company as shall be reasonably requested by
the Initial Purchasers or their counsel and counsel for the Holders available
for discussion of such document, and shall not at any time file or make any
amendment to the Registration Statement, Prospectus or any amendment of or
supplement to the Registration Statement or the Prospectus or any document which
is to be incorporated by reference into the Registration Statement or the
Prospectus, of which the Initial Purchasers and their counsel and counsel for
the Holders shall not have previously been advised and furnished a copy or to
which the Initial Purchasers or their counsel and counsel for the Holders shall
reasonably object;
(k) obtain a CUSIP number for all Registrable Securities not later than
the effective date of the Registration Statement;
(l) make available for inspection by a representative of the Holders of
the Registrable Securities, any Underwriter participating in any disposition
pursuant to such Registration Statement, and attorneys and accountants
designated by the Holders, at reasonable times and in a reasonable manner, all
financial and other records, pertinent documents and properties of the Trust and
the Company, and cause the respective officers, directors and employees of each
of the Trust and the Company to supply all information reasonably requested by
any such representative, Underwriter, attorney or accountant in connection with
the Registration Statement, in each case that would customarily be reviewed or
examined in connection with "due diligence" review of the Trust and the Company;
(m) if reasonably requested by any Holder of Registrable Securities
covered by the Registration Statement, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment such information with respect to such
Holder as such Holder reasonably requests to be included therein and (ii) make
all required filings of such
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Prospectus supplement or such post-effective amendment as soon as the Company
has received notification of the matters to be incorporated in such filing;
(n) cause all Registrable Securities covered by the Registration Statement
to be (i) listed on each securities exchange or quotation system on which
similar securities issued by either of the Trust or the Company are then listed,
if so requested by the Majority Holders and (ii) rated with the appropriate
rating agencies, if so requested by the Majority Holders; and
(o) in the case of an Underwritten Offering, enter into such customary
agreements and take all such other customary actions in connection therewith
(including, those reasonably requested by counsel for the Holders) in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection, (i) to the extent possible, make such representations and
warranties to the Holders and any Underwriters of such Registrable Securities
with respect to the business of the Trust, the Company and the Company's
subsidiaries, the Registration Statement, Prospectus and documents incorporated
by reference or deemed incorporated by reference, if any, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings and confirm the same if and when requested, (ii) obtain
opinions of counsel to the Trust and the Company (which counsel and opinions, in
form, scope and substance, shall be reasonably satisfactory to the Holders and
such Underwriters and their respective counsel) addressed to each selling Holder
and Underwriter of Registrable Securities, covering the matters customarily
covered in opinions requested in underwritten offerings, (iii) obtain "cold
comfort" letters from the independent certified public accountants of the Trust
and the Company (and, if necessary, any other certified public accountant of any
subsidiary of the Trust and the Company, or any business acquired by the Trust
and the Company for which financial statements and financial data are or are
required to be included in the Registration Statement) addressed to each selling
Holder and Underwriter of Registrable Securities, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings, and (iv) deliver
such documents and certificates as may be reasonably requested by counsel for
the Holders to evidence the continued validity of the representations and
warranties of the Trust and the Company made pursuant to clause (i) above and to
evidence compliance with any customary conditions in an underwriting agreement.
In the case of any Underwritten Offering, the Company shall provide written
notice to the Holders of all Registrable Securities of such Underwritten
Offering at least 30 days prior to the filing of a prospectus supplement for
such Underwritten Offering. Such notice shall (x) offer each such Holder the
right to participate in such Underwritten Offering, (y) specify a date, which
shall be no earlier than 10 days following the date of such notice, by which
such Holder must inform the Company of its intent to participate in such
Underwritten Offering and (z) include the
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instructions such Holder must follow in order to participate in such
Underwritten Offering.
The Trust and the Company may require each Holder of Registrable Securities
to promptly furnish to the Company such information regarding the Holder and the
proposed distribution by such Holder of such Registrable Securities as the Trust
and the Company may from time to time reasonably request in writing.
Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(e)(v) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to the Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if
so directed by the Company, such Holder will deliver to the Company (at its
expense) all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
If the Company shall give any such notice to suspend the disposition of
Registrable Securities pursuant to the Registration Statement, the Trust and the
Company shall extend the period during which the Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days during the
period from and including the date of the giving of such notice to and including
the date when the Holders shall have received copies of the supplemented or
amended Prospectus necessary to resume such dispositions.
The Holders of Registrable Securities covered by the Registration Statement
who desire to do so may sell such Registrable Securities in an Underwritten
Offering. In any such Underwritten Offering, the investment banker or
investment bankers and manager or managers (the "Underwriters") that will
administer the offering will be selected by the Holders of a majority in
liquidation preference amount of the Registrable Securities included in such
offering.
4. INDEMNIFICATION AND CONTRIBUTION.
(a) Each of the Trust and the Company agree to indemnify and hold harmless
each Initial Purchaser, each Holder and each Person, if any who controls any
Initial Purchaser or any Holder within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act, or is under common control with, or is
controlled by, any Initial Purchaser or any Holder, from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto pursuant to which Registrable
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Securities were registered under the 1933 Act, including all documents
incorporated therein by reference), or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (as amended or supplemented if the
Trust or the Company shall have furnished any amendments or supplements
thereto), or arising out of or based upon any omission or alleged omission to
state therein a material fact necessary to make the statements therein in the
light of the circumstances under which they were made not misleading, except
insofar as such losses, claims, damages, liabilities or expenses arise out of or
are based upon any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in reliance upon and
in conformity with the information relating to such Initial Purchaser or Holder
furnished in writing to the Company by or on behalf of any Initial Purchaser or
Holder expressly for use in connection therewith. In connection with any
Underwritten Offering permitted by Section 3 hereof, each of the Trust and the
Company will also indemnify the Underwriters, if any, selling brokers, dealers
and similar securities industry professionals participating in the distribution,
their officers and directors and each Person who controls such Persons within
the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act
to the same extent as provided above with respect to the indemnification of the
Holders, if requested in connection with any Registration Statement.
(b) Each Initial Purchaser and each Holder agrees, severally and not
jointly, to indemnify and hold harmless the Trust, the Company, their directors
and officers, and any person who controls the Trust or the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same
extent as the foregoing indemnity from the Trust and the Company to such Initial
Purchaser or Holder, but only with respect to information relating to such
Initial Purchaser or Holder furnished in writing by or on behalf of such Initial
Purchaser or Holder expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the
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fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for (a) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Initial Purchasers and all persons, if any, who control any of
the Initial Purchasers within the meaning of either Section 15 of the 1933 Act
or Xxxxxxx 00 xx xxx 0000 Xxx, (x) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company, its directors,
its officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section, (c) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Trust, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Trust within the meaning of either such
Section and (d) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Holders and all persons, if any, who
control any Holders within the meaning of either such Section. Any such
separate firm for the Initial Purchasers and such control persons of Initial
Purchasers shall be designated in writing by the Initial Purchasers, any such
separate firm for the Holders and such control persons of Holders shall be
designated in writing by the Majority Holders, any such separate firm for the
Company, its directors, its officers and such control persons of the Company
shall be designated in writing by the Company and any such separate firm for the
Trust, its directors, its officers and such control persons of the Trust shall
be designated in writing by the Trust. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for reasonable fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the Indemnifying Person agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such Indemnifying Person of the aforesaid request and (ii) such
Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
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settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 4 is unavailable
to an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the Trust and the Company on the
one hand and the Initial Purchasers or Holders on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the Trust and the Company on the one hand and the Initial
Purchasers or Holders on the other hand 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 Company on the one hand or by Initial Purchaser or
the Holders on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Trust, the Company, each Initial Purchaser and each Holder agree
that it would not be just or equitable if contribution pursuant to this Section
4 were determined by pro rata allocation (even if the Initial Purchasers and the
Holders were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities and expenses referred to
in paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 4, (i) no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Trust Preferred Securities purchased by such
Initial Purchaser were offered exceeds the amount of any damages that such
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and (ii) no Holder
shall be required to indemnify or contribute any amount in excess of the amount
by which the total price at which Registrable Securities were sold by such
Holder exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations to contribute pursuant to this Section 4 are several in
proportion to the aggregate principle
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amount of Trust Preferred Securities sold by them pursuant to such Registration
Statement.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 4 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 4 and the
representations and warranties of the Trust and the Company set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of the Initial Purchasers, any Holder or
any person controlling any Initial Purchaser, any Holder, the Trust's or the
Company's directors or officers or any person controlling the Trust or the
Company, (ii) any termination of this Agreement and (iii) any sale of
Registrable Securities pursuant to the Registration Statement.
5. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. Neither the Trust nor the Company have
not entered into, and on or after the date of this Agreement will not enter
into, any agreement which is inconsistent with the rights granted to the Holders
of Registrable Securities in this Agreement or 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 either of the Trust's or the Company's other issued and outstanding
securities under any such agreements.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Trust and the Company have obtained the written consent of
Holders of at least a majority in aggregate liquidation preference amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or consent.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Trust by means of a notice given in accordance with the provisions of this
Section 5(c), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; and (ii) if to the
Trust or the Company, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 5(c).
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All such notices and communications shall be deemed to have been duly given
at the time delivered, if personally delivered; five business days after being
deposited in the mail, postage pre-paid, if mailed; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and on the next business
day if timely delivered to an air courier guaranteeing overnight delivery.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment or assumption, subsequent Holders; PROVIDED that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement. If any
transferees of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities, shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such person shall be entitled to receive the benefits hereof. No
Initial Purchaser shall have any liability or obligation to either of the Trust
or the Company with respect to any failure by a Holder to comply with, or any
breach by any Holder of, the obligations of such Holder under this Agreement.
(e) PURCHASES AND SALES OF TRUST PREFERRED SECURITIES. Neither the Trust
nor the Company shall, and shall use best efforts to cause its affiliates (as
defined in Rule 405 under the 0000 Xxx) not to, purchase and then resell or
otherwise transfer any Trust Preferred Securities other than to the Trust, the
Company or their respective affiliates.
(f) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Trust and the
Company, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. This Agreement shall be governed by laws of the State
of New York.
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(j) SEVERABILITY. In the event that one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
APPLE SOUTH FINANCING I
By: APPLE SOUTH, INC., as Sponsor
By
---------------------------------
Name:
Title:
APPLE SOUTH, INC.
By
---------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
X.X. XXXXXX SECURITIES INC.
XXXXX XXXXXX INC.
Acting severally on behalf of themselves
and the several Initial Purchasers
By: X.X. Xxxxxx Securities Inc.
Acting severally on behalf of itself
and the several Initial Purchasers
By
---------------------------------
Name:
Title:
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