1
EXHIBIT 4.4
AMERICAN RESTAURANT GROUP, INC.
SECURITYHOLDERS' AND REGISTRATION RIGHTS AGREEMENT
February 25, 1998
XXXXXXXXX & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxx.
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
American Restaurant Group, Inc. (the "Company"), a Delaware
corporation, proposes to issue and sell to Xxxxxxxxx & Company, Inc. (the
"Purchaser"), upon the terms set forth in a purchase agreement, dated as of
February 13, 1998 (the "Purchase Agreement"), between the Purchaser and the
Company, 35,000 Units (as defined below), consisting of (i) $35,000,000
aggregate initial liquidation preference amount of 12% Senior Pay-In-Kind
Exchangeable Preferred Stock (the "Preferred Stock") and (ii) 35,000 warrants
(together with the 4,375 warrants (the "Purchaser Warrants") to purchase shares
of the Company's Common Stock (as defined below) issued to the Purchaser
pursuant to the letter agreement dated November 6, 1997 between the Company and
the Purchaser and to others pursuant to the letter agreement dated as of
February 25, 1998 between the Company and TCW Asset Management Co. the
"Warrants") to purchase initially 93,150 shares (together with the shares of
Common Stock underlying the Purchaser Warrants, the "Warrant Shares") of the
Company's common stock, $0.01 par value per share (together with any securities
issued in exchange therefor or in substitution thereof, the "Common Stock"), at
an initial exercise price of $ .01 per share. The Warrants are to be issued
pursuant to a warrant agreement (the "Warrant Agreement"), to be dated as of
February 25, 1998, between the Company and the warrant agent named therein (the
"Warrant Agent"). The Preferred Stock and the Warrants will be sold in Units,
each Unit consisting of (i) $1,000 initial liquidation preference of Preferred
Stock and (ii) one Warrant to purchase initially 2.66143 Warrant Shares at an
exercise price of $ .01 per share (the "Units"). Unless the context requires
otherwise, references herein to "Securities" shall be deemed to include the
Units, Preferred Stock, Warrants, and Warrant Shares.
As an inducement to the Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Purchaser
thereunder, the Company agrees with the Purchaser, (i) for the benefit of the
Purchaser and (ii) for the benefit of the holders from time to time of the
Warrants and the Warrant Shares, as follows:
2
2
1. Definitions. Capitalized terms used but not defined herein shall
have the respective meaning given to such terms in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:
"Affiliate" of any specified person, means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day" means any day other than (i) Saturday or Sunday or
(ii) a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to be closed.
"Capital Stock" means, with respect to any Person, any capital stock
of such Person and shares, interests, participations, or other ownership
interests (however designated) of such Person and any rights (other than debt
securities convertible into corporate stock), warrants or options to purchase
any of the foregoing, including without limitation, each class of common stock
and preferred stock of such Person, if such Person is a corporation, and each
general or limited partnership interest or other equity interest of such Person,
if such Person is a partnership.
"DTC" means The Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holders" means the Persons with a beneficial interest in the
Warrant Shares or other Registrable Securities.
"Initiating Holders" means one or more Holders owning individually
or in the aggregate not less than the Requisite Securities.
"Management Holders" means those employees of the Company who are
holders of securities of the Company that are or become parties to the
Management Registration Rights Agreement.
"Management Registration Rights Agreement" means the registration
rights agreement, dated as of February 25, 1998, between the Company and the
Management Holders.
"Officer's Certificate" means a certificate signed by any one of the
Chairman, any Vice Chairman, any Chief Executive Officer, any Senior Vice
President or the Chief Financial Officer.
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
3
3
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities.
"Public Equity Offering" means an underwritten public offering
managed by a nationally recognized member of the National Association of
Securities Dealers of Capital Stock of any Person pursuant to an effective
registration statement filed with the SEC pursuant to the Securities Act.
"Registrable Securities" means any of (i) the Warrant Shares
(whether or not the related Warrants have been exercised) or the Purchaser
Warrant Shares (whether or not the related warrants have been exercised) and
(ii) any other securities issued or issuable with respect to any Warrant Shares
or Purchaser Warrant Shares by way of stock dividends or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to the offering of such securities by the
Holder thereof shall have been declared effective under the Securities Act and
such securities shall have been disposed of by such Holder pursuant to such
Registration Statement, (ii) such securities are eligible for sale to the public
pursuant to Rule 144(k) (or any similar provision then in force, but not Rule
144A) promulgated under the Securities Act, (iii) such securities shall have
been otherwise transferred by such Holder thereof and new certificates for such
securities not bearing a legend restricting further transfer shall have been
delivered by the Company or its transfer agent and subsequent disposition of
such securities shall not require registration or qualification under the
Securities Act or any similar state law then in force or (iv) such securities
shall have ceased to be outstanding.
"Registration Expenses" shall mean all expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, all SEC and stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees and expenses, fees and expenses of
compliance with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities), preparing,
printing, filing, duplicating and distributing the Registration Statement and
the related prospectus, the cost of printing stock certificates, the cost and
charges of any transfer agent, rating agency fees, printing expenses, messenger,
telephone and delivery expenses, reasonable fees and disbursements of counsel
for the Company and all independent certified public accountants, the fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (but not including any underwriting discounts or commissions or
transfer taxes, if any, attributable to the sale of Registrable Securities by
Selling Holders), and reasonable fees and expenses of one counsel for the
Holders (which counsel shall be reasonably acceptable to the Company).
"Registration Statement" shall mean any appropriate registration
statement of the Company filed with the SEC pursuant to the Securities Act which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to
4
4
any 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.
"Requisite Securities" shall mean a number of Registrable Securities
equal to not less than 25% of the Registrable Securities held in the aggregate
by all Holders.
"Rule 144" means Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
"Rule 144A" means Rule 144A promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
"Rule 174" means Rule 174 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended form time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Selling Holder" shall mean a Holder who is selling Registrable
Securities in accordance with the provisions of this Agreement.
"Special Counsel" means any special counsel to the Holders, for
which Holders will be reimbursed pursuant to this Agreement.
2. Demand Registration.
(a) From time to time after 180 days following the
completion by the Company of a Public Equity Offering, one or more Initiating
Holders owning
5
5
individually or in the aggregate not less than the Requisite Securities may
request in writing that the Company effect the registration under the Securities
Act of all or part of such Initiating Holders' Registrable Securities and shall
specify the number of Registrable Securities proposed to be sold and the
intended method of disposition thereof (the "Demand Request"). The Company will
give written notice of the Demand Request to all registered holders of
Registrable Securities within fifteen (15) days of receipt thereof. Within 120
days of receipt of the Demand Request the Company will, subject to the terms of
this Agreement, file a Registration Statement and use its best efforts to effect
the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been
so requested to register by such Initiating Holders for disposition in
accordance with the intended method of disposition stated in such request;
(ii) all other Registrable Securities the holders of which
shall have made a written request to the Company for registration thereof
within 20 days after the giving of such written notice by the Company
(which request shall specify the number of Registrable Securities proposed
to be sold and the intended method of disposition of such Registrable
Securities);
(iii) all shares of securities which the management
employees of the Company may elect to register in connection with the
offering of Registrable Securities pursuant to this Section 2; and
(iv) all shares of securities which the Company may elect
to register in connection with the offering of Registrable Securities
pursuant to this Section 2,
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional securities so to be registered.
(b) Registrations under this Section (each, a
"Demand Registration") shall be on such appropriate registration form of the SEC
(i) as shall be selected by the Company and (ii) as shall permit the disposition
of such Registrable Securities in accordance with the intended method or methods
of disposition specified in their request for such registration.
(c) The Company will pay all Registration Expenses
in connection with any registration requested pursuant to this Section 2. The
Selling Holders shall pay the underwriting discounts, commissions, and transfer
taxes, if any, in connection with each Registration Statement requested under
this Section 2, which costs shall be allocated pro rata among all Selling
Holders on whose behalf Registrable Securities of the Company are included in
such registration on the basis of the respective amounts of the Registrable
Securities then being registered on their behalf.
(d) The Holders shall be entitled to request two (2)
registrations pursuant to this Section 2. A Registration Statement requested
pursuant to this Section 2 shall not be deemed to have been effected (i) unless
a Registration Statement with respect
6
6
thereto has been declared effective by the SEC and (ii) the Company has complied
in a timely manner and in all material respects with all of its obligations
under this Agreement; provided, (i) if, after such Registration Statement has
become effective, the offering of Warrant Shares pursuant to such Registration
Statement is or becomes subject to any stop order, injunction or other order or
requirement of the SEC or other governmental or administrative agency or court
that prevents, restrains or otherwise limits the sale of Warrant Shares under
such Registration Statement for any reason, other than by reason of some act or
omission by any Holder participating in such registration, and does not become
effective within a reasonable period of time thereafter, such period not to
exceed 60 days from the date of such stop order, injunction, or other
governmental order or requirement, (ii) the Registration Statement does not
remain effective under the Securities Act until at least the earlier of (A) an
aggregate of 90 days after the effective date thereof or (B) the consummation of
the distribution by the Selling Holders of all of the Registrable Securities
covered thereby or (iii) if the Selling Holders are not able to sell at least
70% of the Registrable Securities to be included therein, less any Registrable
Securities withdrawn or excluded from such Demand Registration in accordance
with the provisions hereof, then, in each case, such Registration Statement
shall be deemed not to have been effected. For purposes of calculating the
90-day period referred to in the preceding sentence, any period of time during
which such Registration Statement was not in effect shall be excluded. The
Holders shall be permitted to withdraw all or any part of the Registrable
Securities from a Demand Registration at any time prior to the effective date of
such Demand Registration.
(e) If a requested registration pursuant to this
Section 2 involves an underwritten offering, and the managing underwriter or
underwriters shall advise the Company in writing (with a copy to each Holder
requesting registration) that, in such managing underwriter's or underwriters'
opinion, the number of securities requested to be included in such registration
(including securities of the Company which are not Registrable Securities) is
such as to adversely affect the success of such offering, including the price at
which such securities can be sold, then the Company will include in such
registration, to the extent of the number which the Company is so advised can be
sold in such offering, (i) first, Registrable Securities requested to be
included in such registration by the Holders, pro rata among such holders
requesting such registration on the basis of the number of such securities
requested to be included by such Holders and (ii) second, securities held by
other Persons, including the Company.
3. Piggy-Back Registration.
(a) If at any time after the Company has completed a Public Equity
Offering (or in connection with the Company's initial Public Equity Offering if
any Management Holders are given the opportunity to register any securities in
such Public Equity Offering) the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering by the Company
for its own account or for the account of any of the holders of any class of its
Common Stock in a firmly underwritten Public Equity Offering (other than (i) a
Registration Statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the SEC) or (ii) a Registration Statement filed in connection with an
exchange offer or offering of securities solely to the Company's existing
security holders), then the Company shall give written notice of such proposed
filing to the Holders as soon as practicable (but in no event fewer than 10 days
before the anticipated filing date), and such notice shall offer such Holders
the
7
7
opportunity to register such number of Warrant Shares as each such Holder may
request in writing within 20 days after receipt of such written notice from the
Company (which request shall specify the Warrant Shares intended to be disposed
of by such Selling Holder) (a "Piggy-Back Registration"). Upon the written
request of any such Holder made within 20 days after the receipt of any such
notice (which request shall specify the number of Registrable Securities
intended to be disposed of by such Holder and the intended method of disposition
thereof), the Company will, subject to the terms of this Agreement, effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the Holders thereof, to the extent
requisite to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be registered, by
inclusion of such Registrable Securities in the registration statement that
covers the securities which the Company proposes to register, provided that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
either not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each Holder
and, thereupon, (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
any holder or holders of Registrable Securities entitled to do so to request
that such registration be effected as a registration under Section 2, and (ii)
in the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this Section 3
shall relieve the Company of its obligation to effect any registration upon
request under Section 2, nor shall any such registration hereunder be deemed to
have been effected pursuant to Section 2.
(b) The Company shall use its reasonable efforts to
cause the managing underwriter or underwriters of such proposed offering to
permit the Registrable Securities requested to be included in a Piggy-Back
Registration to be included in the same terms and conditions as any similar
securities of the Company or any other security holder included therein and to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof. Any Selling Holder
shall have the right to withdraw its request for inclusion of its Registrable
Securities in any Registration Statement pursuant to these provisions by giving
written notice to the Company of its request to withdraw prior to the effective
date of such registration statement.
(c) The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 3 and the Selling Holders shall pay the underwriting
discounts, commissions, and transfer taxes, if any, relating to the sale of such
Selling Holders' Registrable Securities pursuant to this Section 3, such costs
being allocated pro rata among all Selling Holders on whose behalf Registrable
Securities of the Company are included in such registration on the basis of the
respective amounts of Registrable Securities then being registered on their
behalf.
(d) Priority in Piggy-Back Registrations. If a
registration pursuant to this Section 3 involves an underwritten offering of the
securities so being registered,
8
8
whether or not for sale for the account of the Company, the Company will, if
requested by any Holder and subject to the provisions of this Section 3, use its
reasonable efforts to arrange for such underwriters to include all the
Registrable Securities to be offered and sold by such Holder among the
securities to be distributed by such underwriters. Notwithstanding anything to
the contrary, if the managing underwriter of such underwritten offering shall,
in writing, inform the Holders requesting such registration and the holders of
any of the Company's other securities which shall have exercised registration
rights in respect of such underwritten offering of its belief that the number of
securities requested to be included in such registration exceeds the number
which can be sold in (or during the time of) such offering, then the Company
will be required to include in such registration statement only the amount of
securities that it is so advised should be included in such registration. In
such event, (x) in cases initially involving the registration for sale of
securities for the Company's own account, securities shall be registered in such
offering in the following order of priority: (i) first, the securities that the
Company proposes to register, (ii) second, the securities that have been
requested to be included in such registration by Holders and Management Holders
(pro rata on the amount of securities sought to be registered by such Holders
and Management Holders), and (iii) third, the securities that have been
requested to be included in such registration by Persons (other than Holders and
Management Holders) entitled to exercise "piggy-back" registration rights
pursuant to contractual commitments of the Company (pro rata on the amount of
securities sought to be registered by such Persons); and (y) in cases not
initially involving the registration for sale of securities for the Company's
own account, securities shall be registered in such offering as follows: (i)
first, the securities of any person whose exercise of a "demand" registration
right pursuant to a contractual commitment of the Company is the basis for the
registration (provided that if such person is a Holder, there shall be no
priority as among Holders and Warrant Shares sought to be included by Holders
shall be included pro rata based on the amount of securities sought to be
registered by such persons), (ii) second, the securities that have been
requested to be included in such registration by Holders and Management Holders
(pro rata on the amount of securities sought to be registered by such Holders
and Management Holders), (iii) third, securities of other persons entitled to
exercise "piggy-back" registration rights pursuant to contractual commitments
(pro rata based on the amount of securities sought to be registered by such
persons) and (iv) fourth, the securities which the Company proposes to register.
4. Registration Procedures. In connection with any Demand
Registration or Piggy-back Registration, the Company shall (provided that it
will not be required to take any action pursuant to this Section 4 that would,
in the written opinion of counsel for the Company, violate applicable law):
(a) No fewer than five Business Days prior to the
initial filing of a Registration Statement or Prospectus and no fewer than two
Business Days prior to the filing of any amendment or supplement thereto
(including any document that would be incorporated or deemed to be incorporated
therein by reference), if requested, furnish to the Holders, their Special
Counsel and the managing underwriters, if any, copies of all such documents
proposed to be filed, which documents (other than those incorporated or deemed
to be incorporated by reference) will be subject to the review of such Holders,
their Special Counsel and such underwriters, if any, and cause the officers and
directors of the Company, counsel to the Company and independent certified
public accountants to the Company to respond to such
9
9
inquiries as shall be necessary, in the opinion of respective counsel to such
Holders and such underwriters, to conduct a reasonable investigation within the
meaning of the Securities Act, and shall use reasonable efforts to reflect in
each such document filed pursuant to a Demand Registration, when so filed with
the SEC, such reasonable comments as the Holders, their Special Counsel and the
managing underwriters, if any, may propose in writing; provided, however, that
the Company shall not be deemed to have kept a Registration Statement effective
during the applicable period if it voluntarily takes or fails to take any action
that results in Selling Holders covered thereby not being able to sell such
Registrable Securities pursuant to Federal securities laws during that period;
provided, further, the Company shall not file any such Registration Statement or
related Prospectus or any amendments or supplements thereto in connection with a
Demand Registration to which the Holders of a majority of the Registrable
Securities, their Special Counsel, or the managing underwriters, if any, shall
reasonably object on a timely basis;
(b) Take such action as may be necessary so that (i)
any Registration Statement and any amendment thereto and any Prospectus forming
part thereof and any amendment or supplement thereto (and each report or other
document incorporated herein by reference in each case) complies in all material
respects with the Securities Act and the Exchange Act and the respective rules
and regulations thereunder, (ii) any Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any Prospectus
forming part of any Registration Statement, and any amendment or supplement to
such Prospectus, does not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements, in the light
of the circumstances under which they were made, not misleading.
(c) Prepare and file with the SEC such amendments,
including post-effective amendments, to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective for the
applicable time period; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement as
so amended or in such Prospectus as so supplemented;
(d) Notify the Selling Holders, their Special
Counsel and the managing underwriters, if any, promptly (and in any case within
2 Business Days), and (if requested by any such Person), confirm such notice in
writing, (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, (B) with respect to a Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other Federal or state governmental authority for
amendments or supplements to a Registration Statement or related Prospectus or
for additional information, (iii) of the issuance by the SEC, any state
securities commission, any other governmental agency or any court of any stop
order, order or injunction suspending or enjoining the use or the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose, (iv) if at any time any of the representations and warranties of either
the Company
10
10
contained in any agreement (including any underwriting agreement) contemplated
hereby cease to be true and correct in all material respects, (v) of the receipt
by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose, (vi) of the happening of any event that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in such
Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, not misleading, and that in the case
of the Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (vii) of the Company's reasonable determination that a
post-effective amendment to such Registration Statement would be appropriate;
(e) Use its reasonable efforts to avoid the issuance
of, or, if issued, obtain the withdrawal of any order enjoining or suspending
the use or effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest practicable
moment;
(f) If requested by the managing underwriters, if
any, or the Holders of a majority in aggregate number of the Registrable
Securities being sold in connection with such offering reasonably in advance of
the filing thereof, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriters, if any,
and such Holders reasonably agree should be included therein, (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment and (iii) supplement or make amendments to such Registration
Statement;
(g) Furnish to Special Counsel and each managing
underwriter, if any, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested as
soon as practicable after the filing of such documents with the SEC;
(h) Deliver to each Selling Holder, their Special
Counsel, and the underwriters, if any, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons reasonably request; and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the Selling Holders and the underwriters, if any,
in connection with the offering and sale of the Registrable Securities covered
by such Prospectus and any amendment or supplement thereto;
11
11
(i) Prior to any public offering of Registrable
Securities, use its reasonable efforts to register or qualify or cooperate with
the Holders of Registrable Securities to be sold or tendered for, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions within the United States as
any Holder or underwriter reasonably requests in writing; provided, however,
that where Registrable Securities are offered other than through an underwritten
offering, the Company agrees to cause its counsel to perform "blue sky"
investigations and file registrations and qualifications required to be filed
pursuant to this Section 4(i); to use its reasonable best efforts to keep each
such registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and to use
its reasonable best efforts do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by such Registration Statement; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where they are not then so qualified or to take any action that
would subject them to general service of process in any such jurisdiction where
they are not then so subject or subject the Company to any tax in any such
jurisdiction where it is not then so subject;
(j) In connection with any sale or transfer of
Registrable Securities that will result in such securities no longer being
Registrable Securities, cooperate with the Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (with appropriate CUSIP numbers) representing Registrable
Securities to be sold, which certificates shall not bear any restrictive legends
and shall be in a form eligible for deposit with the DTC, and to enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriters, if any, or Holders may request at least two
Business Days prior to any sale of Registrable Securities;
(k) Use its best efforts to cause the offering of
the Registrable Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities
within the United States, except as may be required as a consequence of the
nature of such Selling Holder's business, in which case the Company will
cooperate in all reasonable respects at the expense of such Selling Holder with
the filing of such Registration Statement and the granting of such approvals as
may be necessary to enable the seller or sellers thereof or the underwriters, if
any, to consummate the disposition of such Registrable Securities; provided,
however, that the Company shall not be required to register the Registrable
Securities in any jurisdiction that would subject them to general service of
process in any such jurisdiction where it is not then so subject or subject the
Company to any tax in any such jurisdiction where it is not then so subject or
to require the Company to qualify to do business in any jurisdiction where it is
not then so qualified;
(l) Upon the occurrence of any event contemplated by
Section 4(d)(vi) or 4(d)(vii), as promptly as practicable, prepare a supplement
or amendment, including, if appropriate, a post-effective amendment, to each
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, such Prospectus will
not contain an untrue statement of a material fact or omit to state a material
fact
12
12
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. If the
Company notifies the Holders of the occurrence of any event contemplated by
paragraph 4(d)(vi) or 4(d)(vii) above, the Holders shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made;
(m) Enter into such agreements (including an
underwriting agreement in form, scope and substance as is customary in
underwritten offerings) and take all such other reasonable actions in connection
therewith (including those reasonably requested by the managing underwriters, if
any, or the Holders of a majority in aggregate number of the Registrable
Securities being sold) in order to expedite or facilitate the disposition of
such Registrable Securities, and in such connection, whether or not an
underwriting agreement is entered into and whether or not the registration is an
underwritten registration, (i) make such representations and warranties to the
Holders of such Registrable Securities and the underwriters, if any, with
respect to the business of the Company (including with respect to businesses or
assets acquired or to be acquired by it), and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, 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 Company and
updates thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the managing or sole underwriters, if any,
addressed to the underwriters, if any, covering the matters customarily covered
in opinions requested in underwritten offerings and such other matters as may be
reasonably requested by such underwriters (iii) obtain customary "comfort"
letters and updates thereof (including, if such registration includes an
underwritten public offering, a "bring down" comfort letter dated the date of
the closing under the underwriting agreement) from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any business which may hereafter be acquired by
the Company for which financial statements and financial data are required to be
included in the Registration Statement), addressed to each of the underwriters,
if any, such letters to be in customary form and covering matters of the type
customarily covered in "comfort" letters in connection with underwritten
offerings and such other matters as reasonably required by the managing
underwriter or underwriters and as permitted by the Statement of Auditing
Standards No. 72; (iv) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures no less favorable to the
Selling Holders and the underwriters, if any, than those set forth in Section 8
hereof (or such other provisions and procedures acceptable to Holders of a
majority in aggregate number of Registrable Securities covered by such
Registration Statement and the managing underwriters); and (v) deliver such
documents and certificates as may be reasonably requested by the Holders of a
majority in aggregate number of the Registrable Securities being sold, their
Special Counsel and the managing underwriters, if any, to evidence the continued
validity of the representations and warranties made pursuant to clause 4(n)(i)
above and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company;
(n) Make available for inspection by one
representative of the Selling Holders, the managing underwriter participating in
any such disposition of Registrable
13
13
Securities, if any, and any attorney, consultant or accountant retained by such
Selling Holders or underwriter (collectively, the "Inspectors"), at the offices
where normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company (including
with respect to business and assets acquired or to be acquired to the extent
that such information is available to the Company, and cause the officers,
directors, agents and employees of the Company (including with respect to
business and assets acquired or to be acquired to the extent that such
information is available to the Company) to supply all information in each case
reasonably requested by any such Inspector in connection with such Registration,
provided, however, the Company may first require that such Persons agree to keep
confidential any non-public information relating to the Company received by such
Person and not disclose such information (other than to an Affiliate or
prospective purchaser who agrees to respect the confidentiality provisions of
this Section 4(n)) until such information has been made generally available to
the public (other than as a result of a disclosure or failure to safeguard by
such Inspector) unless the release of such information is required by law or
necessary to respond to inquiries of regulatory authorities (including the
National Association of Insurance Commissioners, or similar organizations or
their successors); without limiting the foregoing, no such information shall be
used by such Inspector as the basis for any market transactions in securities of
the Company or its subsidiaries in violation of law;
(o) Use its best efforts to cause the Warrant Shares
issuable upon exercise of the Warrants to be quoted or listed on any exchange
upon which the Company's Common Stock is then quoted or listed;
(p) Comply with all applicable rules and regulations
of the SEC and make generally available to their security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act),
no later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or reasonable efforts underwritten offering
and (ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter after the effective date of a Registration
Statement, which statement shall cover said period, consistent with the
requirements of Rule 158; and
(q) Use its best efforts to take all other steps
reasonably necessary to effect the registration, offering and sale of the
Registrable Securities covered by the Registration Statement.
The Company may require each Selling Holder as to which any
registration is being effected to furnish to the Company such information
regarding the distribution of such Registrable Securities as is required by law
to be disclosed in the applicable Registration Statement and the Company may
exclude from such registration the Registrable Securities of any Selling Holder
who unreasonably fails to furnish such information promptly after receiving such
request.
14
14
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the deletion of the
reference to such Holder in any amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such reference ceases to
be required.
Each Holder agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 4(d)(ii), 4(d)(iii), 4(d)(v) or 4(d)(vi)
hereof, such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(l) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus. If the Company shall give any such notice, the
90-day period referred to in Section 2(d) shall be extended by the number of
days during such period from and including the date of the giving of such notice
to and including the date when each seller of Registrable Securities covered by
such Registration Statement shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 3(l) hereof or (y)
the Advice, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus.
5. Certain Limitations, Conditions and Qualifications to the
Company's Obligations Under Sections 2 and 3.
The obligations of the Company described in Sections 2 and 3 of this
Agreement are subject to each of the following limitations, conditions and
qualifications:
(a) Subject to the next sentence of this paragraph, the Company
shall be entitled to postpone, for a reasonable period of time, the filing or
effectiveness of, or suspend the rights of any Holder to make sales pursuant to,
any Registration Statement otherwise required to be prepared, filed and made and
kept effective by it under the registration covenants described in Sections 2
hereof; provided, however, that the duration of such postponement or suspension
may not exceed the earlier to occur of (A) 30 days after the cessation of the
circumstances described in the next sentence of this paragraph on which such
postponement or suspension is based or (B) 120 days after the date of the
determination of the Board of Directors of the Company referred to in the next
sentence, and the duration of such postponement or suspension shall be excluded
from the calculation of the 90-day period described in Section 2(d) hereof. Such
postponement or suspension may only be effected if the Board of Directors of the
Company determines in good faith that the filing or effectiveness of, or sales
pursuant to, such registration
15
15
statement would materially impede, delay or interfere with any financing, offer
or sale of securities, acquisition, corporate reorganization or other
significant transaction involving the Company or any of its affiliates (whether
or not planned, proposed or authorized prior to the exercise of demand
registration rights hereunder or any other registration rights agreement) or
require disclosure of material information which the Company has a bona fide
business purpose for preserving as confidential. If the Company shall so
postpone the filing or effectiveness of, or suspend the rights of any Holders to
make sales pursuant to, a Registration Statement it shall, as promptly as
possible, notify any Selling Holders of such determination, and the Selling
Holders shall (y) have the right, in the case of a postponement of the filing or
effectiveness of a Registration Statement, upon the affirmative vote of the
Selling Holders of not less than a majority of the Registrable Securities to be
included in such Registration Statement, to withdraw the request for
registration by giving written notice to the Company within 10 days after
receipt of such notice, or (z) in the case of a suspension of the right to make
sales, receive an extension of the registration period equal to the number of
days of the suspension. Any Demand Registration as to which the withdrawal
election referred to in the preceding sentence has been effected shall not be
counted for purposes of the two Demand Registrations referred to in Section 2(d)
hereof.
(b) The Company shall not be required by this Agreement to include
securities in a Registration Statement relating to a Piggy-back Registration
above if (i) in the written opinion of counsel to the Company, addressed to the
Holders seeking registration and delivered to them, the Holders of such
securities seeking registration would be free to sell all such securities within
the succeeding three-month period, without registration, under Rule 144 under
the Securities Act, which opinion may be based in part upon the representation
by the Holders of such securities seeking registration, which registration shall
not be unreasonably withheld, that each such Holder is not an affiliate of the
Company within the meaning of the Securities Act, and (ii) all requirements
under the Securities Act for effecting such sales are satisfied at such time.
(c) The Company's obligations shall be subject to the obligations of
the Selling Holders to furnish all information and materials and not to take any
and all actions as may be required under Federal and state securities laws and
regulations to permit the Company to comply with all applicable requirements of
the SEC and to obtain any acceleration of the effective date of such
Registration Statement.
(d) The Company shall not be obligated to cause any special audit to
be undertaken in connection with any registration pursuant to this Agreement
unless such audit is requested by the underwriters with respect to such
registration.
6. Indemnification
(a) The Company agrees to indemnify and hold harmless (i) each
Selling Holder, (ii) each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) any of the foregoing
(any of the persons referred to in this clause (ii) being hereinafter referred
to as a "controlling person"), and (iii) the respective officers, directors,
partners, employees, representatives and agents of the Purchaser, each Selling
16
16
Holder, each broker-dealer participating in an offering subject to this
Agreement or any controlling person (any person referred to in clause (i), (ii)
or (iii) may hereinafter be referred to as an "Indemnified Person"), to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including, without limitation, and
as incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing or defending any claim or action, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to any Indemnified Person) directly or
indirectly caused by, related to, based upon, arising out of or in connection
with, any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or form of Prospectus or in
any amendment or supplement thereto or in any preliminary Prospectus, or caused
by 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
any Prospectus or form of Prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Indemnified Person furnished in writing to the
Company by or on behalf of such Indemnified Person expressly for use therein;
provided that the foregoing indemnity with respect to any preliminary Prospectus
shall not inure to the benefit of any Indemnified Person from whom the person
asserting such losses, claims, damages, liabilities and judgments purchased
securities if such untrue statement or omission or alleged untrue statement or
omission made in such preliminary Prospectus is eliminated or remedied in the
Prospectus and a copy of the Prospectus shall not have been furnished to such
person in a timely manner due to the wrongful action or wrongful inaction of
such Indemnified Person or the Underwriter.
(b) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement or any such Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company, such Indemnified Person shall promptly notify the
Company in writing and the Company shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person and
payment of all reasonable fees and expenses; provided, however, that the failure
to so notify the Company shall not relieve it of any obligation or liability
which it may have hereunder or otherwise (unless and only to the extent that
such failure directly results in the loss or compromise of any material rights
or defenses by the Company and the Company was not otherwise aware of such
action or claim). Any Indemnified Person shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person,
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the Company, (ii) the Company shall have failed to
assume the defense and employ counsel or (iii) the named parties to any such
action (including any impleaded parties) include both such Indemnified Person
and the Company and such Indemnified Person shall have been advised by counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the Company (in which case the Company
shall not have the right to assume the defense of such action on behalf of such
Indemnified Person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or
17
17
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all such
Indemnified Persons, which firm shall be designated in writing by such
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred). The Company shall not be liable for any settlement of any
such action effected without its written consent but if settled with the written
consent of the Company, the Company agrees to indemnify and hold harmless any
Indemnified Person from and against any loss or liability by reason of such
settlement. The Company shall not, without the prior written consent of the
Indemnified Person, which consent shall not be unreasonbly withheld, 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 settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
(c) In connection with any Registration Statement in which a Holder
is participating, such Holder agrees, severally and not jointly, to indemnify
and hold harmless each of the Company, its directors, its officers, agents and
employees and any person controlling the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and the directors, officers,
agents or employees of such controlling persons, to the same extent as the
foregoing indemnity from the Company to each Indemnified Person but only with
reference to information relating to such Indemnified Person furnished in
writing by or on behalf of such Indemnified Person expressly for use in such
Registration Statement or any Prospectus (or any amendment or supplement
thereto) or any preliminary Prospectus. In case any action shall be brought
against the Company, any of their directors, any such officer, agent or employee
or any person controlling the Company based on such Registration Statement and
in respect of which indemnity may be sought against any Indemnified Person, the
Indemnified Person shall have the rights and duties given to the Company (except
that if the Company shall have assumed the defense thereof, such Indemnified
Person shall not be required to do so, but may employ separate counsel therein
and participate in defense thereof but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person), and the Company, its
directors, any such officers and any person controlling the Company shall have
the rights and duties given to the Indemnified Person, by Sections 6(b) and 6(d)
hereof.
(d) If the indemnification provided for in this Section 6 is
unavailable to an Indemnified Person or is insufficient to hold such Indemnified
Person harmless in respect of any losses, claims, damages, liabilities or
judgments referred to therein, then the Company, in lieu of indemnifying such
Indemnified Person, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages, liabilities and
judgments (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and each Indemnified Person on
the other hand from the offering of the Warrant Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and each such
Indemnified Person in connection with the statements or omissions (or alleged
statements or omissions) which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and each such Indemnified
Person shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement
18
18
of a material fact or the omission or the alleged omission to state a material
fact relates to information supplied by the Company or such Indemnified Person
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation (even if the Indemnified Person were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an the Company as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other fees or expenses reasonably incurred by such
indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6, no Indemnified
Person shall be required to contribute any amount in excess of the amount by
which the total net proceeds received by it in connection with the sale of the
Warrant Shares pursuant to this Agreement exceeds the amount of any damages
which such Indemnified Person 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
6 will be in addition to any liability which the Company may otherwise have to
the Indemnified Persons referred to above. The Indemnified Persons' obligations
to contribute pursuant to this Section 6(d) are several in proportion to the
respective amount of Warrant Shares included in any such Registration Statement
by each Indemnified Person and not joint.
7. Rules 144 and 144A
The Company shall use its best efforts to file the reports required
to be filed by it under the Securities Act and the Exchange Act in a timely
manner and, if at any time it is not required to file such reports but in the
past had been required to or did file such reports, it will, upon the request of
any Holder, make available other information as required by, and so long as
necessary to permit, sales of its Registrable Securities pursuant to Rule 144A.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
8. Underwritten Registrations
(a) If any of the Registrable Securities covered by
any Registration Statement pursuant to a Demand Registration are to be sold in
an underwritten offering, the investment banker or investment bankers and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate number of such Registrable Securities
included in such offering, subject to the consent of the Company (which will not
be unreasonably withheld or delayed).
19
19
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Registrable Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
(b) Each Holder of a Warrant or Warrant Shares agrees, if requested
(pursuant to a timely written notice) by the managing underwriter or
underwriters in an underwritten offering, not to effect any public sale or
distribution of any of the issue being registered or a similar security of the
Company or any securities convertible or exchangeable or exercisable for such
securities including a sale pursuant to Rule 144 or Rule 144A (except as part of
such underwritten offering), during the period beginning 10 days prior to, and
ending 90 days after, the closing date of each underwritten offering made
pursuant to such registration statement (or such shorter period as the managing
underwriter or underwriters may agree), to the extent timely notified in writing
by the Company or by the managing underwriter or underwriters.
9. Miscellaneous
(a) Remedies. In the event of a breach by the Company, or by a
Holder, of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. Without the written consent of the
Holders of a majority of the then outstanding Registrable Securities, the
Company shall not grant to any person the right to request it to register any of
its equity securities under the Securities Act (other than pursuant to the
Management Registration Rights Agreement) unless the rights so granted are
subject in all respects to the prior rights of the Holders set forth herein, and
are not otherwise in conflict or inconsistent with the provisions of this
Agreement.
(c) 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 written consent of the Holders of a majority of the
then outstanding Registrable Securities is obtained; provided, however, that,
for the purposes of this Agreement, Registrable Securities that are owned,
directly or indirectly, by the Company or an Affiliate of the Company are not
deemed outstanding. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of a majority in aggregate number of the
Registrable Securities being sold by such Holders pursuant to such Registration
Statement;
20
20
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(d) Notices. All notices and other communications provided for
herein shall be made in writing by hand-delivery, next-day air courier,
certified first-class mail, return receipt requested, or facsimile:
(i) if to the Company:
American Restaurant Group, Inc.
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, III
(ii) if to the Purchaser:
Xxxxxxxxx & Company, Inc.
000 Xxxxx Xxxxxx Xxxxxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxx X. Xxxxxx
(iii) if to any other person who is then a registered
Holder, to the address of such Holder as it appears in
the share register of the Company.
21
21
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one business day after being timely delivered to a
next-day air courier; five business days after being deposited in the mail,
postage prepaid, if mailed; and when receipt is acknowledged by the recipient's
telecopier machine, if telecopied.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Notwithstanding the foregoing, no transferee shall have any of the
rights granted under this Agreement until such transferee shall acknowledge its
rights and obligations hereunder by a signed written statement of such
transferee's acceptance of such rights and obligations.
(f) 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.
(g) Governing Law; Submission to Jurisdiction.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPT FOR THEMSELVES AND IN
RESPECT OF THEIR PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS.
(h) Severability. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. All
references made in this
22
22
Agreement to "Section" and "paragraph" refer to such Section or paragraph of
this Agreement, unless expressly stated otherwise.
(j) Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof or thereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(k) Entire Agreement. This Agreement, together with the Purchase
Agreement, the Warrant Agreement, and the Indenture, is intended by the parties
as a final expression of their agreement, and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. This Agreement, the
Purchase Agreement, the Warrant Agreement, and the Indenture supersede all prior
agreements and understandings between the parties with respect to such subject
matter.
23
23
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
AMERICAN RESTAURANT GROUP, INC.
By: /s/Xxxxxxx X. XxXxxxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. XxXxxxxxx, Xx.
Title: V.P. & Chief Financial Officer
The foregoing Securityholders' and Registration Rights Agreement is hereby
confirmed and accepted as of the date first above written.
XXXXXXXXX & COMPANY, INC.
By: /s/Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
24
