EXHIBIT 99.4
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made as of
____________, 2001, by and among Gart Sports Company, a Delaware corporation
(the "Company"), and those Persons set forth on the signature pages hereto (the
"Initial Stockholders").
RECITALS
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A. This Agreement is made in connection with the Agreement and Plan of
Merger, dated as of February 21, 2001, by and among the Company, GSC Acquisition
Corp., a Delaware corporation, and Xxxxxx'x Sporting Goods, Inc., a Delaware
corporation (as such agreement may be amended from time to time, the "Merger
Agreement"), pursuant to which the Initial Stockholders will receive shares of
the Company's common stock, par value $.01 per share (the "Common Stock").
B. The Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "Securities Act"), and
applicable state securities laws.
AGREEMENTS
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NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. As used in this Agreement, the following terms shall have
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the following meanings:
(a) "Initial Amount" is the number of Registrable Securities
originally issued pursuant to the Merger Agreement (as adjusted pursuant to
Section 1.1(d)).
(b) "Merger Shares" means the shares of Common Stock issued to the
Initial Stockholders pursuant to the Merger (as defined in the Merger
Agreement).
(c) "Person" means any individual, firm, corporation, partnership,
limited liability company or other entity, and shall include any successor (by
merger or otherwise) to such entity.
(d) "Registrable Securities" means (i) the Merger Shares and (ii)
securities issued or issuable with respect to Merger Shares or other Registrable
Securities by virtue of this clause (ii), in each case by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, reorganization, reclassification, merger, consolidation,
compulsory share exchange or any other transaction or series of related
transactions in which shares of Common Stock or Registrable Securities are
changed into, converted into or exchanged for other securities. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a registration statement registering such securities under
the Securities Act has been declared effective and
such securities have been sold or otherwise transferred by the holder thereof
pursuant to such effective registration statement, (ii) such securities are sold
in compliance with paragraph (d) of Rule 145 under the Securities Act or (iii)
such securities are sold to the public in accordance with Rule 144.
(e) "Registration Period" means the period ending on the earliest of
(i) the date on which all of the Registrable Securities have been sold
(excluding transfers for estate, securities or tax planning or charitable gift
giving purposes), (ii) the date on which all of the Registrable Securities (in
the reasonable opinion of counsel to the Company) may be immediately sold to the
public without registration and without restriction as to the number of
Registrable Securities to be sold (and without aggregation of any sale with
sales of any other Person whose sales are subject to volume limitations),
whether pursuant to Rule 144, Rule 145(d) or otherwise, and (iii) five (5) years
from the date hereof as may be extended pursuant to Section 2.1.
(f) "Registration Statement" means a registration statement of the
Company under the Securities Act.
(g) "Requisite Amount" means 20% of the then outstanding Registrable
Securities; provided, however, that such Requisite Amount will in no event be an
amount that is less than 10% of the Initial Amount.
(h) "Rule 144" has the meaning set forth in the preamble of Article
VIII.
(i) "Stockholders" means the Initial Stockholders and any transferees
or assignees thereof who agree to become bound by the provisions of this
Agreement in accordance with Article IX hereof. Any reorganization of the
internal structure or composition of a Stockholder will not affect such
Stockholder's designation as a Stockholder hereunder.
1.2. Capitalized Terms. Capitalized terms used herein and not otherwise
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defined herein shall have the respective meanings set forth in the Merger
Agreement.
ARTICLE II
REGISTRATION
2.1. Demand Registrations. During the Registration Period, holders of the
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Requisite Amount of Registrable Securities in the aggregate shall be entitled to
make a written request of the Company (each such request being a "Demand") for
registration under the Securities Act of all or part of the Registrable
Securities (a "Demand Registration") in accordance with this Section 2.1. Such
Demand shall specify: (i) the aggregate number and kind of Registrable
Securities requested to be registered; and (ii) the intended method of
distribution in connection with such Demand Registration to the extent then
known. The holders of Registrable Securities shall be entitled to three (3)
Demand Registrations. Any Demand Registration hereunder shall be on any
appropriate form under the Securities Act permitting registration of such
Registrable Shares for resale by the Stockholders making such Demand
Registration in the manner or manners designated by them (including, without
limitation, pursuant to a shelf registration (a "Shelf Registration") under
Rule 415 under the Securities Act); provided, however, only two Demand
Registrations requested by the Stockholders in accordance with this Section 2.1
shall be for
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an underwritten offering. If the holders of a majority in interest of the
Registrable Securities sought to be registered in a Demand Registration request
that such Demand Registration be an underwritten offering in accordance with
this Section 2.1, then such holders shall select a nationally recognized
underwriter or underwriters to manage and administer such offering, such
underwriter or underwriters, as the case may be, to be subject to the approval
of the Company's board of directors, which such approval shall not be
unreasonably withheld. No Demand shall be effective or impose any obligation
upon the Company unless such Demand shall request the registration of not less
than the Requisite Amount of Registrable Securities. Within ten (10) days after
receipt of a Demand, the Company shall give written notice of such Demand to all
other holders of Registrable Securities and shall include in such registration
all Registrable Securities of each holder thereof with respect to which the
Company has received a written request for inclusion therein within twenty (20)
days after the receipt by such holder of the Company's notice required by this
paragraph. A registration shall not be treated as a Demand Registration unless
the holders of Registrable Securities are able to include, in accordance with
the following provisions, at least 75% of the Registrable Securities requested
to be included in such registration and until (i) the applicable Registration
Statement under the Securities Act has been filed with the United States
Securities and Exchange Commission ("SEC") with respect to such Demand
Registration and has been declared effective and (ii) such Registration
Statement shall have been maintained continuously effective for a period of at
least 120 days (or, in the case of a Shelf Registration, one (1) year) or such
shorter period when all Registrable Securities included therein have been sold
thereunder in accordance with the manner of distribution set forth in such
Registration Statement. Neither the Company nor any other Person shall include
any other securities in a Demand Registration, except with the written consent
of the holders of the majority of the Registrable Securities sought to be
registered pursuant to such Demand Registration. If, in connection with a Demand
Registration, any managing underwriter (or, if such Demand Registration is not
an underwritten offering, a nationally recognized independent underwriter
selected by the holders of a majority of the Registrable Securities sought to be
registered in such Demand Registration (which such underwriter shall be
reasonably acceptable to the Company and whose fees and expenses shall be borne
solely by the Company in the case of the first underwritten Demand Registration
and borne on a pro rata basis by all holders of securities permitted by such
underwriter to be included in any second underwritten Demand Registration, in
proportion to the number of securities included in such Demand Registration))
advises the Company and the holders of the Registrable Securities sought to be
included in such Demand Registration that, in its judgment, marketing or other
factors dictate that limiting the securities to be included in the Registration
Statement is necessary to facilitate public distribution of the Registrable
Securities ultimately to be included therein, then the Company shall include in
such Registration Statement only such limited portion of the Registrable
Securities and other securities sought to be registered therein as the
underwriter shall permit in accordance with this paragraph. Any exclusion of
Registrable Securities shall be made pro rata among the Stockholders seeking to
include Registrable Securities, in proportion to the number of Registrable
Securities sought to be included by such Stockholders; provided, however, that
the Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities other than the Registrable Securities.
The Company may postpone for up to sixty (60) days (but no more than ninety (90)
days in any 365 day period) the filing or the effectiveness (which may include
the withdrawal of an effective registration statement) of a Registration
Statement pursuant to this Section 2.1 if the Company's board of directors
reasonably determines in its good faith judgment that, because of the existence
of
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any proposal or plan by the Company or any of its subsidiaries to engage in any
acquisition or financing activity (other than in the ordinary course of
business) or the unavailability for reasons beyond the Company's control of any
required financial statements, or any other event or condition of similar
significance to the Company (other than any such event or condition consisting
of one or more requests by one or more of the Company's stockholders (other than
any Stockholder) to exercise "demand" registration rights), it would be
materially disadvantageous to the Company for such a Registration Statement to
be maintained effective, or to be filed and become effective; provided, however,
that, in such event, the holders of Registrable Securities making such Demand
will be entitled to withdraw such Demand, and, if such Demand is withdrawn, such
registration will not count as one of the Demand Registrations hereunder; and,
provided, further, that the Registration Period will be extended for a period of
time equal to any such postponements.
2.2. Piggy-Back Registrations. During the Registration Period, if the
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Company shall file with the SEC a Registration Statement (a "Piggyback
Registration Statement") relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities
(except on Form S-4 or Form S-8 or any successor form), then the Company shall
send to each Stockholder written notice of such determination and, if within
fifteen (15) days after the date of such notice, such Stockholder shall so
request in writing, the Company shall include in such Piggyback Registration
Statement all or any part of the Registrable Securities such Stockholder
requests to be registered (provided, that the Company shall not be obligated to
include Registrable Securities if (i) such Registrable Securities are covered by
a Registration Statement filed pursuant to Section 2.1 that provides for an
underwritten offering and provides for sales during the effective period of the
Piggyback Registration Statement, or (ii) such Piggyback Registration Statement
is filed by the Company as the result of the exercise of "demand" registration
rights by holders of the Company's securities pursuant to Section 2.4 of the
Registration Rights Agreement, dated as of January 9, 1998, by and among the
Company and the signatories thereto (the form of which was filed with the SEC as
Exhibit 10.1 to the Company's Form S-4 filed with the SEC on December 16, 1997),
and the holders party to such Registration Rights Agreement do not consent, in
accordance with the terms thereof, to the inclusion of Registrable Securities in
such Piggyback Registration Statement), except that if, in connection with any
such offering for the account of the Company or for the account of others the
managing underwriter(s) thereof shall impose a limitation on the number of
shares of Common Stock that may be included in the Piggyback Registration
Statement because, in such underwriter(s)' judgment, marketing or other factors
dictate that such limitation is necessary to facilitate public distribution,
then the Company shall be obligated to include in such Piggyback Registration
Statement only such limited portion of the Registrable Securities with respect
to which such Stockholder has requested inclusion hereunder as the underwriter
shall permit. Any exclusion of Registrable Securities shall be made pro rata
among the Stockholders seeking to include Registrable Securities, in proportion
to the number of Registrable Securities sought to be included by such
Stockholders; provided, however, that the Company shall not exclude any
Registrable Securities unless the Company has first excluded all outstanding
securities, the holders of which did not initiate the filing of such Piggyback
Registration Statement pursuant to so-called "demand" registration rights or are
not entitled to pro rata inclusion with the Registrable Securities; and,
provided, further, that, after giving effect to the immediately preceding
proviso, any exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such securities in the
Piggyback Registration Statement on the basis of the number of securities such
holders have
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requested to include in such Piggyback Registration Statement. No right to
registration of Registrable Securities under this Section 2.2 shall be construed
to limit any registration required under Section 2.1. If an offering in
connection with which a Stockholder is entitled to registration under this
Section 2.2 is an underwritten offering, then each Stockholder whose Registrable
Securities are included in such Piggyback Registration Statement shall, unless
otherwise agreed to by the Company, offer and sell such Registrable Securities
in an underwritten offering using the same underwriter or underwriters and,
subject to the provisions of this Agreement, on the same terms and conditions as
other shares of Common Stock included in such underwritten offering.
2.3. Holdbacks.
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(a) Subject to the last sentence of this Section 2.3(a), each holder
of Registrable Securities agrees not to file or cause to be effected any other
registration of, or effect any public sale or distribution of, equity securities
of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the ten (10) day period prior to, and
during the seventy-five (75) day period following, the effective date of any
underwritten public offering of Common Stock for the account of the Company or
for the account of others, in each case that is not in violation of Section
2.3(b) (except as part of such underwritten registration, if permitted by
Section 2.1 or 2.2 or otherwise permitted hereunder) unless the underwriters
managing the registered public offering otherwise agree and such sale or
distribution otherwise complies with Regulation M of the Exchange Act. This
Section 2.3(a) will not prohibit sales of Registrable Securities by the
Stockholders pursuant to Rule 144 or Rule 145 or under a Shelf Registration in
accordance with Section 2.1.
(b) The Company agrees not to file or cause to be effected any
registration of, or effect any public sale or distribution of, its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, whether for its own account or for the account of others,
during the ten (10) day period prior to, and during the seventy-five (75) day
period following, the effective date of any underwritten Registration Statement
filed pursuant to a Demand hereunder (except as part of such underwritten
Registration Statement, or if otherwise permitted hereunder, or pursuant to
registration on Form S-4, Form S-8 or any successor form), unless the
underwriters managing the registered public offering otherwise agree.
(c) Notwithstanding the foregoing, neither the Stockholders nor the
Company will be subject to the foregoing holdbacks for any period or periods in
aggregate that are in excess of 150 days during any 365 day period.
ARTICLE III
OBLIGATIONS OF THE COMPANY
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
3.1. A Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein and all documents incorporated by
reference therein) shall not contain any 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.
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3.2. The Company shall prepare and file with the SEC promptly any
Registration Statement that is required to be filed by the Company pursuant to
this Agreement and such amendments (including post-effective amendments) and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statement as may be necessary to keep such Registration
Statement effective at all times required for such Registration Statement under
this Agreement, and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities of
the Company covered by such Registration Statement until the termination of said
period.
3.3. The Company shall furnish to each Stockholder whose Registrable
Securities are included in the Registration Statement and its legal counsel (a)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and each letter written by or on behalf of the Company to
the SEC or the staff of the SEC, and each item of correspondence from the SEC or
the staff of the SEC, in each case relating to such Registration Statement
(other than any portion, if any, thereof that contains information for which the
Company has sought confidential treatment), and (b) such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Stockholder may reasonably
request in order to facilitate the disposition of the Registrable Securities
covered by the Registration Statement that are owned (or to be owned) by such
Stockholder. All correspondence to or from the SEC or its staff shall, subject
to applicable law and legal process, be kept confidential by the Stockholders.
3.4. The Company shall use reasonable efforts to (a) register and qualify
the Registrable Securities covered by the Registration Statement under
securities laws of such jurisdictions in the United States as each Stockholder
who holds (or has the right to hold) Registrable Securities being offered
reasonably requests, (b) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (c) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (d) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (i) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3.4, (ii) subject itself to general taxation in any such jurisdiction,
(iii) file a general consent to service of process in any such jurisdiction,
(iv) provide any undertakings that cause the Company material expense or burden,
or (v) make any change in its charter or by-laws, which in each case the board
of directors of the Company determines to be contrary to the best interests of
the Company and its stockholders.
3.5. In the event the Stockholders who hold a majority in interest of the
Registrable Securities being offered in an offering pursuant to a Registration
Statement or any amendment or supplement thereto select underwriters for the
offering in accordance with Section 2.1, the Company shall enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, including, without limitation, customary indemnification and contribution
obligations, with the underwriters of such offering.
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3.6. As soon as practicable after becoming aware of such event, the Company
shall notify each Stockholder of the happening of any event, of which the
Company has knowledge, as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall use its
best efforts as soon as practicable to prepare a supplement or amendment to
(and, in the event of an amendment, obtain the effectiveness thereof) the
Registration Statement to correct such untrue statement or omission, and deliver
such number of copies of such supplement or amendment to each Stockholder as
such Stockholder may reasonably request.
3.7. The Company shall use its best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement,
and, if such an order is issued, to obtain the withdrawal of such order at the
earliest practicable time and to notify (by telephone and also by facsimile and
reputable overnight carrier) each Stockholder who holds Registrable Securities
being sold (or, in the event of an underwritten offering, the managing
underwriters) of the issuance of such order and the resolution thereof.
3.8. The Company shall permit a single firm of counsel designated by the
Stockholders to review the Registration Statement and all amendments and
supplements thereto for a reasonable period of time prior to their filing with
the SEC, and shall not file any document in a form to which such counsel
reasonably and timely objects.
3.9. The Company shall make generally available to its security holders as
soon as practical, but not later than ninety (90) days if such earnings
statement is on Form 10-K or forty-five (45) days if such earnings statement is
on Form 10-Q after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 under the
Securities Act) covering a twelve (12) month period beginning not later than the
first day of the Company's fiscal quarter next following the effective date (as
defined in said Rule 158) of the Registration Statement.
3.10. At the request of any Stockholder, the Company shall furnish, on the
date of effectiveness of the Registration Statement and thereafter from time to
time on such dates as a Stockholder may reasonably request (a) an opinion, dated
as of such applicable date, from counsel representing the Company addressed to
the Stockholders and in form, scope and substance as is customarily given in an
underwritten public offering and (b) a letter, dated as of such applicable date,
from the Company's independent certified public accountants addressed to the
Stockholders and in form, scope and substance as customarily given to
underwriters in an underwritten public offering; provided, however, that a
Stockholder shall only be entitled to the foregoing no more than two times in
any six (6) month period (unless a greater number of times or a shorter period
would otherwise be reasonable under their applicable circumstances).
3.11. The Company shall make available for inspection by (i) one Stockholder
who has been designated by a majority in interest of the Stockholders whose
Registrable Securities are to be included in the applicable Registration
Statement as their representative, (ii) any underwriter participating in any
disposition pursuant to the Registration Statement, (iii) one firm of attorneys
and one firm of accountants retained by the Stockholders, and (iv) one firm of
attorneys retained by all such underwriters (collectively, the "Inspectors") all
pertinent financial and other records, and pertinent corporate documents and
properties of
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the Company (collectively, the "Records"), as shall be reasonably requested by
any of the foregoing and cause the Company's officers, directors and employees
to supply all information that any Inspector may reasonably request; provided,
however, that each Inspector shall hold in confidence and shall not make any
disclosure (except to a Stockholder) of any Record or other information that the
Company determines in good faith to be confidential, and of which determination
the Inspectors are so notified in writing, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement (in which event the Company shall promptly make
appropriate public disclosure thereof unless such misstatement or omission
relates to events set forth in the last sentence of Section 2.1 that would allow
the Company to postpone the filing or effectiveness of a Registration Statement,
in which event the Inspectors will be so notified and public disclosure of such
misstatement or omission will occur as soon as practicable but no later than 60
days from the date the Inspectors are so notified), (b) the release of such
Records is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, or is otherwise required by
applicable law or legal process or (c) the information in such Records has been
made generally available to the public other than by disclosure in violation of
this Agreement or any other agreement (to the knowledge of the relevant Person).
The Company shall not be required to disclose any confidential information in
such Records to any Inspector until and unless such Inspector shall have entered
into confidentiality agreements (in form and reasonable substance satisfactory
to the Company) with the Company with respect thereto, substantially in the form
of this Section 3.11. Each Stockholder agrees that it shall, upon learning that
disclosure of such Records are sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Company
and allow the Company, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing in this Section 3.11 shall be deemed to limit a
Stockholder's ability to sell Registrable Securities in a manner that is
consistent with applicable laws and regulations.
3.12. The Company shall hold in confidence and not make any disclosure of
information concerning a Stockholder provided to the Company unless (a)
disclosure of such information is necessary to comply with federal or state
securities laws, (b) the disclosure of such information is necessary to avoid or
correct a misstatement or omission in any Registration Statement, (c) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction or is otherwise
required by applicable law or legal process, (d) such information has been made
generally available to the public other than by disclosure in violation of this
Agreement or any other agreement (to the knowledge of the Company), or (e) such
Stockholder consents to the form and content of any such disclosure. The
Company agrees that it shall, upon learning that disclosure of such information
concerning a Stockholder is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to such
Stockholder prior to making such disclosure, and shall allow the Stockholder, at
its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
3.13. The Company shall provide a transfer agent and registrar, which may be
a single entity, for the Registrable Securities not later than the effective
date of the Registration Statement.
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3.14. The Company shall cooperate with the Stockholders who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Stockholders may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Stockholders may request.
3.15. At the request of any Stockholder, the Company shall promptly prepare
and file with the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary in order to change the
description of the plan of distribution set forth in such Registration
Statement.
3.16. The Company shall comply with all applicable laws related to the
applicable Registration Statement and offering and sale of securities and all
applicable rules and regulations of governmental authorities in connection
therewith (including, without limitation, the Securities Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "Exchange Act").
3.17. The Company shall take all such other actions as any Stockholder or
the underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities.
3.18. If the Company receives written notice from any holder of the
Company's securities that such holder is exercising, or contemplating the
exercise of, "demand" registration rights pursuant to a registration rights
agreement entered into by the Company and such holder, then the Company shall
send to the Stockholders written notice thereof.
ARTICLE IV
OBLIGATIONS OF THE STOCKHOLDERS
In connection with the registration of the Registrable Securities, a
Stockholder shall have the following obligations:
4.1. Such Stockholder shall furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the intended method
of disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities, and shall
execute such documents in connection with such registration as the Company may
reasonably request. At least 10 business days prior to the first anticipated
filing date of the Registration Statement, the Company shall notify each
Stockholder of the information that the Company requires from each such
Stockholder.
4.2. Each Stockholder, by such Stockholder's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Stockholder has notified the Company in writing
of such Stockholder's election to
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exclude all of such Stockholder's Registrable Securities from the applicable
Registration Statement.
4.3. Each Stockholder whose Registrable Securities are included in a
Registration Statement understands that the Securities Act may require delivery
of a prospectus relating thereto in connection with any sale thereof pursuant to
such Registration Statement, and each such Stockholder shall comply with the
applicable prospectus delivery requirements of the Securities Act in connection
with any such sale.
4.4. Each Stockholder agrees to notify the Company promptly, but in any
event within five (5) business days after the date on which all Registrable
Securities covered by a Registration Statement that are owned by such
Stockholder have been sold by such Stockholder, if such date is prior to the
expiration of the Registration Period, so that the Company may comply with its
obligation to terminate such Registration Statement in accordance with Item
512(a)(3) of Regulation S-K promulgated under the Securities Act.
4.5. Each Stockholder agrees that, upon receipt of written notice from the
Company of the happening of any event of the kind described in Section 3.6, such
Stockholder will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Stockholder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3.6, and, if so directed by the Company, such
Stockholder shall deliver to the Company (at the expense of the Company) or
destroy (and deliver to the Company a certificate of destruction) all copies in
such Stockholder's possession (other than a limited number of permanent file
copies), of the prospectus covering such Registrable Securities current at the
time of receipt of such notice.
4.6. No Stockholder may participate in any underwritten distribution
pursuant to a Registration Statement under Section 2.1 or 2.2 unless such
Stockholder (a) agrees to sell such Stockholder's Registrable Securities on the
basis provided in any underwriting arrangements in usual and customary form
entered into by the Company, (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements, and (c)
agrees to pay its pro rata share of all underwriting discounts and commissions
and any expenses in excess of those payable by the Company pursuant to
Article V.
ARTICLE V
EXPENSES OF REGISTRATION
All expenses, other than underwriting discounts and commissions, incurred
by the Company in connection with registrations, filings or qualifications
pursuant to Articles II and III shall be borne by the Company, including,
without limitation, all registration, listing and qualification fees, printers
and accounting fees, the fees and disbursements of counsel for the Company, and
the reasonable fees and expenses of one counsel to the Stockholders for the
review of filings hereunder.
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ARTICLE VI
INDEMNIFICATION
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
6.1. The Company agrees to indemnify, to the fullest extent permitted by
law, each holder of Registrable Securities, its officers, directors, employees,
trustees, beneficiaries, partners, attorneys and agents and each Person who
controls (within the meaning of the Securities Act) such holder or such other
indemnified Person against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact contained in
any Registration Statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or a fact necessary to make the
statements therein not misleading, except insofar as the same are caused by and
contained in any information furnished in writing to the Company by such holder
expressly for use therein. In connection with an underwritten offering and
without limiting any of the Company's other obligations under this Agreement,
the Company shall indemnify such underwriters, their officers, directors,
employees and agents and each Person who controls (within the meaning of the
Securities Act) such underwriters or such other indemnified Person to the same
extent as provided above with respect to the indemnification of the holders of
Registrable Securities. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6.1, as it
pertains to any preliminary prospectus, shall not inure to the benefit of any
indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, if such corrected prospectus was
timely made available by the Company pursuant to Section 3.3, and the
indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a violation and such indemnified
Person, notwithstanding such advice, used such incorrect prospectus.
6.2. In connection with any Registration Statement in which a holder of
Registrable Securities is participating, each such holder will furnish to the
Company in writing information regarding such holder's ownership of Registrable
Securities and its intended method of distribution thereof and, to the extent
permitted by law, shall indemnify the Company, its directors, officers,
employees and agents and each Person who controls (within the meaning of the
Securities Act) the Company or such other indemnified Person against any losses,
claims, damages, liabilities and expenses (including with respect to any claim
for indemnification hereunder asserted by any other indemnified Person)
resulting from any untrue or alleged untrue statement of material fact contained
in the Registration Statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is caused by and contained in such information so furnished in writing
by such holder; provided, that the obligation to indemnify will be several, not
joint and several, among holders of Registrable Securities, and the liability of
each such holder of Registrable Securities will be in proportion to and limited
to the net amount received by such holder from the sale of Registrable
Securities pursuant to such Registration Statement.
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6.3. Any Person entitled to indemnification hereunder shall give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification; provided, however, the failure to give such notice shall
not release the indemnifying party from its obligation under this Article VI,
except to the extent that the indemnifying party has been materially prejudiced
by such failure to provide such notice.
6.4. In any case in which any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not (so long as it shall continue to have the right to
defend, contest, litigate and settle the matter in question in accordance with
this paragraph) be liable to such indemnified party hereunder for any legal or
other expense subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation, supervision
and monitoring (unless such indemnified party reasonably objects to such
assumption on the grounds that there may be defenses available to it that are
different from, or in addition to, the defenses available to such indemnifying
party, in which event the indemnified party shall be reimbursed by the
indemnifying party for the expenses incurred in connection with retaining
separate legal counsel). An indemnifying party shall not be liable for any
settlement of an action or claim effected without its consent. The indemnifying
party shall lose its right to defend, contest, litigate and settle a matter if
it shall fail to diligently contest such matter (except to the extent settled in
accordance with the next following sentence). No matter shall be settled by an
indemnifying party without the consent of the indemnified party (which consent
shall not be unreasonably withheld).
6.5. The indemnification provided for under this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified Person and will survive the transfer of the Registrable
Securities.
ARTICLE VII
CONTRIBUTION
If recovery is not available under Article VI for any reason or reasons
other than as specified therein, any Person who would otherwise be entitled to
indemnification by the terms thereof shall nevertheless be entitled to
contribution from the person who would otherwise have been the indemnifying
party with respect to any losses, claims, damages, liabilities or expenses with
respect to which such Person would be entitled to such indemnification but for
such reason or reasons. In determining the amount of contribution to which the
respective Persons are entitled, there shall be considered the Persons' relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted, the opportunity to correct and prevent any statement or
omission, and other equitable considerations appropriate under the
circumstances. It is hereby agreed that it would not necessarily be equitable
if the amount of such contribution were determined by pro rata or per capita
allocation.
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ARTICLE VIII
REPORTS UNDER THE EXCHANGE ACT; NASDAQ LISTING
With a view to making available to the Stockholders the benefits of Rule
144 under the Securities Act or any other similar rule or regulation of the SEC
that may at any time permit the Stockholders to sell securities of the Company
to the public without registration ("Rule 144") and to otherwise establish the
existence of a public market with respect to the Company's securities to provide
liquidity for the Stockholders with respect to the Registrable Securities, the
Company agrees, during the Registration Period and for a period of one year
thereafter, for so long as the Company's equity securities are registered under
Section 12(b) or 12(g) of the Exchange Act, that:
8.1. The Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act would permit such termination.
8.2. The Company shall cause all such Registrable Securities to be listed
on each securities exchange and included in each established over-the-counter
market on which or through which securities of the same class of the Company are
then listed or traded and, if not so listed or traded, to be listed on The
Nasdaq Stock Market ("Nasdaq"), and if listed on Nasdaq, secure designation of
all such Registrable Securities covered by such Registration Statement as a
Nasdaq "national market system security" within the meaning of Rule 11Aa2-1
under the Exchange Act, or, failing that, to secure Nasdaq authorization for
such Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such and
maintain such registration and listing with respect to such Registrable
Securities.
8.3. The Company shall file with the SEC in a timely manner and make and
keep available all reports and other documents required of the Company under the
Securities Act and the Exchange Act so long as the filing and availability of
such reports and other documents is required for the applicable provisions of
Rule 144.
8.4. The Company shall furnish to each Stockholder so long as such
Stockholder holds Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Stockholders to sell such securities pursuant
to Rule 144 without registration.
ARTICLE IX
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of the Stockholders hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall be
automatically assigned by each Stockholder to any transferee of all or any
portion of the Registrable Securities (other than pursuant to a Registration
Statement, Rule 144 or Rule 145 (so long as the shares subject to such transfer
are thereafter freely tradeable under the Securities Act)) if: (a) the
Stockholder agrees in writing with the transferee or assignee to assign such
rights, and a
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copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (b) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee, and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (c) following
such transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act or applicable
state securities laws, and (d) at or before the time the Company receives the
written notice contemplated by clause (b) of this sentence, the transferee or
assignee agrees in writing for the benefit of the Company to be bound by all of
the provisions contained herein.
ARTICLE X
AMENDMENT OF REGISTRATION RIGHTS
Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with written consent of the Company, the Initial
Stockholders (but not an Initial Stockholder who no longer owns any Registrable
Securities and who is not affected by such amendment or waiver) and Stockholders
who then hold a majority interest of the Registrable Securities. Any amendment
or waiver effected in accordance with this Article X shall be binding upon each
Stockholder and the Company. Notwithstanding the foregoing, no amendment or
waiver shall retroactively affect any Stockholder without such Stockholder's
consent or prospectively adversely affect any Stockholder who no longer owns any
Registrable Securities without such Stockholder's consent and neither Article VI
nor Article VII may be amended or waived in a manner adverse to a Stockholder
without such Stockholder's consent. All consents of a Stockholder shall be in
writing to be effective.
ARTICLE XI
MISCELLANEOUS
11.1. A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.
11.2. All notices, requests, claims demands and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission
against facsimile confirmation or mailed by a nationally recognized overnight
courier prepaid, to the parties at the following addresses or facsimile numbers:
To the Company:
Gart Sports Company
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
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With a copy to:
Irell & Xxxxxxx LLP
1800 Avenue of the Stars, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopier: (000) 000-0000
To a Stockholder, to ___________________, who is hereby designated as the
representative for purposes of coordinating communications with the
Stockholders:
___________________
___________________
___________________
Facsimile: _______
With a copy to:
___________________
___________________
___________________
Facsimile: _______
All such notices, requests, claims, demands and other communications will (a) if
delivered personally to the address as provided in this Section 11.2, be deemed
given upon delivery, (b) if delivered by facsimile transmission to the facsimile
number as provided for in this Section 11.2, be deemed given upon facsimile
confirmation, and (c) if delivered by overnight courier to the address as
provided in this Section 11.2, be deemed given on the earlier of the first
business day following the date sent by such overnight courier or upon receipt
(in each case, regardless of whether such notice, request, claim, demand or
other communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section 11.2). Any party hereto from
time to time may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice specifying such change to
the other parties hereto.
11.3. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
11.4. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed in the State of Delaware. The Company irrevocably consents to the
jurisdiction of the federal courts located in the state of Delaware and the
state courts of the State of Delaware located in the County of New Castle in the
State of Delaware in any suit or proceeding based on or arising
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under this Agreement and irrevocably agrees that all claims in respect of such
suit or proceeding may be determined in such courts. The Company irrevocably
waives the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The parties hereto further agree that service of process upon the
parties hereto mailed by first class mail shall be deemed in every respect
effective service of process upon each such party in any such suit or
proceeding. Nothing herein shall affect any party's right to serve process in
any other manner permitted by law. The parties hereto agree that a final non-
appealable judgment in any such suit or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
11.5. This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
11.6. Subject to the requirements of Article IX hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
11.7. Any headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
11.8. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement.
11.9. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
11.10. The Company agrees not to enter into any registration rights or
comparable agreement that provides rights or restrictions which are inconsistent
with this Agreement.
11.11. If any provision of this Agreement shall be invalid or unenforceable,
such invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
GART SPORTS COMPANY
a Delaware corporation
By:_________________________
Name:
Title:
INITIAL STOCKHOLDERS
____________________________
____________________
____________________________
____________________
____________________________
____________________
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