EQUITY REGISTRATION RIGHTS AGREEMENT
EQUITY REGISTRATION RIGHTS AGREEMENT, dated as of August 2, 1996
(this "Agreement"), by Homeland Holding Corporation, a Delaware corporation (the
"Company"), for the benefit of the beneficial owners as of the Confirmation
Date (as such term and other capitalized terms are defined in Section 1.1) of
Old Common Stock (the "Old Equity Holders").
WHEREAS, the Company and Homeland Stores, Inc., a Delaware
corporation and a wholly owned subsidiary of the Company ("Homeland"), filed
a Joint Plan of Reorganization with the United States Bankruptcy Court,
District of Delaware (the "Bankruptcy Court") on May 13, 1996 (the "Plan");
WHEREAS, the Plan was accepted by, among others, the holders of the
requisite percentage and amount of the Old Common Stock (designated as "Class 7
Interests" under the Plan), and the Bankruptcy Court entered an order
confirming the Plan on July 19, 1996 (the "Confirmation Date");
WHEREAS, the Plan became effective on August 2, 1996 (the
"Effective Date"); and
WHEREAS, pursuant to the Plan, (i) the Old Equity Holders are to
receive an aggregate 250,000 shares of Common Stock (the "Original Shares")
and warrants to purchase an aggregate 263,158 shares of Common Stock (the
"Original Warrants" and, together with the Original Shares, the "Original
Securities") in exchange for their Old Common Stock and (ii) registration
rights are to be granted to the Old Equity Holders with respect to such
Original Securities on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the Company agrees, and each Old Equity Holder
by receipt of its Original Securities pursuant to the Plan is deemed to
agree, as follows:
DEFINITIONS
SECTION 1.1 Definitions. As used herein, the following
terms shall have the meanings indicated:
"Bankruptcy Court" shall have the meaning given in the
recitals to this Agreement.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in the City of New York are
authorized or obligated by law or executive order to close.
Unless specifically stated as a Business Day, all days
referred to herein shall mean calendar days.
"Common Stock" shall mean the common stock, par value $.01
per share, of the Company after the Company's Restated Certificate of
Incorporation is filed with the Secretary of State of the State of
Delaware pursuant to the Plan and any and all securities of any kind
whatsoever of the Company which may be issued after such filing with respect
to, or in exchange for, shares of Common Stock pursuant to a merger,
consolidation, reclassification, stock split, stock dividend, rights
offering, combination, recapitalization of the Company or otherwise.
"Complying Response" shall mean, with respect to any
Registration, each written request (other than an Initial Request)
submitted by a Remaining Class 7 Holder in connection with such
Registration that (i) complies with Section 2.1(c) and (ii) is received
by the Company within 15 Business Days from the date on which the Company
shall have given notice of the Initial Request for such Registration
pursuant to Section 2.1(a).
"Confirmation Date" shall have the meaning given in the
recitals to this Agreement.
"Designated Securities" shall mean, with respect to any
Participating Holder in connection with any Registration, the Registrable
Securities of such Participating Holder requested for inclusion in such
Registration in compliance with Section 2.1(c).
"Effective Date" shall have the meaning given in the
recitals to this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Included Securities" shall mean, with respect to any
Registration, all of the Designated Securities requested for inclusion in
such Registration or, in the case of a Registration in connection with an
Underwritten Offering, any lesser number of securities to which such
Registration may be limited pursuant to Section 2.1(h).
"Initial Request" shall have the meaning given in Section
2.1(a).
"Managing Underwriter" shall have the meaning given in
Section 2.1(g).
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Old Common Stock" shall mean the Company's Common Stock,
par value $.01 per share, which was exchanged for the Original Securities
pursuant to the Plan.
"Old Equity Holders" shall have the meaning given in the
recitals to this Agreement.
"Original Securities" shall have the meaning given in the
recitals to this Agreement.
"Original Shares" shall have the meaning given in the
recitals to this Agreement.
"Original Warrants" shall have the meaning given in the
recitals to this Agreement.
"Participating Holder" shall mean, with respect to any
Registration, each Remaining Class 7 Holder that shall have submitted the
Initial Request or a Complying Response in connection with such Registration.
"Permitted Transferee" shall mean a Transferee that satisfies
the eligibility, notice and other requirements set forth in Section 2.1(b)(ii).
"Person" shall mean any individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, or other entity of whatever nature.
"Plan" shall have the meaning given in the recitals to this
Agreement.
"Qualifying Old Equity Holder" shall mean an Old Equity Holder
that satisfies the notice requirements set forth in Section 2.1(b)(i).
"Registrable Securities" shall mean, at any time, (i) all
Original Securities owned beneficially by either Old Equity Holders or Permitted
Transferees, (ii) all shares of Common Stock issuable upon exercise of the
Original Warrants and (iii) all securities that at the time of issuance were
issued in respect of Registrable Securities to the Remaining Class 7 Holder
of such Registrable Securities by way of a stock dividend or stock split or
in connection with a combination of shares, reclassification, rights offering
recapitalization, merger, consolidation, other reorganization or otherwise,
provided that such securities are owned beneficially by either Qualifying
Old Equity Holders or Permitted Transferees.
"Registration" shall mean any registration of Registrable
Securities by the Company with the SEC under the Securities Act pursuant to
Section 2.1(a).
"Registration Document" means any Registration Statement and
any prospectus included therein (including any preliminary prospectus) and any
amendment or supplement to such Registration Statement or prospectus, in each
case, including all exhibits thereto and documents incorporated by reference
therein.
"Registration Expenses" shall mean all expenses incident to
any Registration, whether or not such Registration shall become effective and
whether or not all or a portion of the Registrable Securities originally
requested to be included in such Registration are ultimately included in such
Registration, including, but not limited to: (i) all SEC and stock exchange
or NASD registration and filing fees and expenses; (ii) all fees and expenses of
compliance with applicable state securities or "blue sky" laws (including,
but not limited to, reasonable fees and disbursements of counsel for the
Managing Underwriter, if any, in connection with "blue sky" qualifications of
the Included Securities); (iii) all word processing, duplicating, printing
expenses, messenger and delivery expenses; (iv) all fees and expenses
incurred in connection with the listing of the Included Securities on each
securities exchange or national market system on which the Common Stock is
then listed; (v) all fees and disbursements of counsel for the Company and
all independent certified public accountants (including the expenses of any
annual audit and "cold comfort" letters required by or incident to
such performance and compliance); (vi) all fees and disbursements of
underwriters customarily paid by issuers or sellers of securities (including
the fees and expenses of any "qualified independent underwriter" required by
the NASD); (vii) the reasonable fees and expenses of one counsel retained by
Participating Holders owning a majority in number of the Included Securities
(which counsel shall be reasonably satis factory to the Company); (viii) the
reasonable fees and expenses of any special experts or other Persons
retained by the Company; and (ix) premiums and other costs of policies of
insurance against liabilities arising out of the public offering of the Included
Securities. The foregoing shall not include any underwriting discounts or
commissions or transfer taxes, if any, attributable to the sale of Included
Securities by Participating Holders.
"Registration Statement" shall mean a registration statement
under the Securities Act.
"Registration Trigger Amount" shall mean either (i) 125,000
Original Shares or (ii) 131,579 Original Warrants.
"Remaining Class 7 Holder" shall mean, at any time, (i) each
Qualifying Old Equity Holder that is at such time the beneficial owner of any
Registrable Securities and (ii) each Permitted Transferee that is
at such time the beneficial owner of any Registrable Securities.
"Required Included Securities" shall mean, at any time that
number of Included Securities by which the aggregate Included Securities at
such time exceed the Requisite Class 7 Percentage plus one Included Security.
"Revocation Notice" shall have the meaning given in Section
2.1(j).
"Rule 144" shall mean Rule 144 of the General Rules and
Regulations promulgated under the Securities Act, or any successor rule to
similar effect.
"Rule 144A" shall mean Rule 144A of the General Rules and
Regulations promulgated under the Securities Act, or any successor rule to
similar effect.
"SEC" shall mean the Securities and Exchange Commission and
any successor commission or agency having similar powers.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Transferee" shall mean any beneficial owner of Registrable
Securities other than an Old Equity Holder.
"Underwritten Offering" shall mean a sale of securities of
the Company to an underwriter or underwriters for reoffering to the public.
"Warrants" shall mean warrants to purchase the Common Stock,
including, without limitation, the Original Warrants.
SECTION 1.2 Construction. Unless the context otherwise
requires, words in the singular include the plural, and in the plural
include the singular and "or" is not exclusive.
SECTION 2.1 Demand Registration.
(a) Demand Registration Rights. Subject to the terms and
conditions of this Agreement (including, without limitation, Sec
tions 2.1(b), (c), (d) and (j)), at any one time after the second
anniversary of the Effective Date, one or more Remaining Class 7
Holders owning Registrable Securities at such time equal to or
exceeding the Registration Trigger Amount may make a written
request, which shall comply with Section 2.1(c) (an "Initial
Request"), for Registration of all of their Registrable
Securities or any portion thereof, provided that, in the case of
a Registration of New Common Stock, the number of shares of New
Common Stock requested to be registered shall not be less than
125,000 shares and, in the case of a Registration of New
Warrants, the number of New Warrants requested to be registered
shall not be less than 131,579 warrants. Within 10 Business Days
after receipt of such Initial Request, the Company shall give
written notice thereof to all other Remaining Class 7 Holders
and, subject to Section 2.1(c), such other Remaining Class 7
Holders may request the inclusion of their Registrable Securities
in such Registration. Thereafter, the Company shall, in
accordance with Section 2.4, file a Registration Statement
covering the Included Securities and use all reasonable efforts
to cause such Registration Statement to become effective.
(b) Limitation on Registration Rights.
(i) Notwithstanding any other provision of this
Agreement, the Company shall have no obligations hereunder to any Old Equity
Holder and no Old Equity Holder shall have any rights hereunder (other than
an Old Equity Holder listed on Schedule I hereto, each of whom will be deemed
to have satisfied the identification requirements set forth in this
subsection 2.1(b)) unless and until such Old Equity Holder shall have
established to the reasonable satisfaction of the Company (A) that such Old
Equity Holder was the beneficial owner as of the Confirmation Date of Old
Common Stock and (B) the number of shares and certificate numbers thereof,
which facts such Old Equity Holder can so establish by (1) delivering to the
Company within 90 days of the Effective Date the written certification as to
such facts of the record holder as of the Confirmation Date of such Old Equity
Holder's Old Common Stock or (2) such other proof as shall be reasonably
satisfactory to the Company.
(ii) Notwithstanding any other provision of this
Agreement, the Company shall have no obligations hereunder to any Transferee
and no Transferee shall have any rights hereunder unless (A) the Original
Securities held by such Transferee were originally owned by a Qualifying Old
Equity Holder and each subsequent Transferee of such Original Securities
(including, without limitation, the Person from whom such Transferee
purchased or acquired such Original Securities) has complied timely with the
requirements set forth in clauses (B) and (C) of this Section 2.1(b)(ii), (B)
within 30 days of such Transferee's acquisition or purchase of such Original
Securities, such Transferee delivers to the Company a written certification
(signed by an authorized representative of such Transferee) certifying (1)
the date of such Transferee's acquisition or purchase of such Original
Securities and the number of Original Securities acquired or purchased by
such Transferee, (2) the identity (including record and beneficial owner) and
mailing address of such Transferee and the Person from whom such Transferee
purchased or acquired such Original Securities, (3) the certificate number(s) of
the Original Securities transferred (if reasonably available), (4) to the
knowledge of such Transferee, that the Person from whom such Transferee
purchased or acquired such Original Securities was, at the time of such
purchase or transfer, a Remaining Class 7 Holder (it being understood that
such Transferee shall be entitled to rely on a certificate or written
representation of such Person in making such certification), and (5) that
such securities transferred constitute Registrable Securities and (C) within
30 days of such Transferee's acquisition or purchase of such Original
Securities, such Transferee executes and delivers to the Company a
supplement, in form and substance reasonably satisfactory to the
Company, pursuant to which such Transferee shall agree to be bound by the
terms of this Agreement, including, without limitation, Section 2.5.
(c) Form of Request. Any Remaining Class 7 Holder's request
for Registration pursuant to this Section 2.1 shall (i) state the
number of Registrable Securities to be included in such
Registration, (ii) contain reasonably detailed information as to
prior sales of Original Securities by or on behalf of such
Remaining Class 7 Holder, (iii) contain an undertaking to
(1) furnish all such information and materials and take all such
action as may be reasonably required in order to permit the
Company to comply with all applicable requirements of the SEC and
to obtain acceleration of the effective date of the Registration
Statement filed in connection with such Registration, (2) update,
to the extent required by applicable law, any information about
such Remaining Class 7 Holder contained in such Registration
Statement during the period such Registration Statement is
effective, (3) indemnify and hold harmless each of the parties
specified in Section 2.5(b) to the extent provided in such Section 2.5(b)
and to comply with the other provisions of Section 2.5 and (4) comply with
all other provisions of this Agreement, (iv) in the case of an Initial
Request, indicate whether an Underwritten Offering is requested in connection
with such Registration and (v) contain a certification of such
Remaining Class 7 Holder that, as of the date of delivery of such
Remaining Class 7 Holder's request pursuant to this paragraph (c), (1) such
Remaining Class 7 Holder is a "Remaining Class 7 Holder" as defined in
Section 1.1 and (2) the securities identified in such request as Registrable
Securities are "Registrable Securities" as defined in Section 1.1.
(d) Limitations on Filings. Notwithstanding Section 2.1(a),
the Company shall not be obligated to file a Registration Statement pursuant
to this Section 2.1 (i) other than pursuant to the first Initial Request
received by the Company and any Complying Responses in connection therewith
(except as otherwise provided in Section 2.1(i)), (ii) with
respect to any Designated Securities excluded from a Registration
pursuant to Section 2.1(h), (iii) with respect to any Designated
Securities with respect to which the Company shall not have
received the undertaking referred to in Section 2.5(b), (iv) with
respect to any Designated Securities that shall have ceased to be
Registrable Securities, (v) after such time as Designated
Securities that continue to be Registrable Securities no longer
represent the Requisite Class 7 Percentage or (vi) during the 180
day period following the date on which an earlier filed
Registration Statement (other than a Registration Statement on
Form S-8) relating to shares of Common Stock or Warrants shall
have become effective.
(e) Registration Form. In the case of a Registration in
connection with an Underwritten Offering that is a firm
commitment underwriting, if the Company proposes to file a
Registration Statement on Form S-3 (or any similar short-form
Registration Statement), the Company will comply with any request
by the Managing Underwriter to use another permitted form of
Registration Statement if such Managing Underwriter advises the
Company in writing that, in its opinion, the use of another form
of Registration Statement is of material importance to the
success of the offering, in which case such Registration shall be
effected on the form recommended by the Managing Underwriter.
(f) Expenses. All Registration Expenses shall be paid by
the Company.
(g) Underwritten Offering; Managing Underwriter. If the
Initial Request shall so request, the offering of Registrable
Securities pursuant to any Registration shall be an Underwritten
Offering, in which event the Company shall have the right to
select a nationally recognized investment banker (or investment
bankers), reasonably acceptable to Participating Holders owning a
majority in number of the Included Securities, that shall manage
the offering (collectively, the "Managing Underwriter"). If
requested by the Managing Underwriter for any Underwritten
Offering, the Company shall enter into an underwriting agreement
with the underwriters for such offering, such agreement to
contain such representations and warranties by the Company and
such other terms and provisions as are customarily contained in
agreements of this type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.5. The
Participating Holders shall be parties to such underwriting agreement and the
representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made to
and for the benefit of such Participating Holders and the conditions
precedent to the obligations of such Participating Holders under
such underwriting agreement shall be satisfactory to such
Participating Holders. Such Participating Holders shall not be
required to make any representations or warranties to the Company
or its underwriters other than representations or warranties
regarding such Participating Holder and such Participating
Holder's intended method of distribution.
(h) Priority. In the case of a Registration in connection
with an Underwritten Offering, if the Managing Underwriter shall
advise the Company in writing that, in its opinion, due to market
conditions, the number of shares of Common Stock or Warrants
included in such Underwritten Offering should be limited to fewer
than the aggregate number of Designated Securities, then (i) the
Registration shall be limited to such aggregate number of
securities as the Managing Underwriter shall advise and (ii) the
Company will promptly give written notice of such fact to each
Participating Holder, indicating the number of Designated
Securities of such Participating Holder that will be included in
the Registration as so limited; provided that exclusions of
Designated Securities shall be on a pro rata basis among all
Participating Holders on the basis of the number of Designated
Securities of each such Participating Holder.
(i) Delay of Filing. The Company shall be entitled to
postpone for a reasonable period of time, not to exceed 180 days
from the date of receipt of an Initial Request, the filing of the
Registration Statement otherwise required to be filed by it
pursuant to this Section 2.1 if the Board of Directors of the
Company (i) in good faith determines at such time that such Regis
tration and related offering would materially adversely affect or
interfere with any proposed or pending financing, acquisition,
corporate reorganization or other transaction or the conduct or
outcome of any litigation, in each case, that involves the
Company or any subsidiary thereof and is material to the Company
and its subsidiaries, taken as a whole, and (ii) as promptly as
practicable gives all Participating Holders written notice of
such postponement, setting forth the duration of and reasons for
such postponement; provided, however, that the Company shall not
effect such a postponement more than once in any 360 day period.
(j) Revocation of Request. In any Registration,
Participating Holders owning the Required Included Securities
may, on behalf of all Participating Holders, revoke the request
for such Registration, without incurring any liability to the
Company or to any other Participating Holder, by providing
written notice (a "Revocation Notice") to the Company at any time
prior to the initial filing with the SEC of a Registration
Statement in such Registration. A request for Registration that
is revoked pursuant to this Section 2.1(j) shall not constitute a
request pursuant to Section 2.1(a) and the Remaining Class 7
Holders shall continue to have the right to make one request for
Registration pursuant to Section 2.1(a) if such revocation is
pursuant to (i) a Revocation Notice that is received by the
Company within 10 Business Days of the date on which the Company
shall have given written notice of postponement of the filing of
the Registration Statement in such Registration pursuant to Section 2.1(i)
or (ii) the first Revocation Notice to have been received by the Company in
circumstances other than as described in the preceding clause (i).
(k) Effectiveness. A registration requested pursuant to
Section 2.1(a) shall not be deemed to have been effected:
(i) unless a Registration Statement with respect
thereto has been declared effective by the SEC and remains effective in
compliance with the provisions of the Securities Act and the laws of any
state or other jurisdiction applicable to the disposition of all Included
Securities covered by such Registration Statement until such time as all of
such Included Securities have been disposed of in accordance with such
Registration Statement;
(ii) if, after it has become effective, such
Registration is interfered with by any stop order, injunction or other order
or requirement of the SEC or other governmental or regulatory agency or
court for any reason other than a violation of applicable law solely by the
holders of Included Securities and has not thereafter become effective; or
(iii) if, in the case of an Underwritten Offering, the
conditions to closing specified in the underwriting agreement to which the
Registrant(s) are party are not satisfied other than by reason of any breach
or failure by the holders of the Included Securities, or are not otherwise
waived.
SECTION 2.2 Limitations on Registration Rights.
(a) No Incidental Registrations. The Company shall not be
entitled to include in a Registration any shares of Common Stock
or Warrants other than the Designated Securities, nor shall any
Participating Holder have the right to include any of its Registrable
Securities in any Registration Statement other than pursuant to a
Registration hereunder.
(b) No Other Registration Rights. The Company will not
hereafter enter into any agreement with respect to any shares of
Common Stock or Warrants that grants to any Person incidental
registration rights with respect to any Registration Statement
pursuant to a Registration hereunder.
SECTION 2.3 Holdback Agreements. In the case of a
Registration in connection with an Underwritten Offering, each
Remaining Class 7 Holder and the Company agree not to effect any
sale or distribution, including any private placement or any sale
pursuant to Rule 144, of any shares of Common Stock or Warrants
(other than the Included Securities pursuant to such Underwritten
Offering) during the seven-day period prior, and the 180-day
period following, the effective date of the Registration
Statement in such Registration.
SECTION 2.4 Registration Procedures. If and whenever the
Company is required to effect a Registration, the Company shall,
except as provided in Section 2.1(i), as expeditiously as possible:
(a) prepare and file with the SEC as promptly as
practicable, but in any event not later than 45 days after
receipt of an Initial Request, a Registration Statement on any
form for which the Company then qualifies which counsel for the
Company shall deem appropriate, subject to Section 2.1(e), and
which form shall be available for the sale of the Included
Securities in accordance with the intended methods of
distribution thereof, and use all reasonable efforts to cause
such Registration Statement to become effective; provided that as
promptly as practicable, but in any event not later than four
Business Days before filing any Registration Document with the
SEC, the Company will furnish to each Participating Holder, the
Managing Underwriter, if any, and one counsel selected by
Participating Holders owning a majority in number of the Included
Securities copies of such Registration Document, which shall be
subject to review by such Persons and the Company shall not file
any Registration Document to which the Managing Underwriter, if
any, or Participating Holders owning a majority in number of the
Included Securities or such counsel of such Participating Holders
shall have reasonably objected within three Business Days after
receipt of such Registration Document (provided that the fore
going shall not limit the right of any Participating Holder
identified in such Registration Document reasonably to object,
within three Business Days after receipt of such Registration
Document, to any particular information contained therein
relating specifically to such Participating Holder, including any
information describing the manner in which such Participating
Holder acquired its Included Securities and the intended method
of distribution thereof) and if the Company is unable to file any
such Registration Document due to any objection as provided
herein, use its best efforts to cooperate with the Managing Under
writer, if any, and the Participating Holders to prepare, as
promptly as reasonably practicable, a document that is
satisfactory to the Company, the Managing Underwriter, if any,
and the Participating Holders; provided further that if such
Registration Document refers to any Participating Holder by name
or otherwise as the holder of any Included Securities, then such
Participating Holder shall have the right to require (i) the
insertion therein of language, in form and substance satisfactory
to such Participating Holder, to the effect that the holding by
such Participating Holder of such securities does not necessarily
make such Participating Holder a "Controlling Person" of the
Company within the meaning of the Securities Act and is not to be
construed as a recommendation by such Participating Holder of the
investment quality of the Common Stock or the Warrants, as the
case may be, covered thereby and that such holding does not imply
that such Participating Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that
such reference to such Participating Holder by name or otherwise
is not required by the Securities Act or any rules and
regulations promulgated thereunder, the deletion of the reference
to such Participating Holder; and the Company shall notify each
Participating Holder of any stop order issued or threatened by
the SEC and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered;
(b) prepare and file with the SEC such additional
Registration Documents as may be necessary to keep the
Registration Statement in such Registration effective until the
earlier of (i) such time as all Included Securities have been
sold and (ii) 90 days from the effective date of such
Registration Statement or such longer period as may be required
by the Securities Act, and comply with the provisions of the
Securities Act with respect to the disposition of all Included
Securities during such period in accordance with the intended
methods of disposition thereof set forth in such Registration
Statement;
(c) furnish to each Participating Holder and the Managing
Underwriter, if any, copies of such Registration Documents in
such Registration and in such numbers as may be required by the
Securities Act or as any of the foregoing may reasonably request;
(d) use all reasonable efforts to register or qualify the
Included Securities under such other state securities or "blue
sky" laws of such jurisdictions as any Participating Holder or
the Managing Underwriter, if any, reasonably requests and do any
and all other acts and things that may be reasonably necessary or
advisable to enable the Participating Holders and the Managing
Underwriter, if any, to consummate the disposition in such
jurisdictions of the Included Securities; provided that the
Company will not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required
to qualify but for this Section 2.4(d), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction;
(e) use all reasonable efforts to cause the Included
Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by
virtue of the business and operations of the Company to enable
each Participating Holder to consummate the disposition of its
Included Securities;
(f) at any time when a prospectus relating to the Included
Securities is required to be delivered under the Securities Act,
immediately notify each Participating Holder and the Managing
Underwriter, if any, of the happening of any event that comes to
the Company's attention if as a result of such event the
prospectus included in such Registration Statement contains any
untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading,
and the Company will promptly prepare and furnish to each
Participating Holder and the Managing Underwriter, if any, a
supplement or amendment to such prospectus so that, as thereafter
delivered to purchasers of Included Securities, such prospectus
will not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading;
(g) use all reasonable efforts to cause the Included
Securities to be listed on each securities exchange or national
market system on which the Common Stock is then listed, if any,
and enter into such customary agreements including a listing application
and indemnification agreement in customary form,
provided that the applicable listing requirements are satisfied,
and to provide a transfer agent and registrar for the Included
Securities no later than the effective date of Registration
Statement in such Registration;
(h) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
actions as Participating Holders owning a majority in number of
the Included Securities or the Managing Underwriter, if any,
reasonably request in order to expedite or facilitate the
disposition of the Included Securities, including customary
indemnification;
(i) make available for inspection by any Participating
Holder, the Managing Underwriter, if any, and any attorney,
accountant or other agent retained by any Participating Holder or
the Managing Underwriter, if any, all financial and other
records, pertinent corporate documents and properties of the
Company and its subsidiaries as shall be reasonably necessary to
enable such Persons to exercise their due diligence
responsibility, and cause the Company's and its subsidiaries'
officers, directors and employees to supply all information and
respond to all inquiries reasonably requested by any such Person
in connection with the Registration Statement in such
Registration;
(j) deliver an opinion of counsel for the Company and a
"cold comfort" letter from the Company's independent public
accountants in customary form and covering such matters of the
type customarily covered by opinions of issuer's counsel and
"cold comfort" letters and such other matters as Participating
Holders owning a majority in number of the Included Securities or
the Managing Underwriters, if any, reasonably request; and
(k) otherwise use all reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an
earnings statement no later than 60 days after the end of the 12-
month period commencing at the end of the fiscal quarter of the
Company in which the effective date of the Registration Statement
shall have occurred (as the term "effective date" is defined in
Rule 158(c) under the Securities Act), which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder.
Each Participating Holder agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind
described in Sec tion 2.4(f), such Participating Holder will forthwith
discontinue disposition of its Included Securities until such Participating
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2.4(f), and, if so directed by the Company
such Participating Holder will deliver to the Company (at the Company's
expense) all copies (including, but not limited to, any and all drafts),
other than permanent file copies, then in such Participating Holder's
possession, of the prospectus covering the Included Securities current at
the time of receipt of such notice. In the event the Company shall give any
such notice, the period mentioned in Section 2.4(b) shall be extended by
the greater of (i) 90 days and (ii) the number of days during the period
from and including the date of the giving of such notice pursuant to
Section 2.4(f) to and including the date when each Participating Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 2.4(f).
SECTION 2.5 Indemnification.
(a) Indemnification by the Company. In any Registration,
the Company will, and it hereby does, indemnify and hold
harmless, to the full extent permitted by law, each Participating
Holder, its directors and officers, general partners, limited
partners, managing directors, agents and representatives and each
other Person who participates as an underwriter in the offering
or sale of such securities and each affiliate of such
Participating Holder or underwriter (and directors, officers,
controlling Persons, partners, managing directors, agents and
representatives of any of the foregoing), against any and all
losses, claims, damages or liabilities, joint or several, and
expenses (including any amounts paid in any settlement) to which
such Participating Holder or underwriter, or any such director,
officer, controlling person, partner, managing director, agent or
representative may become subject under the federal securities
laws, state securities or "blue sky" laws, common law or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) or expenses arise
out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any Registration
Document in such Registration, (ii) any omission or alleged
omission to state therein a material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, or (iii) any violation or alleged
violation by the Company of any federal, state or common law rule
or regulation applicable to the Company and relating to action
required of or inaction by the Company in connection with such
Registration, and the Company will reimburse each Participating
Holder or underwriter and each such director, officer,
controlling person, partner, managing director, agent or
representative for any legal or any other expenses reasonably
incurred by them, as and when incurred, in connection with
investigating or defending such loss, claim, damage, liability,
action or proceeding; provided that the Company shall not be
liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in
such Registration Document in reliance upon and in conformity
with written information furnished to the Company through an
instrument duly executed by such Participating Holder in such
Participating Holder's capacity as a stockholder of the Company
or any such director, officer, controlling Person, partner,
managing director, agent, representative or underwriter specifically
stating that it is for use in the preparation thereof;
provided further that the Company shall not be liable to any Participating
Holder, any Person, if any, who participates as an
underwriter in the offering or sale of Included Securities or any
other Person, if any, who controls such underwriter within the
meaning of the Securities Act, pursuant to this Section 2.5 with
respect to any Registration Document, to the extent that any such
loss, claim, damage or liability of such underwriter or controlling
Person results from the fact that such underwriter sold
Included Securities to a Person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a
copy of the final prospectus or of the final prospectus as then
amended or supplemented, whichever is most recent, covering such
Included Securities if the Company had previously furnished
copies thereof to such underwriter and such final prospectus, as
then amended or supplemented, had corrected any such misstatement
or omission. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of
such Participating Holder or underwriter or any such director,
officer, controlling person, partner, managing director, agent or
representative and shall survive the transfer by such
Participating Holder of its Included Securities.
(b) Indemnification by the Participating Holders and Under
writers. As a condition to including any Designated Securities
in any Registration, the Company shall have received an
undertaking reasonably satisfactory to it from each Participating
Holder or any underwriter, to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 2.5(a))
the Company and its directors, officers, controlling
Persons and all other prospective sellers (including, but not
limited to, all other Participating Holders) and their respective
directors, officers, general and limited partners, managing directors,
and their respective controlling Persons with respect to
any statement or alleged statement in or omission or alleged
omission from any Registration Document in such Registration, if
such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company or its representatives
through an instrument duly executed by or on behalf of such Participating
Holder or underwriter specifically stating that it is
for use in the preparation of such Registration Document. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any
Participating Holder, underwriter or any of their respective
directors, officers, general or limited partners, managing
directors or controlling Persons and shall survive the transfer
by such Participating Holder of its Included Securities; provided,
however, that no such Participating Holder shall be liable
under Section 2.5 for any amounts exceeding the product of the
proceeds (net of any underwriting commissions, discounts and the
like) per share to be received by such Participating Holder in
the sale of its Included Securities and the number of Included
Securities owned by such Participating Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party hereunder of, written notice of the
commencement of any action or proceeding with respect to which a
claim for indemnification may be made pursuant to this Section 2.5,
such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, promptly
give written notice to the indemnifying party of the commencement
of such action; provided, that the failure of any indemnified
party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding
subsections of this Section 2.5, except to the extent that the
indemnifying party is actually materially prejudiced by such
failure to give notice. In case any such action is brought
against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such
claim, the indemnifying party will be entitled to participate in
and, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, to the extent that it
may wish, 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 be liable to
such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense
thereof, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying
parties arises in respect of such claim after the assumption of
the defense thereof. No indemnifying party will consent to entry
of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation. An
indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel in any single
jurisdiction for all parties indemnified by such indemnifying
party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event
the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels as may be
reasonably necessary. Notwithstanding anything to the contrary
set forth herein, and without limiting any of the rights set
forth above, in any event each Participating Holder will have the
right to retain at its own expense, counsel with respect to the
defense of a claim.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding subsections of this Section 2.5 (with
appropriate modifications) shall be given by the Company and each
Participating Holder with respect to any required registration or
other qualification of securities under any federal or state law
or regulation or governmental authority other than the Securities
Act.
(e) Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity
agreement provided for in this Section 2.5 is for any reason held
to be unavailable to an indemnified party in accordance with its
terms, the Company and each Participating Holder shall contribute
to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by said indemnity agreement
incurred by the Company and the Participating Holder (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Participating
Holder in question on the other 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
benefits referred to in clause (i), but also the relative fault
of each of the Company and the Participating Holder in question
in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages and expenses, as well
as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Participating
Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to
information supplied by the Company on the one hand or by the
Participating Holder on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. No Person guilty of
fraudulent misrepresentation (within the meaning of subsection
11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. The foregoing contribution agreement shall in
no way affect the contribution liabilities of any Person having
liability under Section 11 of the Securities Act other than the
Company and the Participating Holders.
MISCELLANEOUS
SECTION 3.1 Effectiveness. The terms of this Agreement
shall be effective as of the Effective Date.
SECTION 3.2 Amendments. This Agreement cannot be amended,
modified or supplemented except (a) as contemplated by Section
2.1(b)(ii)(C) and (b) by a written instrument signed by the
Company and the Remaining Class 7 Holders owning at the time of
execution thereof not less than a majority in number of the
Registrable Securities at such time, provided, however, that
without the written consent of each such holder affected thereby
no amendment, modification or supplement pursuant to clause (b)
above may make a change that (i) increases the obligations of
such holder or (ii) adversely affects the rights of such holder
under Section 2.5.
SECTION 3.3 Term of Agreement. This Agreement shall
commence on the Effective Date and shall terminate, except for
the provisions of Section 2.5 which shall survive such
termination, on the earliest to occur of (i) the seventh anniversary
of the Effective Date, (ii) the date on which the
effectiveness of a Registration Statement that has become
effective (within the meaning of Section 2.1(k)) in a
Registration shall have been terminated and (iii) such time as
the Registrable Securities no longer represent the Registration
Trigger Amount.
SECTION 3.4. Calculation of Requisite
Class 7 Percentage and Required Included Securities.
For purposes of calculating the Required Class 7
Percentage and the Required Included Securities, and
for purposes of any similar calculation or
determination to be made under this Agreement, each
Original Warrant to purchase one share of Common Stock
shall be treated as one share of Original Common Stock.
SECTION 3.5. Headings. The descriptive
headings of the several Articles and Sections of this
Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
SECTION 3.6. Specific Performance.
Irreparable damage would occur in the event any of the
provisions of this Agreement were not to be performed
in accordance with the terms hereof and the Company and
the Remaining Class 7 Holders, as the case may be,
shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or
equity.
SECTION 3.7. Complete Agreement. This
Agreement contains the entire agreement of the Company
and the Old Equity Holders in respect of the subject
matter contained herein and the transactions
contemplated hereby. There are no restrictions,
agreements, promises, representations, warranties,
covenants, or undertakings with respect to the subject
matter hereof, other than those expressly set forth or
referred to herein. This Agreement supersedes all
prior agreements and understandings between the parties
hereto with respect to the subject matter hereof.
SECTION 3.8. Assignment. The
registration and other rights provided in this
Agreement, and the obligations of the Company
hereunder, are not assignable to any Person (including,
without limitation, any Transferee) except to the
extent expressly provided in Section 2.1(b)(ii).
SECTION 3.9. Notices. Any notice,
request, instruction or other document to be given
hereunder shall be in writing, shall be delivered
personally or sent by Federal Express or other
overnight delivery service, (a) if to the Company, to
Homeland Holding Corporation, 0000 Xxxxxxxxx
Xxxxxxxxxx, Oil Center East, 11th Floor, Oklahoma city,
OK 73112, Attention: Secretary, or to such other
address as the Company shall specify by written notice,
(b) if to any Old Equity Holder listed on Schedule I,
to the address listed on such schedule and (c) if to
any other Old Equity Holder or Permitted Transferee, to
such address (which shall not be a post office box, but
shall be an address to which overnight delivery
services will deliver) as such Old Equity Holder or
Permitted Transferee shall have specified in a written
notice to the Company (which may be amended by
subsequent written notice), a copy of which written
notice shall be on file with the Secretary of the
Company. Notwithstanding any other provision of this
Agreement, unless and until the Company shall have
received such notice of address from an Old Equity
Holder or Permitted Transferee, the Company shall have
no obligation to such Old Equity Holder or Permitted
Transferee with respect to the giving of any notice
otherwise required hereunder. Notice shall be
effective when sent in the manner, and directed as, provided
above or, if delivered personally, when received.
SECTION 3.10. Governing Law. This
Agreement shall be governed by and construed in
accordance with the laws of the State of New York,
without regard to applicable principles of conflicts of
laws.
SECTION 3.11. Severability. Whenever
possible, each provision of this Agreement will be
interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of
this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be
ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this
Agreement, except to the extent that such prohibition
or invalidity would constitute a material change in the
terms of this Agreement taken as a whole.
SECTION 3.12. Rule 144 and Rule 144A.
The Company shall take all actions reasonably necessary
to enable the Remaining Class 7 Holders to sell their
Registrable Securities without registration under the
Securities Act within the limitation of the exemptions
provided by (i) Rule 144, (ii) Rule 144A, or (iii) any
similar rules or regulations hereafter adopted by the
SEC, including, without limitation, filing on a timely
basis all reports required to be filed under the
Exchange Act. Upon the request of any such holder, the
Registrant(s) shall deliver to such holder a written
statement as to whether they have complied with such
requirements.
IN WITNESS WHEREOF, the Company has executed,
and each Old Equity Holder by receipt of its Original
Securities is deemed to have executed, this Agreement
as of the date first above written.
HOMELAND HOLDING CORPORATION
By:_____________________
Name:
Title:
Identified Holders
Number of Shares
Holder of Old Common Stock
The Xxxxxxx & Dubilier 11,700,000
Private Equity Fund III
Limited Partnership,
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
The Xxxxxxx & Dubilier 13,153,089
Private Equity Fund IV
Limited Partnership
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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