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EXHIBIT 10.5
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REGISTRATION RIGHTS AGREEMENT
BETWEEN
U.S. RESTAURANT PROPERTIES, INC.
AND
LSF3 CAPITAL INVESTMENTS I, LLC
LSF3 CAPITAL INVESTMENTS II, LLC
DATED MARCH 9, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................................... 1
1.1 Definitions........................................................ 1
1.2 Internal References................................................ 3
ARTICLE II REGISTRATION RIGHTS.............................................. 3
2.1 Demand Registration................................................ 3
2.2 Piggyback Registration............................................. 5
2.3 Shelf Registration................................................. 7
ARTICLE III REGISTRATION PROCEDURES......................................... 8
3.1 Filings; Information............................................... 8
3.2 Registration Expenses.............................................. 12
ARTICLE IV INDEMNIFICATION AND CONTRIBUTION................................. 13
4.1 Indemnification by the Company..................................... 13
4.2 Indemnification by Selling Holders................................. 13
4.3 Conduct of Indemnification Proceedings............................. 14
4.4 Contribution....................................................... 14
ARTICLE V MISCELLANEOUS..................................................... 15
5.1 Participation in Underwritten Registrations........................ 15
5.2 Rule 144........................................................... 16
5.3 Holdback Agreements................................................ 16
5.4 Termination........................................................ 17
5.5 Amendments, Waivers, Etc........................................... 17
5.6 Counterparts....................................................... 17
5.7 Entire Agreement................................................... 17
5.8 Governing Law...................................................... 17
5.9 Assignment of Registration Rights.................................. 17
5.10 Binding Effect..................................................... 18
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This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), is made as of
March 9, 2001, by and between U.S. Restaurant Properties, Inc., a Maryland
corporation ("REIT"), LSF3 Capital Investments I, LLC, a Delaware limited
liability company, and LSF3 Capital Investments II, LLC, a Delaware limited
liability company ("Buyer").
WHEREAS, the REIT and Lone Star U.S. Acquisitions, LLC ("Lone
Star"), a Delaware limited liability company, entered into that certain Stock
Purchase Agreement dated as of January 17, 2001, as amended and restated as of
February 27, 2001 (as so amended and restated, the "REIT Stock Purchase
Agreement");
WHEREAS, Lone Star and certain stockholders of the Company have
entered into a certain Stock Purchase Agreement dated January 17, 2001 (as
amended and restated as of February 27, 2001, the "Stockholder Stock Purchase
Agreement" and, together with the REIT Stock Purchase Agreement, the "Stock
Purchase Agreements");
WHEREAS, Lone Star assigned its rights and obligations under the
Stock Purchase Agreement and Buyer assumed such rights and obligations pursuant
to that certain Assignment and Assumption Agreement dated March 9, 2000 by and
among Lone Star and Buyer;
WHEREAS, it is a condition precedent to the closing of the
transactions contemplated in the REIT Stock Purchase Agreement that the parties
hereto execute and deliver this Agreement;
NOW THEREFORE, in consideration of the premises, mutual promises and
covenants contained in this Agreement and intending to be legally bound, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
Unless otherwise indicated to the contrary, capitalized terms defined in
the Stock Purchase Agreements are given the same meaning herein as therein
defined. In addition, the following terms, as used herein, have the following
meanings:
"Affiliate" or "Affiliates," as appropriate, has the same meaning as
set forth in Rule 144 (as hereinafter defined).
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par value
$0.001 per share.
"Company" means the REIT and any subsequent issuer of Registrable
Securities.
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"Demand Registration" means a registration under the Securities Act
requested in accordance with Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, and the
rules and regulations promulgated by the Commission thereunder.
"fair market value" as of any date means the average closing price
of the Registrable Securities, as reported by The Wall Street Journal for the
preceding five consecutive trading days on The New York Stock Exchange (or such
other exchange or quotation system on which such securities are then listed or
traded).
"Holders" or "Holder," as appropriate, means the Initial Holder and
any direct or indirect transferee of any Registrable Securities held by any of
such Persons.
"Initial Amount," on any particular date and with respect to the
Holders means the number of shares of Common Stock held by the Holder on the
date hereof.
"Initial Holder" means Buyer.
"Person" or "persons" means any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or other entity or government or
other agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section 2.2.
"Registrable Securities" means (a) the shares of Common Stock
purchased pursuant to the Stock Purchase Agreements, plus any additional shares
of Common Stock issued in respect thereof in connection with any stock split,
stock dividend or similar event with respect to the Common Stock, (b) any
additional shares of Common Stock acquired by the Holders and (c) any securities
of the Company or any successor entity, including without limitation any parent
entity of such successor, into which Registrable Securities may hereafter be
converted or changed. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of under such registration statement, (ii) such securities shall have been
transferred pursuant to Rule 144 (as hereinafter defined), (iii) such securities
shall have been otherwise transferred or disposed of, and new certificates
therefor not bearing a legend restricting further transfer shall have been
delivered by the Company, and subsequent transfer or disposition of them shall
not require their registration or qualification under the Securities Act or any
similar state law then in force, or (iv) such securities shall have ceased to be
outstanding.
"Registration Expenses" has the meaning set forth in Section 3.2.
"Requesting Holders" means the Holders requesting a Demand
Registration, and shall include parties deemed "Requesting Holders" pursuant to
Section 2.1(a)(iii).
"Rule 144" means Rule 144 (or any successor rule of similar effect)
promulgated under the Securities Act.
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"Securities Act" means the Securities Act of 1933, and the rules and
regulations promulgated by the Commission thereunder.
"Selling Holder" means any Holder who is selling Registrable
Securities pursuant to a public offering registered hereunder.
"Shelf Registration" has the meaning set forth in Section 2.3(a).
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
1.2 INTERNAL REFERENCES.
Unless the context indicates otherwise, references to Articles, Sections
and paragraphs shall refer to the corresponding articles, sections and
paragraphs in this Agreement, and references to the parties shall mean the
parties to the Stock Purchase Agreements.
ARTICLE II
REGISTRATION RIGHTS
2.1 DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION.
(i) Holders of a majority of the Registrable Securities held by all
of the Holders may make up to three written requests for a Demand
Registration of all or any part of the Registrable Securities held by the
Holders; provided, that (A) each such Demand Registration by the Holders
must be in respect of Registrable Securities with a fair market value of
at least $5,000,000, on the date such request is made or all of the
Registrable Securities held by the requesting Holders if the aggregate
fair market value of all of such Registrable Securities is less than
$5,000,000 and (B) the Holders shall not be entitled to a Demand
Registration if, during the 120 days preceding such request, the Holders
had requested a Demand Registration, unless the Company preempted such
Demand Registration in accordance with Section 2.1(e) or the Company
postponed the filing thereof in accordance with Section 3.1(a) and the
requesting Holders withdrew the request for such Demand Registration.
(ii) Any request for a Demand Registration will specify the
aggregate number of shares of Registrable Securities proposed to be sold
by the Requesting Holders and will also specify the intended method of
disposition thereof. A registration will not count as a Demand
Registration until it has become effective. Should a Demand Registration
not become effective due to the failure of a Holder to perform its
obligations under this Agreement or the inability of the Requesting
Holders to reach agreement with the Underwriters for the proposed sale on
price or other customary terms for such transaction, or in the event the
Requesting Holders withdraw or do not pursue the request for the Demand
Registration (in each of the foregoing cases, provided that at such time
the Company is in compliance in all material respects with its obligations
under this
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Agreement), then, subject to Section 2.1(b), such Demand Registration
shall be deemed to have been effected; provided that (i) if the Demand
Registration does not become effective because a material adverse change
has occurred, or is reasonably likely to occur, in the condition
(financial or otherwise), business, assets or results of operations of the
Company and its subsidiaries taken as a whole subsequent to the date of
the written request made by the Requesting Holders, (ii) if the Company
withdraws the Demand Registration for any reason or preempts the request
for the Demand Registration or (iii) if, after the Demand Registration has
become effective, an offering of Registrable Securities pursuant to a
registration is interfered with by any stop order, injunction, or other
order or requirement of the Commission or other governmental agency or
court or (iv) if the Demand Registration is withdrawn at the request of
the Requesting Holders pursuant to Section 2.1(f) or Section 3.1(a), then
the Demand Registration shall not be deemed to have been effected and will
not count as a Demand Registration.
(iii) Upon receipt of any request for a Demand Registration by
holders of a majority of the Registrable Securities held by all of the
Holders, the Company shall promptly (but in any event within ten days)
give written notice of such proposed Demand Registration to all other
Holders and all such Holders shall have the right, exercisable by written
notice to the Company within twenty days of their receipt of the Company's
notice, to elect to include in such Demand Registration such portion of
their Registrable Securities as they may request. All such Holders
requesting to have their Registrable Securities included in a Demand
Registration in accordance with the preceding sentence shall be deemed to
be "Requesting Holders" for purposes of this Section 2.1.
(b) In the event that the Requesting Holders withdraw or do not
pursue a request for a Demand Registration and, pursuant to Section 2.1(a)
hereof, such Demand Registration is deemed to have been effected, the Holders
may reacquire such Demand Registration (such that the withdrawal or failure to
pursue a request will not count as a Demand Registration hereunder) if the
Requesting Holders reimburse the Company for any and all Registration Expenses
incurred by the Company in connection with such request for a Demand
Registration that was withdrawn or not pursued.
(c) If the Requesting Holders so elect, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the form
of a "firm commitment" underwritten offering. A majority in interest of the
Requesting Holders shall have the right to select the managing Underwriters and
any additional investment bankers and managers to be used in connection with any
offering under this Section 2.1, subject to the Company's approval, which
approval shall not be unreasonably withheld.
(d) The Requesting Holders will inform the Company of the time and
manner of any disposition of Registrable Securities; provided, however, that the
Holders' only right to a shelf registration statement shall be pursuant to
Section 2.3.
(e) The Company will have the right to preempt any Demand
Registration with a primary registration by delivering written notice (within
seven business days after the Company has received a request for such Demand
Registration) of such intention to the Requesting Holders indicating that the
Company has identified a specific business need and use for the
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proceeds of the sale of such securities and had contemplated such sale of
securities prior to receiving the Requesting Holders' notice, and the Company
shall use commercially reasonable efforts to effect a primary registration
within 30 days of such notice. In the ensuing primary registration, the Holders
will have such piggyback registration rights as are set forth in Section 2.2
hereof. Upon the Company's preemption of a requested Demand Registration, such
requested registration will not count as the Holders' Demand Registration. If
the Company thereafter decides to abandon its intention to pursue such sale of
securities, it shall give notice thereof to any preempted Holders within two
business days following the Company's decision. The Company may exercise the
right to preempt a Demand Registration only once in any 360-day period; provided
that during any 360-day period the Company shall use its reasonable best efforts
to permit a period of at least 180 consecutive days during which the Selling
Holders may effect a Demand Registration.
(f) Securities to be sold for the account of any Person (including
the Company) other than a Requesting Holder shall not be included in a Demand
Registration if the managing Underwriter or Underwriters shall advise the
Company and the Requesting Holders in writing that the inclusion of such
securities will materially and adversely affect the price of the offering (a
"Material Adverse Effect"). Furthermore, in the event the managing Underwriter
or Underwriters shall advise the Company or the Requesting Holders that even
after exclusion of all securities of other Persons (including the Company)
pursuant to the immediately preceding sentence, the amount of Registrable
Securities proposed to be included in such Demand Registration by Requesting
Holders is sufficiently large to cause a Material Adverse Effect, the
Registrable Securities of the Requesting Holders to be included in such Demand
Registration shall equal the number of shares which the Company and the
Requesting Holders are so advised can be sold in such offering without a
Material Adverse Effect and such shares shall be allocated pro rata among the
Requesting Holders on the basis of the number of Registrable Securities
requested to be included in such registration by each such Requesting Holder;
provided, however, that if any Registrable Securities requested to be registered
pursuant to a Demand Registration under Section 2.1 are excluded from
registration hereunder, then the Holder(s) having shares excluded ("Excluded
Holders") shall have the right to withdraw all, or any part, of their shares
from such registration and if withdrawn in full such Demand Registration shall
not be deemed to have been effected on the withdrawing Holder's or Holders'
behalf and will not count as a Demand Registration for such withdrawing
Holder(s).
2.2 PIGGYBACK REGISTRATION.
(a) If the Company proposes to file a registration statement under
the Securities Act with respect to an offering of Common Stock for its own
account or for the account of another Person (other than a registration
statement on Form S-4 or S-8 (or any substitute form or rule, respectively, that
may be adopted by the Commission)), the Company shall give written notice of
such proposed filing to the Holders at the address set forth in the share
register of the Company as soon as reasonably practicable (but in no event less
than 15 days before the anticipated filing date), undertaking to provide each
Holder the opportunity to register on the same terms and conditions such number
of shares of Registrable Securities as such Holder may request (a "Piggyback
Registration"). Each Holder will have seven business days after receipt of any
such notice to notify the Company as to whether it wishes to participate in a
Piggyback Registration (which notice shall not be deemed to be a request for a
Demand Registration);
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provided that should a Holder fail to provide timely notice to the Company, such
Holder will forfeit any rights to participate in the Piggyback Registration with
respect to such proposed offering other than as described in Section
2.1(a)(iii). If the Company or the Person for whose account such offering is
being made shall determine in its sole discretion not to register or to delay
the proposed offering, the Company may, at its election, provide written notice
of such determination to the Holders and (i) in the case of a determination not
to effect the proposed offering, shall thereupon be relieved of the obligation
to register such Registrable Securities in connection therewith, and (ii) in the
case of a determination to delay a proposed offering, shall thereupon be
permitted to delay registering such Registrable Securities for the same period
as the delay in respect of the proposed offering. As between the Company or any
other Person for whose account any such offering is being made, on one hand, and
the Selling Holders, on the other hand, the Company or such other Person, as the
case may be, shall be entitled to select the Underwriters in connection with any
Piggyback Registration.
(b) If the Registrable Securities requested to be included in the
Piggyback Registration by any Holder differ from the type of securities proposed
to be registered by the Company and the managing Underwriter advises the Company
that due to such differences the inclusion of such Registrable Securities would
cause a Material Adverse Effect, then (i) the number of such Holders'
Registrable Securities to be included in the Piggyback Registration shall be
reduced to an amount which, in the opinion of the managing Underwriter, would
eliminate such Material Adverse Effect or (ii) if no such reduction would, in
the opinion of the managing Underwriter, eliminate such Material Adverse Effect,
then the Company shall have the right to exclude all such Registrable Securities
from such Piggyback Registration, provided that no other securities of such type
are included and offered for the account of any other Person in such Piggyback
Registration. Any partial reduction in number of Registrable Securities of any
Holder to be included in the Piggyback Registration pursuant to clause (i) of
the immediately preceding sentence shall be effected pro rata based on the ratio
which such Holder's requested shares bears to the total number of shares
requested to be included in such Piggyback Registration by all Persons other
than the Company who have the contractual right to request that their shares be
included in such registration statement and who have requested that their shares
be included. If the Registrable Securities requested to be included in the
registration statement are of the same type as the securities being registered
by the Company (whether such registration is initiated by the Company or another
security holder) and the managing Underwriter advises the Company that the
inclusion of such Registrable Securities would cause a Material Adverse Effect,
the Company will be obligated to include in such registration statement, as to
each Holder and any other Person or Persons having a contractual right to
request their shares be included in such registration only a portion of the
shares such Holder and such other Person or Persons have requested be registered
equal to the ratio which each such Holder's and such other Person's requested
shares bears to the total number of shares requested to be included in such
registration statement by all Holders and such other Person or Persons (other
than the Person or Persons initiating such registration request) having a
contractual right to request that their shares be included in such registration
statement and who have requested their shares be included. If the Company
initiated the registration, then the Company may include all of its securities
in such registration statement before any such Holder's requested shares are
included. If another security holder initiated the registration, then such
initiating security holder may include all of its securities in such
registration statement before any such Holder's requested shares are included
and the Company may not include any of its securities in such registration
statement unless all
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Registrable Securities requested to be included in the registration statement by
all Holders are included in such registration statement. If as a result of the
provisions of this Section 2.2(b) any Holder shall not be entitled to include
all Registrable Securities in a registration that such Holder has requested to
be so included, such Holder may withdraw such Holder's request to include
Registrable Securities in such registration statement prior to its
effectiveness.
2.3 SHELF REGISTRATION.
(a) Holders of a majority of the Registrable Securities held by all
of the Holders ("Majority Holders") may, at any time beginning 90 days after the
Closing Date, make a written request that the Company effect a shelf
registration of all or any portion of the Registrable Securities held by the
Holders (the "Shelf Registration") pursuant to Rule 415. Upon receipt of a
request for the Shelf Registration, the Company shall promptly (but in any event
within ten business days) give written notice of the proposed Shelf Registration
to all other Holders, and all such Holders (including their future direct and
indirect transferees to the extent permitted by the Commission) shall have the
right to include Registrable Securities in the Shelf Registration. The Company
shall use commercially reasonable efforts to file as promptly as practicable
(but in no event more than 45 days after the time such obligation to file
arises) with the Commission, and thereafter shall use its reasonable best
efforts to cause to be declared effective within 180 days after the filing
thereof, a shelf registration statement on an appropriate form under the
Securities Act covering all Registrable Securities with respect to which the
Company has received written requests from Holders for inclusion therein within
30 days after delivery to the Holders of the Company's notice. Each such
Holder's request shall specify the number of Registrable Securities to be
registered and the intended method of disposition.
(b) The Company shall use its best efforts to keep the Shelf
Registration continuously effective for a period terminating the earlier of (i)
the fifth anniversary of the date on which the Commission declares the Shelf
Registration effective and (ii) the date on which all the Registrable Securities
covered by the Shelf Registration have been sold pursuant to such Shelf
Registration.
(c) The Company further agrees to supplement or make amendments to
the Shelf Registration, if required by the rules, regulations or instructions
applicable to the registration form utilized by the Company or by the Securities
Act or requested by the holders of a majority of the Registrable Securities
covered by such registration or any underwriter of the Registrable Securities.
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(d) The Holders' rights to require a Shelf Registration shall
include the right to require one underwritten offering off the Shelf
Registration statement (a "take-down") plus an additional number of take-downs
equal to the number of unused Demand Registrations then remaining (as provided
in Section 2.2(a)(i)); provided that any such takedown shall be in respect of
Registrable Securities having a fair market value of at least $5,000,000 on the
date such request is made. Any Holder having Registrable Securities representing
at least a majority of the Registrable Securities included in an effective
registration statement pursuant to a Shelf Registration may request an
underwritten take-down, and the Company shall be obligated to give notice and
opportunity to participate in the take-down to the other Holders having
Registrable Securities included in the Shelf Registration, in accordance with
the same procedures, limitations and allocations applicable to a Demand
Registration (with such changes in those procedures, limitations and allocations
as are necessary to reflect that it is a take-down). No Holder may request a
take-down for a number of such Holder's Registrable Securities that exceeds the
number of that Holder's Registrable Securities already included in the effective
Shelf Registration. No other securities of the Company may be included in an
effective registration statement pursuant to a Shelf Registration other than the
Registrable Securities.
ARTICLE III
REGISTRATION PROCEDURES
3.1 FILINGS; INFORMATION.
In connection with the registration of Registrable Securities pursuant to
Section 2.1, Section 2.2 and Section 2.3 hereof, the Company will use its
reasonable best efforts to effect the registration of such Registrable
Securities as promptly as is reasonably practicable, and in connection with any
such request:
(a) The Company will expeditiously prepare and file with the
Commission a registration statement on any form for which the Company then
qualifies and which counsel for the Company shall deem appropriate and available
for the sale of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof, and use its
reasonable best efforts to cause such filed registration statement to become and
remain effective (i) with respect to any Demand Registration or Piggyback
Registration, for such period, not to exceed 60 days, as may be reasonably
necessary to effect the sale of such securities, (ii) with respect to a Shelf
Registration, until the earlier of the sale of all Registrable Securities
thereunder and the fifth anniversary of the date on which the Commission
declares the Shelf Registration effective; provided that if the Company shall
furnish to the Selling Holder a certificate signed by the Company's Chairman,
President or any Executive Vice-President or Vice-President stating that the
Company's Board of Directors has determined in good faith that it would be
detrimental or otherwise disadvantageous to the Company or its stockholders for
such a registration statement to be filed as expeditiously as possible because
the sale of Registrable Securities covered by such Registration Statement or the
disclosure of information in any related prospectus or prospectus supplement
would materially interfere with any acquisition, financing or other material
event or transaction which is then intended or the public disclosure of which at
the time would be materially prejudicial to the Company, the Company may
postpone the filing or effectiveness of a registration statement for a period of
not more than 120 days; provided that
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during any 360-day period the Company shall use its reasonable best efforts to
permit a period of at least 180 consecutive days during which the Company will
make a registration statement available under this Agreement; and provided
further that if (i) the effective date of any registration statement filed
pursuant to a Demand Registration would otherwise be at least 45 calendar days,
but fewer than 90 calendar days, after the end of the Company's fiscal year, and
(ii) the Securities Act requires the Company to include audited financials as of
the end of such fiscal year, the Company may delay the effectiveness of such
registration statement for such period as is reasonably necessary to include
therein its audited financial statements for such fiscal year. If the Company
exercises its right to postpone the filing or effectiveness of a registration
statement, the applicable Requesting Holders shall be entitled to withdraw their
request for such Demand Registration and it shall not count as a Demand
Registration.
(b) Anything in this Agreement to the contrary notwithstanding, it
is understood and agreed that the Company shall not be required to keep any
shelf registration effective or useable for offers and sales of the Registrable
Securities, file a post effective amendment to a shelf registration statement or
prospectus supplement or to supplement or amend any registration statement, if
the Company is then involved in discussions concerning, or otherwise engaged in,
any material financing or investment, acquisition or divestiture transaction or
other material business purpose if the Company determines in good faith that the
making of such a filing, supplement or amendment at such time would interfere
with such transaction or purpose; provided that under no circumstances may such
postponement exceed 90 days from the date on which the Company notifies the
Holders of such postponement, as provided hereafter. The Company shall promptly
give the Holders of Registrable Securities written notice of such postponement
containing a general statement of the reasons for such postponement and an
approximation of the anticipated delay. Upon receipt by a Holder of Registrable
Securities of notice of an event of the kind described in this Section 3.1(b),
such Holder shall forthwith discontinue such Holder's disposition of Registrable
Securities until such Holder's receipt of notice from the Company that such
disposition may continue and of any supplemented or amended prospectus indicated
in such notice. The Company shall use its reasonable best efforts to permit
sales of Registrable Securities on such shelf registration statement for at
least 180 days during any 360-day period. In the event the Company shall give
notice of an event of the kind described in this Section 3.1(b), the Company
shall extend the period during which the applicable registration statement shall
be maintained effective as provided in Section 3.1(a) hereof by the number of
days during the period from and including the date of the giving of such notice
to the date when the Company shall give notice to the Selling Holders that such
dispositions of such Registrable Securities may continue and shall have made
available to the Selling Holders any such supplemented or amended prospectus.
(c) The Company will, if requested, prior to filing such
registration statement or any amendment or supplement thereto, furnish to the
Selling Holders, and each applicable managing Underwriter, if any, copies
thereof, and thereafter furnish to the Selling Holders and each such
Underwriter, if any, such number of copies of such registration statement,
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein) and the prospectus included in
such registration statement (including each preliminary prospectus) as the
Selling Holders or each such Underwriter may reasonably request in order to
facilitate the sale of the Registrable Securities by the Selling Holders.
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(d) After the filing of the registration statement, the Company will
promptly notify the Selling Holders of any stop order issued or, to the
Company's knowledge, threatened to be issued by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
(e) In addition to the requirements imposed on the Company elsewhere
herein, the Company will use its commercially reasonable efforts to qualify the
Registrable Securities for offer and sale under such other securities or blue
sky laws of such jurisdictions in the United States as the Selling Holders
reasonably request; keep each such registration or qualification (or exemption
therefrom) effective during the period in which such registration statement is
required to be kept effective; and do any and all other acts and things which
may be reasonably necessary or advisable to enable each Selling Holder to
consummate the disposition of the Registrable Securities owned by such Selling
Holder in such jurisdictions; 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 3.1(e), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction.
(f) The Company will as promptly as is practicable notify the
Selling Holders, at any time when a prospectus relating to the sale of the
Registrable Securities is required by law to be delivered in connection with
sales by an Underwriter or dealer, of the occurrence of any event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and promptly make available to the Selling Holders and to
the Underwriters any such supplement or amendment. Upon receipt of any notice of
the occurrence of any event of the kind described in the preceding sentence,
Selling Holders will forthwith discontinue the offer and sale of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until receipt by the Selling Holders and the Underwriters of the
copies of such supplemented or amended prospectus and, if so directed by the
Company, the Selling Holders will deliver to the Company all copies, other than
permanent file copies then in the possession of Selling Holders, of the most
recent prospectus covering such Registrable Securities at the time of receipt of
such notice. In the event the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective as provided in Section 3.1(a) hereof by the number of days during the
period from and including the date of the giving of such notice to the date when
the Company shall make available to the Selling Holders such supplemented or
amended prospectus. Furthermore, in the event the Company shall give such
notice, the Company shall, as promptly as is practical, prepare a supplement or
post-effective amendment to the registration statement or a supplement to the
related prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder, such prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
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(g) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions
(including, without limitation, participation in road shows and investor
conference calls) as are required in order to expedite or facilitate the sale of
such Registrable Securities.
(h) At the request of any Underwriter in connection with an
underwritten offering the Company will furnish (i) an opinion of counsel,
addressed to the Underwriters, covering such customary matters as the managing
Underwriter may reasonably request and (ii) a comfort letter or comfort letters
from the Company's independent public accountants covering such customary
matters as the managing Underwriter may reasonably request.
(i) If requested by the managing Underwriter or any Selling Holder,
the Company shall promptly incorporate in a prospectus supplement or post
effective amendment such information as the managing Underwriter or any Selling
Holder reasonably requests to be included therein, including without limitation,
with respect to the Registrable Securities being sold by such Selling Holder,
the purchase price being paid therefor by the Underwriters and with respect to
any other terms of the underwritten offering of the Registrable Securities to be
sold in such offering, and promptly make all required filings of such prospectus
supplement or post effective amendment.
(j) The Company shall promptly make available for inspection by any
Selling Holder or Underwriter participating in any disposition pursuant to any
registration statement, and any attorney, accountant or other agent or
representative retained by any such Selling Holder or Underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information requested by any such Inspector in connection with such
registration statement; provided, however, that unless the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in the
registration statement or the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, the Company
shall not be required to provide any information under this subparagraph (j) if
(A) the Company believes, after consultation with counsel for the Company, that
to do so would cause the Company to forfeit an attorney-client privilege that
was applicable to such information or (B) if either (1) the Company has
requested and been granted from the Commission confidential treatment of such
information contained in any filing with the Commission or documents provided
supplementally or otherwise or (2) the Company reasonably determines in good
faith that such Records are confidential and so notifies the Inspectors in
writing unless prior to furnishing any such information with respect to (A) or
(B) such Holder of Registrable Securities requesting such information agrees to
enter into a confidentiality agreement in customary form and subject to
customary exceptions; provided further, however, that each Holder of Registrable
Securities agrees that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company and
allow the Company, at its expense, to undertake appropriate action and to
prevent disclosure of the Records deemed confidential.
(k) The Company shall cause the Registrable Securities included in
any registration statement to be (A) listed on each securities exchange, if any,
on which similar
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securities issued by the Company are then listed, or (B) authorized to be quoted
and/or listed (to the extent applicable) on the Nasdaq National Market if the
Registrable Securities so qualify.
(l) The Company shall provide a CUSIP number for the Registrable
Securities included in any registration statement not later than the effective
date of such registration statement.
(m) The Company shall cooperate with each Selling Holder and each
Underwriter participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc.
(n) The Company shall participate in any financial roadshow
organized for purposes of publicizing the sale or other disposition of the
Registrable Securities. Such participation shall include, but not be limited to,
dispatch by the Company of personnel to assist in each presentation made during
the roadshow, and provision of Company data needed for purposes of the roadshow.
(o) The Company shall during the period when the prospectus is
required to be delivered under the Securities Act, promptly file all documents
required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act.
(p) The Company will make generally available to its security
holders, as soon as reasonably practicable, an earnings statement covering a
period of twelve months, beginning within three months after the effective date
of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder.
The Company may require Selling Holders promptly to furnish in writing to
the Company such information regarding such Selling Holders, the plan of
distribution of the Registrable Securities and other information as the Company
may from time to time reasonably request or as may be legally required in
connection with such registration.
3.2 REGISTRATION EXPENSES.
In connection with any Registration effected hereunder, the Company shall
pay all expenses incurred in connection with such registration (the
"Registration Expenses"), including without limitation: (i) registration and
filing fees with the Commission and the National Association of Securities
Dealers, Inc., (ii) all fees and expenses of compliance with securities or blue
sky laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Registrable Securities), (iii) printing
expenses, messenger and delivery expenses, (iv) fees and expenses incurred in
connection with the listing or quotation of the Registrable Securities, (v) fees
and expenses of counsel to the Company and the reasonable fees and expenses of
independent certified public accountants for the Company (including fees and
expenses associated with the special audits or the delivery of comfort letters
together with the fees and expenses of one counsel for the Selling Holders),
(vi) the reasonable fees and expenses of any additional experts retained by the
Company in connection with such registration, (vii) all roadshow costs and
expenses not paid by the Underwriters, and (viii) the fees and expenses of
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other persons retained by the Company will be borne by the Company, whether or
not any registration statement becomes effective; provided that in no event
shall Registration Expenses include any underwriting discounts or commissions or
transfer taxes or the fees and expenses of more than one counsel for the Selling
Holders.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 INDEMNIFICATION BY THE COMPANY.
The Company agrees to indemnify and hold harmless each Selling Holder and
its Affiliates and their respective officers, directors, partners, stockholders,
members, employees, agents and representatives and each Person (if any) which
controls a Selling Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities, costs and expenses (including reasonable
attorneys' fees) caused by, arising out of, resulting from or related to any
untrue statement or alleged untrue statement of a material fact contained or
incorporated by reference in any registration statement or prospectus relating
to the Registrable Securities (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by or based upon any information furnished in writing to
the Company by or on behalf of such Selling Holder expressly for use therein or
by the Selling Holder's failure to deliver a copy of the registration statement
or prospectus or any amendments or supplements thereto after the Company has
furnished the Selling Holder with copies of the same; provided, however, that
the Company shall have no obligation to indemnify under this sentence to the
extent any such losses, claims, damages or liabilities have been finally and
non-appealably determined by a court to have resulted from such Selling Holder's
willful misconduct or gross negligence. The Company also agrees to indemnify any
Underwriters of the Registrable Securities, their officers and directors and
each person who controls such Underwriters on substantially the same basis as
that of the indemnification of the Selling Holders provided in this Section 4.1,
except insofar as such losses, claims, damages or liabilities are caused by or
based upon any information furnished in writing to the Company by or on behalf
of such Underwriter expressly for use therein or by the Underwriter's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Underwriter with copies
of the same; provided, however, that the Company shall have no obligation to
indemnify under this sentence to the extent any such losses, claims, damages or
liabilities have been finally and non-appealably determined by a court to have
resulted from any such Underwriter's willful misconduct or gross negligence.
4.2 INDEMNIFICATION BY SELLING HOLDERS.
Each Selling Holder agrees to indemnify and hold harmless the Company, its
officers and directors, and each Person, if any, which controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the
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foregoing indemnity from the Company to each Selling Holder, but only with
reference to information furnished in writing by or on behalf of such Selling
Holder expressly for use in any registration statement or prospectus relating to
the Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus. Each Selling Holder also agrees to indemnify and hold
harmless any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 4.2, but only with reference to information furnished in writing by or
on behalf of such Selling Holder expressly for use in any registration statement
or prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus. Each such Selling Holder's
liability under this Section 4.2 shall be limited to an amount equal to the net
proceeds (after deducting the underwriting discount and expenses) received by
such Selling Holder from the sale of such Registrable Securities by such Selling
Holder. The obligation of each Selling Holder shall be several and not joint.
4.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS.
In case any proceeding (including any governmental investigation) shall be
instituted involving any Person in respect of which indemnity may be sought
pursuant to Section 4.1 or Section 4.2, such Person (the "Indemnified Party")
shall promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon the request of
the Indemnified Party, shall retain counsel reasonably satisfactory to such
Indemnified Party to represent such Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and, in the written
opinion of counsel for the Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Indemnified
Parties, such firm shall be designated in writing by the Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent (not to
be unreasonably withheld), or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.
4.4 CONTRIBUTION.
If the indemnification provided for in this Article IV is unavailable to
an Indemnified Party in respect of any losses, claims, damages or liabilities in
respect of which indemnity is to
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be provided hereunder, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall to the fullest extent permitted by
law contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of such party in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company, a Selling Holder and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and each Selling Holder agrees that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article IV, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and each Selling
Holder shall not be required to contribute any amount in excess of the amount by
which the net proceeds of the offering (before deducting expenses) received by
such Selling Holder exceeds the amount of any damages which such Selling Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE V
MISCELLANEOUS
5.1 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
No Person may participate in any underwritten registered offering
contemplated hereunder unless such Person (a) agrees to sell its securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, custody arrangements, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and this Agreement and (c) furnishes in
writing to the Company such information regarding such Person, the plan of
distribution of the Registrable Securities and other information as the Company
may from time to time request or as may be legally required in connection with
such registration; provided, however, that no such
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Person shall be required to make any representations or warranties in connection
with any such registration other than representations and warranties as to (i)
such Person's ownership of his or its Registrable Securities to be sold or
transferred free and clear of all liens, claims and encumbrances, (ii) such
Person's power and authority to effect such transfer and (iii) such matters
pertaining to compliance with securities laws as may be reasonably requested;
provided further, however, that the obligation of such Person to indemnify
pursuant to any such underwriting agreements shall be several, not joint and
several, among such Persons selling Registrable Securities, and the liability of
each such Person will be in proportion to, and provided further that such
liability will be limited to, the net amount received by such Person from the
sale of such Person's Registrable Securities pursuant to such registration.
5.2 RULE 144.
The Company covenants that it will file any reports required to be filed
by it under the Securities Act and the Exchange Act and that it will take such
further action as the Holders may reasonably request to the extent required from
time to time to enable the Holders to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Holder, the Company will deliver to such
Holder a written statement as to whether it has complied with such reporting
requirements.
5.3 HOLDBACK AGREEMENTS.
(a) The Holders. Each Holder, for so long as he or it individually
owns Registrable Securities representing ten percent or more of the voting power
of the outstanding voting securities of the Company, agrees, in the event of an
underwritten offering by the Company (whether for the account of the Company or
otherwise) not to offer, sell, contract to sell or otherwise dispose of any
Registrable Securities, or any securities convertible into or exchangeable or
exercisable for such securities, including any sale pursuant to Rule 144 under
the Securities Act (except as part of such underwritten offering), during the 14
days prior to, and during the 90-day period (or such lesser period as the lead
or managing underwriters may require) beginning on, the effective date of the
registration statement for such underwritten offering (or, in the case of an
offering pursuant to an effective shelf registration statement pursuant to Rule
415, the pricing date for such underwritten offering), provided that in
connection with such underwritten offering each officer and director of the
Company and holder of ten percent or more of the Common Stock is subject to
restrictions substantially equivalent to those imposed on the Holders.
(b) Restrictions on Public Sale by the Company. The Company agrees
(i) without the written consent of the managing Underwriters in an underwritten
offering of Registrable Securities covered by a registration statement filed
pursuant to this Agreement, not to effect any public or private sale or
distribution of its equity securities, including a sale pursuant to Regulation D
under the Securities Act, during the period beginning 14 days prior to, and
ending 90 days after, the closing date of each underwritten offering made
pursuant to such Registration Statement (except (w) on Form S-8 or any successor
form to such Form, (x) upon the exercise of any warrants, options or other
securities exercisable or convertible into Common Stock
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outstanding on the date hereof or (y) the grant or exercise of options to
employees of the Company pursuant to any duly adopted employee stock option
plan); provided, however, that such period shall be extended by the number of
days from and including the date of the giving of any notice pursuant to Section
3.1(f) hereof to and including the date when each seller of Registrable
Securities covered by such registration statement shall have received the copies
of the supplemented or amended prospectus contemplated by Section 3.1(f) hereof,
and (ii) to cause each holder of its equity securities purchased from the
Company at any time on or after the date of this Agreement (other than equity
securities purchased in a registered public offering) to agree not to effect any
public sale or distribution of any such equity securities during such periods,
including a sale pursuant to Rule 144.
5.4 TERMINATION.
The registration rights granted under this Agreement will terminate on
December 31, 2015, or such earlier time as there shall no longer be any
Registrable Securities.
5.5 AMENDMENTS, WAIVERS, ETC.
This Agreement may not be amended, waived or otherwise modified or
terminated except by an instrument in writing signed by the Company and the
Holders of at least a majority of the Registrable Securities then held by all
the Holders, if the amendment is to be effective against the Holders.
5.6 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement. Each party need not sign the
same counterpart.
5.7 ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
5.8 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Maryland regardless of the laws that might otherwise govern
under applicable principles of conflicts of law thereof.
5.9 ASSIGNMENT OF REGISTRATION RIGHTS.
Each Holder of the Registrable Securities may assign all or any part of
its rights under this Agreement to any person to whom such Holder sells,
transfers, assigns or pledges such Registrable Securities. In the event that the
Holder shall assign its rights pursuant to this Agreement in connection with the
transfer of less than all its Registrable Securities, the Holder shall also
retain its rights with respect to its remaining Registrable Securities.
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5.10 BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
Company and any successor organization which shall succeed to substantially all
of the business and property of the Company, whether by merger, consolidation,
acquisition of all or substantially all of the assets of the Company or
otherwise, including by operation of law ("Successor"). The Company hereby
covenants and agrees that it shall cause any Successor to adopt and assume this
Agreement. If a parent entity of the Company or its Successor becomes the issuer
of the Registrable Securities, then the Company or such Successor shall cause
such parent entity to adopt and assume this Agreement to the same extent as if
the parent entity were the Company or such Successor.
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IN WITNESS WHEREOF, the Company and each Holder has caused this Agreement
to be signed on its behalf by its officer thereunto duly authorized as of the
date first written above.
U.S. RESTAURANT PROPERTIES, INC.
By: /s/ XXXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
LSF3 CAPITAL INVESTMENTS, I, LLC
By: /s/ X.X. DELL
---------------------------------
Name: X.X. Dell
Title: President
LSF3 CAPITAL INVESTMENTS, II, LLC
By: /s/ X.X. DELL
---------------------------------
Name: X.X. Dell
Title: President
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