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REGISTRATION RIGHTS AGREEMENT
Dated as of March 19, 1997
by and among
QUALITY FOOD CENTERS, INC.,
as Issuer,
the Guarantors named on the signature pages hereof,
and
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
and
BANCAMERICA SECURITIES, INC.,
as Purchasers
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of March 19, 1997 among Quality Food Centers, Inc., a Washington
corporation (the "Issuer"), the Guarantors named on the signature pages hereof,
and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated and BancAmerica Securities, Inc. (collectively, the
"Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated March 13,
1997 among the Issuer, the Guarantors named on the signatures pages hereof and
the Purchasers (the "Purchase Agreement"), which provides for the sale by the
Issuer to the Purchasers of $150,000,000 aggregate principal amount of the
Issuer's 8.70% Senior Subordinated Notes due 2007 (the "Securities"). In order
to induce the Purchasers to enter into the Purchase Agreement, the Issuer and
the Guarantors named on the signature pages hereof have agreed to provide to the
Purchasers and their respective direct and indirect transferees, among other
things, the registration rights for the Securities set forth in this Agreement.
The execution of this Agreement is a condition to the closing of the
transactions contemplated by the Purchase Agreement.
NOW THEREFORE, in consideration of the mutual agreements set forth herein
and in the Purchase Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings (and, unless otherwise indicated, capitalized terms used herein without
definition shall have the meanings ascribed to them by the Purchase Agreement):
Advice: See Section 5 hereof.
Applicable Period: See Section 2 hereof.
beneficial owner: In the case of Securities held by The Depository Trust
Company or another similar depositary, a beneficial owner of such Securities.
Blackout Period: See Section 5 hereof.
Business Combination Blackout Period: See Section 5 hereof.
Effectiveness Period: See Section 3 hereof.
Effectiveness Target Date: See Section 4 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Exchange Offer: See Section 2 hereof.
Exchange Offer Registration Statement: See Section 2 hereof.
Exchange Securities: See Section 2 hereof.
Guarantors: The Guarantors, as defined in the Indenture, and including,
without limitation, the Guarantors named on the signature pages hereof.
Holder: Any registered holder of Transfer Restricted Securities.
Indenture: The Indenture dated as of March 19, 1997 among the Issuer, the
Guarantors and First Trust National Association, as trustee, pursuant to which
the Securities are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Inspectors: See Section 5 hereof.
Issue Date: The date of first issuance of Securities under the Indenture.
Issuer: Quality Food Centers, Inc., a Washington corporation, until a
successor replaces it as the "Company" as defined in, and in accordance with the
provisions, of the Indenture, and thereafter means such successor.
Liquidated Damages: See Section 4 hereof.
Material Business Combination: See Section 5 hereof.
Parent: Such term shall have the meaning set forth in the Indenture.
Participating Broker-Dealer: See Section 2 hereof.
Person or person: An individual, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
business association, firm or other legal entity.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and any
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act) with respect to the offering of any
portion of the Exchange Securities and/or the Transfer Restricted Securities (as
applicable) covered by such Registration Statement, and all amendments and
supplements to such prospectus (including, without limitation, by the filing of
post-effective
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amendments to any such Registration Statement), and all material incorporated or
deemed to be incorporated by reference in such prospectus.
Purchase Agreement: See the introductory paragraph to this Agreement.
Purchasers: See the introductory paragraph to this Agreement.
Registration Default: See Section 4 hereof.
Registration Statement: Any registration statement of the Issuer and the
persons who at the time are the Guarantors, including, but not limited to, the
Exchange Offer Registration Statement and the Shelf Registration (if any), or
that otherwise covers any of the Transfer Restricted Securities or Exchange
Securities pursuant to the provisions of this Agreement, including the
Prospectus, all information (if any) deemed to be part of such registration
statement pursuant to Rule 430A promulgated under the Securities Act, all
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
Rule 144: Rule 144 promulgated pursuant to the Securities Act, as
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
Rule 144A: Rule 144A promulgated pursuant to the Securities Act, as
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated pursuant to the Securities Act, as
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities: See the introductory paragraphs to this Agreement.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
Shelf Date: See Section 2 hereof.
Shelf Notice: See Section 2 hereof.
Shelf Registration: See Section 3 hereof.
TIA: The Trust Indenture Act of 1939, as amended, and the rules and
regulations of the SEC promulgated thereunder.
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Transfer Restricted Securities: The Securities upon original issuance
thereof and at all times subsequent thereto, until in the case of any such
Securities, the earliest of (i) the time at which a Registration Statement
covering such Securities has been declared effective by the SEC and such
Securities have been disposed of in accordance with and pursuant to such
effective Registration Statements, (ii) the time at which such Securities are
sold or distributed in compliance with Rule 144, or (iii) the time at which such
Securities cease to be outstanding (including, without limitation, upon an
exchange of such Securities for Exchange Securities in the Exchange Offer).
Trustee: The trustee under the Indenture and, if applicable, the trustee
under the indenture governing the Exchange Securities.
underwritten registration or underwritten offering: A registration in
which securities of the Issuer or a Guarantor are sold to an underwriter for
reoffering to the public.
For purposes of this agreement, all references to information which is
"included" or "contained" in a Registration Statement, Prospectus or preliminary
Prospectus, and all references of like import, shall be deemed to mean and
include the information incorporated or deemed to be incorporated by reference
therein, and all references to any amendment or supplement to a Registration
Statement, the Prospectus or any preliminary Prospectus, and all references of
like import, shall be deemed to mean and include the filing of any document
under the Exchange Act which is incorporated or deemed to be incorporated by
reference therein.
SECTION 2. Exchange Offer.
(a) The Issuer and the Guarantors agree to use their reasonable best
efforts to file with the SEC within 90 days after the Issue Date a registration
statement related to an offer to exchange (the "Exchange Offer") any and all of
the Transfer Restricted Securities for a like aggregate principal amount of
notes of the Issuer guaranteed on a like basis by the Guarantors (such notes and
guarantees, collectively the "Exchange Securities") which Exchange Securities
will be (i) substantially identical to (and will carry the same rights to
accrued and unpaid interest as) the Securities, except that such Exchange
Securities will not contain terms with respect to transfer restrictions and the
identity of the Guarantors may be different from the Guarantors that initially
guaranteed the Securities pursuant to the Indenture so long as the Securities
are at all times guaranteed in compliance with the Indenture, (ii) entitled to
the benefits of the Indenture or a trust indenture which is substantially
identical to the Indenture (other than such changes to the Indenture or any such
identical trust indenture as are necessary to comply with any requirements of
the SEC to effect or maintain the qualification thereof under the TIA and except
that any provisions with respect to transfer restrictions may be appropriately
changed or removed) and which, in either case, has been qualified under the TIA,
and (iii) registered pursuant to an effective Registration Statement in
compliance with the Securities Act. The Exchange Offer will be registered
pursuant to the Securities Act on an appropriate form of Registration Statement
(the "Exchange Offer Registration Statement") and will comply with all
applicable tender offer rules and regulations promulgated pursuant to the
Exchange Act and shall be duly registered or qualified pursuant to all
applicable state
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securities or Blue Sky laws ; provided that the Issuer and Guarantor shall not
be required to (A) qualify generally to do business in any jurisdiction where
they are not then so qualified or (B) subject themselves to general taxation in
any jurisdiction where they are not then so subject to taxation. The Exchange
Offer shall not be subject to any condition, other than that the Exchange Offer
does not violate any applicable law or interpretation of the staff of the SEC.
No securities shall be included in the Exchange Offer Registration Statement
other than the Transfer Restricted Securities and the Exchange Securities. The
Issuer and the Guarantors agree to (x) use their reasonable best efforts to
cause the Exchange Offer Registration Statement to become effective pursuant to
the Securities Act within 180 days after the Issue Date; (y) keep the Exchange
Offer open for not less than 30 days (or such longer period required by
applicable law) after the date that the notice of the Exchange Offer referred to
below is mailed to Holders; and (z) use their reasonable best efforts to
consummate the Exchange Offer within 45 days after the Effectiveness Target
Date. Each Holder who participates in the Exchange Offer will be required to
represent that any Exchange Securities received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
person to participate in the distribution of the Exchange Securities, and that
such Holder is not an "affiliate" of the Issuer or the Guarantors within the
meaning of Rule 405 of the Securities Act (or that if it is such an affiliate,
it will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable). Each Holder that is not a
Participating Broker-Dealer will be required to represent that it is not engaged
in, and does not intend to engage in, the distribution of the Exchange
Securities. Each Holder that (i) is a Participating Broker Dealer and (ii) will
receive Exchange Securities for its own account in exchange for the Transfer
Restricted Securities that it acquired as the result of market-making or other
trading activities will be required to acknowledge that it will deliver a
prospectus as required by law in connection with any resale of such Exchange
Securities. Upon consummation of the Exchange Offer in accordance with this
Agreement, the Issuer and the Guarantors shall have no further obligation to
register Transfer Restricted Securities pursuant to Section 3 of this Agreement.
(b) The Issuer and the Guarantors shall include within the Prospectus
contained in the Exchange Offer Registration Statement a section entitled "Plan
of Distribution," reasonably acceptable to the Purchasers, which shall contain a
summary statement of the positions taken or policies made by the staff of the
SEC with respect to the potential "underwriter" status of any broker-dealer that
is the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer"). Such "Plan of Distribution" section shall also
allow the use of the Prospectus by all persons subject to the prospectus
delivery requirements of the Securities Act, including all Participating
Broker-Dealers, and include a statement describing the means by which
Participating Broker-Dealers may resell the Exchange Securities.
The Issuer and the Guarantors shall use their reasonable best efforts to
keep the Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such Prospectus
to be lawfully delivered by all persons subject to the prospectus delivery
requirements of the Securities Act for a period commencing
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on the date on which Exchange Offer Registration Statement is declared effective
and ending on the earlier of (i) 180 days after the date on which the Exchange
Offer is consummated (or such longer period if extended pursuant to the last
paragraph of Section 5 hereof) and (ii) the date on which all Participating
Broker-Dealers have sold their Exchange Securities (the "Applicable Period").
In connection with the Exchange Offer, the Issuer shall:
(a) mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;
(b) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York; and
(c) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York time, on the last business day on which
the Exchange Offer shall remain open.
As soon as practicable after the close of the Exchange Offer, the Issuer
and the Guarantors shall:
(i) accept for exchange all Securities validly tendered and not
withdrawn pursuant to the Exchange Offer;
(ii) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(iii) cause the Trustee to authenticate and deliver promptly to each
Holder of Securities so accepted for exchange, Exchange Securities equal
in principal amount to the Securities of such Holder so accepted for
exchange.
(c) If (1) prior to the consummation of the Exchange Offer, applicable
interpretations of the staff of the SEC do not permit the Issuer and the
Guarantors to effect the Exchange Offer, or (2) if for any other reason the
Exchange Offer is not consummated by the date (the "Shelf Date") that is the
earlier of (x) 60 days after the effective date of the Exchange Offer
Registration Statement and (y) 240 days after the Issue Date, then the Issuer
shall promptly deliver to the Holders and the Trustee written notice thereof
(the "Shelf Notice") and the Issuer and the Guarantors shall use their
reasonable best efforts to file a Registration Statement pursuant to Section 3
hereof. Following the delivery of a Shelf Notice to the Holders of Transfer
Restricted Securities, the Issuer and the Guarantors shall not have any further
obligation to conduct the Exchange Offer pursuant to this Section 2 provided
that the Issuer and the Guarantors shall have the right, at their option, to
proceed to consummate the Exchange Offer so long as they shall also comply with
their obligations under Section 3 and, to the extent that they shall consummate
the Exchange Offer, their obligation to consummate a Shelf Registration shall
terminate.
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SECTION 3. Shelf Registration.
If the Issuer is required to deliver a Shelf Notice as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. The Issuer and the Guarantors shall prepare and
use their reasonable best efforts to file with the SEC, within 45 days after the
Shelf Date, a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Transfer Restricted Securities
(the "Shelf Registration"). The Shelf Registration shall be on Form S-3 or
another appropriate form permitting registration of the Transfer Restricted
Securities for resale by the Holders in the manner or manners designated by them
(including, without limitation, one or more underwritten offerings). The Issuer
and the Guarantors shall not permit any securities other than the Transfer
Restricted Securities to be included in the Shelf Registration. The Issuer and
the Guarantors shall use their reasonable best efforts, as described in Section
5(b) hereof, to cause the Shelf Registration to be declared effective pursuant
to the Securities Act on or prior to the 135th day after the Shelf Date and to
keep the Shelf Registration continuously effective under the Securities Act
until the date which is 36 months (or, if the holding period under Rule 144(k)
under the Securities Act is reduced to two years, 24 months) after the Issue
Date (or such longer period if extended pursuant to the last paragraph of
Section 5 hereof or the last sentence of the first paragraph of Section 9(b)
hereof) or such shorter period ending when either (1) all Transfer Restricted
Securities covered by the Shelf Registration have been sold in the manner set
forth and as contemplated in the Shelf Registration or (2) there cease to be
outstanding any Transfer Restricted Securities (the "Effectiveness Period").
(b) Supplements and Amendments. The Issuer and the Guarantors shall
promptly supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act or the SEC, or if
reasonably requested by the Holders of a majority in aggregate principal amount
of the Transfer Restricted Securities covered by such Registration Statement or
by any managing underwriter of such Transfer Restricted Securities.
(c) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
pursuant to this Agreement unless and until such Holder furnishes to the Issuer,
but only to the extent requested in writing by the Issuer, such information
specified in Item 507 or 508, as applicable, of Regulation S-K under the
Securities Act relating to such Holder which is required to be included in any
Shelf Registration or related Prospectus or preliminary Prospectus. Each Holder
of any Transfer Restricted Securities registered pursuant to any Shelf
Registration agrees to furnish promptly to the Issuer all information required
to be disclosed in order to make the information previously furnished to the
Issuer by such Holder not materially misleading.
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SECTION 4. Liquidated Damages.
(a) The Issuer, the Guarantors and the Purchasers agree that the Holders
of Transfer Restricted Securities will suffer damages if the Issuer or the
Guarantors fail to fulfill their obligations pursuant to Section 2 or Section 3
hereof and that it would not be possible to ascertain the extent of such
damages. Accordingly, in the event of such failure by the Issuer or the
Guarantors to fulfill such obligations, the Issuer and the Guarantors hereby
agree to pay liquidated damages ("Liquidated Damages") to each Holder of
Transfer Restricted Securities under the circumstances and to the extent set
forth below:
(i) if neither the Exchange Offer Registration Statement nor the
Shelf Registration has been filed with the SEC on or prior to the date
specified for such filing; or
(ii) if neither the Exchange Offer Registration Statement nor the
Shelf Registration is declared effective by the SEC on or prior to the
date specified herein for such effectiveness (the "Effectiveness Target
Date"); or
(iii) if an Exchange Offer Registration Statement is declared
effective by the SEC and, on or prior to 45 days following the earlier of
(i) the effectiveness thereof and (ii) the Effectiveness Target Date, the
Issuer and the Guarantors have not exchanged Exchange Securities for all
Securities validly tendered and not withdrawn in accordance with the terms
of the Exchange Offer; or
(iv) the Shelf Registration has been declared effective by the SEC
and such Shelf Registration ceases to be effective or such Shelf
Registration Statement or the related Prospectus ceases to be usable in
connection with the resale of Transfer Restricted Securities at any time
during the Effectiveness Period (other than because of a Business
Combination Blackout Period); or
(v) the Prospectus which is a part of the Exchange Offer
Registration Statement ceases to be usable during the Applicable Period
(other than because of a Business Combination Blackout Period) in
connection with the resale of Exchange Securities by Participating
Broker-Dealers; or
(vi) there shall have occurred a Business Combination Blackout
Period in the 60-day period preceding the end of the Effectiveness Period
or the aggregate number of days in all Business Combination Blackout
Periods during any 12-month period shall have exceeded 45 days;
(any of the foregoing, a "Registration Default") then, with respect to the first
90-day period or portion thereof following such Registration Default, the Issuer
and the Guarantors shall pay to each Holder of Transfer Restricted Securities
(or, in the case of Registration Defaults referred to in clause (v) above, to
Participating Broker-Dealers holding Transfer Restricted Securities) Liquidated
Damages in an amount equal to $.05 per week per $1,000 principal amount of
Transfer Restricted Securities held by such Holder or such Participating
Broker-Dealer, as
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applicable, for each week or portion thereof that the Registration Default
continues. The amount of such Liquidated Damages will increase by an additional
$.05 per week per $1,000 principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period or portion thereof until all
Registration Defaults have been cured; provided, however, that Liquidated
Damages shall not at any time exceed $.25 per week per $1,000 principal amount
of Transfer Restricted Securities (regardless of whether one or more than one
Registration Default is outstanding). Following the cure of all Registration
Defaults relating to any Transfer Restricted Securities, the accrual of
Liquidated Damages with respect to such Transfer Restricted Securities will
cease, provided that Liquidated Damages may thereafter again begin to accrue
upon the occurrence of any further Registration Default. A Registration Default
under clause (i) above shall be cured on the date that either the Exchange Offer
Registration Statement or the Shelf Registration is filed with the SEC; a
Registration Default under clause (ii) above shall be cured on the date that
either the Exchange Offer Registration Statement or the Shelf Registration is
declared effective by the SEC; a Registration Default under clause (iii) above
shall be cured on the earlier of the date (A) the Exchange Offer is consummated
or (B) the Issuer delivers a Shelf Notice to the Holders of Transfer Restricted
Securities; a Registration Default under clause (iv) above shall be cured on the
earlier of the date (A) the Shelf Registration again become effective, the Shelf
Registration Statement and the related Prospectus are useable in connection with
the resale of Transfer Restricted Securities and the Issuer shall have notified
Holders that use of such Prospectus may be resumed and shall have delivered to
Holders any required amendments or supplements thereto or (B) the Effectiveness
Period expires; a Registration Default under clause (v) above shall be cured on
the date the Prospectus which is part of the Exchange Offer Registration
Statement is useable in connection with the resale of Exchange Securities by
Participating Broker- Dealers and the Issuer shall have notified Participating
Broker-Dealers that use of such Prospectus may be resumed and shall have
delivered to them any required amendments or supplements thereto; and a
Registration Default under clause (vi) above resulting from the occurrence of a
Business Combination Blackout Period in the 6-month period preceding the end of
the Effectiveness Period, or resulting from the aggregate number of days in all
Business Combination Blackout Periods in any 12-month period exceeding 45 days,
shall be deemed to have been cured when such Business Combination Blackout
Period or the then most recent Business Combination Blackout Period, as the case
may be, shall have terminated.
(b) The Issuer shall notify the Trustee within one business day after each
and every date on which a Registration Default occurs. Liquidated Damages shall
be paid by the Issuer and the Guarantors to the Holders on the semi-annual
interest payment dates provided in the Indenture to the Holders on the related
interest payment record dates or by wire transfer of immediately available funds
to the accounts specified by them or by mailing checks to their registered
addresses if no such accounts have been specified on or before the fifth
business day preceding the semi-annual interest payment date provided in the
Indenture (whether or not any interest is then payable on the Securities);
provided that, in the case of Securities held in global book-entry form, the
payment of Liquidated Damages shall be made in accordance with the Depositary's
customary procedures; and provided, further, that if any Security is redeemed by
the Issuer or purchased by the Issuer pursuant to an Asset Sale Offer or Change
of Control Offer (as such terms are defined in the Indenture), then Liquidated
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Damages payable in respect of the Securities (or portions thereof) to be so
redeemed or purchased shall be paid to the person entitled to receive the
accrued and unpaid interest on such Securities (or portions thereof) on the
relevant redemption date or purchase date; and provided, further, that if the
principal of the Securities is declared or becomes due and payable prior to its
Stated Maturity (as defined in the Indenture) pursuant to the Indenture, then
all accrued and unpaid Liquidated Damages shall also be and become due and
payable immediately and, in the event that any such acceleration of the
Securities is rescinded or annulled in accordance with the provisions of the
Indenture, the acceleration of such Liquidated Damages shall likewise be
rescinded and annulled. Liquidated Damages shall accrue from and including the
date of the applicable Registration Default to but excluding the date when all
Registration Defaults have been cured.
SECTION 5. Registration Procedures.
In connection with the registration of any Exchange Securities or Transfer
Restricted Securities pursuant to Section 2 or 3 hereof, the Issuer and the
Guarantors shall effect such registration to permit the sale of such Exchange
Securities or Transfer Restricted Securities (as applicable) in accordance with
the intended method or methods of disposition thereof, and pursuant thereto the
Issuer and the Guarantors shall:
(a) Prepare and use their reasonable best efforts to file with the SEC, a
Registration Statement or Registration Statements as prescribed by Section 2 or
Section 3 hereof, and use their reasonable best efforts to cause such
Registration Statement to become effective and remain effective as provided
herein; provided that if (1) such filing is pursuant to Section 3 hereof or (2)
a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuer shall furnish to
the Holders and afford the Holders (and, if applicable, the beneficial owners)
of the Transfer Restricted Securities and each such Participating Broker-Dealer,
as the case may be, covered by such Registration Statement, their counsel and
the managing underwriters, if any, a reasonable opportunity to review copies of
all such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed (at least 7
business days prior to such filing, or such later date as is reasonable under
the circumstances). The Issuer and the Guarantors shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto
(including, without limitation, any documents which would, upon filing thereof,
be incorporated by reference therein) in respect of which the Holders, pursuant
to this Agreement, must be afforded an opportunity to review prior to the filing
of such document, if the Holders of a majority in aggregate principal amount of
the Transfer Restricted Securities covered by such Registration Statement, or
any such Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration and Exchange Offer Registration Statement,
as the case may be, as may be necessary to keep such Registration Statement
continuously effective for the
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Effectiveness Period or the Applicable Period, as the case may be (or, if
earlier, until such time as no Transfer Restricted Securities are outstanding);
use their reasonable best efforts to cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to them with respect to the disposition of all securities covered by
such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any Securities being
sold by a Participating Broker-Dealer covered by any such Prospectus; the Issuer
and the Guarantors shall be deemed not to have used their reasonable best
efforts to keep a Registration Statement effective during the Effectiveness
Period or the Applicable Period, as applicable, if they voluntarily take any
action that would result in selling Holders of the Transfer Restricted
Securities covered thereby or Participating Broker-Dealers seeking to sell
Exchange Securities not being able to sell such Transfer Restricted Securities
or such Exchange Securities during that period, unless (i) such action is
required by applicable law or (ii) such action is taken by them in good faith
and for valid business reasons (not including avoidance of their obligations
hereunder), including, without limitation, the acquisition or divestiture of
assets (it being understood and agreed that the provisions of this sentence
shall not affect the Issuer's and the Guarantors' joint and several obligations
to pay Liquidated Damages in the event that a Registration Statement or
Prospectus is not effective or useable in connection with the resale of Transfer
Restricted Securities or Exchange Securities, as applicable, under the
circumstances set forth in Section 4 of this Agreement).
(c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, notify the selling Holders of Transfer Restricted
Securities, or each known Participating Broker-Dealer, as the case may be, their
counsel (to the extent previously identified to the Issuer) and the managing
underwriters, if any, promptly (but in any event within two business days) and
confirm such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective (including in such notice a written statement that any Holder may,
upon request, obtain from the Issuer, without charge, one conformed copy of such
Registration Statement or post-effective amendment including financial
statements and schedules, document incorporated or deemed to be incorporated by
reference and exhibits), (ii) of the issuance of any stop order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary Prospectus or Prospectus or the initiation
of any proceedings for that purpose, (iii) if at any time when a Prospectus is
required by the Securities Act to be delivered in connection with sales of the
Transfer Restricted Securities the representations and warranties of the Issuer
or any Guarantor contained in any agreement (including any underwriting
agreement) contemplated by Section 5(m) hereof cease to be true and correct,
(iv) of the receipt by the Issuer or any Guarantor of any notification with
respect to the suspension of the qualification or exemption from qualification
of a Registration Statement or any of the Transfer Restricted Securities or
Exchange Securities to be sold by any Participating Broker-Dealer for offer or
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sale in any jurisdiction, or initiation of any proceeding for such purpose, (v)
of the happening of any event or any information becoming known that makes any
statement made in a Registration Statement, any preliminary Prospectus or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in a Registration Statement, any preliminary Prospectus or Prospectus or
any such documents so that, in the case of the Registration Statement, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or so that, in the case of a preliminary Prospectus or
Prospectus, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and (vi) of the Issuer's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, use their best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Transfer
Restricted Securities or the Exchange Securities (as applicable) to be sold by
any Participating Broker-Dealer for sale in any jurisdiction, and, if any such
order is issued, to use their best efforts to obtain the withdrawal of any such
order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 hereof and if
requested by the managing underwriters, if any, or the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities being sold in
connection with an underwritten offering, (i) use their reasonable best efforts
to promptly incorporate in a Prospectus supplement or post-effective amendment
such information as the managing underwriters, if any, or such Holders or their
respective counsel reasonably request to be included therein, (ii) use their
reasonable best efforts to make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the Issuer
has received notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment, and use their reasonable best efforts to
(iii) supplement or make amendments to such Registration Statement with such
information as the managing underwriters, if any, or such Holders or counsel
reasonably requests to be included therein.
(f) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, furnish to each selling Holder of Transfer
Restricted Securities and to each such Participating Broker-Dealer who so
requests, to counsel identified by any Holder or Participating Broker-Dealer,
and to each managing underwriter, if any, without charge, one conformed copy of
the Registration
12
Statement or Registration Statements and each post-effective amendment thereto,
including financial statements, schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, deliver to each selling Holder and, if applicable,
beneficial owner of Transfer Restricted Securities, or each such Participating
Broker-Dealer, as the case may be, and to their respective counsel and to the
underwriters, if any, and their counsel without charge, as many copies of the
Prospectus or Prospectuses (including each form of preliminary Prospectus) and
each amendment or supplement thereto and any documents incorporated by reference
therein as such persons may reasonably request; and, subject to the last
paragraph of this Section 5 hereof, the Issuer and the Guarantors hereby consent
to the use of such Prospectus and each amendment or supplement thereto by each
of the selling Holders and beneficial owners of Transfer Restricted Securities
and each such Participating Broker-Dealer, as the case may be, and the
underwriters or agents, if any, and dealers (if any), in connection with the
offering and sale of the Transfer Restricted Securities covered by or the sale
by Participating Broker-Dealers of the Exchange Securities pursuant to such
Prospectus and any amendment or supplement thereto.
(h) If an Exchange Offer Registration Statement is filed pursuant to
Section 2 hereof, furnish to the Trustee, an opinion, dated the date of
consummation of the Exchange Offer, of counsel to the Issuer, to the effect that
the Exchange Securities have been duly authorized by the Issuer and, when
authenticated and delivered in exchange for the Securities, will be valid and
binding obligations of the Issuer, enforceable in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other
similar laws relating to or affecting creditors' rights generally or by general
principles of equity, and will be entitled to the benefits of the Indenture and
to the further effect that such opinion may be relied upon by each Holder of
Exchange Securities.
(i) Prior to any public offering of Transfer Restricted Securities or any
delivery of a Prospectus contained in the Exchange Offer Registration Statement
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, to use their reasonable best efforts to register or
qualify, and to cooperate with the selling Holders of Transfer Restricted
Securities or each such Participating Broker-Dealer, as the case may be, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Transfer Restricted Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as any selling Holder, any
selling beneficial owner, any Participating Broker-Dealer, or the managing
underwriters reasonably request, provided that where Exchange Securities held by
Participating Broker-Dealers or Transfer Restricted Securities are offered other
than through an underwritten offering, the Issuer and the Guarantors agree to
cause their counsel to perform Blue Sky investigations and file registrations
and qualifications required to be filed
13
pursuant to this Section 5(i) as so requested by the selling Holders (or, if
applicable, beneficial owners) or Participating Broker-Dealers; keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and do any
and all other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Securities held by
Participating Broker-Dealers or the Transfer Restricted Securities covered by
the applicable Registration Statement; provided that the Issuer and the
Guarantors shall not be required to (A) qualify generally to do business in any
jurisdiction where they are not then so qualified or (B) subject themselves to
general taxation in any such jurisdiction where they are not then so subject to
taxation.
(j) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Transfer Restricted Securities and the
managing underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company, and enable such Transfer
Restricted Securities to be in such denominations and registered in such names
as the managing underwriters, if any, or Holders may reasonably request.
(k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(v) or 5(c)(vi) above, as promptly as practicable prepare and use
their reasonable best efforts to (subject to Section 5(a) hereof) file with the
SEC, at the expense of the Issuer and the Guarantors, 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, or file any other required document so that, as thereafter
delivered to the purchasers of the Transfer Restricted Securities being sold
thereunder or to the purchasers of the Exchange Securities to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any 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. Notwithstanding the foregoing, the Issuer and the Guarantors
shall not be required to comply with this Section 5(k) if, and only for so long
as (A) either (I) the Subject Entity (as defined in the Indenture) or any of its
subsidiaries shall be engaged in a material acquisition or disposition (a
"Material Business Combination") and (II) (aa) such Material Business
Combination is required to be disclosed in a Registration Statement, the related
Prospectus, or any amendment or supplement thereto, or failure by the Issuer to
disclose such transaction in such Registration Statement, the related
Prospectus, or any amendment or supplement thereto, as then amended or
supplemented, would cause such Registration Statement to 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 not misleading, or
would cause such related Prospectus to 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
14
misleading, (bb) information regarding the existence of such Material Business
Combination has not been made publicly disclosed by or on behalf of the Issuer
and the Guarantors and (cc) a majority of the members of the Board of Directors
of the Subject Entity determines in the exercise of their good faith judgment
that disclosure of such Material Business Combination would not be in the best
interest of the Issuer and its subsidiaries or would have a material adverse
effect on the consummation of such Material Business Combination and (B) the
Issuer notifies the Holders to suspend use of the relevant Prospectus within two
business days after such Board of Directors makes the relevant determination set
forth in clause (A); provided, however, that in each such case each of the
Applicable Period and the Effectiveness Period shall be extended by the number
of days during which the use of the applicable Prospectus in connection with the
resale of Transfer Restricted Securities or Exchange Securities, as applicable,
was suspended pursuant to the foregoing.
(l) Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, (i) provide the Trustee with
certificates for the Transfer Restricted Securities in a form eligible for
deposit with The Depository Trust Company and (ii) provide a CUSIP number for
the Transfer Restricted Securities.
(m) In connection with an underwritten offering of Transfer Restricted
Securities pursuant to a Shelf Registration, enter into an underwriting
agreement as is customary in underwritten offerings and take all such other
actions as are reasonably requested by the managing underwriters in order to
expedite or facilitate the registration or the disposition of such Transfer
Restricted Securities, and in such connection, (i) make such representations and
warranties to the underwriters, with respect to the business of the Issuer, the
Guarantors and their respective subsidiaries and the Registration Statement, any
preliminary Prospectus, the Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in underwritten offerings, and confirm the same
if and when requested; (ii) obtain opinions of counsel to the Issuer and
Guarantors and, if applicable, to the Parent and to such other persons or
businesses which have been or are to be acquired by the Issuer, any Guarantor,
Parent or any of their respective subsidiaries and updates thereof in form and
substance reasonably satisfactory to the managing underwriters, addressed to the
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
underwriters; (iii) obtain "cold comfort" letters and updates thereof in form
and substance reasonably satisfactory to the managing underwriters from the
independent certified public accountants of the Issuer and the Guarantors (and,
if necessary, any other independent certified public accountants of Parent, or
any subsidiary of the Issuer, Parent or any of the Guarantors or of any person
or business acquired or to be acquired by any of them for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each of the underwriters, such letters to
be in customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings and such other
matters as are reasonably requested by underwriters as permitted by Statement on
Auditing Standards No. 72; and (iv) if an underwriting agreement is entered
into, the same shall contain indemnification and contribution provisions and
procedures no less favorable than those set forth in Section 7 hereof (or such
other provisions and procedures acceptable to Holders of a majority in
15
aggregate principal amount of Transfer Restricted Securities covered by such
Registration Statement and the managing underwriters or agents) with respect to
all parties to be indemnified pursuant to said Section. The above shall be done
at each closing under such underwriting agreement, or as and to the extent
required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, make available for inspection by each selling
Holder and each beneficial owner of such Transfer Restricted Securities being
sold, or each such Participating Broker-Dealer, as the case may be, any
underwriter participating in any such disposition of Transfer Restricted
Securities, if any, and any attorney, accountant or other agent retained by any
such selling Holder or beneficial owner or any such Participating Broker-Dealer,
as the case may be, or underwriter (collectively, the "Inspectors"), at the
offices where normally kept, during reasonable business hours, all financial and
other records, pertinent corporate documents and properties of the Issuer, the
Guarantors, Parent and their subsidiaries (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the Issuer,
the Guarantors and Parent and their respective subsidiaries (and, if applicable,
of any person or business acquired or to be acquired by any of them) and their
respective counsel and independent accountants to supply all information, and to
make themselves available for customary due diligence discussions, in each case
as reasonably requested by any such Inspector in connection with such
Registration Statement. If requested by the Issuer, each of the Inspectors will
agree with the Issuer that Records which the Issuer determines, in good faith to
be confidential and which the Issuer notifies the Inspectors in writing are
confidential shall not be disclosed by the Inspectors unless (i) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
such Registration Statement or the Prospectus, (ii) the disclosure of such
Records is required pursuant to any applicable law or regulation, (iii) the
disclosure of such Records is made pursuant to a subpoena or other order of, or
request (whether formal or informal) from, any governmental or regulatory body
or official or any court or tribunal in connection with any legal, governmental
or regulatory proceeding or investigation or the preparation therefor, or (iv)
the information in such Records has been made available to the public.
(o) Provide an indenture trustee for the Transfer Restricted Securities or
the Exchange Securities, as the case may be, and cause the indenture for such
Securities to be qualified under the TIA not later than the effective date of
the Exchange Offer or the first Registration Statement relating to the Transfer
Restricted Securities; and in connection therewith, cooperate with the trustee
under any such indenture and the Holders of the Transfer Restricted Securities,
to effect such changes to such indenture as may be required for such indenture
to be so qualified in accordance with the terms of the TIA; and execute, and use
its reasonable best efforts to cause such trustee to execute, all documents as
may be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable such indenture to be so qualified in
a timely manner.
16
(p) Comply with all applicable rules and regulations of the SEC and, as
soon as reasonably practicable, make generally available to its securityholders
consolidated earnings statements of the Issuer (including a condensed
consolidating footnote if required under SEC rules) and, if required by the SEC,
earnings statements for the Guarantors, Parent or any of their respective
subsidiaries (which need not be certified by an independent public accountant)
that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
(q) If an Exchange Offer is to be consummated, upon delivery of the
Transfer Restricted Securities by Holders to the Issuer (or to such other Person
as directed by the Issuer) in exchange for the Exchange Securities, the Issuer
and the Guarantors shall xxxx, or cause to be marked, on such Transfer
Restricted Securities that such Transfer Restricted Securities are being
cancelled in exchange for the Exchange Securities; in no event shall such
Transfer Restricted Securities be marked as paid or otherwise satisfied.
(r) Cooperate with each seller of Transfer Restricted Securities covered
by any Registration Statement and each underwriter, if any, participating in the
disposition of such Transfer Restricted Securities and their respective counsel
in connection with any filings required to be made with the National Association
of Securities Dealers, Inc. (the "NASD").
(s) Use their reasonable best efforts to take all other steps necessary to
effect the registration of the Transfer Restricted Securities covered by a
Registration Statement contemplated hereby.
(t) Use their reasonable best efforts to cause the Transfer Restricted
Securities or the Exchange Securities, as applicable, covered by an effective
registration statement required by Section 2 or Section 3 hereof to be rated
with appropriate rating agencies, if so requested by the Holders of a majority
in aggregate principal amount of Transfer Restricted Securities relating to such
registration statement or the managing underwriters in connection therewith, if
any.
The Issuer may require each seller of Transfer Restricted Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Issuer such information regarding such seller or Participating
Broker-Dealer and the distribution of such Transfer Restricted Securities or
Exchange Securities to be sold by such Participating Broker- Dealer, as the case
may be, as the Issuer may, from time to time, reasonably request. The Issuer may
exclude from such registration the Transfer Restricted Securities or Exchange
Securities of any seller or Participating Broker-Dealer, as the case may be, who
fails to furnish such information within a reasonable time after receiving such
request.
The Issuer may, by notice to Holders, require the Holders to suspend use
of the Prospectus which is part of the Shelf Registration Statement (and, in the
case of Participating Broker-Dealers, to suspend use of the Prospectus which is
part of the Exchange Offer Registration Statement) (i) for any number of periods
not to exceed 45 days in the aggregate in any 12-month period (other than the
60-day period preceding the end of the Effectiveness Period) if the Subject
Entity or any of its subsidiaries shall be engaged in a Material Business
Combination and the condition set forth in the last sentence of Section 5(k)
shall have been
17
satisfied or (ii) if any event of the kind described in Section 5(c)(ii),
5(c)(iv), 5(c)(v) or 5(c)(vi) hereof shall have occurred (in each case other
than as a result of a Material Business Combination or matters relating thereto)
(any period during which the use of such Prospectus is suspended as provided in
clause (i) or (ii) above being hereinafter called a "Blackout Period," and any
period during which the use of such Prospectus is suspended as provided in
clause (i) being hereinafter called a "Business Combination Blackout Period").
Each Holder of Transfer Restricted Securities and each Participating
Broker-Dealer agrees by acquisition of such Transfer Restricted Securities or
Exchange Securities to be sold by such Participating Broker-Dealer, as the case
may be, that, upon receipt of any notice from the Issuer to suspend the use of
the relevant Prospectus because an event or circumstance described in clause (i)
or (ii) of the preceding sentence has occurred, such Holder shall forthwith
discontinue disposition of such Transfer Restricted Securities covered by such
Prospectus or Exchange Securities to be sold by such Participating Broker-Dealer
covered by such Prospectus, as the case may be, until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
5(k) hereof, or until it is advised in writing (the "Advice") by the Issuer that
the use of the applicable Prospectus may be resumed, and has received copies of
any amendments or supplements thereto. In the event the Issuer shall give any
such notice, each of the Effectiveness Period and the Applicable Period shall be
extended by the number of days during periods from and including the date of the
giving of such notice to and including the date when each seller of Transfer
Restricted Securities covered by such Registration Statement or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
shall have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) or (y) the Advice.
SECTION 6. Registration Expenses.
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuer and the Guarantors shall be borne by the
Issuer and the Guarantors, whether or not the Exchange Offer or a Shelf
Registration is filed or becomes effective, including, without limitation, (i)
all registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Transfer Restricted Securities or Exchange Securities and determination of the
eligibility of the Transfer Restricted Securities or Exchange Securities for
investment under the laws of such jurisdictions (x) where the Holders or
beneficial owners of Transfer Restricted Securities are located, in the case of
the Exchange Securities, or (y) as provided in Section 5(i) hereof, in the case
of Transfer Restricted Securities or Exchange Securities to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Transfer Restricted Securities or Exchange Securities in a form eligible for
deposit with The Depository Trust Company and of printing Prospectuses if the
printing of Prospectuses is requested by the managing underwriters, if any, or,
in respect of Transfer Restricted Securities or Exchange Securities to be sold
by any Participating Broker-Dealer during the Applicable Period, by the Holders
of a majority in aggregate principal amount of the Transfer Restricted
Securities included in any Registration Statement or of such Exchange
18
Securities, as the case may be), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Issuer, the Guarantors
and their subsidiaries and affiliates and, if applicable, Parent and its
subsidiaries and, if applicable, counsel for any person or business acquired or
to be acquired by the Issuer, any of the Guarantors, Parent or any of their
respective subsidiaries, (v) fees and disbursements of all independent certified
public accountants referred to in Section 5(m)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) the fees and expenses of any
"qualified independent underwriter" or other independent appraiser participating
in an offering pursuant to Section 3 as contemplated by Rule 2720 of the Conduct
Rules of the NASD, (vii) rating agency fees, (viii) Securities Act liability
insurance, if the Issuer and the Guarantors desire such insurance, (ix) fees and
expenses of all other Persons retained by the Issuer, any of the Guarantors or,
if applicable, Parent, (x) internal expenses of the Issuer, the Guarantors and,
if applicable, Parent (including, without limitation, all salaries and expenses
or officers and employees of the Issuer and the Guarantors performing legal or
accounting duties), (xi) the expense of any audit, (xii) the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange and (xiii) the expenses relating to printing, word
processing and distributing all Registration Statements, Prospectuses,
preliminary Prospectuses, amendments or supplements to any of the foregoing,
underwriting agreements, securities sales agreements and indentures. Nothing
contained in this Section 6 shall require the Issuer or any Guarantor to pay or
reimburse any Holder for any underwriting discounts or commissions attributable
to the sale of any Transfer Restricted Securities of such Holder in an
underwritten offering pursuant to a Registration Statement filed pursuant to
Section 3 of this Agreement.
(b) In connection with any Shelf Registration hereunder, the Issuer and
the Guarantors shall reimburse the Holders and beneficial owners of the Transfer
Restricted Securities being registered in such registration for the reasonable
fees and disbursements of not more than one counsel chosen by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities to
be included in such Registration Statement and other reasonable out-of-pocket
expenses of the Holders and beneficial owners of Transfer Restricted Securities
reasonably incurred in connection with the registration of the Transfer
Restricted Securities.
SECTION 7. Indemnification.
The Issuer and the Guarantors agree to indemnify and hold harmless (i)
each of the Purchasers, each Holder of Transfer Restricted Securities, each
beneficial owner of Transfer Restricted Securities, each Holder of Exchange
Securities, each beneficial owner of Exchange Securities and each Participating
Broker-Dealer, (ii) each person, if any, who controls (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) any Person
referred to in clause (i) (any of the Persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person"), and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any of such Person referred to in clause (i) or any controlling person (any
Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to
as an "Indemnified Person") to the fullest extent lawful, from and against any
and all losses, claims damages, liabilities, judgments, actions and expenses
(including, without
19
limitation, and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing or defending any claim or action, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Person) directly or indirectly caused by, related to, based upon, or
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary Prospectus or Prospectus (in each case as amended or supplemented if
the Issuer shall have furnished any amendments or supplements thereto), or
caused by, related to, based upon, or arising out of or in connection with any
omission or alleged omission to state therein 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, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Indemnified Person furnished to the
Issuer in writing by such Indemnified Person expressly for use therein. The
Issuer and the Guarantors shall notify the Holders promptly upon becoming aware
thereof of the institution, threat or assertion of any claim, proceeding
(including any governmental investigation) or litigation of which any of them
shall have become aware relating to this Agreement which involves the Issuer,
any Guarantor, the Parent or an Indemnified Person.
In connection with any Registration Statement in which a Holder of
Transfer Restricted Securities is participating, such Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and hold
harmless the Issuer and each Guarantor, their respective directors, their
respective officers who signed such Registration Statement and each person who
controls the Issuer or any Guarantor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Issuer and the Guarantor to each Indemnified
Person, but only with reference to information relating to such Indemnified
Person furnished to the Issuer in writing by such Indemnified Person expressly
for use in any Registration Statement, preliminary Prospectus or Prospectus, (in
each case including any amendment or supplement thereto). The liability of any
Indemnified Person pursuant to this paragraph shall in no event exceed the net
proceeds received by such Indemnified Person from sales of Transfer Restricted
Securities giving rise to such obligations.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
person") in writing, and the indemnifying person shall be entitled to retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying person may reasonably
designate in such proceeding and shall pay the reasonable fees and expenses
actually incurred by 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 person and the indemnified
party shall have mutually agreed in writing to the contrary, (ii) the
indemnifying person failed promptly to
20
assume the defense and employ counsel reasonably satisfactory to the indemnified
party or (iii) the named parties to any such action (including any impleaded
parties) include both such indemnified party and the indemnifying person, or any
affiliate of the indemnifying person, and such indemnified party shall have been
advised by counsel that either (x) there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying person or such affiliate of the indemnifying person or (y) a
conflict may exist between such indemnified party and the indemnifying person or
such affiliate of the indemnifying person (in which case the indemnifying person
shall not have the right to assume the defense of such action on behalf of such
indemnified party, it being understood, however, that the indemnifying person
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such indemnified parties, which firm (together with any such local counsel)
shall be designated in writing by those indemnified parties who sold a majority
in aggregate principal amount of Transfer Restricted Securities sold by all such
indemnified parties, and any such separate firm for the Issuer and the
Guarantors, their directors, their officers who signed the Registration
Statement and such control persons of the Issuer and the Guarantors shall be
designated in writing by the Issuer. The indemnifying person shall not be liable
for any settlement of any proceeding effected without its prior written consent,
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying person agrees to indemnify each indemnified party
from and against any and all loss or liability by reason of such settlement or
judgment. No indemnifying person shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein (other than by
reason of the exceptions provided therein), then each indemnifying person under
such paragraphs, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities, or expenses, as incurred,
(i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnified party on the one hand and the indemnifying person(s)
on the other in connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities, or expenses or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying person(s)
and the indemnified party, as well as any other relevant equitable
considerations. The relative fault of the Issuer and the Guarantors on the one
hand and any Indemnified Persons 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 or alleged omission to state a material fact
relates to information supplied by the Issuer and the Guarantors or by such
Indemnified Person and the parties' relative
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intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The parties agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if such
indemnified parties 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 and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include any reasonable legal or other expenses actually incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall an
Indemnified Person be required to contribute any amount in excess of the amount
by which net proceeds received by such Indemnified Person from sales of Transfer
Restricted Securities or Exchange Securities exceeds the amount of any damages
that such Indemnified Person has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7 will
be in addition to any liability which the indemnifying parties may otherwise
have to the indemnified parties referred to above. The Indemnified Persons'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective principal amount of Securities sold by each Indemnified
Persons hereunder and not joint.
SECTION 8. Rules 144 and 144A
The Issuer and the Guarantors covenant that they will file the annual,
quarterly and other reports and information required to be filed by the Issuer
and the Guarantors pursuant to the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner and, upon
the request of any Holder or beneficial owner of Transfer Restricted Securities,
they will make available to such Holder or beneficial owner of Transfer
Restricted Securities in connection with any sale thereof and to any prospective
purchaser of such Transfer Restricted Securities from such Holder or beneficial
owner, all such other information (if any), including, without limitation,
information with respect to the Parent, required by Rule 144 and Rule 144A under
the Securities Act in order to permit sales of such Transfer Restricted
Securities pursuant to Rule 144 and Rule 144A.
The Issuer and the Guarantors further covenant that they will file the
annual, quarterly and other reports and information, including, without
limitation, information with respect to the Parent, necessary to satisfy the
requirements of Rule 144(d) or any successor provision thereto.
The Issuer and the Guarantors further covenant that they will take such
further action as any Holder or beneficial owner of Transfer Restricted
Securities may reasonably request
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from time (including, without limitation, providing such information, if any,
including, without limitation, information with respect to the Parent, as may be
required pursuant to Rule 144A(d)(iv) in order to permit resales of Transfer
Restricted Securities pursuant to Rule 144A) to time to enable such Holder or
beneficial owner, as applicable, to sell Transfer Restricted Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 and Rule 144A under the Securities Act, as such rules
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC.
SECTION 9. Underwritten Registrations.
(a) If any of the Transfer Restricted Securities covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the Holders of a majority in aggregate principal amount of such
Transfer Restricted Securities included in such offering and reasonably
acceptable to the Issuer.
No Holder or beneficial owner of Transfer Restricted Securities may
participate in any underwritten registration hereunder, unless such Holder or
beneficial owner (a) agrees to sell its Transfer Restricted Securities on the
basis provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
SECTION 10. Miscellaneous.
(a) Remedies. In the event of a breach by the Issuer or any Guarantor of
any of its obligations under this Agreement, each Holder or beneficial owner of
Transfer Restricted Securities, in addition to being entitled to exercise all
rights provided herein, in the Indenture or, in the case of the Purchasers, in
the Purchase Agreement, or granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Agreement. The
Issuer and the Guarantors agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by any of them of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, they shall
waive the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuer and the Guarantors have not, as
of the date hereof, and they shall not, after the date of this Agreement, enter
into any agreement with respect to any of their respective securities that is
inconsistent with or conflicts with the rights granted to the Holders of
Transfer Restricted Securities in this Agreement or otherwise conflicts with the
provisions hereof. The Issuer and the Guarantors have not entered, and will not
enter, into any agreement with respect to any of their respective securities
which grants or will grant to any Person piggyback registration rights with
respect to a Registration Statement, except for agreements entered into on or
prior to the date of this Agreement under which such piggy-back registration
rights have been waived in writing by all of the holders thereof.
23
(c) Amendments and Waivers. Except as provided in Section 10(d) below, the
provisions of this Agreement, including the provisions of this sentence, may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given, unless the Issuer has obtained the
written consent of Holders of at least a majority of the then outstanding
aggregate principal amount of Transfer Restricted Securities. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions with respect to
a matter that relates exclusively to the rights of Holders of Transfer
Restricted Securities whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect, impair, limit or
compromise the rights of other Holders of Transfer Restricted Securities may be
given by Holders of at least a majority in aggregate principal amount of the
Transfer Restricted Securities being sold by such Holders pursuant to such
Registration Statement; provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(d) Amendments Without Consent of Holders. The Issuer shall not enter into
any transaction pursuant to Section 5.1 of the Indenture as a result of which
another corporation would succeed to and be substituted for the Issuer under the
Indenture unless such successor corporation and the Guarantors shall have
delivered a written instrument to the Purchasers to the effect that such
successor corporation agrees to be bound by and comply with all of the covenants
and agreements of, and to make all of the representations and warranties of, the
Issuer in this Agreement, and to the further effect that the Guarantors confirm
that their respective covenants, agreements, representations and warranties
under this Agreement remain in full force and effect. Concurrently with the
addition of any person as a Guarantor under the Indenture, such person shall
enter into and deliver to the other parties hereto a written instrument whereby
such person shall agree to comply with the covenants and agreements of, and to
make the representations and warranties of, and otherwise to become, a Guarantor
under this Agreement. Upon the release of any Guarantor from its obligations
under the Indenture in accordance with the provisions of the Indenture, such
Guarantor shall be released from all of its obligations under this Agreement.
Any amendments or modifications to this Agreement entered into to reflect any of
the transactions referred to in this Section 10(d) may be entered into without
the consent of any Holders.
(e) Notices. All notices and other communications (including, without
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
(i) if to a Holder of Transfer Restricted Securities, at the most
current address given by the Trustee to the Issuer; and
(ii) if to the Issuer or the Guarantors, Quality Food Centers, Inc.,
00000 X.X. 00xx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx X. Xxxxxxx.
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All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier, if made by next-day air
courier; and when receipt is acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto,
including, without limitation and without the need for an express assignment,
subsequent Holders and beneficial owners of Transfer Restricted Securities. The
Issuer and the Guarantors agree that the Holders and beneficial owners of the
Securities shall be third party creditor beneficiaries of the agreements made
hereunder by the Purchasers, the Issuer and the Guarantors, and each Holder and
beneficial owner shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Government Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES, TO THE EXTENT PERMITTED BY
LAW, TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties hereto that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
25
(k) Entire Agreement. This Agreement, together with the Purchase
Agreement, is intended by the parties hereto as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(l) Securities Held by the Issuer, the Guarantors or their Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Transfer Restricted Securities is required hereunder, Transfer Restricted
Securities held by the Issuer, the Guarantors, Parent or any of their respective
affiliates (as such term is defined in Rule 405 under the Securities Act) shall
not be counted in determining whether such consent or approval was given by the
Holders of such required percentage.
(m) Joint and Several Obligations of the Issuer and Guarantors. Anything
herein to the contrary notwithstanding, the obligations of the Issuer and the
Guarantors hereunder are joint and several.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Issuer:
QUALITY FOOD CENTERS, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name:
Title:
Guarantors:
QUALITY FOOD HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name:
Title:
XXXXXX MARKETS, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name:
Title:
KU ACQUISITION CORPORATION
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name:
Title:
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The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION,
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxxxx XxXxx
-----------------------------
Name:
Title:
BANCAMERICA SECURITIES, INC.
By: /s/ Xxxx Xxxxxx
-----------------------------
Name:
Title:
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