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EXHIBIT 99.1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of March 10, 1998 among
XXXX XXXXX, INC., a Delaware corporation (the "ISSUER"), and the Holders (as
defined herein).
WHEREAS, this Agreement is being entered into in connection with
the closing under the Merger Agreement referred to below;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound hereby, agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. Terms defined in the Agreement and Plan
of Merger dated as of November 6, 1997 among the Issuer, Food 4 Less Holdings,
Inc., a Delaware corporation ("F4LH"), and FFL Acquisition Corp., a Delaware
corporation, are used herein as defined therein. In addition, the following
terms, as used herein, shall have the following respective meanings:
"APOLLO HOLDER" means the Investors listed on the signature pages
hereto as an "Apollo Holder" and any Affiliate thereof that is a Holder.
"APOLLO HOLDERS' AGENT" has the meaning ascribed
thereto in Section 3.11.
"COMMISSION" means the Securities and Exchange
Commission or any successor governmental body or agency.
"COMMON STOCK" means the common stock, par value $.01
per share, of the Issuer.
"DEMAND REGISTRATION" has the meaning ascribed thereto
in Section 2.2(a).
"DEMAND REQUEST" has the meaning ascribed thereto in
Section 2.2(a).
"DISADVANTAGEOUS CONDITION" has the meaning ascribed
thereto in Section 2.4.
"HOLDER" means a person who owns Registrable Securities and is
either (i) an Investor or (ii) a Person that (A) has agreed to be bound by the
terms of this Agreement as if such Person were an Investor and (B) is (1) upon
the death of any Investor, the executor of the estate of such Investor or such
Investor's heirs, devisees, legatees or assigns, (2) upon the
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disability of any Investor, any guardian or conservator of such Investor or (3)
(x) a general or limited partner or member of any Investor that has received
Registrable Securities pursuant to a distribution to such partners or members of
Registrable Securities, (y) an individual that has a direct or indirect equity
interest in a general partner or limited partner or member of any Investor and
has received Registrable Securities directly or indirectly from such Investor or
(z) on an Affiliate of any Investor or of any Person specified in clauses (x) or
(y) above to whom Registrable Securities have been transferred or (iii) a Person
that has agreed to be bound by the terms of this Agreement as if such Person
were an Investor and who has received Registrable Securities by way of sale or
transfer from an Investor, provided that not more than six transferees of any
Yucaipa Holder and not more than six transferees of any Apollo Holder shall be
deemed Holders by virtue of this clause (iii).
"HOLDERS' AGENT" means the Apollo Holders' Agent or Yucaipa
Holders' Agent, as the case may be.
"INVESTOR" means a party to this Agreement (other than
the Issuer).
"PERMITTED HOLDER" means, with respect to either of the Apollo
Holders or Yucaipa Holders, the applicable Holders' Agent (or one representative
of such Holders that (x) is designated by such Holders that hold a majority of
the Registrable Securities proposed to be sold by such Holders in the applicable
offering and (y) is reasonably acceptable to the Issuer).
"REGISTRABLE SECURITIES" means Common Stock acquired by the
Holders pursuant to the Merger (and any shares of stock or other securities into
which or for which such Common Stock may hereafter be changed, converted or
exchanged and any other shares or securities issued to Holders of such Common
Stock (or such shares of stock or other securities into which or for which such
shares are so changed, converted or exchanged) upon any reclassification, share
combination, share subdivision, share dividend, share exchange, merger,
consolidation or similar transaction or event) or otherwise. As to any
particular Registrable Securities, such Registrable Securities shall cease to be
Registrable Securities as soon as (i) such Registrable Securities have been sold
or otherwise disposed of pursuant to a registration statement that was filed
with the Commission in accordance with this Agreement and declared effective
under the Securities Act, (ii) based on an opinion of counsel or a no-action
letter of the Commission, in either case reasonably acceptable to the Issuer
(and the applicable Holders' Agent), such Registrable Securities are eligible
for immediate sale pursuant to Rule 144 or Rule 145 (whether or not subject to
applicable volume limitations thereunder), provided that, notwithstanding such
opinion or no-action letter, (x) no Registrable Securities held by an Apollo
Holder shall cease to be Registrable Securities unless all Registrable
Securities held by all Apollo Holders could then be sold in a single transaction
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(assuming for these purposes the aggregation of all such Registrable Securities
of all Apollo Holders) without violation of applicable Rule 144 volume
limitations and (y) no Registrable Securities held by a Yucaipa Holder shall
cease to be Registrable Securities unless all Registrable Securities held by all
Yucaipa Holders could then be sold in a single transaction (assuming for these
purposes the aggregation of all such Registrable Securities of all Yucaipa
Holders) without violation of applicable Rule 144 volume limitations, (iii) they
shall have been otherwise sold, transferred or disposed of by a Holder to any
Person that is not a Holder, or (iv) they shall have ceased to be outstanding.
"REGISTRATION EXPENSES" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article II, including, without limitation, (i) the fees, disbursements and
expenses of the Issuer's counsel and accountants (including in connection with
the delivery of opinions and/or comfort letters) in connection with this
Agreement and the performance of the Issuer's obligations hereunder; (ii) all
expenses, including filing fees, in connection with the preparation, printing
and filing of one or more registration statements hereunder; (iii) the cost of
printing or producing any agreements among underwriters, underwriting
agreements, and blue sky or legal investment memoranda; (iv) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the securities to be
disposed of; (v) transfer agents' and registrars' fees and expenses in
connection with such offering; (vi) all security engraving and security printing
expenses; (vii) all fees and expenses payable in connection with the listing of
the Registrable Securities on any securities exchange or automated interdealer
quotation system on which the Common Stock is then listed; (viii) all reasonable
fees and expenses of one legal counsel for the Holders in connection with each
of the Required Shelf Registration and the Demand Registration, which legal
counsel shall be selected by Holders owning a majority of the Registrable
Securities then being registered and (ix) fees and expenses of compliance with
securities or blue sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities and determination of their eligibility for investment
under the laws of such jurisdictions as the managing underwriter or Holders may
designate); provided that Registration Expenses shall exclude (x) all
underwriting discounts and commissions, selling or placement agent or broker
fees and commissions, and transfer taxes, if any, in connection with the sale of
any securities and (y) the fees and expenses of counsel for any Holder (other
than pursuant to clause (viii) and (ix)).
"REQUIRED SHELF REGISTRATION" has the meaning ascribed
thereto in Section 2.1.
"RULE 144" means Rule 144 (or any successor rule to similar
effect) promulgated under the Securities Act.
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"RULE 145" means Rule 145 (or any successor rule to similar
effect) promulgated under the Securities Act.
"RULE 415 OFFERING" means an offering on a delayed or continuous
basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated
under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SELLING HOLDER" means any Holder who sells Registrable
Securities pursuant to a public offering registered hereunder.
"SHELF REGISTRATION" means the registration under the Securities
Act of a Rule 415 Offering.
"SHELF REGISTRATION STATEMENT" means a registration statement
intended to effect a Shelf Registration.
"YUCAIPA HOLDER" means the Investors listed on the signature
pages hereto as a "Yucaipa Holder" and any Affiliate thereof that is a Holder.
"YUCAIPA HOLDERS' AGENT" has the meaning ascribed
thereto in Section 3.11.
SECTION 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 this Agreement.
ARTICLE 2
REGISTRATION RIGHTS
SECTION 2.1 Shelf Registration. The Issuer has prepared and filed
with the Commission a Shelf Registration Statement on Form S-3 that includes all
Registrable Securities (the "REQUIRED SHELF REGISTRATION"). Unless the Shelf
Registration Statement previously has been declared effective, the Issuer shall
use its reasonable best efforts to cause such Shelf Registration Statement to be
declared effective as soon as practicable after the date hereof; provided,
however, that to the extent necessary to preserve "pooling-of-interest"
accounting treatment for the transactions contemplated by the QFC Merger
Agreement (as reasonably determined by Issuer and its independent public
accountants), the Issuer shall have no such obligation to effect such
registration until 15 days after the first public release by the Issuer of
combined financial results of the Issuer and F4LH. Notwithstanding anything else
contained in this Agreement, the Issuer shall be obligated to keep such Shelf
Registration Statement effective only until the earliest of (a) 12 months after
the date such Shelf Registration Statement has
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been declared effective, provided that such 12-month period shall be extended by
(i) the length of any period during which the Issuer delays in maintaining the
Shelf Registration Statement current pursuant to Section 2.4, (ii) the length of
any period (in which such Shelf Registration Statement is required to be
effective hereunder) during which such Shelf Registration Statement is not
maintained effective, and (iii) such number of days that equals the number of
days elapsing from (x) the date the written notice contemplated by Section
2.6(e) below is given by the Issuer to (y) the date on which the Issuer delivers
to the Holders of Registrable Securities the supplement or amendment
contemplated by Section 2.6(e) below, (b) such time as all Registrable
Securities have been sold or disposed of thereunder or sold, transferred or
otherwise disposed of to a Person that is not a Holder and (c) such time as all
securities that were Registrable Securities on the date hereof have ceased to be
Registrable Securities (the earliest of (a), (b) and (c) being the "SHELF
TERMINATION DATE"). The Required Shelf Registration shall not be counted as a
Demand Registration for purposes of Section 2.2 of this Agreement.
SECTION 2.2 Demand Registration. (a) Upon written notice to the
Issuer from an Apollo Holder or Apollo Holders holding a majority in interest of
the Registrable Securities held by the Apollo Holders (but not later than the
date that is 180 days after the Shelf Termination Date) (the "DEMAND REQUEST")
requesting that the Issuer effect the registration under the Securities Act of
any or all of the Registrable Securities held by such requesting Holders, which
notice shall specify the intended method or methods of disposition of such
Registrable Securities, the Issuer shall prepare as soon as practicable and,
within 60 days after such request, file with the Commission a registration
statement with respect to such Registrable Securities and thereafter use its
reasonable best efforts to cause such registration statement to be declared
effective under the Securities Act for purposes of dispositions in accordance
with the intended method or methods of disposition stated in such request.
Notwithstanding any other provision of this Agreement to the contrary:
(i) the Apollo Holders may collectively exercise their rights
to request registration under this Section 2.2(a) on not more than one
occasion (such registration being referred to herein as the "DEMAND
REGISTRATION");
(ii) the Issuer shall not be required to effect any Demand
Registration unless the aggregate number of Registrable Securities to be
registered pursuant to the Demand Registration is equal to or more than
35% of the initial Registrable Securities held by the Apollo Holders;
(iii) the method of disposition requested by the Apollo Holders
in connection with any Demand Registration may not, without the Issuer's
written consent, be a Rule 415 Offering; and
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(iv) the Issuer shall not be required to effect the Demand
Registration hereunder if all securities that were Registrable
Securities on the date hereof have ceased to be Registrable Securities.
(b) Notwithstanding any other provision of this Agreement to the
contrary, a Demand Registration requested by the Apollo Holders pursuant to this
Section 2.2 shall not be deemed to have been effected, and, therefore, not
requested and the rights of each Apollo Holder shall be deemed not to have been
exercised for purposes of paragraph (a) above, (i) if such Demand Registration
has not become effective under the Securities Act or (ii) if such Demand
Registration, after it became effective under the Securities Act, was not
maintained effective under the Securities Act (other than as a result of any
stop order, injunction or other order or requirement of the Commission or other
government agency or court solely on the account of a material misrepresentation
or omission of a Holder) for at least 30 days (or such shorter period ending
when all the Registrable Securities covered thereby have been disposed of
pursuant thereto) and, as a result thereof, the Registrable Securities requested
to be registered cannot be distributed in accordance with the plan of
distribution set forth in the related registration statement. So long as a
Demand Request is made by the Apollo Holders within the 180-day period referred
to in Section 2.2(a), the Apollo Holders shall not lose their right to their
Demand Registration under Section 2.2 if the Demand Registration related to such
Demand Request is delayed or not effected in the circumstances set forth in this
clause (b).
(c) The Issuer shall have the right to cause the registration of
additional equity securities for sale for the account of the Issuer in the
registration of Registrable Securities requested by the Apollo Holders pursuant
to Section 2.2(a) above, provided that if such Holders are advised in writing
(with a copy to the Issuer) by the lead or managing underwriter referred to in
Section 2.3(b) that, in such underwriters good faith view, all or a part of such
Registrable Securities and additional equity securities cannot be sold and the
inclusion of such Registrable Securities and additional equity securities in
such registration would be likely to have an adverse effect on the price, timing
or distribution of the offering and sale of the Registrable Securities and
additional equity securities then contemplated, then the number of securities
that can, in the good faith view of such underwriter, be sold in such offering
without so adversely affecting such offering shall be allocated pro rata among
the requesting Apollo Holders on the basis of the relative number requested to
be included therein by each such Holder before any equity securities may be
included for the account of the Issuer. The Holders of the Registrable
Securities to be offered pursuant to paragraph (a) above may require that any
such additional equity securities be included by the Issuer in the offering
proposed by such Holders on the same conditions as the Registrable Securities
that are included therein.
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(d) Within 7 days after delivery of a Demand Request by an Apollo
Holder, the Issuer shall provide a written notice to each Apollo Holder (or, if
so requested by the Issuer after appropriate notice to the Apollo Holders' Agent
by the Issuer, the Apollo Holders' Agent shall provide written notice to each
Apollo Holder), advising such Apollo Holder of its right to include any or all
of the Registrable Securities held by such Apollo Holder for sale pursuant to
the Demand Registration and advising such Apollo Holder of procedures to enable
such Apollo Holder to elect to so include Registrable Securities for sale in the
Demand Registration. Any Apollo Holder may, within 7 days of delivery to such
Apollo Holder of a notice pursuant to this Section 2.2(d), elect to so include
Registrable Securities in the Demand Registration by written notice to such
effect to the Issuer specifying the number of Registrable Securities desired to
be so included by such Apollo Holder.
SECTION 2.3 Other Matters In Connection With Registrations. (a)
In connection with any Demand Registration or Shelf Registration, each Holders'
Agent shall keep the Issuer informed promptly (x) of the name, address and other
contact information of each Holder for whom such Holders' Agent is acting as
agent hereunder, (y) of the number of Registrable Securities held by each such
Holder which are or will be included in such registration and (z) of each sale,
transfer or other disposition of Registrable Securities covered by such
registration (including the number of shares sold) by each such Holder.
(b) In the event that any public offering pursuant to this
Agreement shall involve, in whole or in part, an underwritten offering, the
Issuer shall have the right to designate an underwriter or underwriters as the
lead or managing underwriters of such underwritten offering who shall be
reasonably acceptable to Holders owning a majority of the Registrable Securities
proposed to be sold therein.
(c) The Yucaipa Holders agree that, notwithstanding anything to
the contrary contained in that certain Registration Rights Agreement dated
September 9, 1997 among the Company, certain of the Yucaipa Holders, and the
other parties named therein (the "Yucaipa Agreement"), as amended, none of the
Yucaipa Holders or their affiliates shall have any "piggyback" registration
rights pursuant to Section 2.2 of the Yucaipa Agreement with respect to any
Demand Request by the Apollo Holders hereunder. The Apollo Holders' Agent shall
give concurrent written notice to the Yucaipa Holders' Agent of any Demand
Request hereunder, and the Yucaipa Holders' Agent shall give concurrent written
notice to the Apollo Holders' Agent of any Demand Notice delivered by the
Yucaipa Group as defined in, and pursuant to, the Yucaipa Agreement. At the
election of the Yucaipa Holders' Agent and the Apollo Holders' Agent, any Demand
Registration hereunder that includes the Apollo Holders' Registrable Securities
and any demand registration under the Yucaipa Agreement that includes
registrable securities held thereunder by the Yucaipa Group, may be combined
into a single
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registration statement and offering (which may be underwritten if so requested
by holders of a majority of the shares held by the Apollo Holders and the
Yucaipa Group). If mutually agreed to by the Yucaipa Holders' Agent and the
Apollo Holders' Agent, such registration shall count as a single demand under,
and shall be governed by the provisions of, either this Agreement or the Yucaipa
Agreement, as specified in the mutual agreement of such agents.
SECTION 2.4 Certain Delay Rights. Notwithstanding any other
provision of this Agreement to the contrary, if at any time while the Required
Shelf Registration is effective the Issuer provides written notice to each
Holder (whether by notice directly to such Holder or through the Holders' Agent
acting as agent for such Holder hereunder) that in the Issuer's good faith and
reasonable judgment, as evidenced by a resolution of the Issuer's board of
directors, it would be materially disadvantageous to the Issuer (because the
sale of Registrable Securities covered by such registration statement or the
disclosure of information therein or in any related prospectus or prospectus
supplement would materially interfere with any acquisition, financing or other
material event or transaction in connection with which a registration of
securities under the Securities Act for the account of the Issuer is then
intended or the public disclosure of which at the time would be materially
prejudicial to the Issuer) (a "DISADVANTAGEOUS CONDITION") for sales of
Registrable Securities thereunder to then be permitted, and setting forth the
reasons for such judgment, the Issuer may refrain from maintaining current the
prospectus contained in the Shelf Registration Statement until such
Disadvantageous Condition no longer exists (notice of which the Issuer shall
promptly deliver to each Holder (directly or through the applicable Holders'
Agent)). Furthermore, notwithstanding anything else contained in this Agreement,
with respect to any registration statement filed, or to be filed, pursuant to
Section 2.2, if the Issuer provides written notice to each Holder (whether by
notice directly to such Holder or through the Holders' Agent acting as agent for
such Holder hereunder) that in the Issuer's good faith and reasonable judgment,
as evidenced by a resolution of the Issuer's board of directors, it would be
materially disadvantageous to the Issuer (because of a Disadvantageous
Condition) for such a registration statement to be maintained effective, or to
be filed and become effective, and setting forth the general reasons for such
judgment, the Issuer shall be entitled to cause such registration statement to
be withdrawn or the effectiveness of such registration statement terminated, or,
in the event no registration statement has yet been filed, shall be entitled not
to file any such registration statement, until such Disadvantageous Condition no
longer exists (notice of which the Issuer shall promptly deliver to each Holder
(directly or through the applicable Holders' Agent)). With respect to each
Holder, upon the receipt by such Holder of any such notice of a Disadvantageous
Condition (directly from the Issuer or through the applicable Holders' Agent)
(i) in connection with the Required Shelf Registration, such Holder shall
forthwith
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discontinue use of the prospectus and any prospectus supplement under such
registration statement and shall suspend sales of Registrable Securities until
such Disadvantageous Condition no longer exists and (ii) in connection with the
Required Shelf Registration or the Demand Registration, as applicable, if so
directed by the Issuer by notice as aforesaid, such Holder will deliver to the
Issuer all copies, other than permanent filed copies then in such Holder's
possession, of the prospectus and prospectus supplements then covering such
Registrable Securities at the time of receipt of such notice as aforesaid.
Notwithstanding anything else contained in this Agreement, (x) neither the
filing nor the effectiveness of any registration statement under Section 2.2 may
be delayed for more than a total of 60 days pursuant to this Section 2.4 and (y)
the maintaining current of a prospectus (and the suspension of sales of
Registrable Securities) in connection with the Required Shelf Registration may
not be delayed under this Section 2.4 for more than a total of 60 days in any
twelve-month period.
SECTION 2.5 Expenses. Except as provided herein, the Issuer shall
pay all Registration Expenses with respect to each registration hereunder.
Notwithstanding the foregoing, (i) each Holder and the Issuer shall be
responsible for its own internal administrative and similar costs, which shall
not constitute Registration Expenses, (ii) each Holder shall be responsible for
the legal fees and expenses of its own counsel (except as provided in clause
(viii) of the definition of Registration Expenses) and (iii) each Holder shall
be responsible for all underwriting discounts and commissions, selling or
placement agent or broker fees and commissions, and transfer taxes, if any, in
connection with the sale of securities by such Holder.
SECTION 2.6 Registration and Qualification. If and whenever the
Issuer is required to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 2.1 or 2.2, the Issuer shall as
promptly as practicable (but subject to the provisions of Sections 2.1 and 2.2):
(a) prepare, file and cause to become effective a registration
statement under the Securities Act relating to the Registrable
Securities to be offered in accordance with the intended method of
disposition thereof;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities (i) in
the case of the Required Shelf Registration, until the Shelf Termination
Date and (ii) in the case of the Demand Registration, until the earlier
of (A) such time as all Registrable Securities proposed to be sold
therein have been disposed of in accordance with the intended methods of
disposition set forth in such registration statement and (B)
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the expiration of 30 days after such registration statement becomes
effective, provided, that such 30-day period shall be extended for such
number of days that equals the number of days elapsing from (x) the date
the written notice contemplated by paragraph (e) below is given by the
Issuer to (y) the date on which the Issuer delivers to the Holders of
Registrable Securities the supplement or amendment contemplated by
paragraph (e) below;
(c) furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities such number of conformed
copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of
copies of the prospectus included in such registration statement
(including each preliminary prospectus), in conformity with the
requirements of the Securities Act, and such documents incorporated by
reference in such registration statement or prospectus, as the Holders
of Registrable Securities or such underwriter may reasonably request;
(d) furnish to any underwriter of such Registrable Securities an
opinion of counsel for the Issuer and a "cold comfort" letter signed by
the independent public accountants who have audited the financial
statements of the Issuer included in the applicable registration
statement, in each such case covering substantially such matters with
respect to such registration statement (and the prospectus included
therein) and the related offering as are customarily covered in opinions
of issuer's counsel with respect thereto and in accountants' letters
delivered to underwriters in underwritten public offerings of securities
and such other matters as such underwriters may reasonably request;
(e) promptly notifying the Selling Holders in writing (i) at any
time when a prospectus relating to a registration pursuant to Section
2.1 or 2.2 is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits 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 (ii) of any request by the Commission or any other
regulatory body or other body having jurisdiction for any amendment or
supplement to any registration statement or other document relating to
such offering, and in either such case, at the request of the Selling
Holders prepare and furnish to the Selling Holders a reasonable number
of copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or
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necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading;
(f) use its reasonable best efforts to list all such Registrable
Securities covered by such registration on each securities exchange and
automated interdealer quotation system on which the Common Stock is then
listed;
(g) use reasonable efforts to assist the Holders in the marketing
of Common Stock in connection with up to two underwritten offerings
hereunder (including, to the extent reasonably consistent with work
commitments, using reasonable efforts to have officers of the Issuer
attend "road shows" and analyst or investor presentations scheduled in
connection with such registration);
(h) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected
pursuant to Sections 2.1 or 2.2 unlegended certificates representing
ownership of the Registrable Securities being sold in such denominations
as shall be requested by the Selling Holders or the underwriters; and
(i) if requested by any Selling Holders or the managing
underwriters, if any, promptly include in any registration statement or
prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Selling Holders and such managing
underwriters, if any, may reasonably request to have included therein,
including without limitation, information relating to the "Plan of
Distribution" of the Registrble Securities, the purchase price being
paid therefor and any other terms of the offering of the Registrable
Securities to be sold in such offering, and make all required filing of
such supplement or post-effective amendment as soon as practicable after
the Issuer is notified of the matters to be included in such supplement
or post-effective amendment.
SECTION 2.7 Underwriting; Due Diligence. (a) If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant to
a registration requested under this Article II, the Issuer shall enter into an
underwriting agreement with such underwriters for such offering, which agreement
will contain such representations and warranties by the Issuer and such other
terms and provisions as are customarily contained in underwriting agreements
with respect to secondary distributions, including, without limitation,
indemnification and contribution provisions substantially to the effect and to
the extent provided in Section 2.8, and agreements as to the provision of
opinions of counsel and accountants' letters to the effect and to the extent
provided in Section 2.6(d). Such underwriting agreement shall also contain such
representations and warranties by such Selling Holders and such other terms and
provisions as are customarily contained in underwriting
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agreements with respect to secondary distributions, including, without
limitation, indemnification and contribution provisions substantially to the
effect and to the extent provided in Section 2.8.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article II, the Issuer shall give the Permitted Holders of
such Registrable Securities and the underwriters, if any, and their respective
counsel and accountants (the identity and number of whom shall be reasonably
acceptable to the Issuer), such reasonable and customary access to its books,
records and properties and such opportunities to discuss the business and
affairs of the Issuer with its officers and the independent public accountants
who have certified the financial statements of the Issuer as shall be necessary,
in the opinion of such Holders and such underwriters or their respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act; provided that (i) each Holder and the underwriters and their
respective counsel and accountants shall have entered into a confidentiality
agreement reasonably acceptable to the Issuer and (ii) the Permitted Holders and
the underwriters and their respective counsel and accountants shall use their
reasonable best efforts to minimize the disruption to the Issuer's business and
coordinate any such investigation of the books, records and properties of the
Issuer and any such discussions with the Issuer's officers and accountants so
that all such investigations occur at the same time and all such discussions
occur at the same time.
SECTION 2.8 Indemnification and Contribution. (a) The Issuer
agrees to indemnify and hold harmless each Selling Holder, each person, if any,
who controls each Selling Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and their respective officers,
directors, partners, members, employees, representatives and agents from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or alleged
untrue statement of any material fact contained in any registration statement or
any amendment thereof, any preliminary prospectus or prospectus (as amended or
supplemented if the Issuer shall have furnished any amendments or supplements
thereto) relating to the Registrable Securities, 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 any such untrue
statement or omission or alleged untrue statement or omission based upon
information furnished to the Issuer in writing by a Selling Holder expressly for
use therein. The Issuer also agrees to indemnify any underwriter of the
Registrable Securities so offered and each person, if any, who controls such
underwriter
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within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act and their respective officers, directors, partners, members,
employees, representatives and agents on substantially the same basis as that of
the indemnification by the Issuer of the Selling Holder provided in this Section
2.8(a).
(b) Each Selling Holder agrees to indemnify and hold harmless the
Issuer, its directors, the officers who sign the registration statement and each
person, if any who controls the Issuer 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 (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or alleged untrue statement of
a material fact contained in any registration statement or any amendment
thereof, any preliminary prospectus or prospectus (as amended or supplemented if
the Issuer shall have furnished any amendments or supplements thereto) relating
to the Registrable Securities, 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, but only with reference to information
furnished in writing by a Selling Holder (or any representative thereof)
expressly for use in a registration statement, any preliminary prospectus,
prospectus or any amendments or supplements thereto. Each Selling Holder also
agrees to indemnify any underwriter of the Registrable Securities so offered,
each person, if any, who controls such underwriter and their respective
officers, directors, partners, members, employees, representatives and agents on
substantially the same basis as that of the indemnification by such Selling
Holder of the Issuer provided in this Section 2.8(b).
(c) Each party indemnified under paragraph (a) or (b) above
shall, promptly after receipt of notice of a claim or action against such
indemnified party in respect of which indemnity may be sought hereunder, notify
the indemnifying party in writing of the claim or action; provided that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party on account of the indemnity agreement
contained in paragraph (a) or (b) above except to the extent that the
indemnifying party was actually prejudiced by such failure, and in no event
shall such failure relieve the indemnifying party from any other liability that
it may have to such indemnified party. If any such claim or action shall be
brought against an indemnified party, and it shall have notified the
indemnifying party thereof, unless based on the written advice of counsel to
such indemnified party a conflict of interest between such indemnified party and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate therein, and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume the
defense thereof. Except to the extent that
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such conflict of interest exists, after notice from the indemnifying party to
the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 2.8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof. Any indemnifying
party against whom indemnity may be sought under this Section 2.8 shall not be
liable to indemnify an indemnified party if such indemnified party settles such
claim or action without the consent of the indemnifying party. The indemnifying
party may not agree to any settlement of any such claim or action, other than
solely for monetary damages for which the indemnifying party shall be
responsible hereunder, the result of which any remedy or relief shall be applied
to or against the indemnified party, without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld. In any
action hereunder as to which the indemnifying party has assumed the defense
thereof, the indemnified party shall continue to be entitled to participate in
the defense thereof, with counsel of its own choice, but the indemnifying party
shall not be obligated hereunder to reimburse the indemnified party for the
costs thereof.
(d) If the indemnification provided for in this Section 2.8 shall
for any reason be unavailable (other than in accordance with its terms) to an
indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, cost, claim or damage (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Issuer on the one hand and the Selling Holders on the other hand from the
offering of the Registrable Securities 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 party or parties on the
one hand and of the indemnified party or parties on the other hand 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 benefits received by the Issuer on the one hand and the Selling Holders
on the other hand in connection with the offering of the Registrable Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Registrable Securities (before deducting expenses)
received by the Issuer and the Selling Holders, respectively, bear to the
aggregate public offering price of the Registrable Securities. The relative
fault of the Issuer on the one hand and the Selling Holders on the other hand
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 or a
Selling Holder and the parties' relative intent, knowledge,
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access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by an indemnified party as a result of the
loss, cost, claim, damage or liability, or action in respect thereof, referred
to above in this paragraph (d) shall be deemed to include, for purposes of this
paragraph (d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. The Issuer and the Selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 2.8 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in this paragraph. Notwithstanding
any other provision of this Section 2.8, no Selling Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities of such Selling Holder were offered to the public
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.
(e) The obligations of the parties under this Section 2.8 shall
be in addition to any liability which any party may otherwise have to any other
party.
SECTION 2.9 Holdback Agreement. If the Demand Registration
pursuant to this Article II shall be in connection with an underwritten public
offering of Registrable Securities, each Apollo Holder agrees not to effect any
sale or distribution, including any sale under Rule 144, of any equity security
of the Issuer (otherwise than through the registered public offering then being
made), within 10 days prior to or 180 days (or such lesser period as the lead or
managing underwriters may permit) after the effective date of the applicable
registration statement.
ARTICLE 3
MISCELLANEOUS
SECTION 3.1 Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
SECTION 3.2 Assignment. No party may assign any of its rights or
obligations hereunder by operation of law or otherwise, except to any successor
Holder, without the prior written consent of the other parties.
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SECTION 3.3 Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
Issuer and Holders representing a majority of the Registrable Securities then
held by the Apollo Holders and a majority of the Registrable Securities then
held by the Yucaipa Holders.
SECTION 3.4. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly received if given) by hand delivery or telecopy, or
by any courier service, such as Federal Express, providing proof of delivery.
All communications hereunder shall be delivered to the respective parties at the
address or telecopy number set forth on the signature pages hereto (unless such
contact information in the case of the Holders is updated pursuant to Section
2.3(a)).
SECTION 3.5 Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
SECTION 3.6 No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance by
any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
SECTION 3.7 No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any Person
who or which is not a party hereto, other than a Holder of Registrable
Securities.
SECTION 3.8 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of law thereof.
SECTION 3.9 Jurisdiction. Each party hereby irrevocably submits
to the exclusive jurisdiction of the United States District Court for the
Southern District of New York or any state court sitting in the City of New
York, Borough of Manhattan in any action, suit or proceeding arising in
connection
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with this Agreement, and agrees that any such action, suit or proceeding shall
be brought only in such courts (and waives any objection based on forum non
conveniens or any other objection to venue therein); provided, however, that
such consent to jurisdiction is solely for the purpose referred to in this
Section 3.9 and shall not be deemed to be a general submission to the
jurisdiction of said Courts or in the State of New York other than for such
purposes. Each party hereto hereby waives any right to a trial by jury in
connection with any such action, suit or proceeding.
SECTION 3.10 Descriptive Headings. The descriptive headings used
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
SECTION 3.11 Holders' Agents. Each Apollo Holder hereby appoints
Apollo Management L.P. as its agent and attorney-in-fact (the "APOLLO HOLDERS'
AGENT") and each Yucaipa Holder hereby appoints the Yucaipa Companies as its
agent and attorney-in-fact (the "YUCAIPA HOLDERS' AGENT"), in each case for
purposes of the delivery and receipt of all notices and requests pursuant to
this Agreement. The Issuer may give notice to any Holder hereunder by giving
such notice directly to such Holder. Alteratively, the Issuer may request that
the applicable Holders' Agent deliver to each Holder any notice given by the
Issuer hereunder, in which event the applicable Holders' Agent will promptly so
give such notice to each Holder. Prompt delivery by the applicable Holders'
Agent to the Holders will be deemed satisfied if delivery is made to the
Holders, in accordance with Section 3.4, not later than the third business day
after actual receipt of the applicable notice or document by the applicable
Holders' Agent from the Issuer. Notwithstanding anything else contained herein,
the applicable Holders' Agent will not be liable or responsible to any Person
should any Holder fail to act in accordance with any notice so given to such
Holder hereunder.
SECTION 3.12 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, the Issuer and the Holders have caused this
Agreement to be duly executed as of the day and year first above written.
XXXX XXXXX, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
Yucaipa Holders:
F4L EQUITY PARTNERS, L.P.
By: Yucaipa Capital Advisors, Inc., as
general partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name:
Title:
/s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx
FFL PARTNERS
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
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YUCAIPA CAPITAL FUND, L.P.
By: Yucaipa Capital Advisors, Inc., as
general partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name:
Title:
THE YUCAIPA COMPANIES
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
YUCAIPA/F4L PARTNERS
By: The Yucaipa Companies, as general
partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name:
Title:
By: Yucaipa Capital Fund, L.P., as
general partner
By: Yucaipa Capital Advisors, Inc., as
general partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name:
Title:
Address (for all Yucaipa Holders):
c/o The Yucaipa Companies
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
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Apollo Holders:
APOLLO INVESTMENT FUND, L.P.
By: Apollo Advisors, L.P.
Its General Partner
By: Apollo Capital Management,
Inc., Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name:
Title:
APOLLO INVESTMENT FUND III, L.P.
By: Apollo Advisors II, L.P.,
Its General Partner
By: Apollo Capital Management II,
Inc., Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name:
Title:
APOLLO UK PARTNERS III, L.P.
By: Apollo Advisors II, L.P.,
Its General Partner
By: Apollo Capital Management II,
L.P., Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name:
Title:
APOLLO OVERSEAS PARTNERS III, L.P.
By: Apollo Advisors II, L.P.,
Its Managing General Partner
By: Apollo Capital Management II,
Inc., Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name:
Title:
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F4L/AB INVESTORS
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name:
Title:
Address (for all Apollo Holders):
Apollo Management L.P.
0000 Xxxxxx xx xxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx