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EINSTEIN/NOAH BAGEL CORP.
7 1/4% Convertible Subordinated Debentures Due 2004
REGISTRATION RIGHTS AGREEMENT
May 22, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Alex. ▇▇▇▇▇ & Sons Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Einstein/Noah Bagel Corp., a Delaware corporation (the "Company"),
proposes to issue and sell (such issuance and sale, the "Initial Placement") to
you (the "Initial Purchasers"), upon the terms set forth in a purchase
agreement dated May 22, 1997 (the "Purchase Agreement"), $125,000,000 aggregate
principal amount (plus an additional $18,750,000 principal amount to cover
over-allotments, if any) of its 7 1/4% Convertible Subordinated Debentures Due
2004 (the "Securities"). The Securities will be convertible into shares of
common stock, par value $0.01 per share, of the Company (the "Common Stock") at
the conversion price set forth in the Final Offering Memorandum. As an
inducement to you to enter into the Purchase Agreement and in satisfaction of a
condition to your obligations thereunder, the Company agrees with you, (i) for
your benefit and (ii) for the benefit of the holders from time to time of the
Securities or the Common Stock issuable upon conversion of the Securities
(including you) (each of the foregoing, a "Holder" and together, the
"Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
shall have the respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized terms shall have the
following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
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"Affiliate" of any specified person means any other person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day that is neither a Saturday or a Sunday nor
a day on which banking institutions in The City of New York are authorized or
obligated by law or executive order to close.
"Closing Time" has the meaning set forth in the Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Damages Accrual Period" has the meaning set forth in Section 2(d)
hereof.
"Damages Payment Date" has the meaning set forth in Section 2(d) hereof.
"Deferral Period" has the meaning set forth in Section 2(c) hereof.
"DTC" has the meaning set forth in Section 3(j) hereof.
"Event" has the meaning set forth in Section 2(d) hereof.
"Event Date" has the meaning set forth in Section 2(d) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Final Offering Memorandum" has the meaning set forth in the Purchase
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture relating to the Securities dated as of
May 29, 1997, between the Company and Bankers Trust Company, as trustee, as the
same may be amended from time to time in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Interest Payment Date" shall mean June 1 and December 1.
"Liquidated Damages" has the meaning set forth in Section 2(d) hereof.
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"Losses" has the meaning set forth in Section 5(d) hereof.
"Majority Holders" means the Holders of a majority of the then
outstanding aggregate principal amount of Registrable Securities; provided,
that Holders of Common Stock issued upon conversion of Securities shall be
deemed to be Holders of the aggregate principal amount of Securities from which
such Common Stock was converted.
"Notice Holder" has the meaning set forth in Section 2(b) hereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement, and all amendments and supplements to such prospectus, including
post-effective amendments.
"Record Date" has the meaning set forth in Section 2(d) hereof.
"Record Holder" has the meaning set forth in Section 2(d) hereof.
"Registrable Securities" shall mean the Securities and shares of Common
Stock issued upon conversion thereof, excluding any such securities that, and
any such securities the predecessors of which, were previously sold pursuant to
a registration statement of the Company filed under the Act or pursuant to Rule
144 promulgated under the Act.
"Securities" has the meaning set forth in the preamble hereto.
"Selling Confirmation" means, with respect to a Notice Holder and a
Selling Notice given by such Notice Holder, a written notice given by the
Company to such Notice Holder instructing and notifying such Notice Holder that
the Shelf Registration Statement and Prospectus may be used during the
applicable Selling Period to effect the transactions described in such Selling
Notice, that the Company is then currently in compliance with Section 3(b) and
that the Company reaffirms the consent granted pursuant to Section 3(f).
"Selling Notice" has the meaning set forth in Section 2(b) hereof.
"Selling Period" means, with respect to a Notice Holder and a Selling
Notice given by such Notice Holder, a period of forty-five calendar days
commencing on the date such Notice Holder receives a Selling Confirmation in
respect of the transactions described in such Selling Notice; provided, that
the Company may defer existing Selling Periods in accordance with Section
3(c)(2).
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(a)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement of
the Company pursuant to the provisions of Section 2 hereof (including
additional registration statements filed
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pursuant to Section 3(d)) which covers some or all of the Securities and the
Common Stock issuable upon conversion thereof, as applicable, on an appropriate
form under Rule 415 promulgated under the Act, or any similar rule that may be
adopted by the Commission, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Special Counsel" means ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, special counsel to the
Initial Purchasers or such other special counsel as may be designated by the
Majority Holders.
"Trustee" means the trustee with respect to the Securities under the
Indenture.
2. Shelf Registration; Suspension of Use of Prospectus; Liquidated
Damages.
(a) The Company shall prepare and file with the Commission, as soon
as practicable but in any event on or prior to the date sixty days following
the Closing Time, a Shelf Registration Statement under the Act registering the
resale from time to time by Holders thereof of all of the Registrable
Securities. The Shelf Registration Statement shall permit resales of
Registered Securities by Holders in the manner or manners designated by them
from time to time, which shall be set forth in such Shelf Registration
Statement. The Company shall use its reasonable efforts to cause the Shelf
Registration Statement to be declared effective under the Act as soon as
practicable but in any event on or prior to the date ninety days following the
Closing Time and, subject to the provisions contained herein, to keep the Shelf
Registration Statement continuously effective under the Act until the earlier
of (i) the second anniversary of the Closing Time, (ii) the date on which the
Securities or Common Stock issuable upon conversion thereof may be sold by non-
affiliates of the Company pursuant to paragraph (k) of Rule 144 (or any
successor provision) promulgated by the Commission and (iii) such date as of
which all the Securities or the Common Stock issuable upon conversion thereof
have been sold pursuant to the Shelf Registration Statement (the period ending
at such earlier date, the "Shelf Registration Period").
(b) Each Holder of Registrable Securities agrees that if such Holder
wishes to sell its Registrable Securities pursuant to the Shelf Registration
Statement and the Prospectus, it will do so only in accordance with this
Section 2(b). Each Holder of Registrable Securities agrees to give written
notice to the Company at least three Business Days prior to any intended resale
of Registrable Securities under the Shelf Registration Statement, which notice
shall specify the date on which such Holder intends to begin such distribution
and such information with respect to such Holder and the intended distribution
as may be reasonably required to amend the Shelf Registration Statement or
supplement the Prospectus with respect to such intended distribution (each
Holder providing the notice described in this sentence and with respect to
which the related Selling Period is continuing or has been deferred, a "Notice
Holder"; each such notice, a "Selling Notice"). As soon as practicable after
the date a Selling Notice is received by the Company, and in any event within
two Business Days after such date, the Company shall either:
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(i) (A) provide a Selling Confirmation to such Notice Holder
or (B) file a supplement to the Prospectus or a post-effective amendment
to the Shelf Registration Statement as required by Section 3(b) (and use
all reasonable efforts to cause any such amendment to become effective
as soon as practicable thereafter and immediately thereafter provide a
Selling Confirmation to such Notice Holder); or
(ii) in the event of the happening of any event of the kind
described in Section 3(c)(2)(i), 3(c)(2)(ii), 3(c)(2)(iii) or
3(c)(2)(iv) hereof, the Company shall deliver to such Notice Holder the
notice required by Section 3(c)(2) and notify the holder that the
consent granted pursuant to Section 3(f) is suspended until further
notice.
(c) Each such Notice Holder may sell all or any Registrable
Securities pursuant to the Shelf Registration Statement and the Prospectus only
during the Selling Period commencing with the earlier of (x) the date on which
such Notice Holder receives a Selling Confirmation and (y) the third Business
Day after the related Selling Notice has been received by the Company; provided
that in the event the Company elects to take the actions permitted by Section
2(b)(ii), the commencement of the Selling Period shall be deferred until such
later date as the Company delivers a Selling Confirmation. A Notice Holder
shall not sell any Registrable Securities pursuant to the Shelf Registration
Statement or the Prospectus after the expiration of the applicable Selling
Period without giving a new Selling Notice pursuant to Section 2(b) hereof and
receiving a new Selling Confirmation. Notwithstanding the foregoing, the
aggregate number of days during which the Company shall be entitled to exercise
its right under this paragraph to defer the commencement of a Selling Period or
its right under Section 3(c)(2) to defer existing Selling Periods (any such
period of deferral herein referred to as a "Deferral Period") shall not exceed
60 days within any twelve-month period; provided, however, that each day during
any Deferral Period shall only be counted once in determining the aggregate
number of days in such Deferral Period notwithstanding the occurrence of
multiple concurrent deferrals; and, provided, further, if the Company deems it
necessary to file a post-effective amendment to the Shelf Registration
Statement in order to comply with Section 3(b) hereof as a result of any
Selling Notice or other information provided by a Holder for inclusion in the
Prospectus, then such period of time from the date of filing such post-
effective amendment until the date on which the Shelf Registration Statement is
declared effective by the Commission shall not be treated as a Deferral Period.
In the event the Company elects to take the actions described in Section
2(b)(ii), the Company will, at such time as it is in compliance with Section
3(b) and as use of the Prospectus may be resumed, immediately provide Selling
Confirmations to all Notice Holders.
(d) The parties hereto agree that the Holders of the Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Shelf Registration
Statement has not been declared effective under the Securities Act on or before
the date ninety days following the Closing Time, or the aggregate number of
days for all Deferral Periods within any one twelve-month period exceeds the
number permitted pursuant to Section 2(c) hereof (each of the events of a type
described in either of the foregoing clauses (i)
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or (ii) are individually referred to herein as an "Event"; and the date ninety
days following the Closing Time in the case of clause (i) and the date on which
the duration of all Deferral Periods within any one twelve-month period exceeds
the number of days permitted by Section 2(c) hereof in the case of clause (ii),
are referred to herein as an "Event Date"). Events shall be deemed to continue
until the date of the termination of such Event, which shall be the following
date with respect to the respective types of Events: the date the Registration
Statement is declared effective under the Act in the case of an Event described
in clause (i) and termination of the Deferral Period which caused the aggregate
number of days for all Deferral Periods within any one twelve-month period to
exceed the number permitted by Section 2(c) in the case of Events of the type
described in clause (ii).
Accordingly, upon the occurrence of any Event and until such time as
there are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): to each Holder of Registrable
Securities (whether or not a Notice Holder), accruing during the Damages
Accrual Period at a rate equal to one-half of one percent per annum (50 basis
points) on (u) where such Registrable Securities are Securities, the aggregate
principal amount of such Securities held by such Holder and (v) where such
Registrable Securities are shares of Common Stock issued upon conversion of
Securities, the aggregate principal amount of Securities that were converted
into such shares. Notwithstanding the foregoing, no Liquidated Damages shall
accrue as to any Securities or shares of Common Stock from and after the
earlier of (x) the date such securities are no longer Registrable Securities,
or (y) the expiration of the Shelf Registration Period. The rate of accrual of
the Liquidated Damages with respect to any period shall not exceed the rate
provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events.
Liquidated Damages due on any Securities or Common Stock shall be
payable on each Interest Payment Date on the Securities occurring (or if there
are no Securities outstanding, which would have occurred) during the Damages
Accrual Period and on the Interest Payment Date immediately following (or which
would have followed) the termination of such Period (a "Damages Payment Date").
The Company shall pay the Liquidated Damages due on any Securities by
depositing with the Trustee under the Indenture, in trust, for the benefit of
the Holders of Securities or Common Stock or Notice Holders, as the case may
be, entitled thereto, at least one Business Day prior to the applicable Damages
Payment Date, sums sufficient to pay the Liquidated Damages accrued or accruing
since the last preceding Damages Payment Date to such Damages Payment Date.
The Liquidated Damages shall be paid on each Damages Payment Date to the
Holders of record of the Registrable Securities (the "Record Holders") on the
15th day of May or 15th day of November (each a "Record Date") immediately
preceding such Damages Payment Date by wire transfer of immediately available
funds to the accounts specified by them or by mailing checks to their
registered addresses as they appear in the Securities register or stock
transfer books of the Company, if no such accounts have been specified on or
before the applicable Record Date. The Trustee shall be entitled, on behalf of
the Holders of Securities, Common Stock and Notice Holders, to seek any
available remedy for the enforcement
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of this Agreement, including for the payment of such Liquidated Damages.
Notwithstanding the foregoing, the parties agree that the sole remedy payable
for a violation of the terms of this Agreement with respect to which Liquidated
Damages are expressly provided shall be such Liquidated Damages. Nothing shall
preclude a Notice Holder or Holder of Registrable Securities from pursuing or
obtaining specific performance or other equitable relief with respect to any
violation of this Agreement for which Liquidated Damages are not expressly
provided by this Agreement.
All of the Company's obligations set forth in this Section 2(d) which
are outstanding with respect to any Registrable Securities at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement).
The parties hereto agree that the Liquidated Damages provided for in
this Section 2(d) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities (other than the Initial
Purchasers) by reason of the occurrence of an Event.
3. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and the Special Counsel, prior to the
filing thereof with the Commission, a copy of any Shelf Registration Statement,
and each amendment thereof and each amendment or supplement, if any, to the
Prospectus included therein and shall use its reasonable efforts to reflect in
each such document, when so filed with the Commission, such comments as ▇▇▇▇▇▇▇
▇▇▇▇▇ or the Special Counsel reasonably may propose.
(b) The Company shall ensure that (i) any Shelf Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto comply in all material respects with the
Act and the rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective,
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 not
misleading and (iii) any Prospectus forming part of any Shelf Registration
Statement, and any amendment or supplement to such Prospectus, does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided that no
representation or agreement is made hereby with respect to information with
respect to you or any Holder required to be included in any Shelf Registration
Statement or Prospectus pursuant to the Act or the rules and regulations
thereunder or provided by you or any Holder.
(c) (1) The Company shall advise you and the Holders and, if
requested by you or any such Holder, confirm such advice in writing:
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(i) when the Shelf Registration Statement or any post-
effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
(2) During any Selling Period, during the deferral of any
Selling Period and within two Business Days of receipt by the Company of
any Selling Notice, the Company shall notify you and the Notice Holders
and, if requested by you or any such Notice Holder, confirm such
notification in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
or the initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the
Securities included in any Shelf Registration Statement for sale
in any jurisdiction or the initiation or threat of any proceeding
for such purpose;
(iii) of the happening of any event that requires the
making of any changes in the Shelf Registration Statement or the
Prospectus so that, as of such date, the statements therein are
not misleading and do not omit to state a material fact required
to be stated therein or necessary to make the statements therein
(in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading; and
(iv) of the determination by the Company, in its
judgment, that it is advisable to suspend use of the Prospectus
for valid business reasons (not including avoidance of the
Company's obligations hereunder) including, among other things,
the acquisition or divestiture of assets, public filings with the
Commission, pending corporate developments and similar events;
which notice shall be accompanied by an instruction to defer the use of
the Prospectus until the Company delivers a Selling Confirmation
whereupon any existing Selling Period shall be deferred and shall
recommence upon delivery of the aforementioned Selling Confirmation;
provided, that such Selling Period shall be extended by the number of
days elapsed during any such period of deferral.
(d) The Company shall use all reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of any Shelf Registration
Statement at the earliest possible time, including filing an amendment to the
Shelf Registration Statement in a manner reasonably expected by the Company to
obtain the withdrawal of such order, or filing an additional Shelf
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Registration Statement covering all of the Registrable Securities (whereupon
references herein to the Shelf Registration Statement shall be deemed to
include reference to such additional filing).
(e) The Company shall furnish to each Holder of Registrable
Securities upon their written request, without charge, at least one copy of
such Shelf Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so requests in
such writing, all exhibits (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Securities or the Common Stock issued upon conversion thereof
included within the coverage of any Shelf Registration Statement, without
charge, as many copies of the Prospectus included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request; and, except during such periods as the Company shall have suspended
the use of the Prospectus pursuant to Section 2(b)(ii) or 3(c)(2), the Company
consents to the use of the Prospectus or any amendment or supplement thereto by
each of the selling Holders in connection with the offering and sale of the
Securities or the Common Stock issued upon conversion thereof covered by the
Prospectus or any amendment or supplement thereto.
(g) Prior to any offering of Securities or the Common Stock issued
upon conversion thereof pursuant to any Shelf Registration Statement, the
Company shall register or qualify or cooperate with the Holders of Securities
or the Common Stock issued upon conversion thereof included therein and their
respective counsel in connection with the registration or qualification of such
Securities or Common Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as any such Holders reasonably request in writing
and do any and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the Securities and the Common Stock
issued upon conversion thereof covered by such Shelf Registration Statement;
provided, however, that the Company will not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process or to taxation
in any such jurisdiction where it is not then so subject.
(h) The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Securities or the
Common Stock issued upon conversion thereof sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request.
(i) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) above, the Company shall promptly prepare a post-effective
amendment to any Shelf Registration Statement or an amendment or supplement to
the related Prospectus or file any other required document so that, as
thereafter delivered (when and as permitted pursuant to Section 2(c)) to
purchasers of the Securities or the Common Stock issued upon conversion thereof
included therein, the Prospectus will not include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
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(j) At such time as any of the Securities are no longer "restricted
securities", the Company shall take such actions as may be necessary to
provide, as soon as practicable, a separate CUSIP number for such Securities
and to cause such CUSIP number to be assigned to such Securities (or to the
maximum aggregate principal amount of the Securities to which such number may
be assigned). Upon compliance with the foregoing requirements of this Section
3(j), the Company shall provide the Trustee, upon request, with printed
certificates for such Securities, in a form eligible for deposit with DTC.
(k) The Company shall use all reasonable efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Shelf Registration Statement an earnings statement
satisfying the provisions of Section 11(a) of the Act and Rule 158 promulgated
by the Commission thereunder.
(l) The Company shall use all reasonable efforts to cause the
Indenture to be qualified under the Trust Indenture Act in a timely manner.
(m) The Company may require each Holder of Securities or the Common
Stock issued upon conversion thereof to be sold pursuant to any Shelf
Registration Statement to furnish to the Company such information regarding the
Holder and the distribution of such Securities or Common Stock as may, from
time to time, be required by the Act and the rules and regulations promulgated
thereunder (including the information specified in Item 507 of Regulation S-K
under the Act), and the obligations of the Company to any Holder hereunder
shall be expressly conditioned on the compliance of such Holder with such
request.
(n) The Company shall, if requested, use its reasonable efforts to
promptly incorporate in a Prospectus supplement or post-effective amendment to
a Shelf Registration Statement such information as a Holder may provide from
time to time to the Company in writing for inclusion in a Prospectus or any
Shelf Registration Statement concerning such Holder and the distribution of
such Holder's Securities and Common Stock and, in either case, shall make all
required filings of such Prospectus supplement or post-effective amendment as
soon as practicable after being notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment.
(o) The Company shall enter into such agreements and take all other
appropriate actions in order to expedite or facilitate the registration or the
disposition of the Securities or the Common Stock issuable upon conversion
thereof; provided, however, that the Company shall not be required to enter
into an underwriting agreement in connection with any such disposition.
(p) Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that (i) such Holder will promptly (and in any case
within two business days after completion of such sale or distribution) notify
the Company following any sale of Registrable Securities under a Shelf
Registration and (ii) upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(c)(2)(i),
3(c)(2)(ii), 3(c)(2)(iii) or
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3(c)(2)(iv) hereof, such Holder will forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or Prospectus and
will not resume disposition of such Registrable Securities until such Holder's
receipt of one or more copies of a supplemented or amended Prospectus
contemplated by Section 3(f) hereof, or until it is advised in writing by the
Company that the use of the applicable Prospectus may be resumed and has
received copies of the Prospectus and any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
Prospectus.
4. Registration Expenses. The Company shall pay all fees and
expenses incurred by it or the Initial Purchasers incident to the performance
of or compliance with this Agreement by the Company including, without
limitation, (i) all Commission, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or Blue
Sky laws (including reasonable fees and disbursements of counsel for any
holders in connection with Blue Sky qualification of any of the Registrable
Securities), (iii) all expenses in preparing or assisting in preparing,
printing and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, other documents relating to the Company's
performance of and compliance with this Agreement, and (iv) all rating agency
fees but excluding fees of any special accountants retained by the Holders,
counsel to the Holders other than the Special Counsel and underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by a Holder thereof.
5. Indemnification.
(a)(i) In connection with any Shelf Registration Statement, the Company
agrees to indemnify and hold harmless each Holder of Securities or Common Stock
issued upon conversion thereof covered thereby (including the Initial
Purchasers), the directors, officers, employees and agents of each such Holder
and each person who controls any such Holder within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in the Shelf Registration Statement as originally filed or in any amendment
thereof, or in any preliminary Prospectus or Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and agrees
to reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon (A) any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any such Holder or any Initial
Purchaser, (B) use of a Shelf Registration Statement or
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the related Prospectus during a period when a stop order has been issued in
respect of such Shelf Registration or any proceedings for that purpose have
been initiated or use of a Prospectus when use of such Prospectus has been
deferred pursuant to Section 2(c) or 3(c)(2); provided, further, in each case,
that the Company delivered prior notice in accordance with Section 6(c) hereof
of such stop order, initiation of proceedings or deferral or (C) if the Holder
fails to deliver a Prospectus or the then current Prospectus. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Holder of Securities or Common Stock issued upon conversion
thereof covered by a Shelf Registration Statement (including the Initial
Purchasers) severally agrees to indemnify and hold harmless the Company, its
directors, officers, employees and agents and each person who controls the
Company within the meaning of either the Act or the Exchange Act to the same
extent as the foregoing indemnity from the Company to each such Holder, but
only with reference to written information relating to such Holder furnished to
the Company by or on behalf of such Holder. This indemnity agreement will be
in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
5 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 5, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs, and expenses of such
separate counsel (and local counsel) if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action
or (iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party; provided further,
that the indemnifying party shall not be responsible for the fees and expenses
of more than one separate
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counsel (together with appropriate local counsel) representing all the
indemnified parties under paragraph (a)(i), paragraph (a)(ii) or paragraph (b)
above. An indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of such claim,
action, suit or proceeding.
(d) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the officers, directors or controlling persons referred
to in Section 5 hereof, and will survive the sale by a Holder of Securities
covered by a Shelf Registration Statement.
6. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not, as of the date
hereof, entered into nor shall it, on or after the date hereof, enter into, any
agreement with respect to its Securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions
hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Majority Holders; provided that, with respect to any matter that
directly or indirectly affects the rights of the Initial Purchasers hereunder,
the Company shall obtain the written consent of the Initial Purchasers
originally purchasing more than a majority of the Securities against which such
amendment, qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a waiver or
consent to departure from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of Securities being sold rather than
registered under such Shelf Registration Statement.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
1. if to you, initially at the address set forth in the
Purchase Agreement;
2. if to any other Holder, at the most current address given
by such Holder to the Company in accordance with the
provisions of this Section 6(c), which address initially
is, with respect to each Holder, the address of such
Holder
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maintained by the Registrar under the Indenture, with a
copy in like manner to ▇▇▇▇▇▇▇ ▇▇▇▇▇; and
3. if to the Company, initially at its address set forth in
the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if
sent by first-class mail, telex or telecopier.
The Initial Purchasers or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent
by the Company thereto, subsequent Holders. The Company hereby agrees to
extend the benefits of this Agreement to any Holder and any such Holder may
specifically enforce the provisions of this Agreement as if an original party
hereto.
(e) 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.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed in said State, without regard to the conflicts of law
rules thereof.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances,
is held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
or the Common Stock issuable upon conversion thereof is required hereunder,
Securities or the Common Stock issued upon conversion thereof held by the
Company or its Affiliates (other than subsequent Holders of Securities or the
Common Stock issued upon conversion thereof if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
EINSTEIN/NOAH BAGEL CORP.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇, & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
ALEX. ▇▇▇▇▇ & SONS INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
Authorized Signatory
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