REGISTRATION RIGHTS AGREEMENT
-----------------------------
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of October
31, 1997 by and between STACEY'S BUFFET, INC, a Florida corporation (the
"Company"), and STAR BUFFET, INC. a Delaware corporation (the "Holders").
This Agreement is made pursuant to that certain Credit Agreement,
dated as of the date hereof, as subsequently amended or modified from time
to time, by and between the Company and the Holder (the "Credit
Agreement"). In order to induce the Holder to enter into the Credit
Agreement, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution of this Agreement is a condition to
the closing of the transactions contemplated by the Credit Agreement.
In consideration of the foregoing, the parties hereby agree as
follows:
Section 1. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
"ADVICE" shall have the meaning set forth in Section 5.
"AFFILIATE" means, with respect to any specified Person, any other
Person who, directly or indirectly, controls, is controlled by, or is under
common control with such specified Person.
"BUSINESS DAY" means any day other than a day on which banks are
authorized or required to be closed in the State of California.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock, par value $0.01 per share, of
the Company.
"COMPANY" shall have the meaning set forth in the preamble and shall
include the Company's successors by merger, acquisition, reorganization or
otherwise.
"CONTROLLING PERSONS" shall have the meaning set forth in Section
7(a).
"CREDIT AGREEMENT" shall have the meaning set forth in the preamble.
"DEMAND REGISTRATION EFFECTIVE DATE" means the date 60 days after the
earlier of (i) the applicable Demand Registration Filing Date or (ii) the
date on which the applicable Demand Registration Statement is filed with
the Commission.
"DEMAND REGISTRATION EFFECTIVE PERIOD" shall have the meaning set
forth in Section 3(a).
"DEMAND REGISTRATION FILING DATE" shall have the meaning set forth in
Section 3(a).
"DEMAND REGISTRATION STATEMENT" shall have the meaning set forth in
Section 3(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations
of the Commission promulgated thereunder.
"HOLDER" means (i) Star Buffet, Inc., a Delaware corporation, and
(ii) each Person (other than the Company or its Affiliates) to whom a
Holder transfers Shares if such Person acquires such Shares as Registrable
Shares.
"HOLDER'S COUNSEL" means Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx or any
successor counsel selected by the holders of a majority in interest of the
Registrable Shares.
"INSPECTORS" shall have the meaning set forth in Section 5(m).
"NASD" shall have the meaning set forth in Section 5(q).
"OBJECTION NOTICE" shall have the meaning set forth in Section 5(a).
"OBJECTING PARTY" shall have the meaning set forth in Section 5(a).
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, limited liability
company, unincorporated organization or government or other agency or
political subdivision thereof.
"PIGGY-BACK REGISTRATION" shall have the meaning set forth in Section
4(a).
"PROSPECTUS" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an
effective Registration Statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Shares covered by such Registration Statement, and all other
amendments and supplements to the prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
"RECORDS" shall have the meaning set forth in Section 5(m).
"REGISTRABLE SHARES" means the Shares; PROVIDED, HOWEVER, that any
Shares shall cease to be Registrable Shares when (i) a Registration
Statement covering such Registrable Shares has been declared effective and
such Registrable Shares have been disposed of pursuant to such effective
Registration Statement or (ii) such Registrable Shares are transferred to
any Person other than a Holder pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the Securities Act,
including a sale pursuant to the provisions of Rule 144(k).
"REGISTRATION EXPENSES" shall have the meaning set forth in Section 6.
"REGISTRATION STATEMENT" means any registration statement of the
Company that covers any of the Registrable Shares pursuant to the
provisions of this Agreement (including any Shelf Registration Statement),
and all amendments and supplements to any such registration statement,
including post-effective amendments, in each case including the Prospectus,
all exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
"SHARES" means shares of Common Stock which may be issued to any
Holder upon exercise of any or all of the Warrants held by such Holder.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, or any successor statute, and the rules and regulations of
the Commission promulgated thereunder.
"SHELF REGISTRATION STATEMENT" shall have the meaning set forth in
Section 2(a).
"SUSPENSION NOTICE" has the meaning set forth in Section 5.
"SUSPENSION PERIOD" has the meaning set forth in Section 5.
"TARGET EFFECTIVE DATE" means the date 60 days after the earlier of
(i) the Target Filing Date or (ii) the date on which the Shelf Registration
Statement is filed with the Commission.
"TARGET EFFECTIVE PERIOD" shall have the meaning set forth in
Section 2(a).
"TARGET FILING DATE" means the date which is 180 days after the date
of this Agreement
"WARRANTS" means the Warrants to Purchase Shares of Common Stock of
the Company, dated as of even date hereof, together with all amendments,
consolidations, modifications, renewals, and supplements thereto and
replacements and substitutions thereof.
Section 2. SHELF REGISTRATION.
(a) FILING; EFFECTIVENESS. As soon as practicable but not later
than the Target Filing Date, the Company shall prepare and file with the
Commission a "shelf" registration statement (the "Shelf Registration
Statement") on the appropriate form for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (or such
successor rule or similar provision then in effect) covering all of the
Registrable Shares. The Company shall use its best efforts to have the
Shelf Registration Statement declared effective on or before the Target
Effective Date and to keep such Shelf Registration Statement continuously
effective for the period (the "Target Effective Period") beginning on the
Target Effective Date or the date on which such Shelf Registration
Statement is declared effective, if later, and ending on the later of the
date on which the Holders no longer hold any Registrable Shares or October
31, 2002. The Holders shall be permitted to withdraw all or any part of
the Registrable Shares from a Shelf Registration Statement at any time
prior to the effective date of such Shelf Registration Statement.
(b) SUPPLEMENTS; AMENDMENTS. The Company agrees, if necessary,
to supplement or amend the Shelf Registration Statement, as required by the
rules, regulations or instructions applicable to the registration form used
by the Company for such Shelf Registration Statement or by the Securities
Act or as requested (which request shall result in the filing of a
supplement or amendment) by any Holder of Registrable Shares to which such
Shelf Registration Statement relates, and the Company agrees to furnish to
the Holders, Holders' Counsel and any managing underwriter copies of any
such supplement or amendment prior to its being used and/or filed with the
Commission.
(c) EFFECTIVE REGISTRATION. A registration will not be deemed
to have been effected as a Shelf Registration Statement unless the Shelf
Registration Statement with respect thereto has been declared effective by
the Commission and the Company has complied in all material respects with
its obligations under this Agreement with respect thereto; PROVIDED,
HOWEVER, that if after it has been declared effective, the offering of
Registrable Shares pursuant to a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the
Commission or any other governmental agency or court, such Shelf
Registration Statement will be deemed not to have become effective during
the period of such interference until the offering of Registrable Shares
pursuant to such Shelf Registration Statement may legally resume. If a
registration requested pursuant to this Section 2 is deemed not to have
been effected, then the Company shall continue to be obligated to effect a
registration pursuant to this Section 2.
(d) SELECTION OF UNDERWRITER. If the Holders so elect, the
offering of Registrable Shares pursuant to a Shelf Registration Statement
shall be in the form of an underwritten offering. If they so elect, the
Holders participating in such Shelf Registration Statement shall select one
or more nationally recognized firms of investment bankers to act as the
managing underwriter or underwriters in connection with such offering and
shall select any additional investment bankers and managers to be used in
connection with the offering.
Section 3. DEMAND REGISTRATION
(a) REQUEST FOR REGISTRATION. From time to time either
(i) before a date (not before the initial Target Filing Date) on which the
Shelf Registration Statement becomes effective, or (ii) after a date on
which the Shelf Registration Statement ceases to be effective, any Holder
of the issued and outstanding Registrable Securities may make a written
request that the Company file a registration statement under the Securities
Act with the Commission to register such number of shares of Registrable
Shares as each such Holder may request (which request shall specify the
number of Registrable Shares intended to be disposed of by such Holder and
the intended method of distribution thereof) (a "Demand Registration
Statement"). Within 10 days after receipt of such request, the Company
shall give written notice of such registration request to all other Holders
and thereupon the shall effect the filing of such Demand Registration
Statement and shall include in such Demand Registration Statement all
Registrable Shares with respect to which the Company has received written
requests for inclusion therein (which request shall specify the number of
Registrable Shares intended to be disposed of by such Holder and the
intended method of distribution thereof) within 15 business days after the
receipt by the applicable Holders of the notice from the Company of a
request for Demand Registration Statement. The Company shall use its best
efforts to have the Demand Registration Statement declared effective on or
before the date which is 60 days after receipt by the Company of the
applicable request for the filing of a Demand Registration Statement (a
"Demand Registration Filing Date") and to keep such Demand Registration
Statement continuously effective for a period (the "Demand Registration
Effective Period") of at least six (6) months following the Demand
Registration Effective Date or the date on which such Demand Registration
Statement is declared effective, if later.
(b) EFFECTIVE REGISTRATION. The Company's obligations with
respect to a Demand Registration Statement will not be deemed to have been
satisfied unless the applicable Demand Registration Statement has been
declared effective by the Commission and the Company has complied in all
material respects with its obligations under this Agreement with respect
thereto; PROVIDED, HOWEVER, that if after it has been declared effective,
the offering of Registrable Shares pursuant to a Demand Registration
Statement is interfered with by any stop order, injunction or other order
or requirement of the Commission or any other governmental agency or court,
such Demand Registration Statement will be deemed not to have become
effective during the period of such interference until the offering of
Registrable Shares pursuant to such Demand Registration Statement may
legally resume. If a registration requested pursuant to this Section 3 is
deemed not to have been effected, then the Company shall continue to be
obligated to effect a registration pursuant to this Section 3.
(c) SELECTION OF UNDERWRITER. If the Holders so elect, the
offering of Registrable Shares pursuant to a Demand Registration Statement
shall be in the form of an underwritten offering. If they so elect, the
Holders participating in such Demand Registration Statement shall select
one or more nationally recognized firms of investment bankers to act as the
managing underwriter or underwriters in connection with such offering and
shall select any additional investment bankers and managers to be used in
connection with the offering.
Section 4. PIGGY-BACK REGISTRATION.
(a) REQUEST FOR REGISTRATION. Each time the Company proposes to
file a registration statement under the Securities Act with respect to an
offering by the Company for its own account or for the account of any of
its securityholders of any class of equity security (other than (i) a
registration statement on Form S-4 or S-8 (or any substitute form that is
adopted by the Commission) or (ii) a registration statement filed in
connection with an exchange offer or offering of securities solely to the
Company's existing securityholders), then the Company shall give written
notice of such proposed filing to the Holders of Registrable Shares as soon
as practicable (but in no event less than 30 days before the anticipated
filing date), and such notice shall offer such Holders the opportunity to
register such number of shares of Registrable Shares as each such Holder
may request (which request shall specify the Registrable Shares intended to
be disposed of by such Holder and the intended method of distribution
thereof) (a "Piggy-Back Registration"). The Company shall use its best
efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Registrable Shares requested to be
included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company or any other
securityholder included therein and to permit the sale or other disposition
of such Registrable Shares in accordance with the intended method of
distribution thereof. Any Holder shall have the right to withdraw its
request for inclusion of its Registrable Shares in any registration
statement pursuant to this Section 4 by giving written notice to the
Company of such withdrawal. The Company may withdraw a Piggy-Back
Registration at any time prior to the time it becomes effective, provided
that the Company shall give immediate notice of such withdrawal to the
Holders of Registrable Shares requested to be included in such Piggy-Back
Registration and shall reimburse such Holders for all reasonable
out-of-pocket expenses (including counsel fees and expenses) incurred prior
to such withdrawal.
(b) REDUCTION OF OFFERING. In connection with an underwritten
offering where Piggy-Back Registration has been requested as provided in
Section 4(a), the Company shall use its best efforts to cause all
Registrable Shares requested to be included in such Piggy-Back Registration
to be included as provided in Section 4(a). If the managing underwriter or
underwriters of any such underwritten offering have informed, in writing,
the Holders of the Registrable Shares requesting inclusion in such offering
that it is their opinion that the total number of shares which the Company,
Holders of Registrable Shares and any other Persons participating in such
registration intend to include in such offering is such as to materially
and adversely affect the success of such offering, then the number of
shares to be offered for the account of all Persons (other than the
Holders) participating in such registration other than pursuant to demand
registration rights shall be reduced or limited (to zero if necessary) pro
rata in proportion to the respective number of shares requested to be
registered by such Persons to the extent necessary to reduce the total
number of shares requested to be included in such offering to the number of
shares, if any, recommended by such managing underwriter or underwriters.
No registration effected under this Section 4, and no failure to
effect a registration under this Section 4 shall relieve the Company of its
obligation to effect a registration upon the request of Holders pursuant to
Sections 2 or 3. No failure to effect a registration under this Section 4
and to complete the sale of Registrable Shares in connection therewith
shall relieve the Company of any other obligation under this Agreement,
including without limitation, the Company's obligations under Sections 6
and 7.
Section 5. REGISTRATION PROCEDURES.
In connection with the obligations of the Company to effect or cause
the registration of any Registrable Shares pursuant to the terms and
conditions of this Agreement, the Company shall use its best efforts to
effect the registration and sale of such Registrable Shares in accordance
with the intended method of distribution thereof as quickly as practicable,
and in connection therewith:
(a) The Company shall prepare and file with the Commission a
Registration Statement on the appropriate form under the Securities
Act, which form shall comply as to form in all material respects with
the requirements of the applicable form and include all financial
statements required by the Commission to be filed therewith, and use
its best efforts to cause such Registration Statement to become
effective and remain effective in accordance with the provisions of
this Agreement; PROVIDED that, at least ten Business Days prior to
filing a Registration Statement or Prospectus or any amendments or
supplements thereto, including documents incorporated by reference
after the initial filing of the Registration Statement, the Company
shall furnish to the Holders of the Registrable Shares covered by such
Registration Statement, Holders' Counsel and the underwriters, if any,
draft copies of all such documents proposed to be filed, which
documents will be subject to the review of Holders' Counsel and the
underwriters, if any, and the Company will not, unless required by
law, file any Registration Statement or amendment thereto or any
Prospectus or any supplement thereto to which Holders holding a
majority in interest of the Registrable Shares covered by such
Registration Statement or the underwriters with respect to such
Shares, if any, shall object; PROVIDED, HOWEVER, that any such
objection to the filing of any Registration Statement or amendment
thereto or any Prospectus or supplement thereto shall be made by
written notice (the "Objection Notice") delivered to the Company no
later than ten Business Days after the party or parties asserting such
objection (the "Objecting Party") receives draft copies of the
documents that the Company proposes to file. The Objection Notice
shall set forth the objections and the specific areas in the draft
documents where such objections arise. The Company shall have five
(5) Business Days after receipt of the Objection Notice to correct
such deficiencies to the satisfaction of the Objecting Party, and will
notify each Holder of any stop order issued or threatened by the
Commission in connection therewith and shall use its best efforts to
prevent the entry of such stop order or to remove it if entered at the
earliest possible moment.
(b) The Company shall promptly prepare and file with the
Commission such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep such Registration
Statement effective for as long as such registration is required to
remain effective pursuant to the terms hereof; shall cause the
Prospectus to be supplemented by any required Prospectus supplement,
and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and shall comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all
Registrable Shares covered by such Registration Statement during the
applicable period in accordance with the intended methods of
disposition by the Holders set forth in such Registration Statement or
supplement to the Prospectus;
(c) The Company shall promptly furnish to any Holder and the
underwriters, if any, without charge, such number of conformed copies
of such Registration Statement and any post-effective amendment
thereto and such number of copies of the Prospectus (including each
preliminary Prospectus) and any amendments or supplements thereto, any
documents incorporated by reference therein and such other documents
as such Holder or underwriter may request in order to facilitate the
public sale or other disposition of the Registrable Shares being sold
by such Holder.
(d) The Company shall, on or prior to the date on which a
Registration Statement is declared effective, (i) use its best efforts
to register or qualify the Registrable Shares covered by such
Registration Statement under the securities or "blue sky" laws of each
of the fifty states of the United States; (ii) do any and all other
acts and things which may be necessary or advisable to enable such
Holder to consummate the disposition of such Registrable Shares owned
by such Holder; (iii) use its best efforts to keep each such
registration or qualification (or exemption therefrom) effective
during the period in which the Registration Statement is required to
be kept effective; and (iv) use its best efforts to do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of such Registrable Shares; PROVIDED, HOWEVER,
that the Company shall not be required to: (x) qualify generally to
do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 5(d); or (y) file any general
consent to service of process.
(e) The Company shall use its best efforts to cause the
Registrable Shares covered by a Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and
operations of the Company to enable the Holders to consummate the
disposition of such Registrable Shares.
(f) The Company shall promptly notify each Holder, Holders'
Counsel and any underwriter and (if requested by any such Person)
confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by
the Commission or any state securities authority for amendments and
supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become
effective, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement or the
initiation or threatening of any proceedings for that purpose, (iv) of
the issuance by any state securities commission or other regulatory
authority of any order suspending the qualification or exemption from
qualification of any of the Registrable Shares under state securities
or "blue sky" laws or the initiation of any proceedings for that
purpose, (v) if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Shares covered
thereby, the representations and warranties of the Company contained
in any underwriting agreement, placement agreement or other similar
agreement, if any, relating to the offering cease to be true and
correct in all material respects, and (vi) of the happening of any
event which makes any statement made in a Registration Statement or
related Prospectus untrue or which requires the making of any changes
in such Registration Statement or Prospectus so that they will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were
made not misleading; and, as promptly as practicable thereafter,
prepare and file with the Commission and furnish a supplement or
amendment to such Prospectus so that, as thereafter deliverable to the
purchasers of such Registrable Shares, such Prospectus will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(g) The Company shall make generally available to the Holders an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 30 days after the end of the 12-month
period beginning with the first day of the Company's first fiscal
quarter commencing after the effective date of a Registration
Statement, which earnings statement shall cover said 12-month period,
and which requirement will be deemed to be satisfied if the Company
timely files complete and accurate information on forms 10-Q, 10-K and
8-K under the Exchange Act and otherwise complies with Rule 158 under
the Securities Act.
(h) The Company shall promptly use its best efforts to prevent
the issuance of any order suspending the effectiveness of a
Registration Statement, and if one is issued use its best efforts to
obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement at the earliest possible moment.
(i) The Company shall, if requested by the managing underwriter
or underwriters, if any, Holders' Counsel, or any Holder promptly
incorporate in a Prospectus supplement or post-effective amendment
such information as such managing underwriter or underwriters
requests, or Holders' Counsel requests, to be included therein,
including, without limitation, with respect to the Registrable Shares
being sold by such Holder to such underwriter or underwriters, the
purchase price being paid therefor by such underwriter or underwriters
and with respect to any other terms of an underwritten offering of the
Registrable Shares to be sold in such offering, and promptly make all
required filings of such Prospectus supplement or post-effective
amendment.
(j) The Company shall, as promptly as practicable after filing
with the Commission of any document which is incorporated by reference
into a Registration Statement (in the form in which it was
incorporated), deliver a copy of each such document to each of the
Holders and to Holders' Counsel.
(k) The Company shall cooperate with the Holders and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (which shall not bear any
restrictive legends unless required under applicable law) representing
securities sold under a Registration Statement, and enable such
securities to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or such Holders may
request and keep available and make available to the Company's
transfer agent prior to the effectiveness of such Registration
Statement a supply of such certificates.
(l) The Company shall enter into such customary agreements
(including, if applicable, underwriting agreements or placement
agreements in customary form) and take such other actions as the
Holders or the underwriters retained by the Holders may request in
order to expedite or facilitate the disposition of Registrable Shares
(the Holders may, at their option, require that any or all of the
representations, warranties and covenants of the Company to or for the
benefit of any underwriters or placement agents also be made to and
for the benefit of the Holders).
(m) The Company shall promptly make available to each Holder,
any underwriter or placement agent participating in any disposition,
and any attorney, accountant or other agent or representative retained
by any such Holder, underwriter or placement agent (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"),
as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers, directors
and employees to supply all information requested by any such
Inspector in connection with such Registration Statement.
(n) The Company shall furnish to each Holder and to each
underwriter or placement agent, if any, a signed counterpart,
addressed to such Holder, underwriter or placement agent, of (i) an
opinion or opinions of counsel to the Company and (ii) a comfort
letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the
type customarily covered by opinions or comfort letters, as the case
may be, as the Holders of Registrable Shares included in such offering
or the managing underwriter or placement agent therefor reasonably
requests.
(o) The Company shall use its best efforts to cause the
Registrable Shares included in a Registration Statement to be (i)
listed on each securities exchange, if any, on which similar
securities issued by the Company are then listed or (ii) authorized to
be quoted and/or listed, as applicable, on the Nasdaq Stock Market if
the Registrable Shares so qualify.
(p) The Company shall provide a CUSIP number for all Registrable
Shares covered by a Registration Statement not later than the
effective date of such Registration Statement.
(q) The Company shall cooperate with each Holder and each
underwriter or placement agent participating in the disposition of
Registrable Shares and their respective counsel in connection with any
filings required to be made with the National Association of
Securities Dealers, Inc. ("NASD").
(r) The Company shall, during the period when the Prospectus is
required to be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act.
(s) The Company shall appoint a transfer agent and registrar for
all Registrable Shares covered by a Registration Statement not later
than the effective date of such Registration Statement.
(t) In connection with an underwritten offering, the Company
will participate, to the extent reasonably requested by the managing
underwriter for the offering or the Holders, in customary efforts to
sell the securities under the offering, including without limitation,
participating in "road shows."
In the case of a Shelf Registration Statement, each Holder, upon
receipt of any notice (a "Suspension Notice") from the Company of the
happening of any event of the kind described in Section 5(f)(vi), shall
forthwith discontinue disposition of the Registrable Shares pursuant to the
Shelf Registration Statement covering such Registrable Shares until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(f) or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and
has received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and, if so directed by the
Company, such Holder will, or will request the managing underwriter or
underwriters, if any, to, deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Shares current at
the time of receipt of such notice; PROVIDED, HOWEVER, that the Company
shall not give a Suspension Notice until after the Shelf Registration
Statement has been declared effective and in no event shall the period from
the date on which any Holder receives a Suspension Notice to the date on
which any Holder receives either the Advice or copies of the supplemented
or amended Prospectus contemplated by Section 5(f) (the "Suspension
Period") exceed 30 days. In the event that the Company shall give any
Suspension Notice, (i) the Company shall use its best efforts and take such
actions as are reasonably necessary to render the Advice and end the
Suspension Period as promptly as practicable and (ii) the time periods for
which a Shelf Registration Statement is required to be kept effective
pursuant to Section 2 hereof shall be extended by the number of days during
the Suspension Period.
If any Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder
shall have the right to require (i) the insertion therein of language, in
form and substance reasonably satisfactory to such Holder, to the effect
that the holding by such Holder of such securities is not to be construed
as a recommendation by such Holder of the investment quality of the
Company's securities covered thereby and that such holding does not imply
that such Holder will assist in meeting any future financial requirements
of the Company or (ii) in the event that such reference to such Holder by
name or otherwise is not required by the Securities Act or any similar
Federal or state "blue sky" statute and the rules and regulations
thereunder then in force, the deletion of the reference to such Holder.
Section 6. REGISTRATION EXPENSES. Any and all expenses incident
to the Company's performance of or compliance with this Agreement,
including without limitation, all Commission and securities exchange,
Nasdaq Stock Market or NASD registration and filing fees, 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 underwriters, placement agents or Holders in connection with "blue sky"
qualifications of the Registrable Shares), printing expenses, messenger and
delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of the Company's officers and employees performing
legal or accounting duties), all expenses for word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, placement agreements and
other documents relating to the performance of and compliance with this
Agreement, the fees and expenses incurred in connection with the listing of
the Registrable Shares, the fees and disbursements of counsel for the
Company and of the independent certified public accountants of the Company
(including the expenses of any comfort letters or costs associated with the
delivery by independent certified public accountants of a comfort letter or
comfort letter requested pursuant to Section 5(n), Securities Act liability
insurance (if the Company elects to obtain such insurance), the reasonable
fees and expenses of any special experts or other Persons retained by the
Company in connection with any registration, the reasonable fees and
disbursements of Holders' Counsel and any reasonable out-of-pocket expenses
of the Holders and their agents, including any reasonable travel costs, but
excluding underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of Registrable Shares (all such
expenses being herein called "Registration Expenses"), will be borne by the
Company whether or not the Shelf Registration Statement, the Demand
Registration Statement or the Piggy-Back Registration to which such
expenses relate becomes effective.
Section 7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, each
Holder, its partners, officers, directors, trustees, beneficiaries,
stockholders, employees, agents and investment advisers, and each Person
who controls such Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common
control with, or is controlled by, such Holder, together with the partners,
officers, directors, trustees, beneficiaries, stockholders, employees,
agents and investment advisors of such controlling Person (collectively,
the "Controlling Persons"), from and against all losses, claims, damages,
liabilities and expenses (including without limitation any legal or other
fees and expenses incurred by any Holder or any such Controlling Person in
connection with defending or investigating any action or claim in respect
thereof) (collectively, the "Damages") to which such Holder, its partners,
officers, directors, trustees, stockholders, employees, agents and
investment advisers, and any such Controlling Person may become subject
under the Securities Act or otherwise, insofar as such Damages (or
proceedings in respect thereof) arise out of or are based upon any untrue
or alleged untrue statement of material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Registrable Shares
were registered under the Securities Act, including all documents
incorporated therein by reference, or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading, or caused by any untrue statement or alleged untrue statement
of a material fact contained in any Prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto),
or caused by any omission or alleged omission to state therein a material
fact necessary to make the statements therein in light of the circumstances
under which they were made not misleading, except insofar as such Damages
arise out of or are based upon any such untrue statement or omission based
upon information relating to such Holder furnished in writing to the
Company by such Holder expressly for use therein; PROVIDED, HOWEVER, that
the Company shall not be liable to any Holder under this Section 7(a) to
the extent that any such Damages were caused by the fact that such Holder
sold Shares to a Person as to whom it shall be established that there was
not sent or given, or deemed sent or given pursuant to Rule 153 under the
Securities Act, at or prior to the written confirmation of such sale, a
copy of the Prospectus as then amended or supplemented if, and only if, (i)
the Company has previously furnished copies of such amended or supplemented
Prospectus to such Holder and (ii) such Damages were caused by any untrue
statement or omission or alleged untrue statement or omission contained in
the Prospectus so delivered which was corrected in such amended or
supplemented Prospectus. The Company will indemnify the underwriters or
placement agents, if any, participating in any disposition of Registrable
Shares, their officers and directors and each Person who controls such
underwriters or placement agents (within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act) to the same extent
as provided above with respect to the indemnification of the Holders of
Registrable Shares except with respect to information provided by the
underwriter or placement agent specifically for inclusion therein.
(b) INDEMNIFICATION BY THE HOLDERS. Each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, its
directors, officers and each Person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Company to such Holder, but only with reference to information relating to
such Holder furnished to the Company in writing by such Holder expressly
for use in any Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto); PROVIDED, HOWEVER,
that such Holder shall not be obligated to provide such indemnity to the
extent that such Damages result from the failure of the Company to promptly
amend or take action to correct or supplement any such Registration
Statement or Prospectus on the basis of corrected or supplemental
information provided in writing by such Holder to the Company expressly for
such purpose. In no event shall the liability of any Holder of Registrable
Shares hereunder be greater in amount than the amount of the proceeds
received by such Holder upon the sale of the Registrable Shares giving rise
to such indemnification obligation.
(c) INDEMNIFICATION PROCEDURES. In case any proceeding
(including any governmental investigation) shall be instituted involving
any Person in respect of which indemnity may be sought pursuant to either
paragraph (a) or (b) above, such Person (the "indemnified party") shall
promptly notify the Person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request
of the indemnified party, shall retain counsel reasonably satisfactory to
the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceedings and shall pay the fees
and disbursements of such counsel relating to such proceeding. The failure
of an indemnified party to notify an indemnifying party with respect to a
particular proceeding shall not relieve the indemnifying party from any
obligation or liability (i) which it may have pursuant to this Agreement if
the indemnifying party is not substantially prejudiced by the failure to
notify or (ii) which it may have otherwise than pursuant to this Agreement.
In any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (A) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of
such counsel or (B) the indemnifying party fails promptly to assume the
defense of such proceeding or fails to employ counsel reasonably
satisfactory to such indemnified party or parties or (C) (I) the named
parties to any such proceeding (including any impleaded parties) include
both such indemnified party or parties and any indemnifying party or an
Affiliate of such indemnified party or parties or of any indemnifying
party, (II) there may be one or more defenses available to such indemnified
party or parties or such Affiliate of such indemnified party or parties
that are different from or additional to those available to any
indemnifying party or such Affiliate of any indemnifying party and
(III) such indemnified party or parties shall have been advised by such
counsel that there may exist a conflict of interest between or among such
indemnified party or parties or such Affiliate of such indemnified party or
parties and any indemnifying party or such Affiliate of any indemnifying
party, in which case, if such indemnified party or parties notifies the
indemnifying party or parties in writing that it elects to employ separate
counsel of its choice at the expense of the indemnifying parties, the
indemnifying parties shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the indemnifying parties, it
being understood, however, that unless there exists a conflict among
indemnified parties, the indemnifying parties shall not, in connection with
any one such proceeding or separate but substantially similar or related
proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (together with appropriate local
counsel) at any time for such indemnified party or parties. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but, if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party or parties from and against any
loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which such indemnified party is a party, and
indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) CONTRIBUTION. To the extent that the indemnification
provided for in paragraph (a) or (b) of this Section 7 is unavailable to an
indemnified party or insufficient in respect of any Damages, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such Damages (i) in such
proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Holders on the other hand from the
offering of such Registrable Shares, 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 Company on the one hand
and the Holders on the other hand in connection with the statements or
omissions that resulted in such Damages, as well as any other relevant
equitable considerations. The relative fault of the Company on the one
hand and of the 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 Company or by the Holders and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
Notwithstanding the provisions of this Section 7(d), no Holder shall
be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Shares of such Holder were offered to
the public (less any underwriting discounts and commissions) exceeds the
amount of any damages which such Holder has otherwise been required to pay
by reason of such untrue statement or omission. Each Holder's obligation
to contribute pursuant to this Section 7(d) is several in the proportion
that the proceeds of the offering received by such Holder bears to the
total proceeds of the offering received by all the Holders and not joint.
If indemnification is available under paragraph (a) or (b) of this
Section 7, the indemnifying parties shall indemnify each indemnified party
to the full extent provided in such paragraphs without regard to the
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 7(d).
The Company and each Holder agrees that it would not be just or
equitable if contribution pursuant to this Section 7(d) were determined by
PRO RATA allocation or by any other method of allocation that does not take
account of the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the Damages referred
to in this Section 7 shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred (and not
otherwise reimbursed) by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 7 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law
or in equity.
Section 8. RULE 144. The Company covenants that it will file any
reports required to be filed by it under the Securities Act and the
Exchange Act (or, if the Company is not required to file such reports, it
will, upon the request of any Holder, make publicly available other
information so long as necessary to permit sales under Rule 144 under the
Securities Act), and it will take such further action as any Holder may
request, all to the extent required from time to time to enable such Holder
to sell Registrable Shares without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
Section 9. RULE 144A. The Company covenants that it will file all
reports required to be filed by it under the Securities Act and the
Exchange Act, and the rules and regulations adopted by the Commission
thereunder (or if the Company is not required to file such reports, it
will, upon the request of any Holder, make available other information so
long as necessary to permit sales of the Registrable Shares pursuant to
Rule 144A under the Securities Act), all to the extent as may be required
from time to time to enable such Holder to sell Registrable Shares without
registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144A, as such rule may be amended from time
to time, or (b) any similar rule or regulation hereafter adopted by the
Commission.
Section 10. RESTRICTIONS ON SALE BY THE COMPANY AND OTHERS. The
Company agrees and it shall use its best efforts to cause its Affiliates to
agree (i) not to effect any public sale or distribution of any securities
similar to those being registered in accordance with Sections 2 or 3
hereof, or any securities convertible into or exchangeable into or
exchangeable or exercisable for such securities, during the 14 days prior
to, and during the 180-day period beginning on, the effective date of any
Registration Statement (except as part of such Registration Statement) if,
and to the extent, requested by the managing underwriter or underwriters in
the case of an underwritten public offering or the initial purchasers or
placement agent; and (ii) to use their best efforts to ensure that any
agreement entered into after the date of this Agreement pursuant to which
the Company issues or agrees to issue any privately placed securities
(other than to officers or employees) shall contain a provision under which
holders of such securities agree not to effect any sale or distribution of
any such securities during the periods described in (i) above, in each case
including a sale pursuant to Rule 144 or Rule 144A under the Securities Act
(except as part of any such registration, if permitted); provided, however,
that the provisions of this Section 10 shall not prevent the conversion or
exchange of any securities pursuant to their terms into or for other
securities.
Section 11. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. Except with respect to the
Warrants, the Company has not entered into nor will the Company on or after
the date of this Agreement enter into any agreement which is inconsistent
with the rights granted to the Holders of Registrable Shares in this
Agreement or otherwise conflicts with the provisions hereof. In the event
of any inconsistency or discrepancy between the provisions of this
Agreement and the provisions of the Warrants, the terms of this Agreement
shall control. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Company's other issued and outstanding securities under any
such agreements.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, 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 Holders of at least 2/3 of the outstanding Registrable Shares affected
by such amendment, modification, supplement, waiver or consent; PROVIDED,
HOWEVER, that, no amendment, modification, supplement, waiver or consent to
any departure from the provisions of Section 5 hereof (other than any
immaterial amendment, modification, supplement, waiver or consent) shall be
effective as against any Holder of Registrable Shares unless consented to
in writing by such Holder.
(c) NOTICES. All notices and other communications provided for
or permitted hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally or sent by telecopier, registered or
certified mail (return receipt requested), postage prepaid or by a
nationally recognized overnight courier, postage prepaid, to the parties at
their respective addresses set forth on the signature pages hereof (or at
such other address for any party as shall be specified by like notice,
provided that notices of a change of address shall be effective only upon
receipt thereof).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if
mailed; by confirmed receipt of transmission, if telecopied; and on the
next Business Day if timely delivered to a courier guaranteeing overnight
delivery.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of
each of the parties, including, without limitation and without the need for
an express assignment, subsequent Holders. If any transferee of any Holder
shall acquire Registrable Shares in any manner, whether by operation of law
or otherwise, such Registrable Shares shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Shares
such person shall be conclusively deemed to have agreed to be bound by and
to perform all of the terms and provisions of this Agreement and such
person shall be entitled to receive the benefits hereof.
(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 Utah without regard
to principles of conflicts of law.
(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 contained herein
shall not be in any way impaired thereby, it being intended that all of the
rights and privileges of the Holders shall be enforceable to the fullest
extent permitted by law.
(i) ENTIRE AGREEMENT. This Agreement is intended by the parties
as a final expression of their agreement and is intended to be the complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such
subject matter.
(j) ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement or where any provision hereof is
validly asserted as a defense, the successful party shall, to the extent
permitted by applicable law, be entitled to recover reasonable attorneys'
fees in addition to any other available remedy.
(k) FURTHER ASSURANCES. Each party shall cooperate and take
such action as may be reasonably requested by another party in order to
carry out the provisions and purposes of this Agreement and the
transactions contemplated hereby.
(l) REMEDIES. In the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this
Agreement and granted by law. The parties agree that the provisions of
this Agreement shall be specifically enforceable, it being agreed by the
parties that remedies at law for violations hereof (including monetary
damages) are inadequate and that the right to object in any action for
specific performance or injunctive relief hereunder on the basis that a
remedy at law would be adequate is waived.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
STACEY'S BUFFET, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: C.E.O.
--------------------------------
Notice Information:
000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attn: President
with a copy to:
STAR BUFFET, INC.
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: V.P. CFO
--------------------------------
000 Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attn: Xxxxxxxxx Xxxxxx
17
