EXHIBIT 4.05.01
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Amended and Restated REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of May 16, 2002, amends and restates the Registration
Rights Agreement dated as of December 7, 2001, by and among CSK Auto
Corporation, a Delaware corporation, with headquarters located at ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and the undersigned
buyers (each, a "Buyer" and collectively, the "Buyers").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and
among the parties hereto, dated December 7, 2001, as amended by Amendment No. 1
to Securities Purchase Agreement of even date herewith (collectively, the
"Securities Purchase Agreement"), the Company agreed, upon the terms and
subject to the conditions of the Securities Purchase Agreement,
to issue and sell to the Buyers an aggregate of (i) $50,000,000 of the
Company's 7% Convertible Debentures, plus such additional amount as may be
added to such principal amount pursuant to the second paragraph thereof (the
"Convertible Debentures"), which will be convertible into shares of the
Company's common stock, par value $0.01 per share (the "Common Stock") (as
converted, the "Conversion Shares") and (ii) the Company's Make-Whole Warrants
(the "Warrants") to purchase shares of Common Stock (as exercised, the "Warrant
Shares"), or, if required by the Securities Purchase Agreement, to issue the
Break-Up Shares (as defined in the Securities Purchase Agreement;
B. To induce the Buyers to execute and deliver the Securities
Purchase Agreement, the Company agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws; and
C. The location of defined terms in this Agreement is set
forth on the Index of Terms attached hereto.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
a. "Business Day" means any day other than Saturday,
Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.
b. "Investor" means a Buyer, any transferee or
assignee thereof to whom a Buyer assigns its rights under this Agreement and who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9 and any transferee or assignee thereof to whom a transferee or
assignee assigns its rights under this Agreement and who agrees to become bound
by the provisions of this Agreement in accordance with Section 9.
c. "Make-Whole Securities" means (i) the Warrant
Shares issued or issuable upon exercise of the Warrants; (ii) any shares issued
or issuable upon a conversion of the Convertible Debentures on the Make-Whole
Date (as defined in the Convertible Debentures) less the number of shares
issuable upon conversion of the Convertible Debentures immediately prior to the
Make-Whole Date (such difference, the "Adjustment Shares") and (iii) any shares
of capital stock issued or issuable with respect to the Warrants, the Warrant
Shares, or the Adjustment Shares as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise.
d. "Person" means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and governmental or any department or agency
thereof.
e. "register," "registered," and "registration" refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis ("Rule 415"), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "SEC").
f. "Registrable Securities" means (i) the Conversion
Shares issued or issuable upon conversion of the Convertible Debentures at the
Standard Conversion Price (as defined in the Convertible Debentures) prior to
any adjustment that may be made to the Standard Conversion Price pursuant to
Section 6(j) of the Convertible Debentures, (ii) the Interest Shares (as defined
in the Convertible Debentures) issued or issuable, (iii) the Break-Up Shares, if
any, issued and (iv) any shares of capital stock issued or issuable with respect
to the Conversion Shares, the Convertible Debentures, the Interest Shares, or
the Break-Up Shares as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on conversions of the Convertible Debentures. Solely for purposes of
the definition of "Registrable Securities" incorporated by reference in Section
7(c) of the Warrants, Registrable Securities shall also mean and include
Make-Whole Securities
g. "Registration Statement" means each registration
statement or registration statements of the Company filed under the 1933 Act
covering the resale of Registrable Securities or Make-Whole Securities, as the
case may be.
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Securities Purchase
Agreement.
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2. Registration.
a. Mandatory Registrations.
(i) The Company shall prepare, and, as soon as
practicable but in no event later than thirty (30) days after the earlier of (A)
the Closing Date (as defined in the Securities Purchase Agreement) or (B) the
Closing Deadline (as defined in the Securities Purchase Agreement) (the "Closing
Filing Deadline"), file with the SEC a Registration Statement or Registration
Statements (as provided for below in this Section 2(a)(i)) on Form S-3 covering
the resale of all of the Registrable Securities (other than the Break-Up Shares)
if a closing has occurred on or prior to the Closing Deadline or the Break-Up
Shares if such closing has not occurred. In the event that Form S-3 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration, subject to the provisions of Section 2(d).
The Registration Statement referenced above shall register for resale (X) at
least 8.3 million shares of Common Stock if a closing has occurred on or prior
to the Closing Deadline or (Y) if Break-Up Shares are issued, the number of
Break-Up Shares. The Company shall use its best efforts to have the Registration
Statement declared effective by the SEC as soon as practicable, on or before the
date which is one hundred twenty (120) days after the Closing Filing Deadline
(the "Closing Effectiveness Deadline"). To the extent that a closing occurs
during the Post-Closing Participation Period (as defined in the Securities
Purchase Agreement) and the Registration Statement filed with respect to the
Closing Filing Deadline has not yet been declared effective by the SEC, the
Company shall amend such Registration Statement to include the Convertible
Debentures and Warrants be issued during the Post-Closing Participation Period
and at least 125% of the number of shares then issuable upon conversion of such
Convertible Debentures and exercise of such Warrants assuming a conversion price
or exercise price, as applicable, of 62.5% of the Standard Conversion Price in
effect at the time of issuance (the "Post-Closing Securities"). To the extent
that a closing occurs during the Post-Closing Participation Period and the
Registration Statement filed with respect to the Closing Filing Deadline has
already been declared effective by the SEC without inclusion of the Post-Closing
Securities, the Company shall file a new Registration Statement on Form S-3
covering the resale of all such securities within thirty (30) days following
such closing (the "Post-Closing Filing Deadline" and collectively with the
Closing Filing Deadline and the "Make-Whole Filing Deadline" (defined below),
the "Filing Deadlines"). In the event that Form S-3 is unavailable for such a
registration, the Company shall use such other form as is available for such a
registration, subject to the provisions of Section 2(d). The Company shall use
its best efforts to have such Registration Statement declared effective by the
SEC as soon as practicable, on or before the date which is one hundred twenty
(120) days after the Post-Closing Filing Deadline (the "Post-Closing Security
Effectiveness Deadline" and collectively with the Closing Effectiveness Deadline
and the "Make-Whole Securities Effectiveness Deadline" (defined below), the
"Effectiveness Deadlines").
ii. In the event that on the Make-Whole Date, either
(A) the Company issues any Warrant Shares upon the exercise of the Warrants, or
(B) all of the Convertible Debentures have not been converted, and the Standard
Conversion Price (as defined in the Convertible Debenture) of the
then-outstanding Convertible Debentures is adjusted at such time pursuant to
Section 6(j) of the Convertible Debenture, the Company shall prepare and within
two
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Business Days of the Make-Whole Date (the "Make-Whole Filing Deadline") file
with the SEC, a Registration Statement or Registration Statements on Form S-3
covering the resale of all of the Make-Whole Securities. In the event that Form
S-3 is unavailable for such a registration, the Company shall use such other
form as is available for such a registration, subject to the provisions of
Section 2(d). The Company shall use its best efforts to have this Registration
Statement declared effective by the SEC as soon as practicable, on or before the
date which is one hundred twenty (120) days after the Make-Whole Filing Deadline
(the "Make-Whole Securities Effectiveness Deadline"). The Company shall have no
obligation to prepare or file a Registration Statement covering the resale of
any Make-Whole Securities in the event that no Make-Whole Securities are issued
or issuable on the Make-Whole Date.
b. Allocation of Registrable Securities. The initial
number of Registrable Securities or Make-Whole Securities included in any
Registration Statement and each increase in the number of Registrable Securities
or Make-Whole Securities included therein shall be allocated pro rata among the
Investors based on the number of Registrable Securities or Make-Whole
Securities, as the case may be, held by each Investor at the time the
Registration Statement covering such initial number of Registrable Securities or
Make-Whole Securities or increase thereof is declared effective by the SEC. Any
shares of Common Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable Securities or
Make-Whole Securities covered by such Registration Statement shall be allocated
to the remaining Investors, pro rata based on the number of Registrable
Securities or Make-Whole Securities then held by such Investors which are
covered by such Registration Statement. Without the prior written consent of
Buyers holding at least 75% of the Registrable Securities and LBI Group Inc and
its affiliates ("▇▇▇▇▇▇") for so long as ▇▇▇▇▇▇ holds not less than $10 million
in principal amount of Convertible Debentures (or shares of Common Stock
attributable to conversion of such Convertible Debentures), the Company shall
not (i) include on any Registration Statement required to be filed pursuant to
Section 2(a)(i) any securities other than (A) Registrable Securities and (B)
securities held by ▇▇▇▇▇▇▇▇▇▇▇ Capital Fund ("▇▇▇▇▇▇▇▇▇▇▇") and subject to the
Registration Rights Agreement dated August 14, 2001 between the Company and
▇▇▇▇▇▇▇▇▇▇▇, or (ii) file any registration statement with the SEC (other than a
registration statement on Form S-8 or Form S-4 or any successor form to such
forms or a registration statement required under the registration rights
agreement entered into in connection with the Company's Senior Notes issued on
or about the Closing Date) prior to the date on which the Registration Statement
required to be filed pursuant to Section 2(a)(i) is declared to be effective; or
(iii) include on any Registration Statement required to be filed pursuant to
Section 2(a)(ii) any securities other than Make-Whole Securities; or (iv) if the
Company is required to file a Registration Statement pursuant to Section
2(a)(ii), file any Registration Statement with the SEC (other than a
registration statement on Form S-8 or Form S-4 or any successor form to such
forms or a registration statement required under the registration rights
agreement entered into in connection with the Company's Senior Notes issued on
or about the Closing Date) between the Make-Whole Date and the date on which any
Registration Statement filed pursuant to Section 2(a)(ii) is declared to be
effective.
c. Legal Counsel. Subject to Section 5 hereof, the
Buyers shall have the right to select one legal counsel to review and oversee
any registration pursuant to this Section 2 ("Legal Counsel"), which shall be
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ or such
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other counsel as thereafter designated by the holders of at least 75% of the
Registrable Securities and ▇▇▇▇▇▇ for so long as ▇▇▇▇▇▇ holds not less than $10
million in principal amount of Convertible Debentures (or shares of Common Stock
attributable to conversion of such Convertible Debentures). The Company and
Legal Counsel shall reasonably cooperate with each other in performing the
Company's obligations under this Agreement.
d. Ineligibility for Form S-3. In the event that Form
S-3 is not available for the registration of the resale of Registrable
Securities or Make-Whole Securities hereunder, the Company shall (i) register
the resale of the Registrable Securities or the Make-Whole Securities, as the
case may be, on another appropriate form unless holders of at least 25% of the
Registrable Securities or the Make-Whole Securities, as the case may be, or
▇▇▇▇▇▇ for so long as ▇▇▇▇▇▇ holds not less than $10 million in principal amount
of Convertible Debentures (or shares of Common Stock attributable to conversion
of such Convertible Debentures) reasonably object and (ii) undertake to register
the Registrable Securities or the Make-Whole Securities, as the case may be, on
Form S-3 as soon as such form is available, provided that, subject to Section
3(r), the Company shall maintain the effectiveness of any Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities or the Make-Whole Securities, as the case may be, has
been declared effective by the SEC.
e. Sufficient Number of Shares Registered. In the
event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) is insufficient to cover all of the Registrable
Securities or Make-Whole Securities required to be covered by such Registration
Statement or an Investor's allocated portion of the Registrable Securities or
Make-Whole Securities pursuant to Section 2(b), the Company shall amend the
Registration Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to register at least 150% of
the number of such Registrable Securities or Make-Whole Securities as of the
trading day immediately preceding the date of the filing of such amendment or
new Registration Statement, in each case, as soon as practicable, but in any
event not later than fifteen (15) Business Days after the necessity therefor
arises. The Company shall use its best efforts to cause such amendment and/or
new Registration Statement to become effective as soon as practicable following
the filing thereof. For purposes of the foregoing provision, the number of
shares available under a Registration Statement shall be deemed "insufficient to
cover all of the Registrable Securities or Make-Whole Securities " if at any
time the number of Registrable Securities or Make-Whole Securities covered by
such Registration Statement is less than 120% of the total number of shares of
Common Stock then constituting Registrable Securities or Make-Whole Securities,
as the case may be (excluding in each case such shares no longer owned by the
Buyers). The calculation set forth in the foregoing sentence (i) shall be made
without regard to any limitations on the conversion of the Convertible
Debentures or the exercise of the Warrants, (ii) shall assume that the
Convertible Debentures and the Warrants are then convertible into shares of
Common Stock, (iii) shall include a number of Interest Shares equal to the
number that would be issuable in respect of interest payments during a period of
one year on the initial outstanding principal amount of the Convertible
Debentures and (iv) shall assume no redemptions of the Convertible Debentures
prior to the scheduled maturity date. The foregoing calculations shall further
assume that the Registrable Securities and Make-Whole Securities are issuable at
the then prevailing Conversion Price (as defined in the Convertible
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Debentures), Interest Share Conversion Rate (as defined in the Convertible
Debentures), or Warrant Exercise Price (as defined in the Warrants), as
applicable.
f. Effect of Failure to File and Obtain and Maintain
Effectiveness of Registration Statement. If (i) a Registration Statement
required to be filed by the Company pursuant to this Agreement is (A) not filed
with the SEC on or before the applicable Filing Deadline or (B) not declared
effective by the SEC on or before the applicable Effectiveness Deadline or (ii)
on any day after such Registration Statement has been declared effective by the
SEC sales of all the Registrable Securities or Make-Whole Securities, as the
case may be, required to be included on such Registration Statement cannot be
made (other than during an Allowable Grace Period (as defined in Section 3(r))
pursuant to such Registration Statement (including, without limitation, because
of a failure to keep such Registration Statement effective, to disclose such
information as is necessary for sales to be made pursuant to such Registration
Statement or to register sufficient shares of Common Stock), then, as relief for
the damages to any holder by reason of any such delay in or reduction of its
ability to sell the underlying shares of Common Stock (which remedy shall not be
exclusive of any other remedies available at law or equity), the Company shall
pay to each holder of Convertible Debentures or Warrants relating to such
Registration Statement an amount equal to the product of (i) the Outstanding
Principal Amount (as such term is defined in the Convertible Debentures (which
definition, for purposes of clarification, is not impacted by a conversion or
partial redemption of the Convertible Debentures)) multiplied by (ii) the
product of (I) 0.0005 multiplied by (II) the sum of (x) the number of days after
the applicable Filing Deadline that the Registration Statement is not filed with
the SEC, plus (y) the number of days after the applicable Effectiveness Deadline
that the Registration Statement is not declared effective by the SEC, plus (z)
the number of days after the Registration Statement has been declared effective
by the SEC that such Registration Statement is not available (other than during
an Allowable Grace Period) for the sale of all the Registrable Securities or
Make-Whole Securities, as the case may be, required to be included on such
Registration Statement. The payments to which a holder shall be entitled
pursuant to this Section 2(f) are referred to herein as "Registration Delay
Payments." Registration Delay Payments shall be paid in the form of Common Stock
on the earlier of (I) the last day of the calendar month during which such
Registration Delay Payments are incurred and (II) the third Business Day after
the event or failure giving rise to the Registration Delay Payments is cured.
The number of shares of Common Stock to be issued for any Registration Delay
Payment shall be the amount of such Registration Delay Payment divided by the
average Closing Sale Price (as defined in the Debentures) of the Common Stock
for the five (5) trading days immediately preceding the date of payment. In the
event the Company fails to make Registration Delay Payments in a timely manner,
such Registration Delay Payments shall bear interest at the rate of 1.5% per
month (prorated for partial months) until paid in full.
(g) Incidental Registration.
(i) Right to Include Registrable Securities or
Make-Whole Securities. If, at any time or from time to time (A) prior to the
effectiveness of a Registration Statement filed pursuant to Section 2(a)(i) or
during the suspension thereof other than an Allowable Grace Period, or (B) in
the event the Company files a Registration Statement pursuant to Section
2(a)(ii), prior to the effectiveness of such a Registration Statement, or during
the suspension
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thereof other than an Allowable Grace Period, the Company proposes to register
any of its securities under the 1933 Act (other than in a registration on Form
S-4 or S-8 or any successor form to such forms or a registration statement
required under the registration rights agreement entered into in connection with
the Senior Notes issued on or about the Closing Date and other than pursuant to
Section 2) whether or not pursuant to registration rights granted to other
holders of its securities and whether or not for sale for its own account, the
Company shall deliver prompt written notice (which notice shall be given at
least thirty (30) days prior to the effectiveness of such proposed registration)
to all holders of Registrable Securities or Make-Whole Securities, as
applicable, of its intention to undertake such registration, describing in
reasonable detail the proposed registration and distribution (including the
anticipated range of the proposed offering price, if known, the class and number
of securities proposed to be registered and the distribution arrangements) and
of such holders' right to participate in such registration under this Section
2(g) as hereinafter provided. Subject to the other provisions of this paragraph
(i) and paragraph (ii), upon the written request of any holder of Registrable
Securities or Make-Whole Securities, as applicable, made within ten (10) days
after the receipt of such written notice (which request shall specify the amount
of Registrable Securities or Make-Whole Securities to be registered and the
intended method of disposition thereof), the Company shall effect the
registration under the 1933 Act of all Registrable Securities or Make-Whole
Securities, as applicable, requested by the holders thereof to be so registered
(an "Incidental Registration"), to the extent requisite to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Registrable Securities or Make-Whole Securities so to be registered, by
inclusion of such Registrable Securities or Make-Whole Securities in the
registration statement which covers the securities which the Company proposes to
register (the "Incidental Registration Statement"). If an Incidental
Registration involves an underwritten public offering, promptly upon
notification to the Company from the underwriter of the price at which such
securities are to be sold, the Company shall so advise each participating holder
of Registrable Securities or Make-Whole Securities, as the case may be. The
holders of Registrable Securities or Make-Whole Securities requesting inclusion
in an Incidental Registration may, at any time prior to the effective date of
the Incidental Registration Statement (and for any reason), revoke such request
by delivering written notice to the Company revoking such requested inclusion.
If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Incidental
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities or Warrant Shares, as
applicable, and, thereupon, (A) in the case of a determination not to register,
the Company shall be relieved of its obligation to register any Registrable
Securities or Make-Whole Securities in connection with such registration (but
not from its obligation to pay the registration expenses incurred in connection
therewith), without prejudice, however, to the rights of holders to cause such
registration to be effected as a registration under Section 2, and (B) in the
case of a determination to delay such registration, the Company shall be
permitted to delay the registration of such Registrable Securities or Make-Whole
Securities for the same period as the delay in registering such other
securities; provided, however, that if such delay shall extend beyond one
hundred twenty (120) days from the date the Company received a request to
include Registrable Securities or Make-Whole Securities in such Incidental
Registration, then the Company shall
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again give all holders the opportunity to participate therein and shall follow
the notification procedures set forth in the preceding paragraph. There is no
limitation on the number of such Incidental Registrations pursuant to this
Section 2(g) which the Company is obligated to effect.
The registration rights granted pursuant to the provisions of
this Section 2(g) shall be in addition to the registration rights granted
pursuant to the other provisions of Section 2 hereof.
(ii) Priority in Incidental Registration. If an
Incidental Registration involves an underwritten public offering (on a firm
commitment basis), and the sole or the lead managing underwriter, as the case
may be, of such underwritten public offering shall advise the Company in writing
(with a copy to each holder of Registrable Securities or Make-Whole Securities
requesting registration) on or before the date five (5) days prior to the date
then scheduled for such offering that, in its opinion, the amount of securities
(including Registrable Securities or Make-Whole Securities) requested to be
included in such registration exceeds the amount which can be sold in such
offering without materially interfering with the successful marketing of the
securities being offered (such writing to state the basis of such opinion and
the approximate number of such securities which may be included in such offering
without such effect), the Company shall include in such registration, to the
extent of the number which the Company is so advised may be included in such
offering without such effect, (i) in the case of a registration initiated by the
Company, (A) first, the Registrable Securities or Make-Whole Securities, as the
case may be, requested to be included in such registration by the holders,
allocated pro rata in proportion to the number of such Registrable Securities or
Make-Whole Securities requested to be included in such registration by each of
them, (B) second, the securities that the Company proposes to register for its
own account, and (C) third, other securities of the Company to be registered on
behalf of any other Person, (ii) in the case of a registration initiated by a
Person other than the Company, (A) first, the securities requested to be
included in such registration by any Persons initiating such registration,
allocated pro rata in proportion to the number of securities requested to be
included in such registration by each of them, (B) second, the Registrable
Securities or Make-Whole Securities requested to be included in such
registration by the holders thereof and other securities of the company to be
registered on behalf of any other Person, allocated pro rata in proportion to
the number of securities requested to be included in such registration by each
of them and (C) third, the securities that the Company proposes to register for
its own account In the event the Company will not, in accordance with the terms
of this Section 2(g)(ii), include in any registration hereunder all of the
securities of any holder requested to be included in such registration, and any
such holder determines not to include any or all of its securities in such
registration, then the holders not so reducing shall be entitled to a
corresponding increase in the amount of securities to be included in such
registration.
3. Related Obligations.
At such time as the Company is obligated to file a
Registration Statement with the SEC pursuant to Section 2(a), 2(d), 2(e) or 2(g)
(subject to the second paragraph of clause 2(g)(i)), the Company will use its
best efforts to effect the registration of the Registrable Securities or
Make-Whole Securities, as the case may be, in accordance with the intended
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method of disposition thereof and, pursuant thereto, the Company shall have the
following obligations:
a. The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities, and if
necessary following the Make-Whole Date, a Registration Statement with respect
to the Make-Whole Securities. In either case, the Company must make any such
filings on or prior to the applicable Filing Deadline, and must use its best
efforts to cause such Registration Statement relating to the Registrable
Securities or Make-Whole Securities required to be covered thereby to become
effective as soon as practicable after such filing, on or before the applicable
Effectiveness Deadline. The Company shall keep each Registration Statement
effective pursuant to Rule 415 at all times until the earlier of (i) the date as
of which the Investors may sell all of the Registrable Securities or Make-Whole
Securities covered by such Registration Statement without restriction pursuant
to Rule 144(k) (or successor thereto) promulgated under the 1933 Act or (ii) the
date on which the Investors shall have sold all the Registrable Securities or
Make-Whole Securities covered by such Registration Statement (the "Registration
Period"), which Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading. The term "best efforts"
shall mean, among other things, that the Company shall submit to the SEC, within
two (2) Business Days after the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that the staff
has no further comments on the Registration Statement, as the case may be, and
the approval of Legal Counsel pursuant to Section 3(c), a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than 48 hours after the submission of such request.
b. Subject to Section 3(r), the Company shall prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to any Registration Statement and the prospectus used in connection
with such Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the 1933 Act, as may be necessary to keep such
Registration Statement effective at all times during the Registration Period,
and, during such period, comply with the provisions of the 1933 Act with respect
to the disposition of all Registrable Securities or Make-Whole Securities of the
Company covered by such Registration Statement until such time as all of such
Registrable Securities or Make-Whole Securities shall have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in such Registration Statement. In the case of amendments
and supplements to a Registration Statement which are required to be filed
pursuant to this Agreement (including pursuant to this Section 3(b)) by reason
of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any
analogous report under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the Company shall have incorporated such report by reference into
such Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement such
Registration Statement.
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c. The Company shall (A) permit Legal Counsel to review and
comment upon (i) each initial Registration Statement relating to the Registrable
Securities or the Make-Whole Securities at least five (5) Business Days prior to
its filing with the SEC and (ii) all other Registration Statements and all
amendments and supplements to all Registration Statements (except for Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K and any similar or successor reports) within a reasonable number of days
prior to their filing with the SEC, and (B) not file any Registration Statement
or amendment or supplement thereto in a form to which Legal Counsel reasonably
objects. The Company shall not submit a request for acceleration of the
effectiveness of a Registration Statement under Sections 2(a), (d) or (e) or any
amendment or supplement thereto without the prior approval of Legal Counsel,
which consent shall not be unreasonably withheld. The Company shall furnish to
Legal Counsel, without charge, (i) copies of any correspondence from the SEC or
the staff of the SEC to the Company or its representatives relating to any
Registration Statement, (ii) promptly after the same is prepared and filed with
the SEC, one copy of any Registration Statement and any amendment(s) thereto,
including financial statements and schedules, and if requested by such Legal
Counsel, all documents incorporated therein by reference and all exhibits and
(iii) upon the effectiveness of any Registration Statement, one copy of the
prospectus included in such Registration Statement and all amendments and
supplements thereto. The Company shall reasonably cooperate with Legal Counsel
in performing the Company's obligations pursuant to this Section 3.
d. The Company shall furnish to each Investor whose
Registrable Securities or Make-Whole Securities are included in any Registration
Statement, without charge, (i) promptly after the same is prepared and filed
with the SEC, at least one copy of such Registration Statement and any
amendment(s) thereto, including financial statements and schedules and if
requested by an Investor, all documents incorporated therein by reference all
exhibits and each preliminary prospectus, (ii) upon the effectiveness of any
Registration Statement, ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request) and (iii) such other
documents, including copies of any preliminary or final prospectus, as such
Investor may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities or Make-Whole Securities, as the case
may be, owned by such Investor.
e. Subject to Section 3(r), the Company shall use its
reasonable best efforts, if reasonably requested by an Investor in writing, to
(i) register and qualify, unless an exemption from registration and
qualification applies, the resale by such Investor of the Registrable Securities
or Make-Whole Securities covered by any Registration Statement under such other
securities or "blue sky" laws of applicable jurisdictions in the United States,
(ii) prepare and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary to
qualify such Registrable Securities or Make-Whole Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition
10
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities or Make-Whole
Securities of the receipt by the Company of any notification with respect to the
suspension of the registration or qualification of any of the Registrable
Securities or Make-Whole Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of actual notice of
the initiation or threatening of any proceeding for such purpose.
f. The Company shall notify Legal Counsel and each Investor in
writing of the happening of any event, as promptly as practicable after becoming
aware of such event, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (provided that in no event shall such
notice contain any material, nonpublic information), and, subject to Section
3(r), promptly prepare a supplement or amendment to such Registration Statement
to correct such untrue statement or omission, and deliver ten (10) copies of
such supplement or amendment to Legal Counsel and each Investor (or such other
number of copies as Legal Counsel or such Investor may reasonably request). The
Company shall also promptly notify Legal Counsel and each Investor in writing
(i) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness shall be
delivered to Legal Counsel and each Investor by facsimile on the same day of
such effectiveness and by overnight mail), (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus or
related information, and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
g. Subject to Section 3(r), the Company shall use its
reasonable best efforts to prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement, or the suspension of
the qualification of any of the Registrable Securities or Make-Whole Securities
for sale in any applicable jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest
practicable moment and to notify Legal Counsel and each Investor who holds
Registrable Securities or Make-Whole Securities being sold of the issuance of
such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
h. At the reasonable request of any Investor in connection
with an underwritten public offering of any Registrable Securities or Make-Whole
Securities, as the case may be, by such Investor, the Company shall furnish to
each underwriter in such underwritten public offering with a copy to each
requesting Investor, on such date as an Investor may reasonably request (i) a
letter, dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to such underwriters,
11
and (ii) an opinion, dated as of such date, of counsel representing the Company
for purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to such
underwriters.
i. The Company shall make available for inspection by (i) any
Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents
retained by the Investors (collectively, the "Inspectors"), all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "Records") at the offices where normally kept,
during normal business hours, as shall be reasonably deemed necessary by each
Inspector, and cause the Company's officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree to hold in strict confidence and shall not make
any disclosure (except to an Investor) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector has knowledge. Each Investor agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential. Nothing herein (or in any other confidentiality agreement
between the Company and any Investor) shall be deemed to limit the Investors'
ability to sell Registrable Securities or Make-Whole Securities, as the case may
be, in a manner which is otherwise consistent with applicable laws and
regulations.
j. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
k. The Company shall use its best efforts either to (i) cause
all the Registrable Securities or Make-Whole Securities, as the case may be,
covered by a Registration Statement to be listed on each securities exchange on
which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities or Make-Whole
Securities is then permitted under the rules of such exchange, or (ii) if
securities of
12
the same class or series issued by the Company are then quoted on the Nasdaq
National Market, list all of the Registrable Securities or Make-Whole
Securities, as the case may be, covered by the Registration Statement on the
Nasdaq National Market if the listing of such Registrable Securities or
Make-Whole Securities is then permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD"), or (iii) if securities of the
same class or series issued by the Company are not listed on any exchange or on
the Nasdaq National Market, the Company shall use its best efforts to secure the
inclusion for quotation on The Nasdaq SmallCap Market for such Registrable
Securities or Make-Whole Securities and, without limiting the generality of the
foregoing, to use its best efforts to arrange for at least two market makers to
register with the NASD as such with respect to such Registrable Securities or
Make-Whole Securities. The Company shall pay all fees and expenses in connection
with satisfying its obligation under this Section 3(k).
l. The Company shall cooperate with the Investors who hold
Registrable Securities or Make-Whole Securities, as the case may be, being
offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities or Make-Whole Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request.
m. If requested by an Investor, the Company shall as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
by filing such prospectus supplement or post-effective amendment or by
supplementing or making amendments to any Registration Statement such
information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities or Make-Whole Securities,
as the case may be, including, without limitation, information with respect to
the number of Registrable Securities or Make-Whole Securities being offered or
sold, the purchase price being paid therefor and any other terms of the offering
of the Registrable Securities or Make-Whole Securities to be sold in such
offering.
n. The Company shall use its reasonable best efforts to cause
the Registrable Securities or Make-Whole Securities covered by a Registration
Statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to consummate the disposition of such
Registrable Securities or Make-Whole Securities.
o. The Company shall make generally available to its security
holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form complying
with, and in the manner provided by, the provisions of Rule 158 under the ▇▇▇▇
▇▇▇) covering a twelve-month period beginning not later than the first day of
the Company's fiscal quarter next following the effective date of a Registration
Statement.
p. The Company shall use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.
13
q. Within two (2) Business Days after a Registration Statement
which covers Registrable Securities or Make-Whole Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
for the Company to deliver, to the transfer agent for such Registrable
Securities or Make-Whole Securities (with copies to the Investors whose
Registrable Securities or Make-Whole Securities are included in such
Registration Statement) confirmation that such Registration Statement has been
declared effective by the SEC in the form attached hereto as Exhibit A.
r. Notwithstanding anything to the contrary herein, at any
time after any Registration Statement has been declared effective by the SEC,
the Company may (i) suspend the use of such Registration Statement if an event
occurs and is continuing as a result of which the Registration Statement would,
in the good faith opinion of the Board of Directors of the Company and its
counsel, contain an untrue statement of 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 or (ii) delay the
disclosure of material non-public information concerning the Company the
disclosure of which at the time is not, in the good faith opinion of the Board
of Directors of the Company and of counsel to the Company, in the best interests
of the Company (clauses (i) and (ii) together, a "Grace Period"); provided, that
the Company shall promptly (i) notify the Investors in writing of the existence
of such event or of such material non-public information giving rise to a Grace
Period (provided that in each notice the Company will not disclose the content
of such material non-public information to the Investors) and the date on which
the Grace Period will begin, and (ii) notify the Investors in writing of the
date on which the Grace Period ends; and, provided further, that during any
three hundred sixty five (365) day period no more than two such Grace Periods
shall be permitted and such Grace Periods shall not exceed an aggregate of
forty-five (45) days (an "Allowable Grace Period"). For purposes of determining
the length of a Grace Period above, the Grace Period shall begin on and include
the date the Investors receive the notice referred to in clause (i) and shall
end on and include the later of the date the Investors receive the notice
referred to in clause (ii) and the date referred to in such notice. The
provisions of Section 3(g) hereof shall not be applicable during the period of
any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) with respect to the
information giving rise thereto unless such material non-public information is
no longer applicable. Each Holder agrees, if timely requested by the Company in
writing in an underwritten sale of securities of the Company, not to make any
public sale or distribution under the 1933 Act of any Registrable Securities or
Make-Whole Securities (except as part of such registration), during the time
period reasonably requested by the sole or lead managing underwriter not to
exceed ninety (90) days (the "Black-out Period"); provided, that all officers
and directors of the Company and beneficial owners of 1% or more of the
Company's Common Stock are bound by the same restriction and no such officer,
director or owner is treated more favorably than any holder of Registrable
Securities or Make-Whole Securities with respect to said lock-up.
Notwithstanding the foregoing, in no event shall all Grace Periods and/or
Black-out Periods in any three hundred sixty five (365) day period exceed a
total of ninety (90) days.
14
4. Obligations Of The Investors.
a. On or before the later to occur of two (2)
Business Days following the Company's receipt of an Investor's written request
to have its Registrable Securities or Make-Whole Securities, as the case may be,
included in a Registration Statement pursuant to this Agreement in accordance
with section 2(g)(i) and seven (7) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify each such
requesting Investor in writing of the information the Company requires from each
such Investor if such Investor elects to have any of such Investor's Registrable
Securities or Make-Whole Securities included in such Registration Statement. It
shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to any Registrable
Securities or Make-Whole Securities, as the case may be, of a particular
Investor that such Investor shall furnish to the Company at least three (3)
Business Days prior to the anticipated filing date such information regarding
itself, the Registrable Securities or Make-Whole Securities held by it and the
intended method of disposition of such Registrable Securities or Make-Whole
Securities held by it as shall be reasonably required to effect the
effectiveness of the registration of such Registrable Securities or Make-Whole
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.
b. Each Investor, by such Investor's acceptance of
any Registrable Securities or Make-Whole Securities, agrees to cooperate with
the Company as reasonably requested by the Company in connection with the
preparation and filing of any Registration Statement hereunder, unless such
Investor has notified the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities or Make-Whole Securities,
as the case may be, from such Registration Statement.
c. Each Investor agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
the first sentence of Section 3(f) or Section 3(g), such Investor will
immediately discontinue disposition of Registrable Securities or Make-Whole
Securities pursuant to any Registration Statement(s) covering such Registrable
Securities or Make-Whole Securities until such Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by the first sentence of
Section 3(f) or receipt of notice that no supplement or amendment is required
or, in the case of Section 3(g), the withdrawal of such stop order or other
suspension. Notwithstanding anything to the contrary, the Company shall cause
its transfer agent to deliver unlegended shares of Common Stock to a transferee
of an Investor in accordance with the terms of the Securities Purchase Agreement
in connection with any sale of Registrable Securities or Make-Whole Securities
with respect to which an Investor has entered into a contract for sale prior to
the Investor's receipt of a notice from the Company of the happening of any
event of the kind described in Section 3(g) or the first sentence of 3(f) and
for which the Investor has not yet settled.
5. Expenses Of Registration.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the
15
Company. The Company shall also reimburse the Investors for the fees and
disbursements of Legal Counsel in connection with registration, filing or
qualification pursuant to Sections 2 and 3 of this Agreement which amount shall
be limited to $25,000. In addition, the Company shall pay all of the Investors'
reasonable costs (including legal fees) incurred in connection with the
successful enforcement of the Investors' rights hereunder.
6. Indemnification.
In the event any Registrable Securities or Make-Whole
Securities are included in a Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the
Company will, and hereby does, indemnify, hold harmless and defend each
Investor, the directors, officers, partners, employees, agents, representatives
of, and each Person, if any, who controls any Investor within the meaning of the
1933 Act or the 1934 Act (each, an "Indemnified Person"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
several, (collectively, "Claims") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto ("Indemnified
Damages"), to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other "blue sky" laws of any jurisdiction
in which Registrable Securities or Make-Whole Securities are offered ("Blue Sky
Filing"), or the omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective date of
such Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading,
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of any
Registrable Securities or Make-Whole Securities pursuant to a Registration
Statement or (iv) any material violation of this Agreement (the matters in the
foregoing clauses (i) through (iv) being, collectively, "Violations"). Subject
to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly
as such expenses are incurred and are due and payable, for any legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim by an Indemnified Person arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person for such
Indemnified Person expressly for use in connection with the
16
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(d); (ii) with respect to any preliminary prospectus, shall
not inure to the benefit of any such person from whom the person asserting any
such Claim purchased the Registrable Securities or Make-Whole Securities that
are the subject thereof (or to the benefit of any person controlling such
person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then amended or
supplemented, if such prospectus was timely made available by the Company
pursuant to Section 3(d), and the Indemnified Person was promptly advised in
writing not to use the incorrect prospectus prior to the use giving rise to a
violation and such Indemnified Person, notwithstanding such advice, used it or
failed to deliver the correct prospectus as required by the 1933 Act and such
correct prospectus was timely made available pursuant to Section 3(d); (iii)
shall not be available to the extent such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by
the Company, including a corrected prospectus, if such prospectus or corrected
prospectus was timely made available by the Company pursuant to Section 3(d);
and (iv) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities or Make-Whole Securities by the Investors pursuant to
Section 9.
b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement and each Person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934 Act
(each, an "Indemnified Party"), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement; and, subject to Section 6(c), such
Investor will reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6(b) for only that amount of a Claim or
Claims or Indemnified Damages as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities or Make-Whole
Securities pursuant to such Registration Statement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such Indemnified Party and shall survive the transfer of the Registrable
Securities or Make-Whole Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact
17
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. In the case of an
Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Investors holding at least 75% in interest of
the Registrable Securities or Make-Whole Securities, as the case may be,
included in the Registration Statement to which the Claim relates and, if ▇▇▇▇▇▇
is one of such Investors, ▇▇▇▇▇▇ for so long as ▇▇▇▇▇▇ holds not less than $10
million in principal amount of Debentures (or shares of Common Stock
attributable to such Debentures). The Indemnified Party or Indemnified Person
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party or Indemnified Person which relates to such action or
Claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.
18
d. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.
e. The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
7. Contribution.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no person involved in the sale of Registrable Securities or Make-Whole
Securities, which person is guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) in connection with such sale, shall,
be entitled to contribution from any person involved in such sale of Registrable
Securities or Make-Whole Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution or contributions by any seller of
Registrable Securities or Make-Whole Securities shall be limited in amount to
the net amount of proceeds received by such seller from the sale of such
Registrable Securities or Make-Whole Securities pursuant to such Registration
Statement.
8. Reports Under The 1934 Act.
With a view to making available to the Investors the
benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration ("Rule 144"), the
Company agrees during the Registration Period to:
a. make and keep public information available, as
those terms are understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports
and other documents required of the Company under the 1933 Act and the 1934 Act
so long as the Company remains subject to such requirements (it being understood
that nothing herein shall limit the Company's obligations under Section 4(c) of
the Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and
c. furnish to each Investor so long as such Investor
owns Registrable Securities or Make-Whole Securities, promptly upon request, (i)
a written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
19
9. Assignment of Registration Rights.
The rights under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of such
Investor's Registrable Securities or Make-Whole Securities if: (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment; (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect to
which such registration rights are being transferred or assigned; (iii)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the 1933 Act
and applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein, evidenced by signing a signature page to this
Agreement in its then current form; and (v) such transfer shall have been made
in accordance with the applicable requirements of the Securities Purchase
Agreement.
10. Amendment of Registration Rights.
Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company,
Investors who then hold at least 75% of either the Registrable Securities or
Make-Whole Securities, and ▇▇▇▇▇▇ for so long as ▇▇▇▇▇▇ holds not less than $10
million in principal amount of Convertible Debentures (or shares of Common Stock
attributable to conversion of such Convertible Debentures), determined as if all
of the Convertible Debentures held by Investors then outstanding have been
converted into Registrable Securities or Make-Whole Securities, and all Warrants
then outstanding have been exercised for Make-Whole Securities without regard to
any limitations on conversion of the Convertible Debentures or on exercise of
the Warrants. Any amendment or waiver effected in accordance with this Section
10 shall be binding upon each Investor and the Company. No such amendment shall
be effective to the extent that it applies to less than all of the holders of
each of the Registrable Securities or Make-Whole Securities, as applicable,
unless such amendment is not adverse to the remaining holders. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
Notwithstanding any other provision in this Agreement, at the election of the
Company on or prior to Closing Date, this Agreement shall be amended to add one
or more parties as parties hereto that may be added as parties to the Securities
Purchase Agreement.
11. Miscellaneous.
a. A Person is deemed to be a holder of Registrable Securities
or Make-Whole Securities whenever such Person owns or is deemed to own of record
such Registrable Securities or Make-Whole Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities or Make-Whole Securities, the Company
shall act upon the basis of instructions,
20
notice or election received from the such record owner of such Registrable
Securities or Make-Whole Securities.
b. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
CSK Auto Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:▇▇▇▇▇▇▇ ▇▇▇▇▇▇
If to Legal Counsel:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
21
c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
d. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the non- exclusive jurisdiction of the state and federal courts
sitting the City of New York, borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. The Transaction Documents (as defined in the Securities
Purchase Agreement) and the documents referenced herein and therein constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. The
Transaction Documents supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof.
f. Subject to the requirements of Section 9, this Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by
22
facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.
i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
j. All consents and other determinations required to be made
by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by Investors holding at least 75% of either the
Registrable Securities or Make-Whole Securities and ▇▇▇▇▇▇ for so long as ▇▇▇▇▇▇
holds not less than $10 million in principal amount of Convertible Debentures
(or shares of Common Stock attributable to conversion of such Convertible
Debentures), determined as if all of the Convertible Debentures held by
Investors then outstanding have been converted into Registrable Securities or
Make-Whole Securities, and all Warrants then outstanding have been exercised for
Make-Whole Securities without regard to any limitations on conversion of the
Convertible Debentures or on exercise of the Warrants.
k. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent and no rules
of strict construction will be applied against any party.
l. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
* * * * * *
23
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: BUYERS:
CSK AUTO CORPORATION LB I GROUP INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Title: Vice President
Chief Operating Officer
SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
Additional Buyers Signature Page to Amended and Restated Registration Rights
Agreement
INVESTCORP CSK HOLDINGS L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Representative
SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (continued)
SCHEDULE OF BUYERS
Investor Address Investor's Representative's Address
Investor and Facsimile Number and Facsimile Number
-------- -------------------- --------------------
LBI Group Inc. LBI Group Inc. LBI Group Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 745 7th Avenue
NY, NY 10019
▇▇, ▇▇ ▇▇▇▇▇ fax: (▇▇▇)-▇▇▇-▇▇▇▇
Fax: (▇▇▇)-▇▇▇-▇▇▇▇ phone: (▇▇▇)-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, LBI Group Inc. Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, LBI Group Inc.
Investcorp CSK Holdings L.P. Investcorp Bank E.C. Investcorp Bank E.C.
Investcorp House Investcorp House
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇-▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇-▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[Transfer Agent]
Attn:
Re: CSK Auto Corporation
Ladies and Gentlemen:
We are counsel to CSK Auto Corporation, a Delaware corporation
(the "Company"), and have represented the Company in connection with that
certain Securities Purchase Agreement (the "Purchase Agreement") entered into by
and among the Company and the buyers named therein (collectively, the "Holders")
pursuant to which the Company issued to the Holders or their assignees shares of
its 7% Convertible Debentures, (the "Convertible Debentures") convertible into
shares of the Company's Common Stock, par value $0.01 per share (the "Common
Stock") and warrants exercisable for shares of its Common Stock (the
"Warrants"). Pursuant to the Purchase Agreement, the Company also has entered
into an Amended and Restated Registration Rights Agreement with the Holders or
their assignees (the "Registration Rights Agreement") pursuant to which the
Company agreed, among other things, to register under the Securities Act of
1933, as amended (the "1933 Act") the Registrable Securities (as defined in the
Registration Rights Agreement), including the shares of Common Stock issuable
upon conversion of the Convertible Debentures, and the Make-Whole Securities (as
defined in the Registration Rights Agreement), including the shares of Common
Stock issued upon exercise of the Warrants. In connection with the Company's
obligations under the Registration Rights Agreement, on ____________ ___, 200_,
the Company filed a Registration Statement on Form S-3 (File No.
333-_____________) (the "Registration Statement") with the Securities and
Exchange Commission (the "SEC") relating to the [Registrable Securities] [the
Make-Whole Securities] which names each of the Holders or their assignees as a
selling stockholder thereunder.
In connection with the foregoing, we advise you that a member
of the SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the [Registrable
Securities][Make-Whole Securities] are available for resale under the 1933 Act
pursuant to the Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
A-1
By:
-----------------------------
CC: [LIST NAMES OF HOLDERS or ASSIGNEES]
A-2
INDEX OF TERMS
Page
----
1933 Act ................................................................ 1
1934 Act ................................................................ 8
Agreement ............................................................... 1
Allowable Grace Period .................................................. 13
Best efforts ............................................................ 8
Black-out Period ........................................................ 13
Blue Sky Filing ......................................................... 15
Business Day ............................................................ 1
Buyer ................................................................... 1
Claims .................................................................. 14
Closing Effectiveness Deadline .......................................... 3
Closing Filing Deadline ................................................. 2
Common Stock ............................................................ 1
Company ................................................................. 1
Conversion Shares ....................................................... 1
Convertible Debentures .................................................. 1
Effectiveness Deadlines ................................................. 3
Filing Deadlines ........................................................ 3
Grace Period ............................................................ 12
Incidental Registration ................................................. 6
Incidental Registration Statement ....................................... 6
Indemnified Damages ..................................................... 14
Indemnified Party ....................................................... 15
Indemnified Person ...................................................... 14
Inspectors .............................................................. 10
Interest Shares ......................................................... 2
Investor ................................................................ 2
Legal Counsel ........................................................... 4
▇▇▇▇▇▇ .................................................................. 3
Make-Whole Filing Deadline .............................................. 3
Make-Whole Securities ................................................... 2
Make-Whole Securities Effectiveness Deadline ............................ 3
NASD .................................................................... 11
▇▇▇▇▇▇▇▇▇▇▇ ............................................................. 3
Person .................................................................. 2
Post-Closing Filing Deadline ............................................ 3
Post-Closing Securities ................................................. 3
Post-Closing Security Effectiveness Deadline ............................ 3
Records ................................................................. 10
Register ................................................................ 2
Registrable Securities .................................................. 2
Registration Delay Payments ............................................. 5
Registration Period ..................................................... 8
Registration Statement .................................................. 2
Rule 144 ................................................................ 17
Rule 415 ................................................................ 2
SEC ..................................................................... 2
Securities Purchase Agreement ........................................... 1
Violations .............................................................. 15
Warrant Shares .......................................................... 1
Warrants ................................................................ 1