Exhibit 11
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SUPPLEMENTAL REGISTRATION RIGHTS AGREEMENT
by and among
COSI, INC.
and
ZAM HOLDINGS, L.P., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, LJCB NOMINEES PTY. LTD.,
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Dated as of August 5, 2003
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TABLE OF CONTENTS
1. Certain Definitions.......................................................1
2. Demand Registrations......................................................3
(a) Right to Request Registration.........................................3
(b) Number of Demand Registrations........................................3
(c) Priority on Demand Registrations......................................3
(d) Restrictions on Demand Registrations..................................4
(e) Selection of Underwriters.............................................4
(f) Other Registration Rights.............................................5
(g) Effective Period of Demand Registrations..............................5
3. Piggyback Registrations...................................................5
(a) Right to Piggyback....................................................5
(b) Priority on Primary Registrations.....................................6
(c) Priority on Secondary Registrations...................................6
(d) Selection of Underwriters.............................................6
(e) Other Registrations...................................................7
4. S-3 Registrations.........................................................7
5. Holdback Agreement........................................................8
6. Registration Procedures...................................................8
7. Registration Expenses....................................................10
8. Indemnification..........................................................10
9. Participation in Underwritten Registrations..............................10
10. Rule 144.................................................................10
11. Miscellaneous............................................................10
(a) Notices..............................................................10
(b) No Waivers...........................................................10
(c) Successors and Assigns...............................................10
(d) Governing Law........................................................10
(e) Jurisdiction.........................................................10
(f) Waiver of Jury Trial.................................................10
(g) Counterparts; Effectiveness..........................................10
(h) Entire Agreement.....................................................10
(i) Captions.............................................................10
(j) Severability.........................................................10
(k) Amendments...........................................................10
(l) Aggregation of Stock.................................................10
(m) Equitable Relief.....................................................10
(n) No Inconsistent Agreements...........................................10
SUPPLEMENTAL REGISTRATION RIGHTS AGREEMENT, dated as of August 5,
2003, among Cosi, Inc. (the "Company"), ZAM Holdings, L.P. ("ZAM Holdings"),
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Gleacher"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), LJCB Nominees
Pty. Ltd. ("LJCB", and collectively with ZAM Holdings, Gleacher and ▇▇▇▇▇▇▇▇,
the "Stockholders").
In consideration of the mutual covenants and agreements herein
contained and other good and valid consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby agree
as follows:
1. Certain Definitions.
In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of any Person means any other Person which directly, or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person. The term "control" (including
the terms "controlled by" and "under common control with") as used with
respect to any Person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of the definition of Holder, Affiliate shall also
include any Person owning an interest in a holder of record of securities that
are convertible into or exchangeable or exercisable for Company Securities.
"Agreement" means this Supplemental Registration Rights Agreement,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to this Supplemental
Registration Rights Agreement as the same may be in effect at the time such
reference becomes operative.
"Business Day" means any day on which commercial banks are open for
business in New York, New York.
"Common Stock" means common stock, par value $.01 per share, of the
Company.
"Company Securities" means the Common Stock beneficially owned
directly or indirectly by any Stockholder as of the date hereof or at any time
in the future and any other capital stock of any class or series of the
Company, and any and all shares of capital stock or other securities of the
Company or of any successor or assign of the Company or of any other entity
(whether by merger, consolidation, sale of assets or otherwise), which may be
issued or issuable in respect of, in exchange for, or in substitution for any
Common Stock or such other capital stock by reason of any stock dividend,
stock split, reverse split, subdivision or combination of shares,
distribution, recapitalization, reclassification, reorganization, merger,
consolidation, sale of assets or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means any holder of record of Registrable Common Stock (as
defined below) and any Affiliates thereof (or in the case of a Holder of
securities that are convertible into or exchangeable or exercisable for
Company Securities, the Affiliates of such Holder).
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, public benefit corporation, government
(whether federal, state, county, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof) or any other entity.
"Prospectus" means the prospectus or prospectuses included in any
Registration Statement, as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Common Stock covered by such Registration Statement and by all
other amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus or
prospectuses.
"Registrable Common Stock" means the Company Securities. All
references herein to a "Holder" or "Holder of Registrable Common Stock" shall
include the holder or holders of any securities that are convertible into or
exchangeable or exercisable for Company Securities to the extent of the
Company Securities then underlying such convertible, exchangeable or
exercisable securities. For purposes of determining the number of shares of
Registrable Common Stock held by a Holder and the number of shares of
Registrable Common Stock outstanding, for purposes of this Agreement
(including the definition of "Holder") but not for any other purpose, any
holder of record of convertible, exchangeable or exercisable securities shall
be deemed to be a Holder of the number of Company Securities issuable upon
conversion, exchange or exercise of such convertible, exchangeable or
exercisable securities, and all such Company Securities shall be deemed to be
outstanding shares of Registrable Common Stock. Company Securities shall cease
to be Registrable Common Stock with respect to a particular Holder thereof
when such Company Securities can be sold by such Holder (a) pursuant to a
registration statement or (b) in a transaction pursuant to Rule 144 under the
Securities Act, provided that such transaction is not subject to the
limitations of Rule 144(e) under the Securities Act.
"Registration Statement" means any registration statement of the
Company which covers any of the Registrable Common Stock pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective
amendments, all exhibits and all materials incorporated by reference in such
Registration Statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"underwritten registration" or "underwritten offering" or similar
phrases mean a registration in which securities of the Company are sold to
underwriters for reoffering to the public.
2. Demand Registrations.
(a) Right to Request Registration. Any time after the date hereof,
any Holder or Holders who together hold a majority of the then outstanding
Registrable Common Stock ("Initiating Holders") may request registration under
the Securities Act of all or part of the Registrable Common Stock ("Demand
Registration"). Within 10 days after receipt of any such request for Demand
Registration, the Company shall give written notice of such request to all
other Holders of Registrable Common Stock and shall, subject to the provisions
of Section 2(d) hereof, include in such registration all such Registrable
Common Stock with respect to which the Company has received written requests
for inclusion therein within 15 days after the receipt of the Company's
notice.
(b) Number of Demand Registrations. Subject to the provisions of
Section 2(a), the Initiating Holders of Registrable Common Stock shall be
entitled to request an aggregate of two (2) Demand Registrations. A
registration shall not count as one of the permitted Demand Registrations (i)
until it has become effective, (ii) if the Initiating Holders requesting such
registration are not able to register and sell at least 90% of the Registrable
Common Stock requested by such Initiating Holders to be included in such
registration or (iii) in the case of a Demand Registration that would be the
last permitted Demand Registration requested hereunder, if the Initiating
Holders requesting such registration are not able to register and sell all of
the Registrable Common Stock requested to be included by such Initiating
Holders in such registration.
(c) Priority on Demand Registrations. The Company shall not include
in any Demand Registration any securities which are not Registrable Common
Stock without the written consent of the Holders of a majority of the shares
of Registrable Common Stock to be included in such registration. If the
managing underwriters of the requested Demand Registration advise the Company
in writing that in their opinion the number of shares of Registrable Common
Stock proposed to be included in any such registration exceeds the number of
securities which can be sold in such offering and/or that the number of shares
of Registrable Common Stock proposed to be included in any such registration
would adversely affect the price per share of the Company's equity securities
to be sold in such offering, the Company shall include in such registration
only the number of shares of Registrable Common Stock which in the opinion of
such managing underwriters can be sold. If the number of shares which can be
sold is less than the number of shares of Registrable Common Stock proposed to
be registered, the amount of Registrable Common Stock to be so sold shall be
allocated first, to the shares of Registrable Common Stock requested to be
registered by the Initiating Holders pro rata on the basis of the number of
shares initially proposed to be registered by such Initiating Holders, and
then pro rata among the other Holders of Registrable Common Stock desiring to
participate in such registration on the basis of the amount of such
Registrable Common Stock initially proposed to be registered by such other
Holders. If the number of shares which can be sold exceeds the number of
shares of Registrable Common Stock proposed to be sold, such excess shall be
allocated pro rata among the other holders of securities, if any, desiring to
participate in such registration based on the amount of such securities
initially requested to be registered by such holders or as such holders may
otherwise agree.
(d) Restrictions on Demand Registrations. The Company may (i)
postpone for up to ninety (90) days the filing or the effectiveness of a
Registration Statement for a Demand Registration or Shelf Registration (as
hereinafter defined) if, based on the reasonable good faith judgment of the
Company's board of directors, effecting the registration would have a material
adverse effect on a material financing, acquisition of assets (other than in
the ordinary course of business), disposition of assets or stock, merger or
other comparable transaction or would require the Company to make public
disclosure of material nonpublic information the public disclosure of which
the Company's board of directors has reasonably determined would not be in the
best interests of the Company and the Company shall provide the Initiating
Holders with prompt notice of such postponement or (ii) postpone the filing of
a Demand Registration in the event the Company shall be required to prepare
audited financial statements as of a date other than its fiscal year end
(unless the stockholders requesting such registration agree to pay the
expenses of such an audit); provided, however, that in no event shall the
Company withdraw a Registration Statement under clause (i) after such
Registration Statement has been declared effective; and provided, further,
however, that in any of the events described in clause (i) or (ii) above, the
Initiating Holders requesting such a Demand Registration shall be entitled to
withdraw such request and, if such request is withdrawn, such registration
shall not count as one of the permitted Demand Registrations and, in any
event, no such postponed or withdrawn registration shall count as the Shelf
Registration. The Company shall provide written notice to the Initiating
Holders requesting such registration of (x) any postponement or withdrawal of
the filing or effectiveness of a Registration Statement pursuant to this
Section 2(d), (y) the Company's decision to file or seek effectiveness of such
Registration Statement following such withdrawal or postponement and (z) the
effectiveness of such Registration Statement. The Company may defer the filing
of a particular Registration Statement pursuant to this Section 2(d) only once
in any twelve-month period.
(e) Selection of Underwriters. If any of the Registrable Common Stock
covered by a Demand Registration, or an S-3 Registration or a Shelf
Registration pursuant to Section 4 hereof, is to be sold in an underwritten
offering, the Holders of a majority of the shares of Registrable Common Stock
included in such registration shall have the right to select the managing
underwriter(s) to administer the offering subject to the approval of the
Company, which will not be unreasonably withheld or delayed. The Holders of
shares of Registrable Common Stock included in such Registration shall enter
into a customary underwriting agreement with respect to such shares.
(f) Other Registration Rights. The Company shall not grant to any
Person the right, other than as set forth herein and except to employees of
the Company with respect to registrations on Form S-8 (or any successor form
thereto), to request the Company to register any securities of the Company
which would adversely affect the ability of the Holders of a majority of the
then outstanding Registrable Common Stock to dispose of any shares of
Registrable Common Stock held by such Holders without the prior written
consent of the Holders of a majority of the then outstanding Registrable
Common Stock.
(g) Effective Period of Demand Registrations. After any Demand
Registration filed pursuant to this Agreement has become effective, the
Company shall use its best efforts to keep such Demand Registration effective
for a period equal to 180 days from the date on which the SEC declares such
Demand Registration effective (or if such Demand Registration is not effective
during any period within such 180 days, such 180-day period shall be extended
by the number of days during such period when such Demand Registration is not
effective), or such shorter period which shall terminate when all of the
Registrable Common Stock covered by such Demand Registration has been sold
pursuant to such Demand Registration. If the Company shall withdraw any Demand
Registration pursuant to subsection (d) of this Section 2 (a "Withdrawn Demand
Registration"), the Initiating Holders of the Registrable Common Stock
remaining unsold and originally covered by such Withdrawn Demand Registration
shall be entitled to a replacement Demand Registration which (subject to the
provisions of this Section 2) the Company shall use its best efforts to keep
effective for a period commencing on the effective date of such Demand
Registration and ending on the earlier to occur of the date (i) which is 180
days from the effective date of such Demand Registration and (ii) on which all
of the Registrable Common Stock covered by such Demand Registration has been
sold. Such additional Demand Registration otherwise shall be subject to all of
the provisions of this Agreement.
(h) Other Restrictions on Demand Registrations. The Company shall not
be required to effect a registration pursuant to this Section 2 if within
thirty (30) days of receipt of a written request from Initiating Holders
pursuant to Section 2(a) above, the Company gives notice to the Holders of the
Company's intention to make a public offering within ninety (90) days,
provided, that, in any such public offering, the Holders shall be entitled to
dispose of any shares of Common Stock subject to such written request prior to
any other shares of Common Stock disposed of pursuant to such public offering.
3. Piggyback Registrations.
(a) Right to Piggyback. In addition to the other rights of the
Holders described herein, whenever the Company proposes to register any of its
securities under the Securities Act (other than a registration statement on
Form S-8 or on Form S-4 or any similar successor forms thereto), whether for
its own account or for the account of one or more stockholders of the Company,
and the registration form to be used may be used for any registration of
Registrable Common Stock (a "Piggyback Registration"), the Company shall give
prompt written notice (in any event within 10 business days after its receipt
of notice of any exercise of other demand registration rights) to all Holders
of its intention to effect such a registration and, subject to Sections 3(b)
and 3(c), shall include in such registration all Registrable Common Stock with
respect to which the Company has received written requests for inclusion
therein within 15 days after the receipt of the Company's notice.
(b) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering and/or that the number of shares of
Registrable Common Stock proposed to be included in any such registration
would adversely affect the price per share of the Company's equity securities
to be sold in such offering, the Company shall include in such registration
(i) first, the securities the Company proposes to sell, (ii) second, the
Registrable Common Stock requested to be included therein by the Holders, pro
rata among the Holders of such Registrable Common Stock on the basis of the
number of shares requested to be registered by such Holders, and (iii) third,
other securities requested to be included in such registration pro rata among
the holders of such securities on the basis of the number of shares requested
to be registered by such holders or as such holders may otherwise agree.
(c) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of a holder of the
Company's securities other than Registrable Common Stock, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering and/or that the number of shares of
Registrable Common Stock proposed to be included in any such registration
would adversely affect the price per share of the Company's equity securities
to be sold in such offering, the Company shall include in such registration
(i) first, the securities requested to be included therein by the holders
requesting such registration, (ii) second, the Registrable Common Stock
requested to be included in such registration, pro rata among the holders of
such securities on the basis of the number of shares requested to be
registered by such holders, and (iii) third, other securities requested to be
included in such registration pro rata among the holders of such securities on
the basis of the number of shares requested to be registered by such holders
or as such holders may otherwise agree.
(d) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the Company shall have the right to select the managing
underwriter or underwriters to administer any such offering; provided, that
such selection must be approved by the Holders of a majority of the
Registrable Common Stock included in such Piggyback Registration (which such
approval may not be unreasonably withheld or delayed).
The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 3 prior to the effectiveness
of such registration whether or not any Holder has elected to include
securities in such registration.
(e) Other Registrations. If the Company has previously filed a
Registration Statement with respect to Registrable Common Stock pursuant to
Sections 2 or 4(a) hereof or pursuant to this Section 3, and if such previous
registration has not been withdrawn or abandoned, the Company shall not be
obligated to cause to become effective any other registration of any of its
securities under the Securities Act, whether on its own behalf or at the
request of any holder or holders of such securities, until a period of at
least three months has elapsed from the effective date of such previous
registration.
4. S-3 Registrations.
(a) In addition to the other rights of the Holders described herein,
if at any time that the Company is eligible to use Form S-3 or any successor
thereto, any Holder or Holders requests that the Company file a Registration
Statement on Form S-3 or any successor thereto for a public offering of all or
any portion of the Registrable Common Stock held by such Holders, then the
Company shall use its best efforts to register under the Securities Act on
Form S-3 (an "S-3 Registration") or any successor thereto, for public sale in
accordance with the method of disposition specified in such notice from the
Holder or Holders, the number of shares of Registrable Common Stock specified
in such notice; provided, however, that the Company shall have no obligation
to register such shares of Registrable Common Stock pursuant to this Section
if (based on the current market prices) the number of shares of Registrable
Common Stock specified in such notice would not yield gross proceeds to the
selling stockholders of at least $500,000. Whenever the Company is required by
this Section 4(a) to use its best efforts to effect the registration of
Registrable Common Stock, each of the procedures and requirements of Section 2
(including but not limited to the requirement that the Company notify all
Holders from whom notice has not been received and provide them with the
opportunity to participate in the offering, but excluding the first sentence
of Sections 2(a) and 2(b)) shall be deemed to apply to such registration.
There is no limitation on the number of registrations pursuant to this Section
4(a) that the Company is obligated to effect.
(b) In addition to the other rights of the Holders described herein,
once the Company becomes eligible to use Form S-3 or any successor thereto,
the Company shall (i) provide written notice to all Holders of Registrable
Common Stock within 10 Business Days of such event and (ii) within 30 days of
such event, prepare and file with the SEC a Registration Statement covering an
offering of the Registrable Common Stock to be made on a continuous basis
pursuant to Rule 415 under the Securities Act (or any similar rule that may be
adopted by the SEC). The registration of the Registrable Common Stock pursuant
to this Section 4(b) is referred to herein as a "Shelf Registration." The
Company shall keep the registration statement relating to the Shelf
Registration continuously effective pursuant to Rule 415 under the Securities
Act (or any similar rule that may be adopted by the SEC) until such date as is
the earlier of (A) the date on which all of the Registrable Common Stock
covered thereby have been sold and (B) the date that is two years after the
effective date of such Registration Statement. The Company is obligated to
effect only one Shelf Registration; provided, that the Company's obligations
hereunder shall not be deemed satisfied, and the Shelf Registration shall not
be deemed to have been effected, unless the applicable Registration Statement
has been continuously effective for the requisite time period. A Shelf
Registration does not count as one of the Demand Registrations.
(c) During such time as a Shelf Registration is effective with
respect to the shares of Registrable Common Stock of a Holder, such Holder's
rights pursuant to Section 2 (Demand Registrations) and Section 3 (Piggyback
Registrations) hereof shall not be effective.
5. Holdback Agreement.
The Company agrees not to effect any sale or distribution of any of
its equity securities, or any securities convertible into or exercisable or
exchangeable for such securities, during the 10 days prior to and during the
90 days beginning on the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration or any underwritten
S-3 Registration or any underwritten Shelf Registration (except as part of
such underwritten registration or pursuant to registrations on Form S-8 or any
successor forms thereto or pursuant to any acquisition or business combination
transaction) unless the underwriters managing the offering otherwise agree to
a shorter period.
6. Registration Procedures.
Whenever the Holders request that any Registrable Common Stock be
registered pursuant to this Agreement or the Company is obligated to effect a
Shelf Registration, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Common Stock in accordance with
the intended methods of disposition thereof, and pursuant thereto the Company
shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement with
respect to such Registrable Common Stock and use its best efforts to cause
such Registration Statement to become effective as soon as practicable
thereafter; and before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to the Holders of Registrable
Common Stock covered by such Registration Statement and the underwriter or
underwriters, if any, copies of all such documents proposed to be filed,
including documents incorporated by reference in the Prospectus and, if
requested by such Holders, the exhibits incorporated by reference, and such
Holders shall have the opportunity to object to any information pertaining to
such Holders that is contained therein and the Company will make the
corrections reasonably requested by such Holders with respect to such
information prior to filing any Registration Statement or amendment thereto or
any Prospectus or any supplement thereto;
(b) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for a period of
not less than 180 days, in the case of a Demand Registration, Piggyback
Registration or an S-3 Registration; two years, in the case of a Shelf
Registration; or such shorter period as is necessary to complete the
distribution of the securities covered by such Registration Statement, or
until any remaining shares of Registrable Common Stock cease to be Registrable
Common Stock, and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;
(c) furnish to each seller of Registrable Common Stock such number of
copies of such Registration Statement, each amendment and supplement thereto,
the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Common Stock
owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Common Stock under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the Registrable
Common Stock owned by such seller (provided, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph (d), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction);
(e) notify each seller of such Registrable Common Stock, at any time
when a Prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of any event as a result of which the
Prospectus included in such Registration Statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such seller, the
Company shall prepare a supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable Common Stock, such
Prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading;
(f) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Holders
of a majority of number of shares of the Registrable Common Stock being sold
or the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Common Stock;
(g) make available, for inspection by any seller of Registrable
Common Stock, any underwriter participating in any disposition pursuant to
such Registration Statement, and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such Registration Statement;
(h) use its best efforts to cause all such Registrable Common Stock
to be listed on each securities exchange on which securities of the same class
issued by the Company are then listed or, if no such similar securities are
then listed, use its best efforts to secure the designation of all such
Registrable Common Stock as a "national market system security" on The Nasdaq
Stock Market within the meaning of Rule 11Aa2-1 of the SEC or, failing that,
use its best efforts to secure authorization from The Nasdaq Stock Market for
such Registrable Common Stock, and, without limiting the generality of the
foregoing, use its best efforts to arrange for at least two market makers to
register as such with respect to such Registrable Common Stock with the NASD;
(i) provide a transfer agent and registrar for all such Registrable
Common Stock not later than the effective date of such Registration Statement;
(j) if requested, cause to be delivered, immediately prior to the
effectiveness of the Registration Statement (and, in the case of an
underwritten offering, at the time of delivery of any Registrable Common Stock
sold pursuant thereto), letters from the Company's independent certified
public accountants addressed to each selling Holder (unless such selling
Holder does not provide to such accountants the appropriate representation
letter required by rules governing the accounting profession) and each
underwriter, if any, stating that such accountants are independent public
accountants within the meaning of the Securities Act and the applicable rules
and regulations adopted by the SEC thereunder, and otherwise in customary form
and covering such financial and accounting matters as are customarily covered
by letters of the independent certified public accountants delivered in
connection with primary or secondary underwritten public offerings, as the
case may be;
(k) otherwise comply with all applicable rules and regulations of the
SEC, and make generally available to its stockholders a consolidated earnings
statement (which need not be audited) for the 12 months beginning after the
effective date of a Registration Statement as soon as reasonably practicable
after the end of such period, which earnings statement shall satisfy the
requirements of an earning statement under Section 11(a) of the Securities
Act;
(l) promptly notify each seller of Registrable Common Stock and the
underwriter or underwriters, if any:
(i) when the Registration Statement, any pre-effective amendment,
the Prospectus or any Prospectus supplement or post-effective amendment
to the Registration Statement has been filed and, with respect to the
Registration Statement or any post-effective amendment, when the same
has become effective;
(ii) of any written request by the SEC for amendments or
supplements to the Registration Statement or Prospectus;
(iii) of the notification to the Company by the SEC of its
initiation of any proceeding with respect to the issuance by the SEC of
any stop order suspending the effectiveness of the Registration
Statement; and
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable Common
Stock for sale under the applicable securities or blue sky laws of any
jurisdiction;
(m) permit any Holder of Registrable Common Stock, which Holder, in
its sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
Registration Statement or comparable statement and to require the insertion
therein of material, furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be included; and
(n) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any Prospectus or suspending the qualification of any
Registrable Common Stock included in such Registration Statement for sale in
any jurisdiction, the Company shall use its best efforts promptly to obtain
the withdrawal of such order.
At all times after the Company has filed a registration statement
with the SEC pursuant to the requirements of either the Securities Act or the
Exchange Act, the Company shall 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 SEC thereunder, and take such further action as any Holders may
reasonably request, all to the extent required to enable such Holders to be
eligible to sell Registrable Common Stock pursuant to Rule 144 (or any similar
rule then in effect).
Each seller of Registrable Common Stock agrees by having its stock
treated as Registrable Common Stock hereunder that, upon notice of the
happening of any event as a result of which the Prospectus included in such
Registration Statement contains an untrue statement of a material fact or
omits any material fact necessary to make the statements therein not
misleading (a "Suspension Notice"), such seller will forthwith discontinue
disposition of Registrable Common Stock until such seller is advised in
writing by the Company that the use of the Prospectus may be resumed and is
furnished with a supplemented or amended Prospectus as contemplated by Section
6(e) hereof, and, if so directed by the Company, such seller will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies then in such seller's possession, of the Prospectus covering such
Registrable Common Stock current at the time of receipt of such notice;
provided, however, that such postponement of sales of Registrable Common Stock
by the Holders shall not exceed ninety (90) days in the aggregate in any one
year. If the Company shall give any notice to suspend the disposition of
Registrable Common Stock pursuant to a Prospectus, the Company shall extend
the period of time during which the Company is required to maintain the
Registration Statement effective pursuant to this Agreement by the number of
days during the period from and including the date of the giving of such
notice to and including the date such seller either is advised by the Company
that the use of the Prospectus may be resumed or receives the copies of the
supplemented or amended Prospectus contemplated by Section 6(e). In any event,
the Company shall not be entitled to deliver more than three (3) Suspension
Notices in any one year.
7. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities
or blue sky laws, listing application fees, printing expenses, transfer
agent's and registrar's fees, cost of distributing Prospectuses in preliminary
and final form as well as any supplements thereto, and fees and disbursements
of counsel for the Company and all independent certified public accountants
and other Persons retained by the Company (all such expenses being herein
called "Registration Expenses") (but not including any underwriting discounts
or commissions attributable to the sale of Registrable Common Stock), shall be
borne by the Company. In addition, the Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any liability insurance and the
expenses and fees for listing the securities to be registered on each
securities exchange on which they are to be listed.
(b) The obligation of the Company to bear the expenses described in
Section 7(a) shall apply irrespective of whether a registration, once properly
demanded, if applicable, becomes effective, is withdrawn or suspended, is
converted to another form of registration and irrespective of when any of the
foregoing shall occur; provided, however, that Registration Expenses for any
Registration Statement withdrawn solely at the request of a Holder of
Registrable Common Stock (unless withdrawn following postponement of filing by
the Company in accordance with Section 2(d)(i) or (ii)) or any supplements or
amendments to a Registration Statement or Prospectus resulting from a
misstatement furnished in writing to the Company by a Holder shall be borne by
such Holder.
8. Indemnification.
(a) The Company shall indemnify, to the fullest extent permitted by
law, each Holder, its officers, directors and Affiliates and each Person who
controls such Holder (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses arising out of or based upon
any untrue or alleged untrue statement of material fact contained in any
Registration Statement, Prospectus or preliminary Prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or applicable "blue sky" laws,
except insofar as the same are made in reliance and in conformity with
information relating to such Holder furnished in writing to the Company by
such Holder expressly for use therein or caused by such Holder's failure to
deliver to such Holder's immediate purchaser a copy of the Registration
Statement or Prospectus or any amendments or supplements thereto (if the same
was required by applicable law to be so delivered) after the Company has
furnished such Holder with a sufficient number of copies of the same.
(b) In connection with any Registration Statement in which a Holder
of Registrable Common Stock is participating, each such Holder shall furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such Registration Statement
or Prospectus and, shall indemnify, to the fullest extent permitted by law,
the Company, its officers and directors, and each Person who controls the
Company (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses arising out of or based upon any untrue or
alleged untrue statement of material fact contained in the Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or applicable "blue sky laws," but only to
the extent that the same are made in reliance and in conformity with
information relating to such Holder furnished in writing to the Company by
such Holder expressly for use therein; provided, however, that the obligation
to indemnify shall be several, not joint and several, among such Holders and
the liability of each such Holder shall be in proportion to and limited to the
net amount received by such Holder from the sale of Registrable Common Stock
pursuant to such Registration Statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not
be unreasonably withheld or delayed). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one counsel (in addition
to any reasonably required local counsel) for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party there may be one or more legal or equitable
defenses available to such indemnified party which are in addition to or may
conflict with those available to another indemnified party with respect to
such claim. Failure to give prompt written notice shall not release the
indemnifying party from its obligations hereunder.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities.
(e) If the indemnification provided for in or pursuant to this
Section 8 is due in accordance with the terms hereof, but is held by a court
to be unavailable or unenforceable in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified Person as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the statements or
omissions which result in such losses, claims, damages, liabilities or
expenses as well as any other relevant equitable considerations. The relative
fault of the indemnifying party on the one hand and of the indemnified Person
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party, and by such party's
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. In no event shall the liability of any
selling Holder be greater in amount than the lesser of the amount of net
proceeds received by such Holder upon such sale and the amount for which such
indemnifying party would have been obligated to pay by way of indemnification
if the indemnification provided for under Section 8(b) hereof had been
available under the circumstances.
9. Participation in Underwritten Registrations.
No Person may participate in any registration hereunder which is
underwritten unless such Person (a) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements; provided that no Holder of Registrable Common Stock included in
any underwritten registration shall be required to make any representations or
warranties to the Company or the underwriters (other than representations and
warranties regarding such Holder and such Holder's intended method of
distribution) or to undertake any indemnification obligations to the Company
or the underwriters with respect thereto, except as otherwise provided in
Section 8 hereof.
10. Rule 144.
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and it will take such further
action as any Holder may reasonably request to make available adequate current
public information with respect to the Company meeting the current public
information requirements of Rule 144(c) under the Securities Act, to the
extent required to enable such Holder to sell Registrable Common Stock without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Holder, the Company will deliver to such
Holder a written statement as to whether it has complied with such information
and requirements.
11. Miscellaneous.
(a) Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing)
and shall be given,
If to the Company, to:
Cosi, Inc.
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice), to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, Esq.
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to ZAM Holdings, to:
ZAM Holdings, L.P.
c/o Ziff Brothers Investments, L.L.C.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice), to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Gleacher, to:
▇▇▇▇ ▇▇▇▇▇▇▇▇
Gleacher Partners LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇▇, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to LJCB, to:
LJCB Nominees Pty Ltd.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Attention: President
Telecopy No.: ▇▇▇ ▇▇▇-▇▇▇▇▇▇
If to a transferee Holder, to the address of such Holder set forth in
the transfer documentation provided to the Company;
in each case with copies to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or facsimile number as such party (or transferee) may
hereafter specify for the purpose by notice to the other parties. Each such
notice, request or other communication shall be effective (a) if given by
facsimile, when such facsimile is transmitted to the facsimile number
specified in this Section and the appropriate facsimile confirmation is
received or (b) if given by any other means, when delivered at the address
specified in this Section.
(b) No Waivers. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
(c) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, it being understood that subsequent Holders
of the Registrable Common Stock are intended third party beneficiaries hereof.
(d) Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York.
(e) Jurisdiction. Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby may be brought in any
federal or state court located in the County and State of New York, and each
of the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 11(a)
shall be deemed effective service of process on such party.
(f) Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(g) Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts (any number of which may be by facsimile), each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
(h) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the transactions contemplated herein.
Except as provided to the contrary herein, no provision of this Agreement or
any other agreement contemplated hereby is intended to confer on any Person
other than the parties hereto any rights or remedies.
(i) Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
(j) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.
(k) Amendments. 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
without the prior written consent of the holders of a majority of the Company
Securities (as constituted on the date hereof); provided, however, that
without a Stockholder's written consent no such amendment, modification,
supplement or waiver shall affect adversely such Stockholder's rights
hereunder in a discriminatory manner inconsistent with its adverse effects on
rights of other Stockholders hereunder (other than as reflected by the
different number of shares held by such Stockholder); provided, further, that
the consent or agreement of the Company shall be required with regard to any
termination, amendment, modification or supplement of, or waivers or consents
to departures from, the terms hereof, which affect the Company's obligations
hereunder.
(l) Aggregation of Stock. All Registrable Common Stock held by or
acquired by any Affiliated Persons will be aggregated together for the purpose
of determining the availability of any rights under this Agreement.
(m) Equitable Relief. The parties hereto agree that legal remedies
may be inadequate to enforce the provisions of this Agreement and that
equitable relief, including specific performance and injunctive relief, may be
used to enforce the provisions of this Agreement.
(n) No Inconsistent Agreements. The Company shall not enter into any
agreement, or any amendment to any agreement, which is inconsistent with or
violates the rights granted to the Holders of Registrable Common Stock in this
Agreement.
IN WITNESS WHEREOF, this Supplemental Registration Rights Agreement
has been duly executed by each of the parties hereto as of the date first
written above.
ZAM Holdings, L.P.,
by its General Partner,
PBK HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: VP
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇. ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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LJCB NOMINEES PTY. LTD.
by its Director,
▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
COSI, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Chairman