Exhibit 10.4
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
by and among
VALUE CITY DEPARTMENT STORES, INC.,
and
THE INITIAL HOLDERS SPECIFIED ON
THE SIGNATURE PAGES HEREOF
Dated as of June 11, 2002
TABLE OF CONTENTS
PAGE
1. DEFINITIONS.............................................................................................2
2. REGISTRATION UNDER THE SECURITIES ACT...................................................................6
2.1 Demand Registration..............................................................................6
2.2 Incidental Registration..........................................................................9
2.3 Shelf Registration..............................................................................11
2.4 Underwritten Offerings..........................................................................11
2.5 Expenses........................................................................................12
3. HOLDBACK ARRANGEMENTS..................................................................................12
3.1 Restrictions on Sale by Holders of Registrable Securities.......................................12
3.2 Restrictions on Sale by the Company and Others..................................................12
4. REGISTRATION PROCEDURES................................................................................13
4.1 Obligations of the Company......................................................................13
4.2 Seller Information..............................................................................17
4.3 Notice to Discontinue...........................................................................17
5. INDEMNIFICATION; CONTRIBUTION..........................................................................18
5.1 Indemnification by the Company..................................................................18
5.2 Indemnification by Holders......................................................................18
5.3 Conduct of Indemnification Proceedings..........................................................19
5.4 Contribution....................................................................................20
5.5 Other Indemnification...........................................................................20
5.6 Indemnification Payments........................................................................20
6. GENERAL................................................................................................21
6.1 Adjustments Affecting Registrable Securities....................................................21
6.2 Registration Rights to Others...................................................................21
6.3 Availability of Information; Rule 144; Other Exemptions.........................................21
6.4 Amendments and Waivers..........................................................................22
6.5 Notices.........................................................................................22
6.6 Successors and Assigns..........................................................................24
6.7 Counterparts....................................................................................24
6.8 Descriptive Headings, Etc.......................................................................24
6.9 Severability....................................................................................24
6.10 Choice of Law and Venue; Jury Trial Waiver.....................................................25
6.11 Remedies; Specific Performance.................................................................25
6.12 Entire Agreement...............................................................................26
6.13 Further Assurances.............................................................................26
6.14 Construction...................................................................................26
6.15 No Inconsistent Agreement......................................................................26
6.16 Costs and Attorneys' Fees......................................................................26
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6.17 Nominees for Beneficial Owners.................................................................26
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This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the
"AGREEMENT") dated as of June 11, 2002, by and among Value City Department
Stores, Inc., an Ohio corporation (the "COMPANY"), and the parties specified on
the signature pages to this Agreement amends and restates in its entirety that
certain Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT")
dated as of March 15, 2000 by and between the Company and Prudential Securities
Credit Corp., LLC ("PSCC").
W I T N E S S E T H :
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WHEREAS, in connection with the Financing Agreement dated as of the
date hereof, as such agreement is amended or otherwise modified from time to
time, by and among the Company, certain subsidiaries of the Company, Cerberus
Partners, L.P. and the lenders set forth therein (the "FINANCING AGREEMENT"),
the Company has agreed, upon the terms and subject to the conditions of the
Financing Agreement, to issue warrants (the "WARRANTS") to each Initial Holder
exercisable for up to 2,954,793 shares (subject to adjustment pursuant to the
terms of the Warrant), of the Company's Common Stock without par value (the
"COMMON SHARES") (the Common Shares issued or issuable upon exercise of the
Warrant are hereinafter referred to as the "WARRANT SHARES"); and
WHEREAS, pursuant to the Amended and Restated Convertible Loan
Agreement as amended by Amendment No. 1 to Amended and Restated Convertible Loan
Agreement dated as of the date hereof, as such agreement is further amended or
otherwise modified from time to time, by and among the Company, certain
Subsidiaries of the Company, Cerberus Partners, L.P. and Schottenstein Stores
Corporation (the "LOAN AGREEMENT"), amounts outstanding under the Loan Agreement
(the "ADVANCES") shall be convertible into Common Shares by each of the Initial
Holders at any time in their sole discretion, pursuant to the terms of the Loan
Agreement (the Common Shares issued or issuable upon conversion of the Advances
are hereinafter referred to as the "CONVERSION SHARES"); and
WHEREAS, to induce the Initial Holders to enter into the Financing
Agreement and to amend and restate the Loan Agreement, the Company has 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 "SECURITIES ACT"), and applicable state securities
laws; and
WHEREAS, the Company and PSCC entered into the Registration Rights
Agreement; and
WHEREAS, as of December 11, 2000, PSCC sold to Schottenstein Stores
Corporation ("SSC") the convertible notes which were subject to the Registration
Rights Agreement; and
WHEREAS, in connection with the transactions contemplated by the
Financing Agreement and the Loan Agreement, the Company and SSC have agreed to
amend and restate the Registration Rights Agreement in its entirety as set forth
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and in order to induce the Initial Holders to enter
into the Financing Agreement
and to amend and restate the Loan Agreement, the Company and the Initial Holders
hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
"ADVANCES" shall have the meaning set forth in the preamble.
"AFFILIATE" shall mean, with respect to any Person, any other Person
that directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control," "controls," "controlled by," or "under common
control with" shall mean the possession, direct or indirect of the power to
cause the direction of the management and policies of a Person whether through
the ownership of voting securities, by contract or otherwise. A Person shall be
deemed to have control of another Person if it is a "beneficial owner" (as such
term is defined in Rule 13d-3 and Rule 13-d-5 under the Securities Exchange Act)
or a member of a "group" that is the beneficial owner, directly or indirectly,
of 20% or more of the voting stock of or equity interest in such Person. A
Person shall be deemed to direct the management and policies of a Person if it,
without limitation, obtains the power (whether or not exercised) to elect a
majority of the Board of Directors of such Person.
"COMMON SHARES" shall have the meaning set forth in the preamble.
"COMPANY" shall have the meaning set forth in the introductory
paragraph.
"CONVERSION SHARES" shall have the meaning set forth in the preamble.
"DEMAND REGISTRATION" shall mean a registration required to be effected
by the Company pursuant to Section 2.1.
"DEMAND REGISTRATION STATEMENT" shall mean a registration statement of
the Company which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.1 and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference (or deemed to be incorporated by
reference) therein.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"FINANCING AGREEMENT" shall have the meaning set forth in the preamble.
"HOLDERS" shall mean the Initial Holders for so long as they are the
registered owners of any Registrable Securities and such of their respective
heirs, successors and permitted assigns (including any permitted transferees of
Registrable Securities) who acquire or are otherwise the transferee of
Registrable Securities, directly or indirectly, from such Initial Holders (or
any subsequent Holder), for so long as such heirs, successors and permitted
assigns are the registered owners of any Registrable Securities. For purposes of
this Agreement, a Person will
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be deemed to be a Holder whenever such Person holds an option to purchase, or a
security convertible into or exercisable or exchangeable for, Registrable
Securities, whether or not such purchase, conversion, exercise or exchange has
actually been effected and disregarding any legal restrictions upon the exercise
of such rights. Registrable Securities issuable upon exercise of an option or
upon conversion, exchange or exercise of another security shall be deemed
outstanding for the purposes of this Agreement.
"HOLDERS' COUNSEL" shall mean one firm of counsel (per registration) to
the Holders of Registrable Securities participating in such registration, which
counsel shall be selected (i) in the case of a Demand Registration, by the
Initiating Holder who requested registration in the Request, and (ii) in all
other cases, by the Initial Holders of the Registration.
"INCIDENTAL REGISTRATION" shall mean a registration required to be
effected by the Company pursuant to Section 2.2.
"INCIDENTAL REGISTRATION STATEMENT" shall mean a registration statement
of the Company, which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.2 and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference (or deemed to be incorporated by
reference) therein.
"INITIAL HOLDERS" shall mean the parties specified on the signature
pages to this Agreement and any party to whom any such party transfers at least
50% of its Registrable Securities.
"INITIAL HOLDERS OF THE REGISTRATION" shall mean, with respect to a
particular registration, the Initial Holders who hold Registrable Securities to
be included in such registration.
"INITIATING HOLDER" shall mean, with respect to a particular
registration, the Holder who initiated the Request for such registration.
"LOAN AGREEMENT" shall have the meaning set forth in the preamble.
"NYSE" shall mean the New York Stock Exchange, Inc.
"PERSON" shall mean any individual, firm, partnership, corporation,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement (including, without limitation, any preliminary prospectus and any
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act) and any such Prospectus as amended or
supplemented by any prospectus supplement, and all other amendments and
supplements to such Prospectus, including post-effective amendments, and in
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each case including all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"REGISTRABLE SECURITIES" shall mean (i) any Warrant Shares issued upon
exercise of the Warrants, (ii) any Conversion Shares issued upon conversion of
the Advances, and (iii) any other securities of the Company (or any successor or
assign of the Company, whether by merger, consolidation, sale of assets or
otherwise) which may be issued with respect to, in exchange for, or in
substitution of, Registrable Securities referenced in clauses (i) and (ii) above
by reason of any dividend or stock split, combination of shares, merger,
consolidation, recapitalization, reclassification, reorganization, sale of
assets or similar transaction. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (A) a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and either (i) the registration statement
with respect thereto has remained effective for 150 days from the time the
Warrant Shares are issued pursuant to the Warrants or from the time the
Conversion Shares are issued upon conversion of the Advances (PROVIDED, that
this clause (A)(i) shall not apply to a registration statement that is a shelf
registration) or (ii) such securities shall have been disposed of in accordance
with such registration statement, (B) such securities are eligible for sale
pursuant to Rule 144(k) (or any similar provisions then in force) under the
Securities Act, (C) such securities have been otherwise transferred, a new
certificate or other evidence of ownership for them not bearing the legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under the
Securities Act, or (D) such securities shall have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance with this Agreement by the Company and its
subsidiaries, including, without limitation (i) all SEC, stock exchange, NYSE
and other registration, listing and filing fees, (ii) all fees and expenses of
the Company incurred in connection with compliance with state securities or blue
sky laws and compliance with the rules of any stock exchange (including fees and
disbursements of counsel in connection with such compliance and the preparation
of a blue sky memorandum and legal investment survey), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing,
distributing, mailing and delivering any Registration Statement, any Prospectus,
any underwriting agreements, transmittal letters, securities sales agreements,
securities certificates and other documents relating to the performance of or
compliance with this Agreement, (iv) the fees and disbursements of counsel for
the Company, (v) the fees and disbursements of Holders' Counsel up to $15,000
per Registration Statement, (vi) the fees and disbursements of all independent
public accountants (including the expenses of any audit and/or "cold comfort"
letters) and the fees and expenses of other Persons, including experts, retained
by the Company, (vii) the expenses incurred in connection with making road show
presentations and holding meetings with potential investors to facilitate the
distribution and sale of Registrable Securities, and (viii) except as set forth
below, any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities; PROVIDED, HOWEVER, that Registration Expenses shall not
include discounts and commissions payable to underwriters, selling brokers,
dealer managers or other similar Persons engaged in the distribution of any of
the Registrable Securities; and PROVIDED FURTHER, that in any case where
Registration Expenses are not to be borne by the Company, such expenses shall
not include salaries of Company personnel or general overhead expenses of the
Company, auditing
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fees, premiums or other expenses relating to liability insurance required by
underwriters of the Company or other expenses for the preparation of financial
statements or other data normally prepared by the Company in the ordinary course
of its business or which the Company would have incurred in any event; and
PROVIDED FURTHER, that in the event the Company shall not register any
securities with respect to which it had given written notice of its intention to
register to Holders, notwithstanding anything to the contrary in the foregoing,
all of the costs incurred by the Holders in connection with such registration
shall be deemed to be Registration Expenses.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"REQUEST" shall have the meaning set forth in Section 2.1(a).
"RULE 144" means Rule 144 issued by the SEC under the Securities Act,
or any subsequent rule pertaining to the disposition of securities without
registration.
"RULE 144A" means Rule 144A issued by the SEC under the Securities Act,
or any subsequent rule pertaining to private resales of securities to
institutions.
"SEC" shall mean the Securities and Exchange Commission, or any
successor agency having jurisdiction to enforce the Securities Act.
"SECURITIES ACT" shall have the meaning set forth in the preamble.
"SHELF REGISTRATION" shall have the meaning set forth in Section
2.1(a).
"UNDERWRITERS" shall mean the underwriters, if any, of the offering
being registered under the Securities Act.
"UNDERWRITTEN OFFERING" shall mean a sale of securities of the Company
to an Underwriter or Underwriters for reoffering to the public.
"WARRANTS" shall have the meaning set forth in the preamble.
"WARRANT SHARES" shall have the meaning set forth in the preamble.
"WITHDRAWN DEMAND REGISTRATION" shall have the meaning set forth in
Section 2.1(a).
"WITHDRAWN REQUEST" shall have the meaning set forth in Section 2.1(a).
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Financing Agreement.
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2. REGISTRATION UNDER THE SECURITIES ACT.
2.1 DEMAND REGISTRATION.
(a) RIGHT TO DEMAND REGISTRATION. Subject to Section 2.1(c), at any
time or from time to time each Initial Holder shall have the right to request in
writing that the Company register all or part of such Holder's Registrable
Securities (a "REQUEST") (which Request shall specify the amount of Registrable
Securities intended to be disposed of by such Holder and the intended method of
disposition thereof) by filing with the SEC a Demand Registration Statement. As
promptly as practicable, but no later than 10 days after receipt of a Request,
the Company shall give written notice of such requested registration to all
other Holders of Registrable Securities. Subject to Section 2.1(b), the Company
shall include in a Demand Registration (i) the Registrable Securities intended
to be disposed of by the Initiating Holder and (ii) the Registrable Securities
intended to be disposed of by any other Holder which shall have made a written
request (which request shall specify the amount of Registrable Securities to be
registered and the intended method of disposition thereof) to the Company for
inclusion thereof in such registration within 30 days after the receipt of such
written notice from the Company. The Company shall, promptly, following a
Request, use its reasonable best efforts to cause to be filed with the SEC a
Demand Registration Statement providing for the registration under the
Securities Act of the Registrable Securities which the Company has been so
requested to register by all such Holders, to the extent necessary to permit the
disposition of such Registrable Securities to be registered in accordance with
the intended methods of disposition thereof specified in such Request or further
requests (including, without limitation, by means of a shelf registration
pursuant to Rule 415 under the Securities Act (a "SHELF REGISTRATION") if so
requested and if the Company is then eligible to use such a registration. The
Company shall use its reasonable best efforts to have such Demand Registration
Statement declared effective by the SEC as soon as practicable thereafter and to
keep such Demand Registration Statement continuously effective for the period
specified in Section 4.1(b).
A Request may be withdrawn prior to the filing of the Demand
Registration Statement by the Initiating Holder (a "WITHDRAWN REQUEST") and a
Demand Registration Statement may be withdrawn prior to the effectiveness
thereof by the Initiating Holder (a "WITHDRAWN DEMAND REGISTRATION"), and such
withdrawals shall be treated as a Demand Registration which shall have been
effected pursuant to this Section 2.1, unless the Holders of Registrable
Securities to be included in such Registration Statement reimburse the Company
for its reasonable out-of-pocket Registration Expenses relating to the
preparation and filing of such Demand Registration Statement (to the extent
actually incurred), in which case such withdrawal shall not be treated as a
Demand Registration effected pursuant to this Section 2.1 (and shall not be
counted toward the number of Demand Registrations); PROVIDED, HOWEVER, that if a
Withdrawn Request or Withdrawn Registration Statement is made (A) because of a
material adverse change in the business, financial condition or prospects of the
Company, or (B) because the sole or lead managing Underwriter advises that the
amount of Registrable Securities to be sold in such offering be reduced pursuant
to Section 2.1(b) by more than 25% of the Registrable Securities to be included
in such Registration Statement, then such withdrawal shall not be treated as a
Demand Registration effected pursuant to this Section 2.1 (and shall not be
counted toward the number of Demand Registrations), and the Company shall pay
all Registration Expenses in connection therewith. Any Holder requesting
inclusion in a Demand Registration
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may, at any time prior to the effective date of the Demand Registration
Statement (and for any reason) revoke such request by delivering written notice
to the Company revoking such requested inclusion.
The registration rights granted pursuant to the provisions of this
Section 2.1 shall be in addition to the registration rights granted pursuant to
the other provisions of Section 2 hereof.
(b) PRIORITY IN DEMAND REGISTRATIONS. If a Demand Registration involves
an Underwritten Offering, and the sole or lead managing Underwriter, as the case
may be, of such Underwritten Offering shall advise the Company in writing (with
a copy to each Holder requesting registration) on or before the date five days
prior to the date then scheduled for such offering that, in its opinion, the
amount of Registrable Securities requested to be included in such Demand
Registration exceeds the number which can be sold in such offering within a
price range acceptable to the Initiating Holder (such writing to state the
approximate number of Registrable Securities which may be included in such
offering), and the Request is not thereafter withdrawn, the Company shall
include in such Demand Registration, to the extent of the number which the
Company is so advised may be included in such offering, the Registrable
Securities requested to be included in the Demand Registration by the Holders
allocated PRO RATA in proportion to the number of Registrable Securities
requested to be included in such Demand Registration by each of them; PROVIDED,
however, that from and after the date on which a Buyout Exercise Notice (as
defined in the Loan Agreement) has been delivered by SSC (unless a Referral
Notice (as defined in the Loan Agreement is delivered by Cerberus Partners, L.P.
in connection with such Buyout Exercise Notice), the Company shall include in
such Demand Registration, (A) first, the Registrable Securities requested to be
included in the Demand Registration by Cerberus Partners, L.P. (or its assignee)
and (B) second, to the extent of the number which the Company is so advised may
be included in such offering, the Registrable Securities requested to be
included in the Demand Registration by the other Holders allocated PRO RATA in
proportion to the number of Registrable Securities requested to be included in
such Demand Registration by each of them. In the event the Company shall not, by
virtue of this Section 2.1(b), include in any Demand Registration all of the
Registrable Securities of any Holder requested to be included in such Demand
Registration, such Holder may, upon written notice to the Company given within
five days of the time such Holder first is notified of such matter, further
reduce the amount of Registrable Securities it desires to have included in such
Demand Registration, whereupon only the Registrable Securities, if any, that it
desires to have included will be so included and the Holders not so reducing
shall be entitled to a corresponding pro rata increase in the amount of
Registrable Securities to be included in such Demand Registration.
(c) LIMITATIONS ON REGISTRATIONS. The rights of Holders of Registrable
Securities to request Demand Registrations pursuant to Section 2.1(a) are
subject to the limitation that in no event shall the Company be required to
effect more than three Demand Registrations requested by each Initial Holder as
the Initiating Holder; PROVIDED, HOWEVER, that such number shall be increased to
the extent the Company (x) does not include in what would otherwise be such
registration, for which the Company is required to pay Registration Expenses,
the number of Registrable Securities requested to be registered by the Holders
by reason of Section 2.1(b) or (y) terminates a Shelf Registration pursuant to
Section 2.3 prior to the earlier of the time that all Registrable Securities
covered by such Shelf Registration have been sold or one
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year following the effectiveness of such Shelf Registration. The Holders of the
Registrable Securities may only make one Demand Registration per 180 days. In
order to effect a Demand Registration, the Holder seeking such Demand
Registration must seek to register at least a number of shares with a Current
Market Value of $5,000,000, or such lesser number which is all of the
Registrable Securities held by such Holder.
(d) UNDERWRITING; SELECTION OF UNDERWRITERS. Notwithstanding anything
to the contrary contained in Section 2.1(a), if the Initiating Holder who
requested registration in the Request so elects, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the form
of a firm commitment Underwritten Offering and such Initiating Holder may
require that all Persons (including other Holders) participating in such
registration sell their Registrable Securities to the Underwriters at the same
price and on the same terms of underwriting applicable to the Initiating Holder.
If any Demand Registration involves an Underwritten Offering, the sole or
managing Underwriters and any additional investment bankers and managers to be
used in connection with such registration shall be selected by the Company,
subject to the approval of the Initiating Holder who requested such registration
in the Request (such approval not to be unreasonably withheld).
(e) EFFECTIVE REGISTRATION STATEMENT; SUSPENSION. A Demand Registration
Statement shall not be deemed to have become effective (and the related
registration will not be deemed to have been effected) (i) unless it has been
declared effective by the SEC and remains effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
shorter of (i) one year for a Shelf Registration or 90 days for any other
Registration Statement or (ii) the time period specified in Section 4.1(b), (ii)
if the offering of any Registrable Securities pursuant to such Demand
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, or
(iii) if, in the case of an Underwritten Offering, the conditions to closing
specified in an underwriting agreement to which the Company is a party are not
satisfied (other than by the sole reason of any breach or failure by the Holders
of Registrable Securities) and are not otherwise waived.
(f) REGISTRATION OF OTHER SECURITIES. Whenever the Company shall effect
a Demand Registration, no securities other than the Registrable Securities shall
be covered by such registration unless each Initial Holder of the Registration
shall have consented in writing to the inclusion of such other securities;
provided, however, that the number of shares of Registrable Securities to be
registered by the Holders shall not be reduced pursuant to Section 2.1(b) unless
all other securities are first entirely excluded from the underwriting.
(g) REGISTRATION STATEMENT FORM. Registrations under this Section 2.1
shall be on such appropriate registration form of the SEC (i) as shall be
reasonably selected by the Company, and (ii) which shall be available for the
sale of Registrable Securities in accordance with the intended method or methods
of disposition specified in the requests for registration.
2.2 INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at any time
or from time to time proposes to register any of its securities under the
Securities Act (other than in
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a registration on Form S-4 or S-8 or any successor form to such forms and other
than pursuant to Section 2.1 or 2.3) 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 five Business Days prior to filing with the SEC
such proposed registration) to all Holders of Registrable Securities 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, 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 2.2 as hereinafter provided.
Subject to the other provisions of this paragraph (a) and Section 2.2(b), upon
the written request of any Holder made within five Business Days after the
receipt of such written notice (which request shall specify the amount of
Registrable Securities to be registered and the intended method of disposition
thereof), the Company shall effect the registration under the Securities Act of
all Registrable Securities requested by Holders 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 so to be registered, by inclusion of such Registrable
Securities in the Registration Statement which covers the securities which the
Company proposes to register and shall cause such Registration Statement to
become and remain effective with respect to such Registrable Securities in
accordance with the registration procedures set forth in Section 4. If an
Incidental Registration involves an Underwritten Offering, immediately 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. If such price is 15% (or $1.50 per share, whichever is less) less than
the Current Market Value of the Registrable Securities on the date that a Holder
delivered its notice requesting inclusion in an Incidental Registration, such
Holder 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 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 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 2.1 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 for the same period as the delay in registering such other
securities; PROVIDED, HOWEVER, that if such delay shall extend beyond 120 days
from the date the Company received a request to include Registrable Securities
in such Incidental Registration, then the Company shall 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 2.2 which the
Company is obligated to effect; PROVIDED, HOWEVER, that the Company shall not be
obligated to include any shares requested unless the number of shares has a
Current Market Value of at least $5,000,000, or is all of the Registrable
Securities held by a Holder.
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The registration rights granted pursuant to the provisions of this
Section 2.2 shall be in addition to the registration rights granted pursuant to
the other provisions of Section 2 hereof.
(b) PRIORITY IN INCIDENTAL REGISTRATION. If an Incidental Registration
involves an Underwritten Offering (on a firm commitment basis), and the sole or
the lead managing Underwriter, as the case may be, of such Underwritten Offering
shall advise the Company in writing (with a copy to each Holder requesting
registration) on or before the date five days prior to the date then scheduled
for such offering that, in its opinion, the amount of securities (including
Registrable 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 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 securities that the Company proposes to register
for its own account, and (B) second, on a PRO RATA basis, in proportion to the
number of securities requested to be included in such registration, the
Registrable Securities requested to be included in such registration by the
Holders and the holders of other securities of the Company to be registered on
behalf of any other Person, and (ii) in the case of a registration initiated by
any Persons other than the Company, (A) first, the securities of the Company
requested to be included in such registration by any Persons initiating such
registration, and (B) second, on a PRO RATA basis, in proportion to the number
of securities requested to be included in such registration, the Registrable
Securities requested to be included in such registration by the Holders, the
securities requested to be included in such registration by any other Persons
and the securities that the Company proposes to register for its own account;
PROVIDED, HOWEVER, that in the event the Company will not, by virtue of this
Section 2.2(b), include in any such registration all of the Registrable
Securities of any Holder requested to be included in such registration, such
Holder may, upon written notice to the Company given within three days of the
time such Holder first is notified of such matter, reduce the amount of
Registrable Securities it desires to have included in such registration,
whereupon only the Registrable Securities, if any, it desires to have included
will be so included and the Holders not so reducing shall be entitled to a
corresponding pro rata increase in the amount of Registrable Securities to be
included in such registration.
(c) SELECTION OF UNDERWRITERS. If any Incidental Registration involves
an Underwritten Offering, the sole or managing Underwriter(s) and any additional
investment bankers and managers to be used in connection with such registration
shall be selected by the Company in its sole discretion.
2.3 SHELF REGISTRATION.
(a) SHELF REGISTRATION. If a request made pursuant to Section 2.1 is
for a Shelf Registration, the Company shall use its reasonable best efforts to
keep the Shelf Registration continuously effective through the date on which all
of the Registrable Securities covered by such Shelf Registration may be sold
pursuant to Rule 144(k) under the Securities Act (or any successor provision
having similar effect); PROVIDED, HOWEVER, that prior to the termination of such
Shelf Registration, the Company shall first furnish to each Holder of
Registrable Securities
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participating in such Shelf Registration (i) an opinion, in form and substance
reasonably satisfactory to each Initial Holder of the Registration, of counsel
for the Company satisfactory to each Initial Holder of the Registration (it
being agreed that Porter, Wright, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP is reasonably
satisfactory) stating that such Registrable Securities are freely saleable
pursuant to Rule 144(k) under the Securities Act (or any successor provision
having similar effect) or (ii) a "No-Action Letter" from the staff of the SEC
stating that the SEC would not recommend enforcement action if the Registrable
Securities included in such Shelf Registration were sold in a public sale other
than pursuant to an effective registration statement.
2.4 UNDERWRITTEN OFFERINGS.
(a) DEMAND UNDERWRITTEN OFFERINGS. If requested by the sole or lead
managing Underwriter and the Initial Holders of the Registration for any
Underwritten Offering effected pursuant to a Demand Registration, the Company
shall enter into a customary underwriting agreement with the Underwriters for
such offering to contain such representations and warranties by the Company and
the Initial Holders of the Registration and such other terms as are generally
prevailing in agreements of that type, including, without limitation,
indemnification and contribution to the effect and to the extent provided in
Section 5.
(b) HOLDERS OF REGISTRABLE SECURITIES TO BE PARTIES TO UNDERWRITING
AGREEMENT. The Holders of Registrable Securities to be distributed by
Underwriters in an Underwritten Offering contemplated by Section 2 shall be
parties to the underwriting agreement between the Company and such Underwriters
and may, at such Holders' option, require that any or all of the representations
and warranties by, and the other agreements on the part of, the Company to and
for the benefit of such Underwriters shall also be made to and for the benefit
of such Holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of such Underwriters under such underwriting
agreement be conditions precedent to the obligations of such Holders of
Registrable Securities; PROVIDED, HOWEVER, that the Company shall not be
required to make any representations or warranties with respect to written
information specifically provided by a selling Holder for inclusion in the
Registration Statement. No Holder shall be required to make any representations
or warranties to, or agreements with, the Company or (in the case of an
Incidental Registration) the Underwriters other than representations, warranties
or agreements regarding such Holder, such Holder's Registrable Securities and
such Holder's intended method of disposition.
(c) PARTICIPATION IN UNDERWRITTEN REGISTRATION. Notwithstanding
anything herein to the contrary, no Person may participate in any underwritten
registration hereunder unless such Person (i) agrees to sell its securities on
the same terms and conditions provided in any underwritten arrangements approved
by the Persons entitled hereunder to approve such arrangement and (ii)
accurately completes and executes in a timely manner all questionnaires, powers
of attorney, indemnities, custody agreements, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements.
2.5 EXPENSES. The Company shall pay all Registration Expenses in
connection with any Demand Registration, Incidental Registration or Shelf
Registration whether or not such registration shall become effective and whether
or not all Registrable Securities originally requested to be included in such
registration are withdrawn or otherwise ultimately not
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included in such registration, except as otherwise provided with respect to a
Withdrawn Request and a Withdrawn Demand Registration in Section 2.1(a).
3. HOLDBACK ARRANGEMENTS
3.1 RESTRICTIONS ON SALE BY HOLDERS OF REGISTRABLE SECURITIES. Each
Holder of Registrable Securities agrees, by acquisition of such Registrable
Securities, if timely requested in writing by the sole or lead managing
Underwriter, not to make any short sale of, loan, grant any option for the
purchase of or effect any public sale or distribution, including a sale pursuant
to Rule 144 (or any successor provision having similar effect) under the
Securities Act of any Registrable Securities (except as part of such
registration), during the seven days prior to, and during the time period
reasonably requested by the sole or lead managing Underwriter (or the closing
date for any Underwritten Offering sold pursuant to a Shelf Registration), not
to exceed 90 days, beginning on the effective date of the applicable
registration statement, unless the sole or lead Managing Underwriter in such
Underwritten Offering otherwise agrees; PROVIDED, that the Company, each officer
and director of the Company and each other holder of 5% or more of the equity
securities (or any security convertible into or exchangeable or exercisable for
any of its equity securities) of the Company so agree.
3.2 RESTRICTIONS ON SALE BY THE COMPANY AND OTHERS. The Company agrees
that if timely requested in writing by the sole or lead managing Underwriter in
an Underwritten Offering of any Registrable Securities, not to make any short
sale of, loan, grant any option for the purchase of or effect any public sale or
distribution of any of the Company's equity securities (or any security
convertible into or exchangeable or exercisable for any of the Company's equity
securities) during the seven days prior to, and during the time period
reasonably requested by the sole or lead managing Underwriter not to exceed 90
days, beginning on the effective date of the applicable registration statement
(except as part of such underwritten registration or pursuant to registrations
on Forms S-4 or S-8 or any successor form to such forms), unless the sole or
lead Managing Underwriter in such Underwritten Offering otherwise Agrees. The
Company will use its reasonable best efforts to cause each director and officer
of the Company and each holder of 5% or more of the equity securities (or any
security convertible into or exchangeable or exercisable for any of its equity
securities) of the Company to so agree.
4. REGISTRATION PROCEDURES.
4.1 OBLIGATIONS OF THE COMPANY. Whenever the Company is required to
effect the registration of Registrable Securities under the Securities Act
pursuant to Section 2 of this Agreement, the Company shall, as expeditiously as
possible:
(a) prepare and file with the SEC (promptly, and in any event within 45
days after receipt of a request to register Registrable Securities) the
requisite Registration Statement to effect such registration, which Registration
Statement shall comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required by the SEC
to be filed therewith, and the Company shall use its reasonable best efforts to
cause such Registration Statement to become effective (promptly, and in any
event within 60 days of the initial filing of the Registration Statement with
the SEC) (PROVIDED, HOWEVER, that the Company may discontinue any registration
of its securities that are not Registrable Securities,
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and, under the circumstances specified in Section 2.2, its securities that are
Registrable Securities); and PROVIDED FURTHER, that before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, or comparable
statements under securities or blue sky laws of any jurisdiction, the Company
shall (i) provide Holders' Counsel and any other Inspector with an adequate and
appropriate opportunity to participate in the preparation of such Registration
Statement and each Prospectus included therein (and each amendment or supplement
thereto or comparable statement) to be filed with the SEC, which documents shall
be subject to the review and comment of Holders' Counsel, and (ii) not file any
such Registration Statement or Prospectus (or amendment or supplement thereto or
comparable statement) with the SEC to which Holder's Counsel, any selling Holder
or any other Inspector shall have reasonably objected on the grounds that such
filing does not comply in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder;
(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 (i) to keep such Registration Statement effective, and (ii) to
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by such Registration Statement, in each
case until such time as all of such Registrable Securities have been disposed of
in accordance with the intended methods of disposition by the seller(s) thereof
set forth in such Registration Statement;
(c) furnish, without charge, to each selling Holder of such Registrable
Securities and each Underwriter, if any, of the securities covered by such
Registration Statement, such number of copies of such Registration Statement,
each amendment and supplement thereto (in each case including all exhibits), and
the Prospectus included in such Registration Statement (including each
preliminary Prospectus) in conformity with the requirements of the Securities
Act, and other documents, as such selling Holder and Underwriter may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities owned by such selling Holder (the Company hereby
consenting to the use in accordance with applicable law of each such
Registration Statement (or amendment or post-effective amendment thereto) and
each such Prospectus (or preliminary prospectus or supplement thereto) by each
such selling Holder of Registrable Securities and the Underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Registration Statement or Prospectus);
(d) prior to any public offering of Registrable Securities, use its
reasonable best efforts to register or qualify all Registrable Securities and
other securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as any selling Holder of
Registrable Securities covered by such Registration Statement or the sole or
lead managing Underwriter, if any, may reasonably request to enable such selling
Holder to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such selling Holder and to continue such registration or
qualification in effect in each such jurisdiction for as long as such
Registration Statement remains in effect (including through new filings or
amendments or renewals), and do any and all other acts and things which may be
necessary or advisable to enable any such selling Holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
selling Holder;
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(e) use its reasonable best efforts to obtain all other approvals,
consents, exemptions or authorizations from such governmental agencies or
authorities as may be necessary to enable the selling Holders of such
Registrable Securities to consummate the disposition of such Registrable
Securities;
(f) notify Holders' Counsel, each Holder of Registrable Securities
covered by such Registration Statement and the sole or lead managing
Underwriter, if any: (i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any prospectus supplement related thereto 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 request by the SEC or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the Company becomes aware or the happening of any
event which results in (A) the Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein not misleading, or
(B) the Prospectus included in such Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein, in the light of the
circumstances under which they were made, not misleading, (vi) if at any time
the representations and warranties contained in any underwriting agreement in
respect of such offering cease to be true and correct in all material respects,
and (vii) of the Company's reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate or that there exists
circumstances not yet disclosed to the public which make further sales under
such Registration Statement inadvisable pending such disclosure and
post-effective amendment; and, if the notification relates to an event described
in any of the clauses (ii) through (vii) of this Section 4.1(f), the Company
shall promptly prepare a supplement or post-effective amendment to such
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that (1) such
Registration Statement 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 not misleading, and (2) as thereafter delivered to
the purchasers of the Registrable Securities being sold thereunder, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading (and shall furnish to each such Holder and each Underwriter, if
any, a reasonable number of copies of such Prospectus so supplemented or
amended); and if the notification relates to an event described in clause (iii)
of this Section 4.1(f), the Company shall take all reasonable action required to
prevent the entry of such stop order or to remove it if entered;
(g) make available for inspection by any selling Holder of Registrable
Securities, any sole or lead managing Underwriter participating in any
disposition pursuant to such Registration Statement, Holders' Counsel and any
attorney, accountant or other agent
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retained by any such seller or any Underwriter (each, an "INSPECTOR" and,
collectively, the "INSPECTORS"), all financial and other records, pertinent
corporate documents and properties of the Company and any subsidiaries thereof
as may be in existence at such time relevant to the Offering (collectively, the
"RECORDS") as shall be necessary, in the reasonable opinion of such Holders' and
such Underwriters' respective counsel, to enable them to exercise their due
diligence responsibility and to conduct a reasonable investigation within the
meaning of the Securities Act, and cause the Company's and any subsidiaries'
officers, directors and employees, and the independent public accountants of the
Company, to supply all information reasonably requested by any such Inspectors
in connection with such Registration Statement;
(h) obtain an opinion from the Company's counsel and a "cold comfort"
letter from the Company's independent public accountants who have certified the
Company's financial statements included or incorporated by reference in such
Registration Statement, in each case dated the effective date of such
Registration Statement (and if such registration involves an Underwritten
Offering, dated the date of the closing under the underwriting agreement), in
customary form and covering such matters as are customarily covered by such
opinions and "cold comfort" letters delivered to underwriters in underwritten
public offerings, which opinion and letter shall be in customary form, and
furnish to each Holder participating in the offering and to each Underwriter, if
any, a copy of such opinion and letter addressed to such Holder (in the case of
the opinion) and Underwriter (in the case of the opinion and the "cold comfort"
letter);
(i) provide a CUSIP number for all Registrable Securities and provide
and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than the
effectiveness of such Registration Statement;
(j) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC and any other governmental agency or
authority having jurisdiction over the offering, and make available to its
security holders, as soon as reasonably practicable but no later than 90 days
after the end of any 12-month period, an earnings statement (i) commencing at
the end of any month in which Registrable Securities are sold to Underwriters in
an Underwritten Offering and (ii) commencing with the first day of the Company's
calendar month next succeeding each sale of Registrable Securities after the
effective date of a Registration Statement, which statement shall cover such
12-month periods, in a manner which satisfies the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;
(k) if so requested by an Initial Holder of the Registration, use its
reasonable best efforts to cause all such Registrable Securities to be duly
included for quotation on the national securities exchange on which the
Company's similar securities are then listed, if applicable, or if securities of
the Company are not at the time listed on any national securities exchange (or
if the listing of Registrable Securities is not permitted under the rules of
each national securities exchange on which the Company's securities are then
listed), on a national securities exchange to which it meets the listing
requirements designated by the Initial Holders of the Registration;
(l) enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers'
certificates and other customary closing documents;
-15-
(m) reasonably cooperate with each selling Holder of Registrable
Securities and each Underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NYSE and make reasonably available its
employees and personnel and otherwise provide reasonable assistance to the
Underwriters (taking into account the needs of the Company's businesses and the
requirements of the marketing process) in the marketing of Registrable
Securities in any Underwritten Offering;
(n) cooperate with the selling Holders of Registrable Securities and
the sole or lead managing Underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause such Registrable
Securities to be issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of Registrable
Securities to the Underwriters or, if not an Underwritten Offering, in
accordance with the instructions of the selling Holders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities;
(o) keep each selling Holder of Registrable Securities advised in
writing as to the initiation and progress of any registration under Section 2
hereunder;
(p) furnish to each Holder participating in the offering and the sole
or lead managing Underwriter, if any, without charge, at least one
manually-signed copy of the Registration Statement and any post-effective
amendments thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those deemed to be
incorporated by reference);
(q) if requested by the sole or lead managing Underwriter or any
selling Holder of Registrable Securities, immediately incorporate in a
prospectus supplement or post-effective amendment such information concerning
such Holder of Registrable Securities, the Underwriters or the intended method
of distribution as the sole or lead managing Underwriter or the selling Holder
of Registrable Securities reasonably requests to be included therein and as is
appropriate in the reasonable judgment of the Company, including, without
limitation, information with respect to the number of shares of the Registrable
Securities being sold to the Underwriters, the purchase price being paid
therefor by such Underwriters and with respect to any other terms of the
Underwritten Offering of the Registrable Securities to be sold in such offering;
make all required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; and supplement or make
amendments to any Registration Statement if requested by the sole or lead
managing Underwriter of such Registrable Securities; and
(r) use its reasonable best efforts to take all other steps necessary
to expedite or facilitate the registration and disposition of the Registrable
Securities contemplated hereby.
4.2 SELLER INFORMATION. The Company may require each selling Holder of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding such seller and the disposition of
such securities as the Company may from time to time reasonably request in
writing; PROVIDED, HOWEVER, that such information
-16-
shall be used only in connection with such Registration. If any Registration
Statement or comparable statement under "blue sky" laws refers to any Holder by
name or otherwise as the Holder of any securities of the Company, then such
Holder shall have the right to require (i) the insertion therein of language, in
form and substance reasonably satisfactory to such Holder and the Company, to
the effect that the holding by such Holder of such securities is not to be
construed as a recommendation by such Holder of the investment quality of the
Company's securities covered thereby and that such holding does not imply that
such Holder will assist in meeting any future financial requirements of the
Company, and (ii) in the event that such reference to such Holder by name or
otherwise is not in the judgment of the Company, as advised by counsel, required
by the Securities Act or any similar federal statute or any state "blue sky" or
securities law then in force, the deletion of the reference to such Holder.
4.3 NOTICE TO DISCONTINUE. Each Holder of Registrable Securities agrees
by acquisition of such Registrable Securities that, (i) upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 4.1(f)(ii) through 4.1(f)(v), such Holder shall forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 4.1(f) and, if
so directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Registrable Securities which
is current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective pursuant to this Agreement (including,
without limitation, the period referred to in Section 4.1(b)) by the number of
days during the period from and including the date of the giving of such notice
pursuant to Section 4.1(f) to and including the date when the Holder shall have
received the copies of the supplemented or amended prospectus contemplated by
and meeting the requirements of Section 4.1(f).
5. INDEMNIFICATION; CONTRIBUTION.
5.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by law, each Holder of
Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates, advisers, attorneys and agents
(collectively, "AGENTS") and each Person who controls such Holder (within the
meaning of the Securities Act) and its Agents with respect to each registration
which has been effected pursuant to this Agreement, against any and all losses,
claims, damages or liabilities, joint or several, actions or proceedings
(whether commenced or threatened) in respect thereof, and expenses (as incurred
or suffered and including, but not limited to, any and all expenses incurred in
investigating, preparing or defending any litigation or proceeding, whether
commenced or threatened, and the reasonable fees, disbursements and other
charges of legal counsel) in respect thereof (collectively, "CLAIMS"), insofar
as such Claims arise out of or are based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus (including any preliminary, final or summary prospectus and any
amendment or supplement thereto) related to any such registration or any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
-17-
required of the Company in connection with any such registration, or any
qualification or compliance incident thereto; PROVIDED, HOWEVER, that the
Company will not be liable in any such case to the extent that any such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact so made in
reliance upon and in conformity with written information furnished to the
Company in an instrument duly executed by such Holder specifically stating that
it was expressly for use therein. The Company shall enter into an agreement with
any Underwriters of the Registrable Securities to provide for customary
indemnification of any such Underwriter, their Agents and each Person who
controls any such Underwriter (within the meaning of the Securities Act). Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of any Person who may be entitled to indemnification
pursuant to this Section 5 and shall survive the transfer of securities by such
Holder or Underwriter.
5.2 INDEMNIFICATION BY HOLDERS. Each Holder, if Registrable Securities
held by it are included in the securities as to which a registration is being
effected, agrees to, severally and not jointly, indemnify and hold harmless, to
the fullest extent permitted by law, the Company, its directors and officers,
each other Person who participates as an Underwriter in the offering or sale of
such securities and its Agents and each Person who controls the Company against
any and all Claims, insofar as such Claims arise out of or are based upon any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to such
registration, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company in an instrument duly executed by such Holder specifically stating that
it was expressly for use therein; PROVIDED, HOWEVER, that the aggregate amount
which any such Holder shall be required to pay pursuant to this Section 5.2
shall in no event be greater than the amount of the net proceeds received by
such Holder upon the sale of the Registrable Securities pursuant to the
Registration Statement giving rise to such Claims less all amounts previously
paid by such Holder with respect to any such Claims.
5.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by
an indemnified party of notice of any Claim or the commencement of any action or
proceeding involving a Claim under this Section 5, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party
pursuant to Section 5, (i) notify the indemnifying party in writing of the Claim
or the commencement of such action or proceeding; PROVIDED, HOWEVER, that the
failure of any indemnified party to provide such notice shall not relieve the
indemnifying party of its obligations under this Section 5, except to the extent
the indemnifying party is materially and actually prejudiced thereby and shall
not relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section 5, and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; PROVIDED, HOWEVER, that any indemnified
party shall have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (A) the indemnifying party has agreed
in writing to pay such fees and expenses, (B) the indemnifying party shall have
failed to assume the defense of such claim and employ counsel
-18-
reasonably satisfactory to such indemnified party within 20 days after receiving
notice from such indemnified party that the indemnified party believes it has
failed to do so, (C) in the reasonable judgment of any such indemnified party,
based upon advice of counsel, a conflict of interest shall exist between such
indemnified party and the indemnifying party with respect to such claims; it
being understood, however, that the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to no more than one firm of local
counsel) at any time for all such indemnified parties or (D) such indemnified
party is a defendant in an action or proceeding which is also brought against
the indemnifying party and reasonably shall have concluded that there may be one
or more legal defenses available to such indemnified party which are not
available to the indemnifying party. No indemnifying party shall be liable for
any settlement of any such claim or action effected without its written consent,
which consent shall not be unreasonably withheld. No indemnifying party shall,
without the consent of the indemnified party, which consent shall not be
unreasonably withheld, consent to entry of any judgment or enter into any
settlement or compromise of any pending or threatened claim or action in respect
of which indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such claim or action),
unless such settlement, (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim, (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party, and (3) does not provide for any
action on the part of any party other than the payment of money damages which is
to be paid in full by or on behalf of the indemnifying party.
5.4 CONTRIBUTION. If the indemnification provided for in Section 5.1 or
5.2 from the indemnifying party for any reason is unavailable to (other than by
reason of exceptions provided therein), or is insufficient to hold harmless an
indemnified party hereunder in respect of any Claim, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Claim in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the other
hand, in connection with the actions which resulted in such Claim, as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative faults but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.4 were determined by PRO RATA allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by a party as a result of any
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Claim referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth in Section 5.3, any legal or other
fees, costs or expenses reasonably incurred by such party in connection with any
investigation or proceeding. Notwithstanding anything in this Section 5.4 to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 5.4 to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such Claims,
less all amounts previously paid by such indemnifying party with respect to such
Claims. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
5.5 OTHER INDEMNIFICATION. Indemnification similar to that specified in
the preceding Sections 5.1 and 5.2 (with appropriate modifications) shall be
given by the Company and each selling Holder of Registrable Securities with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other than
the Securities Act. The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract.
5.6 INDEMNIFICATION PAYMENTS. The indemnification and contribution
required by this Section 5 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when bills are
received or any expense, loss, damage or liability is incurred.
6. GENERAL.
6.1 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company agrees
that it shall not effect or permit to occur any combination or subdivision of
shares which would adversely affect the ability of the Holder of any Registrable
Securities to include such Registrable Securities in any registration
contemplated by this Agreement or the marketability of such Registrable
Securities in any such registration.
6.2 REGISTRATION RIGHTS TO OTHERS. The Company is not currently party
to any agreement with respect to its securities granting any registration rights
to any Person. If the Company shall at any time hereafter provide to any
Affiliate of the Company rights with respect to the registration of such
securities under the Securities Act, (i) such rights shall not be in conflict
with or adversely affect any of the rights provided in this Agreement to the
Holders and (ii) if such rights are provided on terms or conditions more
favorable to such holder than the terms and conditions provided in this
Agreement, the Company shall provide (by way of amendment to this Agreement or
otherwise) such more favorable terms or conditions to the Holders.
6.3 AVAILABILITY OF INFORMATION; RULE 144; OTHER EXEMPTIONS. At any
time during which the Company is not subject to the reporting requirements of
the Exchange Act, the Company shall, at any time and from time to time, upon the
request of any Holder of Registrable Securities or upon the request of any
Person designated by such Holder as a prospective purchaser of any Registrable
Securities, furnish in writing to such Holder or such prospective
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purchaser, as the case may be, a statement as of a date not earlier than 12
months prior to the date of such request of the nature of the business of the
Company and the products and services it offers and copies of the Company's most
recent balance sheet and profit and loss and retained earnings statements,
together with similar financial statements for such part of the two preceding
fiscal years as the Company shall have been in operation, all such financial
statements to be audited to the extent audited statements are reasonable
available, PROVIDED, that, in any event the most recent financial statements so
furnished shall include a balance sheet as of a date less than 16 months prior
to the date of such request, statements of profit and loss and retained earnings
for the 12 months preceding the date of such balance sheet, and, if such balance
sheet is not as of a date less than 6 months prior to the date of such request,
additional statements of profit and loss and retained earnings for the period
from the date of such balance sheet to a date less than 6 months prior to the
date of such request. During any time during which the Company is not subject to
the reporting requirements of the Exchange Act and as long as any Registrable
Securities are outstanding , the Warrants have not yet expired or the Advances
have not yet been converted, the Company shall deliver to the Holders all
reports, financial statements and other documents required to be provided under
Section 6.01(a)(i) of the Financing Agreement and Section 6.01(a) of the Loan
Agreement, without regard to (A) whether, at any time, such reporting
requirements are required pursuant to Section 6.01(a)(i) of the Financing
Agreement and Section 6.01(a) of the Loan Agreement and (B) whether all Liens,
Reimbursement Obligations, Letter of Credit Obligations and all other
Obligations under the Financing Agreement and the Loan Agreement have been paid
or whether any Lender shall have any commitment thereunder. The Company will use
its best efforts to take such steps as are necessary to allow the Company to
become, and remain, eligible to register securities on Form S-3 (or any
comparable form adopted by the SEC) for resale purposes, and to make publicly
available and available to the Holder of Registrable Securities to make sales of
Registrable Securities pursuant to such rules.
The Company covenants that it will use its reasonable best efforts to
timely file any reports required to be filed by it under the Securities Act or
the Exchange Act (including, but not limited to, the reports under Sections 13
and 15(d) of the Exchange Act referred to in subparagraph (c) of Rule 144 under
the Securities Act), and that it shall take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities 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 other rule or regulation now existing or
hereafter adopted by the SEC. The Company will furnish to any Holder of
Registrable Securities, upon request made by such Holder at any time, a written
statement signed by the Company, addressed to such Holder, as to whether the
Company has complied with the current public information requirements of Rule
144 or Rule 144A. The Company will, at the request of any Holder of Registrable
Securities (upon receipt from such Holder of a certificate certifying (i) that
such Holder has held such Registrable Securities for a period of not less than
one (1) year, and (ii) that such Holder has not been an affiliate (as defined in
Rule 144) of the Company for more than the ninety (90) preceding days), remove
from the stock certificates representing such Registrable Securities that
portion of any restrictive legend which relates to the registration provisions
of the Securities Act.
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6.4 AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified, supplemented or
terminated, and waivers or consents to departures from the provisions hereof may
not be given, without the written consent of the Company and each Initial
Holder; PROVIDED, HOWEVER, that no such amendment, modification, supplement,
waiver or consent to departure shall reduce the aforesaid percentage of
Registrable Securities without the written consent of all of the Holders of
Registrable Securities; and PROVIDED FURTHER, that nothing herein shall prohibit
any amendment, modification, supplement, termination, waiver or consent to
departure the effect of which is limited only to those Holders who have agreed
to such amendment, modification, supplement, termination, waiver or consent to
departure.
6.5 NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, telecopier, any
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties in accordance with the
provisions of this Section:
If to the Company: Value City Department Stores, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: Porter, Wright, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Initial Holders: Cerberus Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Schottenstein Stores Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. Block
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
If to any subsequent
Holder, to the address of
such Person set forth in
the records of the Company.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; on the next business day, if timely delivered to a
courier guaranteeing overnight delivery; and five days after being deposited in
the mail, if sent first class or certified mail, return receipt requested,
postage prepaid.
6.6 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, successors
and permitted assigns (including any permitted transferee of the Warrants,
Advances or Registrable Securities). Any Holder may assign to any permitted (as
determined under the Warrants, Financing Agreement and Loan Agreement)
transferee of its Warrants, Advances or Registrable Securities (other than a
transferee that acquires such Registrable Securities in a registered public
offering or pursuant to a sale under Rule 144 of the Securities Act (or any
successor rule)), its rights and obligations under this Agreement; PROVIDED,
HOWEVER, if any permitted transferee shall take and hold the Warrants, Advances
or Registrable Securities, such transferee shall promptly notify the Company and
by taking and holding such Registrable Securities such permitted transferee
shall automatically be entitled to receive the benefits of and be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement as if it were a party hereto (and shall, for all
purposes, be deemed a Holder under this Agreement). If the Company shall so
request, any heir, successor or permitted assign (including any permitted
transferee) wishing to avail itself of the benefits of this Agreement shall
agree in writing to acquire and hold the Registrable Securities subject to all
of the terms hereof. For purposes of this Agreement, "successor" for any entity
other than a natural person shall mean a successor to such entity as a result of
such entity's merger, consolidation, sale of substantially all of its assets, or
similar transaction. Except as provided above or otherwise permitted by this
Agreement, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any Holder or by
the Company without the consent of the other parties hereto.
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6.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
6.8 DESCRIPTIVE HEADINGS, ETC. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (5) "or" is not
exclusive; and (6) provisions apply to successive events and transactions.
6.9 SEVERABILITY. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
6.10 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THE VALIDITY OF THIS
AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE
RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF).
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. THE COMPANY AND THE
INITIAL HOLDERS WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
6.10. NOTHING HEREIN CONTAINED SHALL BE DEEMED TO AFFECT THE RIGHT OF ANY PARTY
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY OTHER PARTY IN ANY OTHER JURISDICTION TO ENFORCE
JUDGMENTS OBTAINED IN ANY ACTION, SUIT OR PROCEEDING BROUGHT PURSUANT TO THIS
SECTION.
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THE COMPANY AND THE INITIAL HOLDERS HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. THE COMPANY AND THE INITIAL HOLDERS REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
6.11 REMEDIES; SPECIFIC PERFORMANCE. The parties hereto acknowledge
that money damages would not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court specified in Section 6.10 hereof, and if any action
should be brought in equity to enforce any of the provisions of this Agreement,
none of the parties hereto shall raise the defense that there is an adequate
remedy at law. Except as otherwise provided by law, a delay or omission by a
party hereto in exercising any right or remedy accruing upon any such breach
shall not impair the right or remedy or constitute a waiver of or acquiescence
in any such breach. No remedy shall be exclusive of any other remedy. All
available remedies shall be cumulative.
6.12 ENTIRE AGREEMENT. This Agreement, the Financing Agreement, the
Loan Agreement, the Warrants and the other transaction documents (collectively,
the "OTHER AGREEMENTS") are intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings relating to such subject matter, other
than those set forth or referred to herein or in the Other Agreements. This
Agreement and the Other Agreements supersede all prior agreements and
understandings between the Company and the other parties to this Agreement with
respect to such subject matter.
6.13 FURTHER ASSURANCES. Each party hereto 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 any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
6.14 CONSTRUCTION. The Company and the Initial Holders acknowledge that
each of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by the Company and the
Holders.
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6.15 NO INCONSISTENT AGREEMENT. The Company will not hereafter enter
into any agreement which is inconsistent with the rights granted to the Holders
in this Agreement.
6.16 COSTS AND ATTORNEYS' FEES. In the event that any action, suit or
other proceeding is instituted concerning or arising out of this Agreement, the
Company and the Initial Holders agree that the prevailing party shall recover
from the non-prevailing party all of such prevailing party's costs and
reasonable attorneys' fees incurred in each and every such action, suit or other
proceeding, including any and all appeals or petitions therefrom.
6.17 NOMINEES FOR BENEFICIAL OWNERS. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
COMPANY: INITIAL HOLDERS:
VALUE CITY DEPARTMENT STORES, CERBERUS PARTNERS, L.P.
INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By:
--------------------------- -------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name:
Title: President Title:
SCHOTTENSTEIN STORES
CORPORATION
By:
-------------------------------------
Name:
Title:
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