EXHIBIT 4.7
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is made and entered into as of October 23, 1997 by and between The
Pantry, Inc., a Delaware corporation (the "Company"), FS Equity Partners III,
L.P., a Delaware limited partnership ("FSEP III"), FS Equity Partners
International, L.P., a Delaware limited partnership ("FSEP International"; FSEP
III and FSEP International are sometimes collectively referred to herein as the
"FS Entities"), Peter J. Sodini, an individual ("Sodini"), Chase Manhattan
Capital, L.P., a Delaware limited partnership, as successor to Chase Manhattan
Capital Corporation, a Delaware corporation ("CMC"), CB Capital Investors, L.P.,
a Delaware limited partnership ("CBC"), and Baseball Partners, a New York
general partnership ("BP"; CMC, CBC and BP, together with any other member of
the Chase Capital Group (as defined herein) to which any of CMC, CBC or BP
transfers Registrable Securities (as defined herein), are sometimes collectively
referred to herein as the "Chase Entities"). The FS Entities, the Chase
Entities and Sodini are sometimes collectively referred to as the "Holders" and
individually as the "Holder."
R E C I T A L S
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A. The Company, the FS Entities, CMC and BP have previously entered
into an Amended and Restated Registration Rights Agreement (the "Common Stock
Registration Rights Agreement") dated as of August 19, 1996 with respect to an
aggregate of One Hundred Fourteen Thousand Twenty-Nine (114,029) shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), held by
such parties;
B. Pursuant to that certain Stock Purchase Agreement (the "Stock
Purchase Agreement") dated October 23, 1997 entered into by and among the
Company, the FS Entities, CBC and Sodini (collectively, the "Purchasers"), the
Purchasers have agreed to purchase and the Company has agreed to sell to the
Purchasers an aggregate of Seventy-Two Thousand (72,000) shares of Common Stock
(all such shares of Common Stock purchased pursuant to the Stock Purchase
Agreement, the One Hundred Fourteen Thousand Twenty-Nine (114,029) shares of
Common Stock defined as Registrable Securities under the Common Stock
Registration Rights Agreement, together with any other securities for which or
into which they may be converted or exchanged, shall be referred to herein as
the "Registrable Securities");
C. It is a condition precedent to the consummation of the
transactions contemplated by the Stock Purchase Agreement that each of the FS
Entities, CMC and BP contribute each outstanding share of Series A Preferred
Stock, $.01 par value per share of the Company (the "Series A Preferred"), owned
by such entity to the capital of the Company pursuant to the terms of that
certain Contribution to Capital Agreement dated as of an even
date herewith by and among the Company, the FS Entities, CMC and BP (the
"Contribution Agreement");
D. Section 17 of that certain Amended and Restated Registration
Rights Agreement (the "Series A Registration Rights Agreement") dated as of
August 19, 1996 by and among the Company, the FS Entities, CMC and BP, which
sets forth certain registration rights with respect to the Series A Preferred,
provides that the Series A Registration Rights Agreement may be canceled or
discharged by written instrument executed by the Company and the holders of at
least fifty percent (50%) of the Registrable Securities, as defined therein, (i)
held by the FS Entities and (ii) held by CMC and BP;
E. Section 17 of the Common Stock Registration Rights Agreement
provides that the Common Stock Registration Rights Agreement may be amended by
written instrument executed by the Company and the holders of at least fifty
percent (50%) of the Registrable Securities, as defined therein, (i) held by the
FS Entities and (ii) held by CMC and BP;
F. The Holders collectively own at least fifty percent (50%) of the
Registrable Securities, as defined in the Series A Registration Rights Agreement
and the Common Stock Registration Rights Agreement, held by each of the FS
Entities, CMC and BP, respectively, and hereby desire to terminate the Series A
Registration Rights Agreement and to amend and restate the Common Stock
Registration Rights Agreement in its entirety; and
G. The Board of Directors of the Company (the "Board") has approved
this Agreement and the transactions contemplated hereby, upon the terms and
subject to the conditions set forth herein.
A G R E E M E N T
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1. Termination of Series A Registration Rights Agreement. Effective
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as of the date hereof, and simultaneous with the consummation of the
transactions contemplated by the Contribution Agreement, the Series A
Registration Rights Agreement shall terminate and be of no further force or
effect.
2. Restrictions on Transfer. Notwithstanding any provision
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contained in this Agreement to the contrary, the Registrable Securities shall
not be transferable except upon the conditions specified in this Agreement,
which conditions are intended, among other things, to insure compliance with the
provisions of the Securities Act of 1933, as amended (the "Securities Act"), in
respect of the transfer of such Registrable Securities. Each Holder, on the
execution and delivery of this Agreement, agrees that such Holder will not
transfer the Registrable Securities prior to delivery to the Company of an
opinion of counsel (as such opinion and such counsel are described in Section 3
of this Agreement), or until registration of such Registrable Securities under
the Securities Act has become effective.
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3. Opinion of Counsel. In connection with any exercise or transfer
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of the Registrable Securities, the following provisions shall apply:
(a) If in the opinion of Riordan & McKinzie, or such other counsel as
shall reasonably be approved by the Company, the proposed transfer of
Registrable Securities may be effected without registration of such Registrable
Securities under the Securities Act, each Holder shall be entitled to transfer
such Registrable Securities in accordance with the proposed method of
disposition.
(b) If, in the opinion of such counsel the proposed transfer of such
Registrable Securities may not be effected without registration of such
Registrable Securities under the Securities Act, then none of the Holders shall
be entitled to transfer such Registrable Securities until such registration is
effected.
(c) CMC and CBC may transfer Registrable Securities within the "Chase
Capital Group" without complying with the above opinion procedures provided that
the transferee agrees to be bound by all provisions of this Agreement. "Chase
Capital Group" means and includes (a) The Chase Manhattan Corporation, (b)
entities that are controlled Affiliates (as defined in Rule 12b-2 of the General
Rules and Regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") of The Chase Manhattan Corporation and (c) entities
the majority of the equity owners of which are employees, officers or directors
of any of the foregoing. BP may transfer Registrable Securities to a member of
the Chase Capital Group in the manner described in Section 6(b) of that certain
Amended and Restated Stockholders' Agreement dated as of an even date herewith
(the "Stockholders' Agreement") by and among the Company and the Holders.
4. Demand Registration.
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(a) Upon the written request of the Holder or Holders of at least
fifty percent (50%) of the Registrable Securities (the "Initiating Holders") the
Company shall be obligated to effect the registration under the Securities Act
of such Registrable Securities as are requested to be registered by the
Initiating Holders, all in accordance with the following provisions of this
Agreement, provided that the obligation of the Company to effect such
registration shall not be deemed to have been satisfied until the registration
statement with respect thereto has become effective under the Securities Act and
only so long as no stop order suspending the effectiveness of the registration
statement or the qualification or registration of any of the Registrable
Securities for sale in any jurisdiction in which the Company shall be required
pursuant to Section 6(d) to register or qualify such Registrable Securities
shall not have been issued and no proceedings for that purpose shall have been
initiated or threatened by the Securities and Exchange Commission (the
"Commission") or any similar state agency. Within ten (10) days of the request
for registration by the Initiating Holders, the Company shall give written
notice of such request to all Holders, who shall be entitled, by written notice
to the Company and subject to Section 5(a) hereof, to include shares of
Registrable Securities
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in any registration prepared by the Company pursuant to this Section 4(a). The
Company shall not be obligated to effect more than three (3) demand
registrations pursuant to this Section 4(a).
(b) In addition to the registration rights provided pursuant to
Section 4(a) hereof, at any time and from time to time after six months
following a firm commitment underwritten initial public offering of the
Company's Common Stock (an "IPO"), upon the written request of the Initiating
Holders, or at the request of any Holder which agrees to register Registrable
Securities having a value of Five Million Dollars ($5,000,000) or more after an
IPO, the Company shall be obligated to effect the registration under the
Securities Act on Form S-3 (if the Company is then eligible to use such
registration form), or any similar short form registration adopted by the
Commission for which the Company may then be eligible, of all or any portion of
the Registrable Securities held by such Holder, all in accordance with the
applicable provisions of this Agreement.
(c) Whenever the Company shall be requested by the Initiating Holders
pursuant to Section 4(a) or by a Holder pursuant to Section 4(b) to effect the
registration of Registrable Securities under the Securities Act, the Company
shall, as provided in Section 5, effect the registration under the Securities
Act of the Registrable Securities which the Company has been requested to
register pursuant to Section 4(a) or (b), all to the extent requisite to permit
the disposition by such Holder of the Registrable Securities so registered.
(d) In connection with requesting registration of Registrable
Securities pursuant to Section 4(a) or (b), if the Initiating Holders or a
Holder in the case of Section 4(b) advise the Company that they intend to
publicly offer or distribute Registrable Securities to be covered by the
registration statement pursuant to a firm commitment underwriting with an
investment banking firm or firms selected by the Holders, the Company and any
other person entitled to include shares of Common Stock in such registration
statement shall enter into the same underwriting agreement with such underwriter
or underwriters as shall such Holders, containing representations, warranties
and agreements not substantially different from those customarily made by an
issuer or selling shareholder in underwriting agreements with respect to
secondary distributions.
(e) Neither the Company nor any of its security holders (other than
the Holders) shall have the right to include any securities of the Company in a
registration requested pursuant to Section 4(a) or (b) unless (a) such
securities are of the same class as any of the Registrable Securities included
in such registration and (b) the offering is either (a) not being underwritten
and the Holders of a majority of the Registrable Securities requesting
registration consent to such inclusion in writing or (b) a firm commitment
underwriting and the managing underwriter has informed the Holders that
inclusion of such securities will not adversely affect the price range or the
probability of success of the offering and such securities are allocated as
provided in Section 4(f) and sold on the same terms and conditions as apply to
the Registrable Securities being sold. If any security holders of the Company
(other than the
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Holders) register securities of the Company in a registration in
accordance with the provisions of Section 4(a) or (b), such security holders
shall pay their pro rata share of the Registration Expenses, as defined below,
unless the Company has agreed to pay such expenses and, in the opinion of
counsel to the Holders, such payment would not affect the ability of the
Registrable Securities to be registered or qualified under the blue sky laws of
any jurisdiction.
(f) If the Company or any of its security holders request the right to
include equity securities in a registration statement filed pursuant to Section
4(a) or (b) and such securities are proposed to be sold in a firm commitment
underwritten offering and the managing underwriters advise the Company that, in
their opinion, the total number of securities requested to be included in such
registration exceeds the number of securities which can be sold in such offering
without adversely affecting the price range or probability of success of such
offering, the securities to be included in such offering shall include (a)
first, all of the Registrable Securities being registered, (b) second, pro rata
among the other holders of the Company's securities requesting inclusion in such
registration on the basis of the number of shares of securities requested to be
registered by such holders and (c) third, such other securities being offered by
the Company.
5. "Piggyback" Registrations.
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(a) If the Company at any time or from time to time after the IPO,
proposes to file with the Commission a registration statement under the
Securities Act (other than a registration statement on Form S-4 or S-8, or any
form substituting therefor, or filed in connection with an exchange offer) for
the sale of shares of Common Stock, it will at each such time give written
notice to each Holder of its intention so to do. Upon the written request of
any Holder, the Company will use its best efforts to cause each Registrable
Security which the Company has been requested to register by any Holder, in the
aggregate, to be included in such registration statement under the Securities
Act, all to the extent required to permit the sale or other disposition by each
such Holder of the Registrable Securities so registered. Notwithstanding the
foregoing, if the managing underwriter or underwriters, if any, of the offering
to be effected pursuant to such registration statement delivers a written
opinion to each Holder requesting the registration of Registrable Securities
that the total number of shares of Common Stock which it and any other persons
or entities intend to include in such offering would adversely affect the price
range or probability of success of such offering, then the Company shall include
in such registration: (a) first, all securities the Company proposes to sell,
and (b) second, all Registrable Securities requested to be included in such
registration by any Holders and all securities of the Company requested to be
included in such registration by any other holders of Securities who are
entitled to include securities in such registration pursuant to written
registration rights agreements approved by the Board of Directors of the Company
(the "Other Stockholders") in excess of the number of shares of its securities
of the Company proposes to sell which, in the opinion of such underwriters, can
be sold without adversely affecting the price range or probability of success of
such offering (allocated pro rata
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among such Holders and the Other Stockholders on the basis of the number of
shares of such securities requested to be included therein).
(b) If all or substantially all of the securities (other than the
Registrable Securities) to be registered for sale pursuant to a registration
statement, the intention to file which caused a notice to be given pursuant to
Section 5(a), are to be offered for sale for the account of the Company and are
to be distributed by or through an underwriter or underwriters of recognized
standing pursuant to underwriting terms appropriate for such transactions, then
each Holder agrees that such Holder shall forbear from selling Registrable
Securities to the public (except as part of such underwritten registration)
pursuant to a registration statement or pursuant to Rule 144 or 144A under the
Securities Act for a period of fourteen (14) business days prior to and one
hundred twenty (120) days following the effective date of the registration
statement to which reference is made in Section 5(a).
(c) Notwithstanding anything contained herein to the contrary, if the
FS Entities are permitted to include any Registrable Securities in the IPO then
each other Holder shall also be permitted to include a pro rata portion of the
Registrable Securities held thereby.
6. Company's Obligations in Registration. If and whenever the
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Company is obligated by the provisions of this Agreement to effect the
registration of Registrable Securities under the Securities Act, the Company
will, as expeditiously as possible,
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become and remain effective during the period required
for the distribution of the securities covered by the registration statement,
provided that, if the Registrable Securities covered by such registration
statement are not to be sold to or through underwriters acting for the Company,
the Company shall not be required to keep such registration statement effective,
or to prepare and file any amendment or supplement thereto, after the expiration
of one hundred eighty (180) days following the date on which such registration
statement becomes effective under the Securities Act or such longer period
during which the Commission requires that such registration statement be kept
effective with respect to any of the Registrable Securities so registered;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement, whenever any Holder shall desire to dispose of the same, subject,
however, to the proviso contained in Section 6(a) and provided that in any event
the Company's obligations under this Section 6(b) shall terminate on the first
anniversary of the effective date of any such registration statement;
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(c) furnish to each Holder such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such Holder may reasonably request in order to facilitate the
disposition of such Registrable Securities;
(d) make the Chairman of the Board of Directors of the Company, the
Chief Executive Officer and other members of the management of the Company
available to cooperate fully in any offering of Registrable Securities
hereunder, which cooperation shall include, among other things, the
participation of such persons in meetings with potential investors and the
assistance of such persons with the preparation of all materials for such
investors;
(e) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as each Holder shall reasonably request, and
do any and all other acts and things to so register or qualify which may be
necessary or advisable to enable such Holder to consummate the disposition in
such jurisdictions of such Registrable Securities;
(f) if at any time a prospectus relating to the Registrable Securities
covered by such registration statement is required to be delivered under the
Securities Act and any event occurs as a result of which the prospectus included
in such registration statement as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary at any time to amend the
prospectus to comply with the Securities Act, the Company promptly will prepare
and file with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance and
shall use its best efforts to cause any amendment of such registration statement
containing an amended prospectus to be made effective as soon as possible; and
(g) furnish to each Holder at the time of the disposition of
Registrable Securities by such Holder an opinion of counsel for the Company, in
form and substance satisfactory to such Holder, to the effect that (a) a
registration statement covering such Registrable Securities has been filed with
the Commission under the Securities Act and has been made effective by order of
the Commission, (b) such registration statement and the prospectus contained
therein comply in all material respects with the requirements of the Securities
Act, and nothing has come to said counsel's attention which would cause it to
believe that either such registration statement or the prospectus contains any
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, (c) the
prospectus meeting the delivery requirements of the Securities Act is available
for delivery, (d) no stop order has been issued by the Commission suspending the
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effectiveness of such registration statement and, to the best of such counsel's
knowledge, no proceedings for the issuance of such a stop order are threatened
or contemplated, and (e) there has been compliance with the applicable
provisions of the securities or blue sky laws of each jurisdiction in which the
Company shall be required pursuant to Section 6(d) hereof to register or qualify
such Registrable Securities, assuming the accuracy and completeness of the
information furnished to such counsel with respect to each filing related to
such laws.
7. Payment of Registration Expenses. The costs and expenses of all
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"piggyback" registrations and qualifications under the Securities Act pursuant
to Section 5 hereof, all registrations and qualifications under the Securities
Act pursuant to Section 4(b) hereof and three (3) demand registrations and
qualifications under the Securities Act pursuant to Section 4(a), and of all
other actions which the Company is required to take or effect pursuant to this
Agreement shall be paid by the Company (including without limitation all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company and for each Holder and expenses of any special audit
incident to or required in connection with any such registration) (collectively,
"Registration Expenses"), provided that the Company shall not be obligated to
pay the underwriters' discount or commission in respect of such Registrable
Securities.
8. Information From Each Holder. Notices and requests delivered by
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any Holder to the Company pursuant to this Agreement shall contain such
information regarding the Holder, such Holder's Registrable Securities and the
intended method of disposition thereof as shall reasonably be required in
connection with the action to be taken.
9. Restrictions on Public Sale by the Company and Others. The
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Company shall not effect any public sale or distribution of any of its equity
securities, or cause to be effected any other registration of such securities
(other than securities issued pursuant to an employee benefit plan), during the
fourteen (14) business days prior to, and during the one hundred twenty (120)-
day period beginning on the effective date of a registration statement covering
the Registrable Securities (the "Holdback Period"), and the Company shall cause
each holder of its equity securities (other than securities purchased in a
registered public offering) issued after November 30, 1995 to agree not to
effect any public sale or distribution of any securities during such period,
except as part of such registration, if permitted. Each Holder agrees not to
effect any public sale or distribution of such securities during any Holdback
Period with respect to securities that the Company issued or agreed to be issued
prior to November 30, 1995, except pursuant to a registration covering the
Registrable Securities effected pursuant to Section 5 hereof.
10. Participation in Underwritten Registrations. No Holder may
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participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's securities on the basis provided in any
underwriting arrangements approved by the Holders and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
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arrangements and this Agreement, provided that (x) if FSEP III, FSEP
International or any of their Affiliates, or the Chase Entities or any of their
Affiliates participate in such registration, such parties will not be required
to make any representations or warranties except those that relate solely to
such parties and (y) the liability of FSEP III, FSEP International or any of
their Affiliates, and the Chase Entities or any of their Affiliates to any
underwriter under such underwriting agreement will be limited to liability
arising from misstatements in, or omissions from, written information regarding
such parties provided by or on behalf of such parties for inclusion in the
prospectus and shall be limited to proceeds received by such Holder from the
offering.
11. Company's Indemnification. In the event of any registration
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under the Securities Act of Registrable Securities pursuant to this Agreement,
the Company hereby agrees to indemnify and hold harmless each Holder and each
other person, if any, who controls each such Holder within the meaning of
Section 15 of the Securities Act and each other person (including any
underwriter) who participates in the offering of such Registrable Securities,
against any loss, claim, damage or liability, joint or several, to which any
Holder or such controlling person or a participating person may become subject
under the Securities Act, the Exchange Act or other federal or state law or
regulation, at common law or otherwise, to the extent that such loss, claim,
damage or liability (or proceeding in respect thereof) arises out of or is based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement thereto, or
arises out of or is based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Holder and each such
controlling person or participating person for any legal or other expense
reasonably incurred by such Holder or such controlling person or participating
person in connection with investigating or defending any such loss, claim,
damage, liability or proceeding, provided that the Company will not be liable in
any such case to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
said preliminary or final prospectus or said amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder or such controlling or participating
person, as the case may be, specifically for use in the preparation thereof.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
12. Indemnification of Each Holder. It shall be a condition of the
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Company's obligation under this Agreement to effect any registration under the
Securities Act that there shall have been delivered to the Company an agreement
or agreements duly executed by each Holder whereby each Holder, severally but
not jointly, agrees to indemnify and hold harmless the Company, each other
person referred to in subparts (1), (2) and (3) of Section 11(a) of the
Securities Act in respect of such registration statement and each other
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person, if any, which controls the Company within the meaning of Section 15 of
the Securities Act, against any loss, claim, damage or liability, joint or
several, to which the Company or such other person or such person controlling
the Company may become subject under the Securities Act, the Exchange Act or
other federal or state law or regulation, at common law or otherwise, but only
to the extent that such loss, claim, damage or liability (or proceeding in
respect thereof) arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
under which such Registrable Securities were registered under the Securities
Act, in any preliminary prospectus or final prospectus contained therein or in
any amendment or supplement thereto, or arises out of or is based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
which, in each such case, has been made in or omitted from such registration
statement, said preliminary or final prospectus or said amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder specifically for use in
the preparation thereof. Such indemnification shall be limited to proceeds
received by such Holder from the offering.
13. Notification of and Participation in Actions. Promptly after
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receipt by an indemnified party under this Agreement of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this Agreement,
notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not affect the liability of
the indemnifying party hereunder except to the extent it is actually prejudiced
by such omission and will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Agreement. In case any such
action is brought against any indemnified party and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate in and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so as to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Agreement for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
14. Contribution.
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(a) If the indemnification provided for in this Agreement from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages or liabilities to which such indemnified party
would be otherwise entitled under this Agreement, 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 losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified parties in
connection with the
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actions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties 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 parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding. In no event shall any Holder be required
to contribute an amount greater than the dollar amount of the net proceeds
received by such Holder with respect to the sale of Registrable Securities to
which such losses, claims, damages or liabilities relates.
(b) The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Agreement were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Neither the Company nor any Holder, if guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act), shall be entitled
to contribution. The contribution provided for in this Agreement shall survive
the transfer of the Registrable Securities and shall remain in full force and
effect regardless of any investigation made by or on behalf of any indemnified
party.
15. Public Information. At any time after the Company has completed
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its initial public offering of Common Stock, if any Holder desires to make sales
of any Registrable Securities in reliance on Rule 144 promulgated under the
Securities Act the Company covenants and agrees that either there will be
available adequate current public information with respect to the Company as
required by paragraph (c) of said Rule 144 or the Company will use its best
efforts to make such information available without delay if such information is
not available. Without limiting the foregoing, after the Company has completed
its initial public offering of Common Stock, the Company will timely file with
the Commission all reports required to be filed under Sections 13 and 15(d) of
the Exchange Act and will promptly furnish to each Holder, upon request, a
written statement that the Company has complied with all such reporting
requirements.
16. Subsequent Offerings of Shares. The Company hereby grants to
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each Holder the right of first refusal to purchase, pro rata, all or any part of
any Additional Securities, as defined below, which the Company may, from time to
time, propose to sell and issue. A Holder's pro rata share, for purposes of
this right of first refusal, shall be such Holder's percentage interest in the
shares of Common Stock then outstanding (assuming, for purposes of such
percentage interest, complete conversion of all outstanding convertible
securities and complete exercise of any and all outstanding options and warrants
of the Company). This right of first refusal shall be subject to the following
provisions:
11
(a) "Additional Securities" shall mean any shares of capital stock of
the Company, including any shares of Common Stock or of preferred stock, whether
now authorized or not, and any rights, options or warrants to purchase such
shares, and securities of any type whatsoever that are, or may become,
convertible into such shares, provided that "Additional Securities" do not
include (a) any securities that are issued on a proportional basis to all of the
holders of Common Stock, (b) any securities that are issued or issuable in
connection with any public offering of shares of Common Stock by the Company,
(c) any securities issued pursuant to the acquisition of another corporation by
the Company, (d) any of the Company's Common Stock (or related options
exercisable for such Common Stock) issued to employees, officers and directors
of, and consultants to, the Company, pursuant to any arrangement approved by the
Board of Directors of the Company, (e) any securities issued upon conversion or
exercise of any convertible securities, options or warrants, provided that the
rights of first refusal established by this Section 16 first applied or were
properly waived with respect to the initial sale or grant by the Company of such
convertible securities, options or warrants, (f) any securities issued in
connection with any stock split, stock dividend or recapitalization by the
Company, and (g) any securities issued in connection with an issuance of debt
securities of the Company where the primary purpose of such issuance is to
provide debt financing for the Company.
(b) In the event the Company proposes to undertake an issuance of
Additional Securities, it shall give each Holder written notice of its
intention, describing the type of Additional Securities, and the price and terms
upon which the Company proposes to issue the same. Each Holder shall have
fifteen (15) days from the date of receipt of any such notice to agree to
purchase up to such Holder's pro rata share of such Additional Securities for
the price and upon the terms specified in the notice by giving written notice to
the Company and stating therein the quantity of Additional Securities to be
purchased.
(c) If a Holder fails to exercise the right of first refusal within
such fifteen (15) days period, the Company shall have ninety (90) days
thereafter to sell the Additional Securities with respect to which a Holder's
option was not exercised, at the price and upon terms no more favorable to the
purchasers of such securities than specified in the Company's notice. In the
event the Company has not sold the Additional Securities within said ninety (90)
day period, the Company shall not thereafter issue or sell any Additional
Securities, without first offering such securities to the Holders in the manner
provided in Section 16.
(d) The rights granted to a Holder under this Section 16 shall
terminate (a) upon completion of the Company's initial public offering of Common
Stock pursuant to an effective registration statement that results in gross
proceeds to the Company of Twenty Million Dollars ($20,000,000) or more or (b)
upon the sale by a Holder of more than fifty percent (50%) of the shares of
Common Stock held by such Holder on the date of such sale, provided that a
transfer within the Chase Capital Group will not count against this
12
limitation if made in accordance with the provisions of Section 6 of the
Stockholders Agreement of even date herewith.
17. Amendments. This Agreement may not be amended, supplemented,
----------
canceled or discharged except by written instrument executed by the Company and
the holders of at least fifty percent (50%) of the Registrable Securities held
by the FS Entities and fifty percent (50%) of the Registrable Securities held by
the Chase Entities.
18. Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties, provided, however, that the registration and other rights set forth in
this Agreement may only be assigned to a purchaser of at least fifty percent
(50%) of the Registrable Securities held by such party on the date of such sale,
provided that the Chase Entities may transfer their rights within the Chase
Capital Group subject to and in accordance with the provisions of Section 6 of
the Stockholders' Agreement.
19. Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same Agreement and
each of which shall be deemed an original.
20. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of North Carolina, without regard to
principles of conflicts of laws.
21. Entire Agreement. This Agreement is intended by the parties
----------------
hereto as a final expression of their agreement, and is intended to be a
complete and exclusive statement of the parties hereto in respect of the subject
matter contained herein. This Agreement is intended to and does hereby
supersede and restate entirely in all respects the Registration Rights
Agreement.
22. Other Registration Rights. The Company will not enter into any
-------------------------
agreement granting registration rights with respect to its securities which is
in conflict or inconsistent with the rights of the Holders set forth in this
Agreement.
23. Waiver of Rights. Each of CMC and BP hereby acknowledges and
----------------
agrees that, notwithstanding its rights under Section 17 of the Common Stock
Registration Rights Agreement, it hereby waives any and all rights to acquire
any Additional Securities with respect to the transactions contemplated by the
Stock Purchase Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by an officer or partner thereunto duly authorized, all as of the date
first written above.
THE PANTRY, INC.,
a Delaware corporation
By: /s/ WILLIAM T. FLYG
--------------------------------------------------
Name: William T. Flyg
-------------------------------------------
Title: Senior Vice President - Finance and
Chief Financial Officer
-------------------------------------------
FS EQUITY PARTNERS III, L.P.,
a Delaware limited partnership
By: FS Capital Partners, L.P.
Its: General Partner
By: FS Holdings, Inc.
Its: General Partner
By: /s/ WILLIAM M. WARDLAW
---------------------------------------
Name: William M. Wardlaw
--------------------------------
Title: Vice President
--------------------------------
FS EQUITY PARTNERS INTERNATIONAL, L.P.,
a Delaware limited partnership
By: FS&Co. International, L.P.
Its: General Partner
By: FS International Holdings Limited
Its: General Partner
By: /s/ WILLIAM M. WARDLAW
---------------------------------------
Name: William M. Wardlaw
--------------------------------
Title: Vice President
--------------------------------
[Signatures continued on following page]
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[Signatures continued from previous page]
CHASE MANHATTAN CAPITAL, L.P.
a Delaware limited partnership
By: Chase Manhattan Capital Corporation,
Its: General Partner
By: /s/ DONALD HOFMANN
--------------------------------------
Name: Donald Hofmann
-------------------------------------
Title: General Partner
-------------------------------------
CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc.,
Its: General Partner
By: /s/ DONALD HOFMANN
--------------------------------------
Name: Donald Hofmann
-------------------------------------
Title: General Partner
-------------------------------------
BASEBALL PARTNERS,
a New York general partnership
By: /s/ CHRISTOPHER BEHRENS
--------------------------------------------
Name: Christopher Behrens
--------------------------------------
Title: General Partner
PETER J. SODINI
/s/ PETER J. SODINI
--------------------------------------------
Peter J. Sodini
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