EXHIBIT 4.4.2
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SUPPLEMENTAL REGISTRATION RIGHTS AGREEMENT
by and among
COSI, INC.
and
ZAM HOLDINGS, L.P., ERIC J. GLEACHER,
CHARLES G. PHILLIPS, LJCB NOMINEES PTY. LTD.,
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Dated as of August 5, 2003
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TABLE OF CONTENTS
1. Certain Definitions.......................................................1
2. Demand Registrations......................................................3
(a) Right to Request Registration.........................................3
(b) Number of Demand Registrations........................................3
(c) Priority on Demand Registrations......................................3
(d) Restrictions on Demand Registrations..................................4
(e) Selection of Underwriters.............................................4
(f) Other Registration Rights.............................................5
(g) Effective Period of Demand Registrations..............................5
3. Piggyback Registrations...................................................5
(a) Right to Piggyback....................................................5
(b) Priority on Primary Registrations.....................................6
(c) Priority on Secondary Registrations...................................6
(d) Selection of Underwriters.............................................6
(e) Other Registrations...................................................7
4. S-3 Registrations.........................................................7
5. Holdback Agreement........................................................8
6. Registration Procedures...................................................8
7. Registration Expenses....................................................10
8. Indemnification..........................................................10
9. Participation in Underwritten Registrations..............................10
10. Rule 144.................................................................10
11. Miscellaneous............................................................10
(a) Notices..............................................................10
(b) No Waivers...........................................................10
(c) Successors and Assigns...............................................10
(d) Governing Law........................................................10
(e) Jurisdiction.........................................................10
(f) Waiver of Jury Trial.................................................10
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(g) Counterparts; Effectiveness..........................................10
(h) Entire Agreement.....................................................10
(i) Captions.............................................................10
(j) Severability.........................................................10
(k) Amendments...........................................................10
(l) Aggregation of Stock.................................................10
(m) Equitable Relief.....................................................10
(n) No Inconsistent Agreements...........................................10
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SUPPLEMENTAL REGISTRATION RIGHTS AGREEMENT, dated as of August 5, 2003,
among Cosi, Inc. (the "Company"), ZAM Holdings, L.P. ("ZAM Holdings"), Eric J.
Gleacher ("Gleacher"), Charles G. Phillips ("Phillips"), LJCB Nominees Pty. Ltd.
("LJCB", and collectively with ZAM Holdings, Gleacher and Phillips, the
"Stockholders").
In consideration of the mutual covenants and agreements herein contained
and other good and valid consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. Certain Definitions.
In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of any Person means any other Person which directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person. The term "control" (including the
terms "controlled by" and "under common control with") as used with respect to
any Person means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise. For
purposes of the definition of Holder, Affiliate shall also include any Person
owning an interest in a holder of record of securities that are convertible into
or exchangeable or exercisable for Company Securities.
"Agreement" means this Supplemental Registration Rights Agreement,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to this Supplemental
Registration Rights Agreement as the same may be in effect at the time such
reference becomes operative.
"Business Day" means any day on which commercial banks are open for
business in New York, New York.
"Common Stock" means common stock, par value $.01 per share, of the
Company.
"Company Securities" means the Common Stock beneficially owned directly or
indirectly by any Stockholder as of the date hereof or at any time in the future
and any other capital stock of any class or series of the Company, and any and
all shares of capital stock or other securities of the Company or of any
successor or assign of the Company or of any other entity (whether by merger,
consolidation, sale of assets or otherwise), which may be issued or issuable in
respect of, in exchange for, or in substitution for any Common Stock or such
other capital stock by reason of any stock dividend, stock split, reverse split,
subdivision or combination of shares, distribution, recapitalization,
reclassification, reorganization, merger, consolidation, sale of assets or
otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means any holder of record of Registrable Common Stock (as
defined below) and any Affiliates thereof (or in the case of a Holder of
securities that are convertible into or exchangeable or exercisable for Company
Securities, the Affiliates of such Holder).
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, government (whether
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof)
or any other entity.
"Prospectus" means the prospectus or prospectuses included in any
Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Common Stock covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus or prospectuses.
"Registrable Common Stock" means the Company Securities. All references
herein to a "Holder" or "Holder of Registrable Common Stock" shall include the
holder or holders of any securities that are convertible into or exchangeable or
exercisable for Company Securities to the extent of the Company Securities then
underlying such convertible, exchangeable or exercisable securities. For
purposes of determining the number of shares of Registrable Common Stock held by
a Holder and the number of shares of Registrable Common Stock outstanding, for
purposes of this Agreement (including the definition of "Holder") but not for
any other purpose, any holder of record of convertible, exchangeable or
exercisable securities shall be deemed to be a Holder of the number of Company
Securities issuable upon conversion, exchange or exercise of such convertible,
exchangeable or exercisable securities, and all such Company Securities shall be
deemed to be outstanding shares of Registrable Common Stock. Company Securities
shall cease to be Registrable Common Stock with respect to a particular Holder
thereof when such Company Securities can be sold by such Holder (a) pursuant to
a registration statement or (b) in a transaction pursuant to Rule 144 under the
Securities Act, provided that such transaction is not subject to the limitations
of Rule 144(e) under the Securities Act.
"Registration Statement" means any registration statement of the Company
which covers any of the Registrable Common Stock pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and
all materials incorporated by reference in such Registration Statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
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"underwritten registration" or "underwritten offering" or similar phrases
mean a registration in which securities of the Company are sold to underwriters
for reoffering to the public.
2. Demand Registrations.
(a) Right to Request Registration. Any time after the date hereof, any
Holder or Holders who together hold a majority of the then outstanding
Registrable Common Stock ("Initiating Holders") may request registration under
the Securities Act of all or part of the Registrable Common Stock ("Demand
Registration"). Within 10 days after receipt of any such request for Demand
Registration, the Company shall give written notice of such request to all other
Holders of Registrable Common Stock and shall, subject to the provisions of
Section 2(d) hereof, include in such registration all such Registrable Common
Stock with respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the Company's notice.
(b) Number of Demand Registrations. Subject to the provisions of Section
2(a), the Initiating Holders of Registrable Common Stock shall be entitled to
request an aggregate of two (2) Demand Registrations. A registration shall not
count as one of the permitted Demand Registrations (i) until it has become
effective, (ii) if the Initiating Holders requesting such registration are not
able to register and sell at least 90% of the Registrable Common Stock requested
by such Initiating Holders to be included in such registration or (iii) in the
case of a Demand Registration that would be the last permitted Demand
Registration requested hereunder, if the Initiating Holders requesting such
registration are not able to register and sell all of the Registrable Common
Stock requested to be included by such Initiating Holders in such registration.
(c) Priority on Demand Registrations. The Company shall not include in any
Demand Registration any securities which are not Registrable Common Stock
without the written consent of the Holders of a majority of the shares of
Registrable Common Stock to be included in such registration. If the managing
underwriters of the requested Demand Registration advise the Company in writing
that in their opinion the number of shares of Registrable Common Stock proposed
to be included in any such registration exceeds the number of securities which
can be sold in such offering and/or that the number of shares of Registrable
Common Stock proposed to be included in any such registration would adversely
affect the price per share of the Company's equity securities to be sold in such
offering, the Company shall include in such registration only the number of
shares of Registrable Common Stock which in the opinion of such managing
underwriters can be sold. If the number of shares which can be sold is less than
the number of shares of Registrable Common Stock proposed to be registered, the
amount of Registrable Common Stock to be so sold shall be allocated first, to
the shares of Registrable Common Stock requested to be registered by the
Initiating Holders pro rata on the basis of the number of shares initially
proposed to be registered by such Initiating Holders, and then pro rata among
the other Holders of Registrable Common Stock desiring to participate in such
registration on the basis of the amount of such Registrable Common Stock
initially proposed to be registered by such other Holders. If the number of
shares which can be sold exceeds the number of shares of Registrable Common
Stock
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proposed to be sold, such excess shall be allocated pro rata among the other
holders of securities, if any, desiring to participate in such registration
based on the amount of such securities initially requested to be registered by
such holders or as such holders may otherwise agree.
(d) Restrictions on Demand Registrations. The Company may (i) postpone for
up to ninety (90) days the filing or the effectiveness of a Registration
Statement for a Demand Registration or Shelf Registration (as hereinafter
defined) if, based on the reasonable good faith judgment of the Company's board
of directors, effecting the registration would have a material adverse effect on
a material financing, acquisition of assets (other than in the ordinary course
of business), disposition of assets or stock, merger or other comparable
transaction or would require the Company to make public disclosure of material
nonpublic information the public disclosure of which the Company's board of
directors has reasonably determined would not be in the best interests of the
Company and the Company shall provide the Initiating Holders with prompt notice
of such postponement or (ii) postpone the filing of a Demand Registration in the
event the Company shall be required to prepare audited financial statements as
of a date other than its fiscal year end (unless the stockholders requesting
such registration agree to pay the expenses of such an audit); provided,
however, that in no event shall the Company withdraw a Registration Statement
under clause (i) after such Registration Statement has been declared effective;
and provided, further, however, that in any of the events described in clause
(i) or (ii) above, the Initiating Holders requesting such a Demand Registration
shall be entitled to withdraw such request and, if such request is withdrawn,
such registration shall not count as one of the permitted Demand Registrations
and, in any event, no such postponed or withdrawn registration shall count as
the Shelf Registration. The Company shall provide written notice to the
Initiating Holders requesting such registration of (x) any postponement or
withdrawal of the filing or effectiveness of a Registration Statement pursuant
to this Section 2(d), (y) the Company's decision to file or seek effectiveness
of such Registration Statement following such withdrawal or postponement and (z)
the effectiveness of such Registration Statement. The Company may defer the
filing of a particular Registration Statement pursuant to this Section 2(d) only
once in any twelve-month period.
(e) Selection of Underwriters. If any of the Registrable Common Stock
covered by a Demand Registration, or an S-3 Registration or a Shelf Registration
pursuant to Section 4 hereof, is to be sold in an underwritten offering, the
Holders of a majority of the shares of Registrable Common Stock included in such
registration shall have the right to select the managing underwriter(s) to
administer the offering subject to the approval of the Company, which will not
be unreasonably withheld or delayed. The Holders of shares of Registrable Common
Stock included in such Registration shall enter into a customary underwriting
agreement with respect to such shares.
(f) Other Registration Rights. The Company shall not grant to any Person
the right, other than as set forth herein and except to employees of the Company
with respect to registrations on Form S-8 (or any successor form thereto), to
request the Company to register any securities of the Company which would
adversely affect the ability of the Holders of a majority of the then
outstanding Registrable Common Stock to dispose of
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any shares of Registrable Common Stock held by such Holders without the prior
written consent of the Holders of a majority of the then outstanding Registrable
Common Stock.
(g) Effective Period of Demand Registrations. After any Demand
Registration filed pursuant to this Agreement has become effective, the Company
shall use its best efforts to keep such Demand Registration effective for a
period equal to 180 days from the date on which the SEC declares such Demand
Registration effective (or if such Demand Registration is not effective during
any period within such 180 days, such 180-day period shall be extended by the
number of days during such period when such Demand Registration is not
effective), or such shorter period which shall terminate when all of the
Registrable Common Stock covered by such Demand Registration has been sold
pursuant to such Demand Registration. If the Company shall withdraw any Demand
Registration pursuant to subsection (d) of this Section 2 (a "Withdrawn Demand
Registration"), the Initiating Holders of the Registrable Common Stock remaining
unsold and originally covered by such Withdrawn Demand Registration shall be
entitled to a replacement Demand Registration which (subject to the provisions
of this Section 2) the Company shall use its best efforts to keep effective for
a period commencing on the effective date of such Demand Registration and ending
on the earlier to occur of the date (i) which is 180 days from the effective
date of such Demand Registration and (ii) on which all of the Registrable Common
Stock covered by such Demand Registration has been sold. Such additional Demand
Registration otherwise shall be subject to all of the provisions of this
Agreement.
(h) Other Restrictions on Demand Registrations. The Company shall not be
required to effect a registration pursuant to this Section 2 if within thirty
(30) days of receipt of a written request from Initiating Holders pursuant to
Section 2(a) above, the Company gives notice to the Holders of the Company's
intention to make a public offering within ninety (90) days, provided, that, in
any such public offering, the Holders shall be entitled to dispose of any shares
of Common Stock subject to such written request prior to any other shares of
Common Stock disposed of pursuant to such public offering.
3. Piggyback Registrations.
(a) Right to Piggyback. In addition to the other rights of the Holders
described herein, whenever the Company proposes to register any of its
securities under the Securities Act (other than a registration statement on Form
S-8 or on Form S-4 or any similar successor forms thereto), whether for its own
account or for the account of one or more stockholders of the Company, and the
registration form to be used may be used for any registration of Registrable
Common Stock (a "Piggyback Registration"), the Company shall give prompt written
notice (in any event within 10 business days after its receipt of notice of any
exercise of other demand registration rights) to all Holders of its intention to
effect such a registration and, subject to Sections 3(b) and 3(c), shall include
in such registration all Registrable Common Stock with respect to which the
Company has received written requests for inclusion therein within 15 days after
the receipt of the Company's notice.
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(b) Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering and/or that the number of shares of
Registrable Common Stock proposed to be included in any such registration would
adversely affect the price per share of the Company's equity securities to be
sold in such offering, the Company shall include in such registration (i) first,
the securities the Company proposes to sell, (ii) second, the Registrable Common
Stock requested to be included therein by the Holders, pro rata among the
Holders of such Registrable Common Stock on the basis of the number of shares
requested to be registered by such Holders, and (iii) third, other securities
requested to be included in such registration pro rata among the holders of such
securities on the basis of the number of shares requested to be registered by
such holders or as such holders may otherwise agree.
(c) Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of a holder of the Company's
securities other than Registrable Common Stock, and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering and/or that the number of shares of Registrable Common
Stock proposed to be included in any such registration would adversely affect
the price per share of the Company's equity securities to be sold in such
offering, the Company shall include in such registration (i) first, the
securities requested to be included therein by the holders requesting such
registration, (ii) second, the Registrable Common Stock requested to be included
in such registration, pro rata among the holders of such securities on the basis
of the number of shares requested to be registered by such holders, and (iii)
third, other securities requested to be included in such registration pro rata
among the holders of such securities on the basis of the number of shares
requested to be registered by such holders or as such holders may otherwise
agree.
(d) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the Company shall have the right to select the managing
underwriter or underwriters to administer any such offering; provided, that such
selection must be approved by the Holders of a majority of the Registrable
Common Stock included in such Piggyback Registration (which such approval may
not be unreasonably withheld or delayed).
The Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 3 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in such
registration.
(e) Other Registrations. If the Company has previously filed a
Registration Statement with respect to Registrable Common Stock pursuant to
Sections 2 or 4(a) hereof or pursuant to this Section 3, and if such previous
registration has not been withdrawn or abandoned, the Company shall not be
obligated to cause to become effective any other registration of any of its
securities under the Securities Act, whether
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on its own behalf or at the request of any holder or holders of such securities,
until a period of at least three months has elapsed from the effective date of
such previous registration.
4. S-3 Registrations.
(a) In addition to the other rights of the Holders described herein, if at
any time that the Company is eligible to use Form S-3 or any successor thereto,
any Holder or Holders requests that the Company file a Registration Statement on
Form S-3 or any successor thereto for a public offering of all or any portion of
the Registrable Common Stock held by such Holders, then the Company shall use
its best efforts to register under the Securities Act on Form S-3 (an "S-3
Registration") or any successor thereto, for public sale in accordance with the
method of disposition specified in such notice from the Holder or Holders, the
number of shares of Registrable Common Stock specified in such notice; provided,
however, that the Company shall have no obligation to register such shares of
Registrable Common Stock pursuant to this Section if (based on the current
market prices) the number of shares of Registrable Common Stock specified in
such notice would not yield gross proceeds to the selling stockholders of at
least $500,000. Whenever the Company is required by this Section 4(a) to use its
best efforts to effect the registration of Registrable Common Stock, each of the
procedures and requirements of Section 2 (including but not limited to the
requirement that the Company notify all Holders from whom notice has not been
received and provide them with the opportunity to participate in the offering,
but excluding the first sentence of Sections 2(a) and 2(b)) shall be deemed to
apply to such registration. There is no limitation on the number of
registrations pursuant to this Section 4(a) that the Company is obligated to
effect.
(b) In addition to the other rights of the Holders described herein, once
the Company becomes eligible to use Form S-3 or any successor thereto, the
Company shall (i) provide written notice to all Holders of Registrable Common
Stock within 10 Business Days of such event and (ii) within 30 days of such
event, prepare and file with the SEC a Registration Statement covering an
offering of the Registrable Common Stock to be made on a continuous basis
pursuant to Rule 415 under the Securities Act (or any similar rule that may be
adopted by the SEC). The registration of the Registrable Common Stock pursuant
to this Section 4(b) is referred to herein as a "Shelf Registration." The
Company shall keep the registration statement relating to the Shelf Registration
continuously effective pursuant to Rule 415 under the Securities Act (or any
similar rule that may be adopted by the SEC) until such date as is the earlier
of (A) the date on which all of the Registrable Common Stock covered thereby
have been sold and (B) the date that is two years after the effective date of
such Registration Statement. The Company is obligated to effect only one Shelf
Registration; provided, that the Company's obligations hereunder shall not be
deemed satisfied, and the Shelf Registration shall not be deemed to have been
effected, unless the applicable Registration Statement has been continuously
effective for the requisite time period. A Shelf Registration does not count as
one of the Demand Registrations.
(c) During such time as a Shelf Registration is effective with respect to
the shares of Registrable Common Stock of a Holder, such Holder's rights
pursuant to
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Section 2 (Demand Registrations) and Section 3 (Piggyback Registrations) hereof
shall not be effective.
5. Holdback Agreement.
The Company agrees not to effect any sale or distribution of any of its
equity securities, or any securities convertible into or exercisable or
exchangeable for such securities, during the 10 days prior to and during the 90
days beginning on the effective date of any underwritten Demand Registration or
any underwritten Piggyback Registration or any underwritten S-3 Registration or
any underwritten Shelf Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-8 or any successor forms
thereto or pursuant to any acquisition or business combination transaction)
unless the underwriters managing the offering otherwise agree to a shorter
period.
6. Registration Procedures.
Whenever the Holders request that any Registrable Common Stock be
registered pursuant to this Agreement or the Company is obligated to effect a
Shelf Registration, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Common Stock in accordance with
the intended methods of disposition thereof, and pursuant thereto the Company
shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement with respect to
such Registrable Common Stock and use its best efforts to cause such
Registration Statement to become effective as soon as practicable thereafter;
and before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, furnish to the Holders of Registrable Common Stock covered
by such Registration Statement and the underwriter or underwriters, if any,
copies of all such documents proposed to be filed, including documents
incorporated by reference in the Prospectus and, if requested by such Holders,
the exhibits incorporated by reference, and such Holders shall have the
opportunity to object to any information pertaining to such Holders that is
contained therein and the Company will make the corrections reasonably requested
by such Holders with respect to such information prior to filing any
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto;
(b) prepare and file with the SEC such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective for a period of not less
than 180 days, in the case of a Demand Registration, Piggyback Registration or
an S-3 Registration; two years, in the case of a Shelf Registration; or such
shorter period as is necessary to complete the distribution of the securities
covered by such Registration Statement, or until any remaining shares of
Registrable Common Stock cease to be Registrable Common Stock, and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement;
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(c) furnish to each seller of Registrable Common Stock such number of
copies of such Registration Statement, each amendment and supplement thereto,
the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Common Stock
owned by such seller;
(d) use its best efforts to register or qualify such Registrable Common
Stock under such other securities or blue sky laws of such jurisdictions as any
seller reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Common Stock owned by such
seller (provided, that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph (d), (ii) subject itself to taxation in any
such jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Common Stock, at any time when
a Prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of any event as a result of which the Prospectus included
in such Registration Statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, the Company shall prepare a supplement or
amendment to such Prospectus so that, as thereafter delivered to the purchasers
of such Registrable Common Stock, such Prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading;
(f) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Holders of
a majority of number of shares of the Registrable Common Stock being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Common Stock;
(g) make available, for inspection by any seller of Registrable Common
Stock, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such Registration Statement;
(h) use its best efforts to cause all such Registrable Common Stock to be
listed on each securities exchange on which securities of the same class issued
by the Company are then listed or, if no such similar securities are then
listed, use its best efforts to secure the designation of all such Registrable
Common Stock as a "national market system security" on The Nasdaq
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Stock Market within the meaning of Rule 11Aa2-1 of the SEC or, failing that, use
its best efforts to secure authorization from The Nasdaq Stock Market for such
Registrable Common Stock, and, without limiting the generality of the foregoing,
use its best efforts to arrange for at least two market makers to register as
such with respect to such Registrable Common Stock with the NASD;
(i) provide a transfer agent and registrar for all such Registrable Common
Stock not later than the effective date of such Registration Statement;
(j) if requested, cause to be delivered, immediately prior to the
effectiveness of the Registration Statement (and, in the case of an underwritten
offering, at the time of delivery of any Registrable Common Stock sold pursuant
thereto), letters from the Company's independent certified public accountants
addressed to each selling Holder (unless such selling Holder does not provide to
such accountants the appropriate representation letter required by rules
governing the accounting profession) and each underwriter, if any, stating that
such accountants are independent public accountants within the meaning of the
Securities Act and the applicable rules and regulations adopted by the SEC
thereunder, and otherwise in customary form and covering such financial and
accounting matters as are customarily covered by letters of the independent
certified public accountants delivered in connection with primary or secondary
underwritten public offerings, as the case may be;
(k) otherwise comply with all applicable rules and regulations of the SEC,
and make generally available to its stockholders a consolidated earnings
statement (which need not be audited) for the 12 months beginning after the
effective date of a Registration Statement as soon as reasonably practicable
after the end of such period, which earnings statement shall satisfy the
requirements of an earning statement under Section 11(a) of the Securities Act;
(l) promptly notify each seller of Registrable Common Stock and the
underwriter or underwriters, if any:
(i) when the Registration Statement, any pre-effective amendment,
the Prospectus or any Prospectus supplement or post-effective amendment to
the Registration Statement has been filed and, with respect to the
Registration Statement or any post-effective amendment, when the same has
become effective;
(ii) of any written request by the SEC for amendments or supplements
to the Registration Statement or Prospectus;
(iii) of the notification to the Company by the SEC of its
initiation of any proceeding with respect to the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement;
and
(iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification of any Registrable Common Stock for
sale under the applicable securities or blue sky laws of any jurisdiction;
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(m) permit any Holder of Registrable Common Stock, which Holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
Registration Statement or comparable statement and to require the insertion
therein of material, furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be included; and
(n) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any Prospectus or suspending the qualification of any
Registrable Common Stock included in such Registration Statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order.
At all times after the Company has filed a registration statement with the
SEC pursuant to the requirements of either the Securities Act or the Exchange
Act, the Company shall file all reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
SEC thereunder, and take such further action as any Holders may reasonably
request, all to the extent required to enable such Holders to be eligible to
sell Registrable Common Stock pursuant to Rule 144 (or any similar rule then in
effect).
Each seller of Registrable Common Stock agrees by having its stock treated
as Registrable Common Stock hereunder that, upon notice of the happening of any
event as a result of which the Prospectus included in such Registration
Statement contains an untrue statement of a material fact or omits any material
fact necessary to make the statements therein not misleading (a "Suspension
Notice"), such seller will forthwith discontinue disposition of Registrable
Common Stock until such seller is advised in writing by the Company that the use
of the Prospectus may be resumed and is furnished with a supplemented or amended
Prospectus as contemplated by Section 6(e) hereof, and, if so directed by the
Company, such seller will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such seller's possession, of
the Prospectus covering such Registrable Common Stock current at the time of
receipt of such notice; provided, however, that such postponement of sales of
Registrable Common Stock by the Holders shall not exceed ninety (90) days in the
aggregate in any one year. If the Company shall give any notice to suspend the
disposition of Registrable Common Stock pursuant to a Prospectus, the Company
shall extend the period of time during which the Company is required to maintain
the Registration Statement effective pursuant to this Agreement by the number of
days during the period from and including the date of the giving of such notice
to and including the date such seller either is advised by the Company that the
use of the Prospectus may be resumed or receives the copies of the supplemented
or amended Prospectus contemplated by Section 6(e). In any event, the Company
shall not be entitled to deliver more than three (3) Suspension Notices in any
one year.
11
7. Registration Expenses.
(a) All expenses incident to the Company's performance of or compliance
with this Agreement, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, listing
application fees, printing expenses, transfer agent's and registrar's fees, cost
of distributing Prospectuses in preliminary and final form as well as any
supplements thereto, and fees and disbursements of counsel for the Company and
all independent certified public accountants and other Persons retained by the
Company (all such expenses being herein called "Registration Expenses") (but not
including any underwriting discounts or commissions attributable to the sale of
Registrable Common Stock), shall be borne by the Company. In addition, the
Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which they are to be
listed.
(b) The obligation of the Company to bear the expenses described in
Section 7(a) shall apply irrespective of whether a registration, once properly
demanded, if applicable, becomes effective, is withdrawn or suspended, is
converted to another form of registration and irrespective of when any of the
foregoing shall occur; provided, however, that Registration Expenses for any
Registration Statement withdrawn solely at the request of a Holder of
Registrable Common Stock (unless withdrawn following postponement of filing by
the Company in accordance with Section 2(d)(i) or (ii)) or any supplements or
amendments to a Registration Statement or Prospectus resulting from a
misstatement furnished in writing to the Company by a Holder shall be borne by
such Holder.
8. Indemnification.
(a) The Company shall indemnify, to the fullest extent permitted by law,
each Holder, its officers, directors and Affiliates and each Person who controls
such Holder (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses arising out of or based upon any
untrue or alleged untrue statement of material fact contained in any
Registration Statement, Prospectus or preliminary Prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading or any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or applicable "blue sky" laws, except insofar
as the same are made in reliance and in conformity with information relating to
such Holder furnished in writing to the Company by such Holder expressly for use
therein or caused by such Holder's failure to deliver to such Holder's immediate
purchaser a copy of the Registration Statement or Prospectus or any amendments
or supplements thereto (if the same was required by applicable law to be so
delivered) after the Company has furnished such Holder with a sufficient number
of copies of the same.
(b) In connection with any Registration Statement in which a Holder of
Registrable Common Stock is participating, each such Holder shall furnish to the
12
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such Registration Statement or
Prospectus and, shall indemnify, to the fullest extent permitted by law, the
Company, its officers and directors, and each Person who controls the Company
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses arising out of or based upon any untrue or alleged
untrue statement of material fact contained in the Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act or applicable "blue sky laws," but only to the extent that the same
are made in reliance and in conformity with information relating to such Holder
furnished in writing to the Company by such Holder expressly for use therein;
provided, however, that the obligation to indemnify shall be several, not joint
and several, among such Holders and the liability of each such Holder shall be
in proportion to and limited to the net amount received by such Holder from the
sale of Registrable Common Stock pursuant to such Registration Statement.
(c) Any Person entitled to indemnification hereunder shall (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party shall not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld or
delayed). An indemnifying party who is not entitled to, or elects not to, assume
the defense of a claim shall not be obligated to pay the fees and expenses of
more than one counsel (in addition to any reasonably required local counsel) for
all parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party there may be one or
more legal or equitable defenses available to such indemnified party which are
in addition to or may conflict with those available to another indemnified party
with respect to such claim. Failure to give prompt written notice shall not
release the indemnifying party from its obligations hereunder.
(d) The indemnification provided for under this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of securities.
(e) If the indemnification provided for in or pursuant to this Section 8
is due in accordance with the terms hereof, but is held by a court to be
unavailable or unenforceable in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified Person as a result of such losses,
claims, damages, liabilities or expenses in such
13
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions which result in such losses, claims, damages,
liabilities or expenses as well as any other relevant equitable considerations.
The relative fault of the indemnifying party on the one hand and of the
indemnified Person on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party, and by such
party's relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. In no event shall the liability
of any selling Holder be greater in amount than the lesser of the amount of net
proceeds received by such Holder upon such sale and the amount for which such
indemnifying party would have been obligated to pay by way of indemnification if
the indemnification provided for under Section 8(b) hereof had been available
under the circumstances.
9. Participation in Underwritten Registrations.
No Person may participate in any registration hereunder which is
underwritten unless such Person (a) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements; provided that no Holder of Registrable Common Stock included in
any underwritten registration shall be required to make any representations or
warranties to the Company or the underwriters (other than representations and
warranties regarding such Holder and such Holder's intended method of
distribution) or to undertake any indemnification obligations to the Company or
the underwriters with respect thereto, except as otherwise provided in Section 8
hereof.
10. Rule 144.
The Company covenants that it will file the reports required to be filed
by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and it will take such further action
as any Holder may reasonably request to make available adequate current public
information with respect to the Company meeting the current public information
requirements of Rule 144(c) under the Securities Act, to the extent required to
enable such Holder to sell Registrable Common Stock without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.
11. Miscellaneous.
(a) Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile or similar writing) and shall
be given,
14
If to the Company, to:
Cosi, Inc.
Attn: William D. Forrest
242 West 36th Street, 11th Floor
New York, NY 10018
Facsimile No.: (212) 739-7334
with a copy (which shall not constitute notice), to:
William P. Mills, III, Esq.
Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 10038
Facsimile No.: (212) 504-6666
If to ZAM Holdings, to:
ZAM Holdings, L.P.
c/o Ziff Brothers Investments, L.L.C.
153 E. 53rd Street
New York, New York 10022
Attention: Frederick H. Fogel, Esq.
Facsimile No.: (212) 292-6538
with a copy (which shall not constitute notice), to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Attention: Diana M. Lopo, Esq.
Facsimile No.: (212) 735-2000
If to Gleacher, to:
William McNichols
Gleacher Partners LLC
660 Madison Avenue
New York, NY 10021
Facsimile No.: (212) 843-4910
15
If to Phillips, to:
Charles G. Phillips
775 Park Avenue
New York, NY 10021
Facsimile No.: (212) 249-7855
If to LJCB, to:
Greg Woolley
Facsimile No.: (011-61-2-9255-4170)
If to a transferee Holder, to the address of such Holder set forth in the
transfer documentation provided to the Company;
in each case with copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Attention: Diana M. Lopo, Esq.
Facsimile No.: (212) 735-2000
or such other address or facsimile number as such party (or transferee) may
hereafter specify for the purpose by notice to the other parties. Each such
notice, request or other communication shall be effective (a) if given by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section and the appropriate facsimile
16
confirmation is received or (b) if given by any other means, when delivered at
the address specified in this Section.
(b) No Waivers. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
(c) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, it being understood that subsequent Holders of the
Registrable Common Stock are intended third party beneficiaries hereof.
(d) Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
(e) Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in any federal
or state court located in the County and State of New York, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 11(a) shall be deemed
effective service of process on such party.
(f) Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(g) Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts (any number of which may be by facsimile), each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
(h) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the transactions contemplated herein. Except
as provided to the contrary
17
herein, no provision of this Agreement or any other agreement contemplated
hereby is intended to confer on any Person other than the parties hereto any
rights or remedies.
(i) Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
(j) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
(k) Amendments. The provisions of this Agreement, including the provisions
of this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given without the
prior written consent of the holders of a majority of the Company Securities (as
constituted on the date hereof); provided, however, that without a Stockholder's
written consent no such amendment, modification, supplement or waiver shall
affect adversely such Stockholder's rights hereunder in a discriminatory manner
inconsistent with its adverse effects on rights of other Stockholders hereunder
(other than as reflected by the different number of shares held by such
Stockholder); provided, further, that the consent or agreement of the Company
shall be required with regard to any termination, amendment, modification or
supplement of, or waivers or consents to departures from, the terms hereof,
which affect the Company's obligations hereunder.
(l) Aggregation of Stock. All Registrable Common Stock held by or acquired
by any Affiliated Persons will be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
(m) Equitable Relief. The parties hereto agree that legal remedies may be
inadequate to enforce the provisions of this Agreement and that equitable
relief, including specific performance and injunctive relief, may be used to
enforce the provisions of this Agreement.
(n) No Inconsistent Agreements. The Company shall not enter into any
agreement, or any amendment to any agreement, which is inconsistent with or
violates the rights granted to the Holders of Registrable Common Stock in this
Agreement.
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IN WITNESS WHEREOF, this Supplemental Registration Rights Agreement has
been duly executed by each of the parties hereto as of the date first written
above.
ZAM Holdings, L.P.,
by its General Partner,
PBK HOLDINGS, INC.
By: /s/ Fred Fogel
------------------------------------
Name: Fred Fogel
Title: VP
ERIC J. GLEACHER
/s/ Eric. J. Gleacher
----------------------------------------
CHARLES G. PHILLIPS
/s/ Charles G. Phillips
----------------------------------------
LJCB NOMINEES PTY. LTD.
by its Director,
Greg Woolley
By: /s/ Greg Woolley
------------------------------------
Name: Greg Woolley
Title: Director
COSI, INC.
By: /s/ William D. Forrest
-----------------------------
Name: William D. Forrest
Title: Executive Chairman
19