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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2 )*
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BROADWAY STORES, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.01
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(Title of Class of Securities)
111572103
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(CUSIP Number)
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(312) 984-9711
DAVID M. SCHULTE, CHILMARK PARTNERS, L.P., TWO N. RIVERSIDE PLAZA, CHICAGO, IL 60606
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
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AUGUST 14, 1995
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box a [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of thc Act (however, see
the Notes).
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ONLY THOSE ITEMS AMENDED ARE REPORTED HEREIN. CAPITALIZED TERMS NOT
OTHERWISE DEFINED HEREIN SHALL HAVE THE SAME MEANING AS THEY HAVE IN THE
SCHEDULE 13D AND AMENDMENTS THERETO.
Item 4. Purpose of Transaction.
and
Item 6. Contracts, Agreements, Understandings or Relationships
with Respect to Securities of the Issuer.
On August 14, 1995, Zell/Chilmark and Federated Department
Stores, Inc. ("Federated") entered into a Stock Agreement
(the "Stock Agreement") in connection with a Merger
Agreement between the Issuer and Federated. Pursuant to the
Stock Agreement, Zell/Chilmark granted Federated an
irrevocable option to purchase the 24,800,866 shares of
Common Stock owned by Zell/Chilmark and agreed to vote its
24,800,866 shares of Common Stock in favor of the adoption
of the Merger Agreement and for approval of the merger and
the other transactions contemplated by the Merger Agreement
at the meeting of stockholders called to consider such
proposals. The summary contained in this Amendment to
Schedule 13D of certain provisions of the Stock Agreement
is qualified in its entirety by reference to the Stock
Agreement attached as Exhibit 4 hereto and incorporated
herein by reference.
Item 7. Material to be Filed as Exhibits.
Exhibit 4 Stock Agreement dated August 14, 1995 between
Zell/Chilmark and Federated.
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in the Statement is true, complete and correct.
Dated: August 16, 1995 Zell/Chilmark Fund, L.P..
By: ZC Limited Partnership, general partner
By: ZC Partnership, general partner
By: ZC, Inc., a partner
By:
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Samuel Zell, President
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EXHIBIT INDEX
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Exhibit Page
Number Description Number
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1. First Amended Plan of Reorganization *
(As Modified) (July 28, 1992)
2. Agreement between First Plaza Group Trust *
and Zell/Chilmark Fund, L.P. dated
October 8, 1992
3. Letter dated October 8, 1992 from *
Zell/Chilmark Fund, L.P. to Carter Hawley
Hale Stores, Inc.
4. Stock Agreement 5
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EXHIBIT 4
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STOCK AGREEMENT
BY AND BETWEEN
FEDERATED DEPARTMENT STORES, INC.
AND
ZELL/CHILMARK FUND, L.P.
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DATED AS OF AUGUST 14, 1995
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TABLE OF CONTENTS
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1. Option .................................................................. 1
1.1 Option.......................................................... 1
1.2 Prohibited Transfers ........................................... 3
2. Representations and Warranties of Stockholder ........................... 3
2.1 Authorization, Validity and Effect of Agreement ................ 3
2.2 No Conflict; Required Filings and Consents ..................... 3
2.3 Ownership of Owned Shares ...................................... 4
2.4 Purchase Not for Distribution .................................. 4
2.5 No Brokers ..................................................... 4
3. Representations and Warranties of Parent ................................ 4
3.1 Authorization, Validity and Effect of Agreement ............... 4
3.2 No Conflict; Required Filings and Consents .................... 4
3.3 Purchase Not for Distribution ................................. 5
3.4 No Brokers .................................................... 5
3.5 Issuance of Parent Common Shares .............................. 5
4. Certain Covenants ...................................................... 5
4.1 Voting of Shares .............................................. 5
4.2 No Solicitation ............................................... 6
4.3 Registration Rights ........................................... 6
(a) Definitions ............................................... 6
(b) Securities Subject to this Section 4.3 .................. 8
(c) Piggy-Back Registration Rights .......................... 8
(d) Demand Registration Rights .............................. 9
(e) Selection of Underwriters ............................... 10
(f) Blackout Periods ........................................ 10
(g) Registration Procedures ................................. 11
(h) Registration Expenses ................................... 16
(i) Reports Under the Exchange Act .......................... 16
(j) Indemnification; Contribution ........................... 16
(k) Participation in Underwritten Offerings ................. 19
4.4 Transfer of Shares ............................................ 19
5. General Provisions ..................................................... 20
5.1 Notices........................................................ 20
5.2 Assignment; Binding Effect .................................... 20
5.3 Entire Agreement .............................................. 20
5.4 Governing Law ................................................. 20
5.5 Counterparts .................................................. 21
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TABLE OF CONTENTS (CONT'D)
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5.6 Headings ...................................................... 21
5.7 Interpretation ................................................ 21
5.8 Severability .................................................. 21
5.9 Termination ................................................... 21
5.10 Specific Performance .......................................... 21
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STOCK AGREEMENT
Stock Agreement (this "Agreement"), dated as of August 14, 1995, by and
between Federated Department Stores, Inc., a Delaware corporation ("Parent"),
and Zell/Chilmark Fund, L.P., a Delaware limited partnership ("Stockholder").
RECITALS
A. Parent, Nomo Company, Inc., a Delaware corporation and wholly
owned subsidiary of Parent ("Merger Sub"), and Broadway Stores, Inc., a
Delaware corporation (the "Company"), have entered into an Agreement and Plan
of Merger, dated the date hereof (the "Merger Agreement"), pursuant to which
the parties thereto have agreed, on the terms and subject to the conditions
set forth therein, to merge the Company with and into Merger Sub (the "Merger").
B. As of the date hereof, Stockholder is the record and beneficial
owner of, and has the sole right to vote and dispose of, 24,800,866 shares
(the "Owned Shares") of Common Stock, par value $0.01 per share, of the
Company ("Company Common Shares").
C. As a condition to its willingness to enter into the Merger
Agreement, Parent has required that simultaneously with the execution of the
Merger Agreement Stockholder agree, and Stockholder is willing to agree, to
the matters set forth herein.
1. OPTION
1.1 Option. (a) Stockholder hereby grants to Parent an irrevocable
option (the "Option") to purchase, on the terms and subject to the conditions
set forth herein, all of the Owned Shares, together with (i) any additional
shares of capital stock of the Company which Stockholder is or becomes
entitled to receive from the Company by reason of being a record holder of the
Owned Shares, (ii) any securities or other property into which any such Owned
Shares shall have been or shall be converted or changed (other than Parent
Common Shares (as defined below)), whether by amendment to the Certificate of
Incorporation of the Company, merger, consolidation, reorganization, capital
change or otherwise, (iii) any additional Company Common Shares acquired by
Stockholder as the result of Stockholder exercising an option, warrant or other
right to acquire shares of capital stock from the Company (all of the foregoing
hereinafter collectively referred to as the "Additional Owned Shares"), and
(iv) any shares of capital stock referred to in clauses (i), (ii), and (iii)
above that are issued or issuable in respect of Additional Owned Shares (the
Owned Shares, the Additional Owned Shares and any securities referred to in
clause (iv) above hereinafter collectively referred to as the "Option Shares").
(b) Subject to the conditions set forth in Section 1.1(f), the
Option may be exercised in whole but not in part by notice given by Parent to
Stockholder at any time prior to the later of (i) February 29, 1996 and (ii)
the date to which the date specified in Section 7.2(a) of the Merger Agreement
may from time to time be extended (the "Outside Date").
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(c) In the event Parent wishes to exercise the Option, Parent first
will send a written notice to Stockholder specifying a place, date (not less
than two Business Days (as defined in Section 4.3(a)) nor more than 60
calendar days from the date such notice is given) and time for the closing of
the purchase of the Option Shares (the "Closing").
(d) The total price payable to Stockholder upon exercise of the
Option will be the number of shares of Common Stock, par value $0.01 per share,
of Parent together with the associated share purchase rights ("Parent Common
Share") equal to the product of (i) the Conversion Rate (as defined in the
Merger Agreement) and (ii) the number of Option Shares to be purchased upon such
exercise; provided, however, that if any additional shares of capital stock of
the Company or any of its Subsidiaries (as defined in the Merger Agreement) are
issued by the Company or any of its Subsidiaries or any of their respective
successors, other than those described in Section 3.3 to the Merger Agreement
(the "Excess Shares"), the total number of Parent Common Shares payable to
Stockholder for all of the Option Shares, including any Excess Shares owned
beneficially or of record by Stockholder, will be the number of Parent Common
Shares equal to the product of (A) the Conversion Rate and (B) the total number
of Option Shares, less the total number of Excess Shares owned beneficially or
of record by Stockholder.
(e) At the Closing, Stockholder will deliver to Parent a certificate
or certificates representing the Option Shares, duly endorsed for transfer or
accompanied by appropriate stock powers, duly executed in blank, and Parent
will issue or deliver to Stockholder a certificate representing the number of
Parent Common Shares to which Stockholder is entitled pursuant to Section 1.1
(d). Transfer taxes, if any, imposed as a result of the exercise of the Option
and the transfer of the Parent Common Shares will be shared equally by
Stockholder and Parent.
(f) The obligations of Parent and Stockholder to consummate the
purchase and sale of the Option Shares pursuant to this Section 1.1 will be
subject to the fulfillment of the following conditions:
(i) The expiration or termination of the waiting period
applicable to the consummation of such transactions under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder (the "HSR Act");
(ii) Neither of the parties hereto shall be subject to any
order of injunction of a court of competent jurisdiction which prohibits
the consummation of such transactions; and
(iii) Satisfaction of the condition set forth in Section 6.1(g)
of the Merger Agreement.
Each of the parties will promptly make, and cause each of their respective
affiliates to make, all such filings and take all such actions as may be
reasonably required in order to permit the
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lawful exercise of the Option, as promptly as possible, including without
limitation all filings and other actions contemplated by Section 1.1(f).
1.2 Prohibited Transfers. Stockholder will not during the term of
the Option, except pursuant to this Agreement or the Merger Agreement (a) sell,
pledge or otherwise dispose of any Option Shares or any interest therein, (b)
deposit any Option Shares into a voting trust or enter into a voting agreement
or arrangement with respect to any Option Shares or grant any proxy with respect
thereto, or (c) enter into any contract, option or other arrangement or
undertaking with respect to the foregoing or the direct or indirect acquisition
or sale, assignment, transfer or other disposition of any Company Common Shares
or any interest therein.
2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder hereby represents and warrants to Parent as follows:
2.1 Authorization. Validity and Effect of Agreement. Stockholder has
the requisite limited partnership power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Stockholder and constitutes
the valid and binding obligation of Stockholder, enforceable against
Stockholder in accordance with its terms.
2.2 No Conflict: Required Filings and Consents. (a) The execution
and delivery of this Agreement by Stockholder do not, and the consummation by
Stockholder of the transactions contemplated hereby will not, (i) conflict
with or violate the partnership agreement of Stockholder, (ii) subject to
making the filings and obtaining the approvals identified in Section 2.2(b),
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Stockholder or by which Stockholder or any Option Shares is
bound or affected, or (iii) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, result in the loss of a material benefit under, or give to others any
right of purchase or sale, or any right of termination, amendment,
acceleration, increased payments or cancellation of, or result in the creation
of a lien or other encumbrance on any Option Shares pursuant to any contract,
agreement or other instrument or obligation to which Stockholder is a party or
by which Stockholder or any property or asset of Stockholder is bound or
affected.
(b) The execution and delivery of this Agreement by Stockholder do
not, and the performance of this Agreement and the consummation by Stockholder
of the transactions contemplated hereby will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign (each a "Governmental Entity"),
except for (i) applicable requirements, if any, of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and (ii) the notification
requirements under the HSR Act.
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2.3 Ownership of Owned Shares. Stockholder is the sole record and
beneficial owner of the Owned Shares, free and clear of any security interests,
liens, charges, encumbrances, equities, claims, options (other than the Option),
proxies, stockholder agreements or limitations of whatever nature and free of
any other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of the Owned Shares or any interest therein)
except pursuant to this Agreement. The Owned Shares constitute all of the
Company Common Shares owned of record or beneficially (within the meaning of
Rule 13d-3 under the Exchange Act) by Stockholder.
2.4 Purchase Not for Distribution. The Parent Common Shares to be
acquired upon exercise of the Option will be so acquired without a view to the
public distribution thereof and such shares will not be transferred or otherwise
disposed of except in a transaction registered or exempt from registration
under the Securities Act of 1933, as amended (the "Securities Act"), and in
compliance with applicable state securities laws.
2.5 No Brokers. Stockholder has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of Parent to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.
3. REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to Stockholder as follows:
3.1 Authorization. Validity and Effect of Agreement. Parent has the
requisite corporate power and authority to execute and deliver this agreement
and to consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Parent and constitutes the valid and binding
obligation of Parent, enforceable against Parent in accordance with its terms.
3.2 No Conflict; Required Filings and Consents. (a) The execution
and delivery of this Agreement by Parent do not, and the consummation by
Parent and of the transactions contemplated hereby will not, (i) conflict with
or violate the certificate of incorporation or by-laws of Parent, (ii) subject
to making the filings and obtaining the approvals identified in Section 3.2(b),
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Parent or by which any property or asset of Parent is bound or
affected, or (iii) subject to making the filings and obtaining the approvals
identified in Schedule 4.3(a) of the Merger Agreement, result in any breach of
or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, result in the loss of a material benefit
under, or give to others any right of termination, amendment, acceleration,
increased payments or cancellation of, or result in the creation of a lien or
other encumbrance on any property or asset of Parent pursuant to, any contract,
agreement or other instrument or obligation to which Parent is a party or by
which Parent or any property or asset of Parent is bound or affected.
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(b) The execution and delivery of this Agreement by Parent do not,
and the performance of this Agreement and the consummation by Parent of the
transactions contemplated hereby will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Entity, except for (i) applicable requirements, if any, of the Exchange Act and
(ii) the notification requirements under the HSR Act.
3.3 Purchase Not for Distribution. The Option and the securities to
be acquired upon exercise of the Option (the "Acquired Shares") are and will
be acquired by Parent without a view to the public distribution thereof and
neither this Option nor any Acquired Shares will be transferred or otherwise
disposed of except in a transaction registered or exempt from registration
under the Securities Act and in compliance with applicable state securities
laws.
3.4 No Brokers. Parent has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of Stockholder to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.
3.5 Issuance of Parent Common Shares. The Parent Common Shares to be
paid to Stockholder upon exercise of the Option pursuant to this Agreement
will, when issued in accordance with this Agreement, be duly authorized,
validly issue, fully paid and nonassessable.
4. CERTAIN COVENANTS
4.1 Voting of Shares. (a) Stockholder will, with respect to (i) all
Owned Shares and (ii) any other Option Shares that it owns of record or
beneficially on the record date for voting at the meeting of stockholders
called to consider and vote upon the Merger (the "Stockholder Meeting"), vote
or cause to be voted such Option Shares (or execute or cause to be executed
written consents with respect to such Option Shares) (A) in favor of the
adoption of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, (B) against any Alternative
Proposal (as defined in the Merger Agreement), and (C) in favor of any other
matter necessary for the consummation of the transactions contemplated by the
Merger Agreement and considered and voted upon at the Stockholder Meeting.
Stockholder acknowledges receipt and review of a copy of the Merger Agreement.
(b) Following the acquisition of the Option Shares by Parent upon
the exercise of the Option, Parent will, with respect to the Option Shares
that it owns of record or beneficially on the record date for the Stockholder
Meeting, vote or cause to be voted such Option Shares (or execute or cause to
be executed written consents with respect to such Option Shares) (i) in favor
of the adoption of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, (ii) against any
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Alternative Proposal, and (iii) in favor of any other matter necessary for the
consummation of the transactions contemplated by the Merger Agreement and
considered and voted upon at the Stockholder Meeting.
4.2 No Solicitation. Prior to the Effective Time (as defined in the
Merger Agreement), (a) Stockholder will not, and will cause its officers,
directors and employees, in their capacities as such, and its agents or
representatives (including, without limitation, any investment banker,
attorney or accountant retained by it or any of its subsidiaries) not to,
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making or implementation of any Alternative Proposal or engage in any
negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any person relating to an Alternative Proposal,
or otherwise facilitate any effort or attempt to make or implement an
Alternative Proposal, and (b) Stockholder will notify Parent immediately if
any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, it.
4.3 Registration Rights. (a) Definitions. For purposes of this
Section 4.3, the following terms will have the following meanings:
"Blackout Period" means a Section 4.3(f)(i) Period or a Section 4.3(f)
(ii) Period.
"Business Day" means a day, other than a Saturday or Sunday, on which
banking institutions and securities exchanges in New York, New York are
required to be open.
"Counsel to Stockholder" means the single law firm reasonably
acceptable to Parent from time to time representing Stockholder.
"Effective Period" means a period commencing on the date of this
Agreement and ending on the earlier of (i) the first date as of which all
Registrable Securities cease to be Registrable Securities and (ii) the date on
which such Stockholder may sell Registrable Securities in accordance with Rule
145(d)(3) under the Securities Act.
"Inspectors" has the meaning specified in Section 4.3(g)(xii).
"NASD" means the National Association of Securities Dealers, Inc.
"Prospectus" means the prospectus 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
Securities covered by any 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.
"Records" has the meaning specified in Section 4.3(g)(xii).
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"Registrable Securities" means Parent Common Shares acquired by
Stockholder upon the exercise of the Option.
"Registration Expenses" means any and all reasonable expenses incident
to performance of or compliance with this Agreement, including without
limitation, (i) all SEC, NASD and securities exchange registration and filing
fees, (ii) all fees and expenses of complying with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters in connection with blue sky qualifications of the Registrable
Securities), (iii) all printing expenses, (iv) all fees and expenses incurred
in connection with the listing of the Registrable Securities on any securities
exchange or automated quotation system pursuant to Section 4.3(g)(viii), (v)
the fees and disbursements of counsel for Parent and of its independent public
accountants, (vi) the reasonable fees and expenses of any special experts
retained by Parent in connection with the requested registration, and (vii)
out-of-pocket expenses of underwriters customarily paid by the issuer to the
extent provided for in any underwriting agreement, but excluding underwriting
discounts, commissions and transfer taxes, if any, fees and expenses of
Counsel to Stockholder and all the fees and expenses of Stockholder incident
to its offering or sale of Registerable Securities.
"Registration Hold Period" means a Section 4.3(g)(v) Period or a
Section 4.3(g)(xiii) Period.
"Registration Statement" means any registration statement of Parent
referred to in Sections 4.3(c) or (d), including any Prospectus, amendments
and supplements to any such registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in
any such registration statement.
"Related Securities" means any securities of Parent similar or
identical to any of the Registrable Securities, including without limitation
Parent Common Shares and all options, warrants, rights and other securities
convertible into, or exchangeable or exercisable for, Parent Common Shares.
"SEC" means the Securities and Exchange Commission.
"Section 4.3(f)(i) Period" has the meaning specified in Section 4.3(f)
(i).
"Section 4.3(f)(ii) Period" has the meaning specified in Section 4.3(f)
(ii).
"Section 4.3(g)(v) Period" has the meaning specified in Section 4.3(g)
(v).
"Section 4.3(g)(xiii) Period" has the meaning specified in Section 4.3
(g)(xiii).
"Shelf Registration" means a registration statement on an appropriate
form pursuant to Rule 415 under the Securities Act (or any successor rule that
may be adopted by the SEC).
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"underwritten registration" or "underwritten offering" means an
underwritten offering in which securities of Parent are sold to an underwriter
for reoffering to the public.
(b) Securities Subject to this Section 4.3. The securities entitled to
the benefits of this Section 4.3 are the Registrable Securities. For the
purposes of this Section 4.3, Registrable Securities will cease to be
Registrable Securities when and to the extent that (i) a Registration Statement
covering Registrable Securities has been declared effective under the
Securities Act and Registrable Securities have been disposed of pursuant to
such effective Registration Statement or three years has passed since such
Registration Statement was declared effective, (ii) Registrable Securities are
distributed to the public pursuant to Rule 144 (or any similar provision then
in force) under the Securities Act, or (iii) Registrable Securities have ceased
to be outstanding.
(c) Piggy-Back Registration Rights. (i) Whenever during the Effective
Period Parent proposes to file a registration statement under the Securities
Act relating to the public offering of Parent Common Shares for cash pursuant
to a firm commitment underwritten offering (other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor forms, or filed
in connection with an exchange offer or an offering of securities solely to
existing stockholders or employees of Parent), Parent will (A) give written
notice at least 15 Business Days prior to the filing thereof to Stockholder,
specifying the approximate date on which Parent proposes to file such
registration statement and advising Stockholder of its right to have any or all
of the Registrable Securities then held by Stockholder included among the
securities to be covered thereby, and (B) at the written request of Stockholder
given to Parent at least five Business Days prior to the proposed filing date,
include among the securities covered by such registration statement the number
of Registrable Securities which Stockholder shall have requested be so included
(subject, however, to reduction in accordance with paragraph (ii) of this
Section). Parent will use commercially reasonable efforts to cause the managing
underwriter of the proposed underwritten offering to permit the Registrable
Securities so requested to be included in the Registration Statement for such
offering to be included in such offering on the same terms and conditions as
any similar securities of Parent included therein.
(ii) In the event Stockholder desires to participate in an offering
pursuant to Section 4.3(c)(i), Stockholder may include Registrable Securities
in any Registration Statement relating to such offering to the extent that the
inclusion of such Registrable Shares will not reduce the number of shares of
Parent Common Shares to be offered and sold by Parent or any other person
pursuant thereto. If the lead managing underwriter selected by Parent for an
underwritten offering pursuant to Section 4.3(c)(i) determines that marketing
factors require a limitation on the number of Parent Common Shares to be
offered and sold by the stockholders of Parent in such offering, there will be
included in the offering only that number of Parent Common Shares, if any, that
such lead managing underwriter determines will not jeopardize the success of
the offering of all the Parent Common Shares that Parent desires to sell for
its own account. In such event and provided the managing underwriter has so
notified Parent in writing, the number of shares of Parent Common Shares to be
offered and sold by stockholders of Parent, including Stockholder, desiring to
participate in such
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offering will be allocated among such holders of the Parent Common Shares
(subject to any written agreements between two or more holders requiring a
different priority).
(iii) Nothing in this Section 4.3(c) will create any liability on the
part of Parent to Stockholder if Parent for any reason should decide not to
file a registration statement proposed to be filed under Section 4.3(c)(i) or to
withdraw such registration statement subsequent to its filing, regardless of
any action whatsoever that Stockholder may have taken, whether as a result of
the issuance by Parent of any notice hereunder or otherwise.
(iv) A request by Stockholder to include Registrable Securities in a
proposed underwritten offering pursuant to Section 4.3(c)(i) will not be deemed
to be a request for a demand registration pursuant to Section 4.3(d).
(d) Demand Registration Rights. (i) Upon the written request by
Stockholder during the Effective Period that Parent effect the registration
with the SEC under and in accordance with the provisions of the Securities Act
of all or part of Stockholder's Registrable Securities (which written request
will specify the aggregate number of shares of Registrable Securities requested
to be registered and the means of distribution), Parent will file a Registration
Statement covering Stockholder's Registrable Securities requested to be
registered within 20 Business Days after receipt of such request; provided,
however, that Parent will not be required to take any action pursuant to this
Section 4.3(d):
(A) if prior to the date of such request Parent shall have effected
one registration pursuant to this Section 4.3(d);
(B) if Parent has effected a registration pursuant to Section
4.3(c) within the 180-day period next preceding such request which
permitted Stockholder to register Registrable Securities;
(C) if Parent shall at the time have effective a Shelf Registration
pursuant to which Stockholder could effect the disposition of Stockholder's
Registrable Securities in the manner requested;
(D) if the Registrable Securities which Parent shall have been
requested to register shall have a then-current market value of less than
$50,000,000, unless such registration request is for all remaining
Registrable Securities; or
(E) during the pendency of any Blackout Period;
provided further, however, that Parent will be permitted to satisfy its
obligations under this Section 4.3(d)(i) by amending (to the extent permitted
by applicable law) any registration statement previously filed by Parent under
the Securities Act so that such registration statement (as amended) will permit
the disposition (in accordance with the intended methods of disposition
specified as aforesaid) of all of the Registrable Securities for which a demand
for registration has been made under this Section 4.3(d)(i). If Parent so
amends a previously
- 9 - PAGE 16 OF 29
<PAGE> 13
filed registration statement, it will be deemed to have effected a registration
for purposes of this Section 4.3(d).
(ii) Stockholder may distribute the Registrable Securities covered by
such request by means of an underwritten offering or any other lawful means, as
determined by Stockholder.
(iii) A registration requested pursuant to this Section 4.3(d) will
not be deemed to be effected for purposes of this Section 4.3(d) if it has not
been declared effective by the SEC or become effective in accordance with the
Securities Act and the rules and regulations thereunder.
(iv) Stockholder may, at any time prior to the effective date of the
Registration Statement relating to such registration, revoke such request by
providing a written notice to Parent revoking such request. In such event,
Stockholder will reimburse Parent for all its out-of-pocket expenses incurred
in the preparation, filing and processing of the Registration Statement;
provided, however, that, if such revocation was based on (A) Parent's failure
to comply in any material respect with its obligations hereunder or (B) the
occurrence of a Blackout Period, such reimbursement will not be required.
(v) Parent will not include any securities which are not Registrable
Securities in any Registration Statement filed pursuant to a demand made under
this Section 4 without the prior written consent of Stockholder.
(e) Selection of Underwriters. In connection with any underwritten
offering pursuant to a Registration Statement filed pursuant to a demand made
under Section 4.3(d) Stockholder will have the right to select a managing
underwriter or underwriters to administer the offering, which managing
underwriter or underwriters will be reasonably satisfactory to Parent.
(f) Blackout Periods. (i) If (A) during the Effective Period, Parent
files or proposes to file a registration statement (other than in connection
with the registration of securities issuable pursuant to a continuous "at the
market offering" pursuant to Rule 415(a)(4) under the Securities Act, an
employee stock option, stock purchase, dividend reinvestment plan or similar
plan or pursuant to a merger, exchange offer or a transaction of the type
specified in Rule 145(a) under the Securities Act) with respect to any
securities of Parent, and (B) with reasonable prior notice, (1) Parent (in the
case of a non-underwritten offering pursuant to such registration statement)
advises Stockholder in writing that a sale or distribution of Registrable
Securities would adversely affect such offering or (2) the managing
underwriter or underwriters (in the case of an underwritten offering) advise
Parent in writing (in which case Parent will notify Stockholder), that a sale
or distribution of Registrable Securities would adversely affect such offering,
then Parent will not be obligated to effect the initial filing of a
Registration Statement pursuant to Section 4.3(d) during the period commencing
on the date that is 30 calendar days prior to the date Parent in good faith
estimates (as certified in writing by an officer of Parent to Stockholder
following a request for registration pursuant to Section 4.3(d)(i)) will be the
date of the filing of, and ending on
- 10 - PAGE 17 OF 29
<PAGE> 14
the date which is 120 calendar days following the effective date of, such
registration statement (a "Section 4.3(f)(i) Period").
(ii) If Parent determines in good faith that the registration and
distribution of Registrable Securities (A) would materially impede, delay or
interfere with any pending financing (other than a financing of the type
described in Section 4.3(f)(i)), acquisition, corporate reorganization or other
significant transaction involving Parent or (B) would require disclosure of
non-public material information, the disclosure of which would materially and
adversely affect Parent, and, in the case of clause (B), Parent is concurrently
forbidding purchases or sales in the open market by senior executives of
Parent, Parent will promptly give the stockholder written notice of such
determination and will be entitled to postpone the filing or effectiveness of a
Registration Statement for a reasonable period of time not to exceed 120
calendar days (a "Section 4.3(f)(ii) Period"); provided, however, that in
connection therewith Parent will be required to deliver to Counsel to
Stockholder (as identified at such time to the Company) a general statement,
signed by an officer of Parent, describing in reasonable detail the reasons for
such postponement or restriction on use and an estimate of the anticipated
delay. Parent will promptly notify Stockholder of the expiration or earlier
termination of a Section 4.3(f)(ii) Period.
(iii) Notwithstanding anything in this Section 4.3(f) to the contrary,
(A) the beginning of any Blackout Period will be at least 120 calendar days
after the end of the prior Blackout Period, and (B) the aggregate number of
days included in all Blackout Periods and all Registration Hold Periods during
any consecutive 12-month period during the Effective Period will not exceed 180
calendar days.
(g) Registration Procedures. If and whenever Parent is required to
use commercially reasonable efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
Parent will, as expeditiously as possible:
(i) prepare and file with the SEC a Registration Statement with
respect to such Registrable Securities on any form for which Parent
then qualifies or which counsel for Parent deems appropriate, and which
form is available for the sale of the Registrable Securities in accordance
with the intended methods of distribution thereof (including, if so
requested by Stockholder, distributions under Rule 415 under the Securities
Act pursuant to a Shelf Registration Statement), and use commercially
reasonable efforts to cause such Registration Statement to become and
remain effective;
(ii) prepare and file with the SEC amendments and post-effective
amendments to such Registration Statement and such amendments to the
Prospectus used in connection therewith as may be necessary to maintain the
effectiveness of such registration or as may be required by the rules,
regulations or instructions applicable to the registration form utilized by
Parent or by the Securities Act or rules and regulations thereunder
necessary to keep such Registration Statement effective for up to 90
calendar days, in the case of an underwritten offering, or 180 calendar
days,
- 11 - PAGE 18 OF 29
<PAGE> 15
in any other case (or longer period in the event of a Registration Hold
Period during such 90 or 180 calendar days, as provided in this Section
4.3(g)) and cause the Prospectus as so supplemented to be filed pursuant to
Rule 424 under the Securities Act, and to otherwise comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement until the earlier of (A)
such 90th or 180th calendar day (or longer period) and (B) such time as all
Registrable Securities covered by such Registration Statement have ceased
to be Registrable Securities; provided that a reasonable time before filing
a Registration Statement or Prospectus, or any amendments or supplements
thereto, Parent will furnish to Stockholder, the managing underwriter and
their respective counsel for review and comment, copies of all documents
proposed to be filed and will not file any such documents to which any of
them reasonably object prior to the filing thereof;
(iii) furnish to Stockholder such number of copies of such
Registration Statement and of each amendment and post-effective
amendment thereto (in each case including all exhibits), any Prospectus or
Prospectus supplement and such other documents as Stockholder may
reasonably request in order to facilitate the disposition of the
Registrable Securities by Stockholder (Parent hereby consenting to the use
(subject to the limitations set forth in the last paragraph of this Section
4.3(g)) of the Prospectus or any amendment or supplement thereto in
connection with such disposition);
(iv) use commercially reasonable efforts to register or qualify such
Registrable Securities covered by such Registration Statement under
such other securities or blue sky laws of such jurisdictions as Stockholder
reasonably requests, and do any and all other acts and things which may be
reasonably necessary or advisable to enable Stockholder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by
Stockholder, except that Parent will not for any such purpose be required
to qualify generally to do business as a foreign corporation in any
jurisdiction where, but for the requirements of this Section 4.3(g)(iv), it
would not be obligated to be so qualified, to subject itself to taxation in
any such jurisdiction or to consent to general service of process in any
such jurisdiction;
(v) notify Stockholder at any time when a Prospectus relating to any
such Registrable Securities is required to be delivered under the
Securities Act within the appropriate period mentioned in Section
4.3(g)(ii) of Parent's becoming aware that the Prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing (the period during which Stockholder is
required to refrain from effective public sales or distributions in such
case being referred to as a "Section 4.3(g)(v) Period"), and prepare and
furnish to Stockholder a reasonable number of copies of an amendment to
such Registration Statement or related Prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus shall not include an untrue statement of a
- 12 - PAGE 19 OF 29
<PAGE> 16
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and the time during which such
Registration Statement shall remain effective pursuant to Section
4.3(g)(ii) will be extended by the number of days in the Section 4.3(g)(v)
Period;
(vi) notify Stockholder at any time,
(A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same
has become effective;
(B) of any request by the SEC for amendments or supplements to
the Registration Statement or the Prospectus or for additional
information;
(C) of the issuance by the SEC of any stop order of which
Parent or its counsel is aware or should be aware suspending the
effectiveness of the Registration Statement or any order preventing the
use of a related Prospectus, or the initiation or any threats of any
proceedings for such purposes;
(D) of the receipt by Parent of any written notification of the
suspension of the qualification of any of the Registrable Securities
for sale in any jurisdiction of the initiation or any threats of any
proceeding for that purpose; and
(E) if at any time the representations and warranties of
Parent contemplated by Section 4.3(g)(ix)(A) cease to be true and
correct in any material respect;
(vii) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to
Stockholder an earnings statement which shall satisfy the provisions of
Section 11(a) of the Securities Act, provided that Parent will be deemed to
have complied with this Section 4.3(g)(vii) if it has satisfied the
provisions of Rule 158 under the Securities Act;
(viii) use commercially reasonable efforts to cause all such
Registrable Securities to be listed on any securities exchange or
automated quotation system on which the Parent Common Shares is then
listed, if such Registrable Securities are not already so listed and if
such listing is then permitted under the rules of such exchange or
automated quotation system, and to provide a transfer agent and registrar
for such Registrable Securities covered by such Registration Statement no
later than the effective date of such Registration Statement;
- 13 - PAGE 20 OF 29
<PAGE> 17
(ix) enter into agreements (including underwriting agreements) and
take all other appropriate and reasonable actions in order to expedite
or facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration:
(A) make such representations and warranties to Stockholder
and the underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in comparable underwritten
offerings;
(B) obtain opinions of counsel to Parent thereof (which
counsel and opinions (in form, scope and substance) will be reasonably
satisfactory to the managing underwriters, if any, and Stockholder)
addressed to Stockholder and the underwriters, if any, covering the
matters customarily covered in opinions requested in comparable
underwritten offerings and such other matters as may be reasonably
requested by Stockholder and the managing underwriter, if any;
(C) obtain "cold comfort" letters and bring-downs thereof
from Parent's independent certified public accountants addressed to
Stockholder and the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters by independent accountants in connection with
underwritten offerings;
(D) if requested, provide indemnification in accordance with
the provisions and procedures of Section 4.3(j) to all parties to be
indemnified pursuant to said Section; and
(E) deliver such documents and certificates as may be
reasonably requested by Stockholder and the managing underwriters, if
any, to evidence compliance with Section 4.3(g)(vi) and with any
customary conditions contained in the underwriting agreement or other
agreement entered into by Parent.
(x) cooperate with Stockholder and the managing underwriter or
underwriters or agents, if any, to facilitate, to the extent commercially
reasonable under the circumstances, the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing the
securities to be sold under such Registration Statement, and enable such
securities to be in such denominations and registered in such names as
the managing underwriter or underwriters or agents, if any, or Stockholder
may request;
(xi) if reasonably requested by the managing underwriter or
underwriters or Stockholder, incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriters and
Stockholder agree should be included therein relating to the plan of
distribution with respect to such
- 14 - PAGE 21 OF 29
<PAGE> 18
Registrable Securities, including without limitation information with
respect to the purchase price being paid by such underwriters and with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering and make all required filings of
such Prospectus supplement or post-effective amendment as promptly as
practicable upon being notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(xii) provide Stockholder, any underwriter participating in any
disposition pursuant to such Registration Statement and any attorney,
accountant or other agent retained by Stockholder or underwriter
(collectively, the "Inspectors") reasonable access to appropriate officers
of Parent and Parent's subsidiaries to ask questions and to obtain
information reasonably requested by any such Inspector and make available
for inspection all financial and other records and other information,
pertinent corporate documents and properties of any of Parent and its
subsidiaries and affiliates (collectively, the "Records") as may be
reasonably necessary to enable them to exercise their due diligence
responsibilities; provided, however, that the Records that Parent
determines, in good faith, to be confidential and which it notifies the
Inspectors in writing are confidential will not be disclosed to any
Inspector unless such Inspector signs a confidentiality agreement
reasonably satisfactory to Parent but in any event permitting disclosure by
an Inspector if (A) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission of a material fact in such Registration
Statement or (B) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction; provided
further, however, that any decision regarding the disclosure of information
pursuant to clause (A) may be made only after consultation with counsel for
the applicable Inspectors. Stockholder agrees that it will promptly after
learning that disclosure of such Records is sought in a court having
jurisdiction, give notice to Parent and allow Parent, at Parent's expense,
to undertake appropriate action to prevent disclosure of such Records; and
(xiii) in the event of the issuance of any stop order of which Parent
or its counsel is aware or should be aware suspending the effectiveness
of the Registration Statement or of any order suspending or preventing the
use of any related Prospectus or suspending the qualification of any
Registrable Securities included in the Registration Statement for sale in
any jurisdiction, Parent will use commercially reasonable efforts promptly
to obtain its withdrawal; and the period for which the Registration
Statement will be kept effective will be extended by a number of days equal
to the number of days between the issuance and withdrawal of any stop
orders (a "Section 4.3(g)(xiii) Period").
Parent may require Stockholder to furnish Parent with such information
regarding Stockholder and pertinent to the disclosure requirements relating to
the registration and the distribution of such securities as Parent may from
time to time reasonably request in writing. Upon receipt of any notice from
Parent of the happening of any event of the kind described in Section
4.3(g)(v), Stockholder will forthwith discontinue disposition of Registrable
Securities pursuant to the Prospectus or Registration Statement covering such
Registrable
- 15 - PAGE 22 OF 29
<PAGE> 19
Securities until Stockholder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4.3(g)(v), and, if so, directed by
Parent, Stockholder will deliver to Parent (at Parent's expense) all copies,
other than permanent file copies then in Stockholder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice.
(h) Registration Expenses. Parent will pay all Registration Expenses in
connection with all registrations of Registrable Securities pursuant to
Sections 4.3(c) and (d) upon the written request of Stockholder, and
Stockholder will pay (A) any fees or disbursements of Counsel to Stockholder
and (B) all underwriting discounts and commissions and transfer taxes, if any,
and other fees, costs and expenses of Stockholder relating to the sale or
disposition of Stockholder's Registrable Securities pursuant to the
Registration Statement.
(i) Reports Under the Exchange Act. Parent will:
(i) file with the SEC in a timely manner all reports and other
documents required of Parent under the Exchange Act; and
(ii) furnish to Stockholder, during the Effective Period, forthwith
upon request (A) a written statement by Parent that it has complied with the
current public information and reporting requirements of Rule 144 under the
Securities Act and the Exchange Act and (B) a copy of the most recent
annual or quarterly report of Parent and such other reports and documents
so filed by Parent.
(j) Indemnification; Contribution. (i) Indemnification by Parent. Parent
will indemnify and hold harmless Stockholder, its officers, directors, agents,
trustees, general partners and each person who controls Stockholder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act),
against all losses, claims, damages, liabilities and expenses (including
reasonable attorneys' fees, disbursements and expenses) incurred by such party
pursuant to any actual or threatened action, suit, proceeding or investigation
arising out of or based upon (A) any violation by Parent (or its officers,
directors or controlling persons) of any federal or state law, rule or
regulation applicable to Parent and relating to any action required or inaction
by Parent (or such other person) in connection with or relating to any
Registration Statement, (B) any untrue or alleged untrue statement of material
fact contained in the Registration Statement, any Prospectus or preliminary
Prospectus, or any amendment or supplement to any of the foregoing, or (C) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
Prospectus or a preliminary Prospectus, in light of the circumstances then
existing) not misleading, except in each case insofar as the same arise out of
or are based upon any such untrue statement or omission made in reliance on and
in conformity with information with respect to such indemnified party furnished
in writing to Parent by such indemnified party or its counsel expressly for use
therein. In connection with an underwritten offering, Parent will indemnify the
underwriters thereof, their officers, directors, agents, trustees, general
partners, and each person who controls such underwriters (within the meaning of
Section 15 of the Securities
- 16 - PAGE 23 OF 29
<PAGE> 20
Act or Section 20 of the Exchange Act) to the same extent as provided above
with respect to the indemnification of Stockholder. Notwithstanding the
foregoing provisions of this Section 4.3(j)(i), Parent will not be liable to
Stockholder (or any officer, director, agent, trustee or controlling person
thereof), any person who participates as an underwriter in the offering or sale
of Registrable Securities or any other person, if any, who controls Stockholder
or underwriter (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act), under the indemnity agreement in this Section
4.3(j)(i) for any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expense that arises out of Stockholder's or such other
person's failure to send or deliver a copy of the final Prospectus to the
person asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of the
Registrable Securities to such person if such statement or omission was
corrected in such final Prospectus and Parent had previously furnished copies
thereof to Stockholder or such other person in accordance with this Agreement.
(ii) Indemnification by Stockholder. In connection with the
Registration Statement, Stockholder will furnish to Parent in writing such
information, including the name and address of, and the amount of Registrable
Securities held by, Stockholder, as Parent reasonably requests for use in such
Registration Statement or the related Prospectus and will indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
4.3(j)(i)) Parent or any underwriter, as the case may be, and any of their
respective affiliates, directors, officers, agents, trustees and controlling
persons (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act), against any losses, claims, damages, liabilities and
expenses resulting from (A) any violation by Stockholder (or its officers,
directors, agents, trustees or controlling persons) of any federal or state
law, rule or regulation relating to action required of or inaction by
Stockholder (or such other person) in connection with its offer and sale of
Registrable Securities and (B) any untrue or alleged untrue statement of a
material fact contained in, or any omission or alleged omission of a material
fact required to be stated in, such Registration Statement or Prospectus or any
amendment or supplement to either of them or necessary to make the statements
therein (in the case of a Prospectus, in the light of the circumstances then
existing) not misleading, but only to the extent that any such untrue statement
or omission is made in reliance on and in conformity with information with
respect to Stockholder furnished in writing to Parent by Stockholder or its
counsel specifically for inclusion therein.
(iii) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such indemnified party of any written
notice of the commencement of any action, suit, proceeding or investigation or
threat thereof made in writing for which such indemnified party may claim
indemnification or contribution pursuant to this Agreement (provided that
failure to give such notification will not affect the obligations of the
indemnifying party pursuant to this Section 4.3(j) except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure). In case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it wishes, jointly with any other indemnifying party similarly notified,
to
- 17 - PAGE 24 OF 29
<PAGE> 21
assume the defense thereof, with counsel satisfactory to such indemnified party
(who may not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under these
indemnification provisions for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation, unless in the reasonable judgment of any indemnified party a
conflict of interest is likely to exist, based on the written opinion of
counsel, between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party will
be obligated to pay the reasonable fees and expenses of such additional
counsel. No indemnifying party, in defense of any such action, suit, proceeding
or investigation, may, except with the consent of each indemnified party,
consent to the entry of any judgment or entry into any settlement (which
consent will not be unreasonably withheld) which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such action,
suit, proceeding or investigation to the extent the same is covered by the
indemnity obligation set forth in this Section 4.3(j). No indemnified party may
consent to entry of any judgment or enter into any settlement without the
consent of each indemnifying party (which consent will not be unreasonably
withheld).
(iv) Contribution. If the indemnification from the indemnifying party
provided for in this Section 4.3(j) is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party, will contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities and
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified party in connection with the actions
which resulted in such losses, claims, damages, liabilities and expenses, as
well as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party will be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above will be deemed to
include, subject to the limitations set forth in Section 4.3(j)(iii), any legal
and other fees and expenses reasonably incurred by such indemnified party in
connection with any investigation or proceeding. The parties hereto agree that
it would not be just and equitable if contribution pursuant to this Section
4.3(j)(iv) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this Section 4.3(j)(iv), no
underwriter will be required to contribute any amount in excess of the
underwriting discount or commission applicable to the Registrable Securities
underwritten by it. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was
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<PAGE> 22
not guilty of such fraudulent misrepresentation. Stockholder's obligation to
contribute is several in the proportion that the proceeds of the offering
received by Stockholder bears to the total proceeds of the offering, and not
joint. If indemnification is available under this Section 4.3(j)(iv), the
indemnifying parties will indemnify each indemnified party to the full extent
provided in Section 4.3(j)(i) or 4.3(j)(ii), as the case may be, without regard
to the relative fault of said indemnifying parties or indemnified party or any
other equitable consideration provided for in this Section 4.3(j)(iv).
(v) Certain Limitations. In no event will Stockholder be liable or
required to contribute any amount under this Section 4.3(j) or otherwise in
respect of any untrue or alleged untrue statement or omission or alleged
omission for amounts in excess of the amount by which the total price at which
the Registrable Securities of Stockholder were offered to the public exceeds
the amount of any damages which Stockholder has otherwise been required to pay
by reason of such untrue statement or omission.
(vi) Nonexclusivity. The provisions of this Section 4.3(j) will be
in addition to any liability which any indemnifying party may have to any
indemnified party and will survive the termination of this Agreement.
(k) Participation in Underwritten Offerings. Stockholder may not
participate in any underwritten offering pursuant to Section 4.3(c) hereunder
unless Stockholder (i) agrees to sell Stockholder's Registrable Securities on
the basis provided in any underwriting arrangements approved by Parent in its
reasonable discretion and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
4.4 Transfer of Shares. Prior to the Effective Time or, if earlier,
the termination of the Merger Agreement in accordance with its terms,
Stockholder will not directly or indirectly, through any affiliate or
associate, sell, assign, transfer, pledge or otherwise dispose of or acquire,
or enter into any put, call or other contract, option or other arrangement or
undertaking with respect to the direct or indirect acquisition or sale,
assignment or other disposition of any Parent Common Shares. For 90 calendar
days beginning on the date of the Effective Time, Stockholder will not directly
or indirectly, through any affiliate or associate, sell, assign, transfer,
pledge or otherwise dispose of (including make any distribution to its limited
partners) or acquire, or enter into any put, call or other contract, option or
other arrangement or undertaking with respect to the direct or indirect
acquisition or sale, assignment or other disposition of, any Parent Common
Shares.
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<PAGE> 23
5. General Provisions
5.1 Notices. Any notice required to be given hereunder will be
sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first class postage prepaid), addressed as
follows:
<TABLE>
<S> <C>
If to Parent or Merger Sub: If to Stockholder:
Federated Department Stores, Inc. Zell/Chilmark Fund, L.P.
7 W. Seventh Street Two North Riverside Plaza
Cincinnati, Ohio 45202 Suite 1500
Attention: Dennis J. Broderick Chicago, IL 60606
General Counsel Attention: David M. Schulte
Fax No.: 513/579-7354 Fax No.: (312) 984-0317
With copies to: With copies to:
Jones, Day, Reavis & Pogue Rosenberg & Liebentritt, P. C.
599 Lexington Avenue Two North Riverside Plaza
New York, New York 10022 Suite 1600
Attention: Robert A. Profusek, Esq. Chicago, Illinois 60606
Fax No.: 212/755-7306 Attention: Sheli Z. Rosenberg
Fax No.: (312) 454-0531
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or to such other address as any party shall specify by written notice so given,
and such notice will be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
5.2 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned or delegated by
either of the parties hereto (whether by operation of law or otherwise). This
Agreement will be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
will confer upon any person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
5.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements and understandings between the parties with respect
thereto.
5.4 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware without regard to its rules
of conflict of laws.
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<PAGE> 24
5.5 Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered will be
an original, but all such counterparts will together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than both, but together signed by both of the parties hereto.
5.6 Headings. Headings of the Articles and Sections of this Agreement
are for the convenience of the parties only, and will be given no substantive or
interpretive effect whatsoever.
5.7 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number will include the plural and vice
versa, and words denoting any gender will include all genders and words denoting
natural persons will include corporations and partnerships and vice versa.
5.8 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement will nevertheless
remain in full force and effect 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 determination that any term or other provisions
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
5.9 Termination. If Parent has not theretofore purchased the Option
Shares pursuant to the Option or not then given notice of its desire to
exercise the Option pursuant to Section 1.1(c), this Agreement will terminate
automatically immediately upon the earlier to occur of (a) the Outside Date and
(b) the termination of the Merger Agreement pursuant to Section 7.1, 7.2(a),
7.2(b), 7.3(c) or 7.4 thereof. In addition if Parent fails to exercise the
Option to purchase Parent Common Shares within 60 calendar days after giving
notice that it wishes to do so, this Agreement will terminate automatically.
5.10 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties will be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
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<PAGE> 25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FEDERATED DEPARTMENT STORES,
INC.
By:__________________________
Name:________________________
Title:_______________________
Zell/Chilmark Fund, L.P.
By: ZC Limited Partnership,
general partner
By: ZC Partnership,
general partner
By: CZ Inc., a partner
By:__________________________
David M. Schulte, President
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