Exhibit 4.4
-------------------------
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JULY 6, 2001
AMONG
MICHAELS STORES, INC.
AND
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED,
CREDIT SUISSE FIRST BOSTON CORPORATION,
DEUTSCHE BANC ALEX. XXXXX INC.,
FLEET SECURITIES, INC.
AND
XXXXX FARGO BROKERAGE SERVICES, LLC
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS......................................................... 1
2. REGISTRATION UNDER THE 1933 ACT..................................... 5
2.1. Exchange Offer............................................. 5
2.2. Shelf Registration......................................... 8
2.3. Expenses................................................... 10
2.4. Effectiveness.............................................. 10
2.5. Interest................................................... 10
3. REGISTRATION PROCEDURES............................................. 12
4. INDEMNIFICATION; CONTRIBUTION....................................... 19
5. MISCELLANEOUS....................................................... 24
5.1. Rule 144 and Rule 144A..................................... 24
5.2. No Inconsistent Agreements................................. 24
5.3. Amendments and Waivers..................................... 24
5.4. Notices.................................................... 24
5.5. Successor and Assigns...................................... 26
5.6. Third Party Beneficiaries.................................. 26
5.7. Specific Enforcement....................................... 26
5.8. Restriction on Resales..................................... 26
5.9. Counterparts............................................... 26
5.10. Headings................................................... 27
5.11. Governing Law.............................................. 27
5.12. Severability............................................... 27
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REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (the "Agreement") is made and
entered into this 6th day of July 2001, among Michaels Stores, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Credit Suisse First Boston Corporation, Deutsche Banc Alex. Xxxxx
Inc., Fleet Securities, Inc. and Xxxxx Fargo Brokerage Services, LLC
(collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement,
dated June 29, 2001, among the Company and the Initial Purchasers (the
"Purchase Agreement"), which provides for the sale by the Company to the
Initial Purchasers of an aggregate of $150.0 million principal amount of the
Company's 9 1/4% Senior Notes due 2009, (the "Securities"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended
from time to time.
"1934 Act" shall mean the Securities Exchange Act of l934, as
amended from time to time.
"Closing Date" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Company, PROVIDED, HOWEVER, that such
depositary must have an address in the Borough of Manhattan, in the City
of
New York.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Securities for Securities pursuant to Section 2.1 hereof.
"Exchange Offer Registration" shall mean a registration under
the 1933 Act effected pursuant to Section 2.1 hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form or on any successor form used for substantially the
same transactions), and all amendments and supplements to such
registration statement, including the Prospectus contained therein, all
exhibits thereto and all documents incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section
2.1 hereof.
"Exchange Securities" shall mean the 9 1/4% Senior Notes due
2009 issued by the Company under the Indenture containing terms
identical to the Securities in all material respects (except for
references to certain interest rate provisions, restrictions on
transfers and restrictive legends), to be offered to Holders of
Securities in exchange for Securities pursuant to the Exchange Offer.
"Holder" shall mean an Initial Purchaser, for so long as it owns
any Registrable Securities, and each of its successors, assigns and
direct and indirect transferees who become registered owners of
Registrable Securities under the Indenture and each Participating
Broker-Dealer that holds Exchange Securities for so long as such
Participating Broker-Dealer is required to deliver a prospectus meeting
the requirements of the 1933 Act in connection with any resale of such
Exchange Securities.
"Indenture" shall mean the Indenture relating to the Securities,
dated as of _____________ , 2001, between the Company and The Bank of
New York, as trustee, as the same may be amended, supplemented, waived
or otherwise modified from time to time in accordance with the terms
thereof.
"Initial Purchaser" or "Initial Purchasers" shall have the
meaning set forth in the preamble.
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"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indenture)
Registrable Securities; provided that whenever the consent or approval
of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company and other
obligors on the Securities or any Affiliate (as defined in the
Indenture) of the Company shall be disregarded in determining whether
such consent or approval was given by the Holders of such required
percentage amount.
"Participating Broker-Dealer" shall mean any of Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, Credit Suisse First Boston
Corporation, Deutsche Banc Alex. Xxxxx Inc., Fleet Securities, Inc.
Xxxxx Fargo Brokerage Services, LLC and any other broker-dealer which
makes a market in the Securities and exchanges Securities in the
Exchange Offer for Exchange Securities.
"Person" shall mean an individual, partnership (general or
limited), corporation, limited liability company, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section
2.1 hereof.
"Private Exchange Securities" shall have the meaning set forth
in Section 2.1 hereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus supplement,
including any such prospectus supplement with respect to the terms of
the offering of any portion of the Registrable Securities covered by a
Shelf Registration Statement, and by all other amendments and
supplements to a prospectus, including post-effective amendments, and in
each case including all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Registrable Securities" shall mean the Securities and, if
issued, the Private Exchange Securities; PROVIDED, HOWEVER, that
Securities and, if issued, the Private Exchange Securities, shall cease
to be Registrable Securities when (i) a Registration Statement with
respect to such Securities shall have been declared effective under the
1933 Act and such Securities shall have been disposed of pursuant to
such Registration Statement, (ii) such Securities have been sold or are
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permitted to be sold to the public pursuant to Rule l44 (or any similar
provision then in force, but not Rule 144A) under the 1933 Act, (iii)
such Securities shall have ceased to be outstanding or (iv) the Exchange
Offer is consummated, except in any such case with respect to Securities
as to which the Company is required to file a Shelf Registration.
"Registration Expenses" shall mean any and all expenses incident
to performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC, stock exchange or National
Association of Securities Dealers, Inc. (the "NASD") registration and
filing fees, including, if applicable, the fees and expenses of any
"qualified independent underwriter" (and its counsel) that is required
to be retained by any holder of Registrable Securities in accordance
with the rules and regulations of the NASD, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky
laws and compliance with the rules of the NASD (including reasonable
fees and disbursements not to exceed $5,000 of counsel for any
underwriters or Holders in connection with blue sky qualification of any
of the Exchange Securities or Registrable Securities and any filings
with the NASD), (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and
other documents relating to the performance of and compliance with this
Agreement, (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Securities on any securities
exchange or exchanges, (v) all rating agency fees, (vi) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance
and compliance, (vii) the fees and expenses of the Trustee, and any
escrow agent or custodian, (viii) in the case of a Shelf Registration
Statement, the reasonable fees and disbursements of one counsel
representing the Holders of Registrable Securities but excluding fees
and expenses of counsel to the underwriters (other than fees and
expenses set forth in clause (ii) above) or the Holders' underwriting
discounts and commissions and transfer taxes, if any, relating to the
sale or disposition of Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement
of the Company which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and
all amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
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"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant
to Section 2.2 hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2.2 of
this Agreement which covers all of the Registrable Securities or all of
the Private Exchange Securities on an appropriate form under Rule 415
under the 1933 Act, or any successor or similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including
the Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Securities
under the Indenture.
2. REGISTRATION UNDER THE 1933 ACT.
2.1. EXCHANGE OFFER. The Company shall, for the benefit
of the Holders, at the Company's cost, (A) prepare and, as soon as practicable
but not later than 75 days following the Closing Date, file with the SEC an
Exchange Offer Registration Statement on an appropriate form under the 1933 Act
with respect to a proposed Exchange Offer and the issuance and delivery to the
Holders, in exchange for the Registrable Securities (other than Private Exchange
Securities), of a like principal amount of Exchange Securities, (B) use its
commercially reasonable efforts to cause the Exchange Offer Registration
Statement to be declared effective under the 1933 Act within 135 days of the
Closing Date, (C) use its commercially reasonable efforts to keep the Exchange
Offer Registration Statement effective until the closing of the Exchange Offer
and (D) use its commercially reasonable efforts to cause the Exchange Offer to
be consummated not later than 165 days following the Closing Date. Upon the
effectiveness of the Exchange Offer Registration Statement, the Company shall
promptly commence the Exchange Offer, it being the objective of such Exchange
Offer to enable each Holder eligible and electing to exchange Registrable
Securities for Exchange Securities (assuming that such Holder (a) is not an
affiliate of the Company within the meaning of Rule 405 under the 1933 Act, (b)
is not a broker-dealer tendering Registrable Securities acquired directly from
the Company for its own account, (c) acquired or will acquire the Exchange
Securities in the ordinary course of such Holder's business and (d) is not
engaged in, and does not intend to engage in, and has no arrangements or
understandings with any Person to participate in the Exchange Offer for the
purpose of distributing the Exchange Securities) to transfer such Exchange
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Securities from and after their receipt without any limitations or restrictions
under the 1933 Act and under state securities or blue sky laws.
In connection with the Exchange Offer, the Company shall:
(a) mail as promptly as practicable to each Holder a
copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and
related documents;
(b) keep the Exchange Offer open for acceptance for
a period of not less than 30 calendar days after
the date notice thereof is mailed to the Holders
(or longer if required by applicable law) (such
period referred to herein as the "Exchange
Period");
(c) utilize the services of the Depositary for the
Exchange Offer;
(d) permit Holders to withdraw tendered Registrable
Securities at any time prior to 5:00 p.m.
(Eastern Time), on the last business day of the
Exchange Period, by sending to the institution
specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth
the name of such Holder, the principal amount of
Registrable Securities delivered for exchange,
and a statement that such Holder is withdrawing
such Holder's election to have such Securities
exchanged;
(e) notify each Holder that any Registrable
Security not tendered will remain outstanding
and continue to accrue interest, but will not
retain any rights under this Agreement (except
in the case of the Initial Purchasers and
Participating Broker-Dealers as provided
herein); and
(f) otherwise comply in all respects with all
applicable laws relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Company upon the request of
any Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to such Initial Purchaser
in exchange (the "Private Exchange") for the Securities held by such Initial
Purchaser, a like principal amount of debt securities of the Company on a
senior basis, that are identical (except that such securities shall bear
appropriate transfer restrictions) to the Exchange Securities (the "Private
Exchange Securities") but will not have been registered under the Exchange
Offer.
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The Exchange Securities and the Private Exchange Securities
shall be issued under (i) the Indenture or (ii) an indenture identical in all
material respects to the Indenture and which, in either case, has been qualified
under the Trust Indenture Act of 1939, as amended (the "TIA"), or is exempt from
such qualification and shall provide that the Exchange Securities shall not be
subject to the transfer restrictions set forth in the Indenture but that the
Private Exchange Securities shall be subject to such transfer restrictions and
shall not be subject to Section 2.5 hereof. The Indenture or such indenture
shall provide that the Exchange Securities, the Private Exchange Securities and
the Securities shall vote and consent together on all matters as one class and
that none of the Exchange Securities, the Private Exchange Securities or the
Securities will have the right to vote or consent as a separate class on any
matter. The Private Exchange Securities shall be of the same series as the
Exchange Securities and the Company shall use all commercially reasonable
efforts to have the Private Exchange Securities bear the same CUSIP number as
the Exchange Securities.
As soon as practicable after the close of the Exchange Offer
and/or the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all Securities duly tendered
and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration
Statement and the letter of transmittal which shall be an
exhibit thereto;
(ii) accept for exchange all Securities properly
tendered pursuant to the Private Exchange;
(iii) deliver to the Trustee for cancellation all
Securities so accepted for exchange; and
(iv) cause the Trustee promptly to authenticate and
deliver Exchange Securities or Private Exchange Securities, as
the case may be, to each Holder of Securities so accepted for
exchange in a principal amount equal to the principal amount of
the Securities of such Holder so accepted for exchange.
The Exchange Offer and the Private Exchange shall not be subject to any
conditions, other than (i) that the Exchange Offer or the Private Exchange, or
the making of any exchange by a Holder, does not violate applicable law or any
applicable interpretation of the staff of the SEC, (ii) the due tendering of
Registrable Securities in accordance with the Exchange Offer and the Private
Exchange, (iii) that each Holder of Securities exchanged in the Exchange Offer
shall have represented that it is not an affiliate of the
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Company or a broker-dealer tendering Securities acquired directly from the
Company for its account and all Exchange Securities to be received by it
shall be acquired in the ordinary course of its business and that at the time
of the consummation of the Exchange Offer it is not engaged in, and does not
intend to engage in and shall have no arrangement or understanding with any
person to participate in the distribution (within the meaning of the 0000
Xxx) of the Exchange Securities and shall have made such other
representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to render the use of Form S-4 or other
appropriate form under the 1933 Act available and (iv) that no action or
proceeding shall have been instituted or threatened in any court or by or
before any governmental agency with respect to the Exchange Offer or the
Private Exchange which, in the Company's judgment, would reasonably be
expected to impair the ability of the Company to proceed with the Exchange
Offer or the Private Exchange. The Company shall inform the Initial
Purchasers of the names and addresses of the Holders to whom the Exchange
Offer is made, and the Initial Purchasers shall have the right to contact
such Holders and otherwise facilitate the tender of Registrable Securities in
the Exchange Offer.
2.2. SHELF REGISTRATION. (i) If, because of any changes
in law, SEC rules or regulations or applicable interpretations thereof by the
staff of the SEC, the Company is not permitted to effect the Exchange Offer as
contemplated by Section 2.1 hereof, (ii) if for any other reason the Exchange
Offer Registration Statement is not declared effective within 135 days following
the original issue of the Securities or the Exchange Offer is not consummated
within 165 days after the original issue of the Securities, or (iii) if a Holder
is not permitted by applicable law to participate in the Exchange Offer or
elects to participate in the Exchange Offer but does not receive fully tradeable
Exchange Securities pursuant to the Exchange Offer, then in case of each of
clauses (i) through (iii) the Company shall, at its cost:
(a) As promptly as reasonably practicable, file with
the SEC, and thereafter shall use its commercially reasonable
efforts to cause to be declared effective as promptly as
practicable but no later than 165 days after the original issue
of the Securities or as promptly as practical thereafter, a Shelf
Registration Statement relating to the offer and sale of the
Registrable Securities by the Holders from time to time in
accordance with the methods of distribution elected by the
Majority Holders participating in the Shelf Registration and set
forth in such Shelf Registration Statement.
(b) Use its commercially reasonable efforts to
keep the Shelf Registration Statement continuously effective in
order to permit the Prospectus forming part thereof to be usable
by Holders for a period of two
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years from the date hereof or for such shorter period that will
terminate when all Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding or otherwise
to be Registrable Securities (the "Effectiveness Period");
PROVIDED, HOWEVER, that the Effectiveness Period in respect of
the Shelf Registration Statement shall be extended to the
extent required to permit dealers to comply with the
applicable prospectus delivery requirements under the 1933 Act
and as otherwise provided herein.
(c) Notwithstanding any other provisions hereof, use
its commercially reasonable efforts to ensure that (i) any
Shelf Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any supplement thereto
complies in all material respects with the 1933 Act and the
rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration
Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements, in light of the
circumstances under which they were made, not misleading;
provided, however, that the Company shall not be responsible
for any untrue statement of a material fact or omission to
state a material fact necessary in order to make the
statements in light of the circumstances under which they were
made, not misleading, if any such statement or omission was in
connection with or related to information provided by a Holder
in writing for use in such Shelf Registration Statement or
Prospectus, as the case may be.
In addition, in the event that the Initial Purchasers shall not
have resold all of the Securities initially purchased by them from the Company
pursuant to the Purchase Agreement prior to the consummation of the Exchange
Offer and the Initial Purchasers exchange those Securities for Private Exchange
Securities, the Company shall use its commercially reasonable efforts to file
under the Securities Act as soon as practicable after request therefor by the
Initial Purchasers a Shelf Registration Statement. The foregoing provisions will
apply to this Shelf Registration for the Initial Purchasers except that the
Company will use its commercially reasonable efforts to have the Shelf
Registration Statement declared effective as promptly as practicable (however,
in no event later than 30 days after filing if such registration statement is
not reviewed by the SEC or 90 days if such registration statement is reviewed by
the SEC) and to keep the
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Shelf Registration Statement continuously effective for one year from the
date hereof or for such shorter period that will terminate when those Private
Exchange Securities have been sold or cease to be outstanding or otherwise to
be Registrable Securities.
The Company shall not permit any securities other than
Registrable Securities to be included in the Shelf Registration Statement, other
than any additional Securities issued under the Indenture. The Company further
agrees, if necessary, to supplement or amend the Shelf Registration Statement,
as required by Section 3(b) below, and to furnish to the Holders of Registrable
Securities copies of any such supplement or amendment promptly after its being
used or filed with the SEC.
2.3. EXPENSES. The Company shall pay all Registration
Expenses in connection with the registration pursuant to Section 2.1 or 2.2.
Each Holder shall pay all underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
2.4. EFFECTIVENESS. (a) If, after the Company has filed
an Exchange Offer Registration Statement that satisfies the requirements of
Section 2.1 above, the Company is required to file a Shelf Registration
Statement solely because the Exchange Offer is not permitted because of any
change in law or applicable interpretations thereof by the staff of the SEC,
then the filing of the Exchange Offer Registration Statement shall be deemed to
satisfy the requirements of Section 2.2(b); provided that, in such event, the
Company shall remain obligated to meet the effectiveness deadline set forth in
Section 2.2(a) above.
(b) An Exchange Offer Registration Statement pursuant to Section
2.1 hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof
will not be deemed to have become effective unless it has been declared
effective by the SEC; PROVIDED, HOWEVER, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to an Exchange
Offer Registration Statement or a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement will be
deemed not to have become effective during the period of such interference,
until the offering of Registrable Securities pursuant to such Registration
Statement may legally resume.
2.5. INTEREST. The Indenture executed in connection with
the Securities will provide that in the event that either (a) the Exchange Offer
Registration Statement is not filed with the SEC on or prior to the 75th
calendar day following the date of original issue of the Securities, (b) the
Exchange Offer Registration Statement has not been declared effective on or
prior to the 135th calendar day following the date of original
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issue of the Securities or (c) the Exchange Offer is not consummated or a
Shelf Registration Statement is not declared effective, in either case, on or
prior to the 165th calendar day (or in the case of an unsold allotment held
by the Initial Purchasers, the time periods for effectiveness set forth in
the penultimate paragraph of Section 2.2) following the date of original
issue of the Securities (each such event referred to in clauses (a) through
(c) above, a "Registration Default"), the interest rate borne by the
Securities shall be increased ("Additional Interest") by one-quarter of one
percent per annum upon the occurrence of each Registration Default, which
rate will increase by one quarter of one percent each 90-day period that such
Additional Interest continues to accrue under any such circumstance, provided
that the maximum aggregate increase in the interest rate will in no event
exceed one percent (1%) per annum. Following the earlier of (a) the cure of
all Registration Defaults or (b) the Securities become fully tradeable
without registration under the 1933 Act, the accrual of Additional Interest
will cease and the interest rate will revert to the original rate.
If the Shelf Registration Statement is unusable by the Holders
for any reason, and the consecutive number of days in any consecutive
twelve-month period for which the Shelf Registration Statement shall not be
usable exceeds 30 days in the aggregate, then the interest rate borne by the
Securities will be increased by 0.25% per annum of the principal amount of the
Securities for the first 90-day period (or portion thereof) beginning on the
31st such date that such Shelf Registration Statement ceases to be usable, which
rate shall be increased by an additional 0.25% per annum of the principal amount
of the Securities at the beginning of each subsequent 90-day period, provided
that the maximum aggregate increase in the interest rate will in no event exceed
one percent (1%) per annum. Any amounts payable under this paragraph shall also
be deemed "Additional Interest" for purposes of this Agreement. Upon the earlier
of (a) the Shelf Registration Statement once again becoming usable, or (b) the
Securities become fully tradeable without registration under the 1933 Act, the
interest rate borne by the Securities will be reduced to the original interest
rate if the Company is otherwise in compliance with this Agreement at such time.
Additional Interest shall be computed based on the actual number of days elapsed
in each 90-day period in which the Shelf Registration Statement is unusable.
The Company shall notify the Trustee within three business days
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). Additional
Interest shall be paid by depositing with the Trustee, in trust, for the benefit
of the Holders of Registrable Securities, on or before the applicable semiannual
interest payment date, immediately available funds in sums sufficient to pay the
Additional Interest then due. The Additional Interest due shall be payable on
each interest payment date to the record Holder of Securities entitled to
receive the interest payment to be paid on such date as set forth in the
Indenture.
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Each obligation to pay Additional Interest shall be deemed to accrue from and
including the day following the applicable Event Date.
3. REGISTRATION PROCEDURES.
In connection with the obligations of the Company with respect
to Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the
Company shall:
(a) prepare and file with the SEC a Registration Statement,
within the relevant time period specified in Section 2, on the appropriate
form under the 1933 Act, which form (i) shall be selected by the Company, (ii)
shall, in the case of a Shelf Registration, be available for the sale of the
Registrable Securities by the selling Holders thereof, (iii) shall comply as
to form in all material respects with the requirements of the applicable form
and include or incorporate by reference all financial statements required by
the SEC to be filed therewith or incorporated by reference therein, and (iv)
shall comply in all respects with the requirements of Regulation S-T under the
1933 Act, and use its commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective in accordance
with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary
under applicable law to keep such Registration Statement effective for the
applicable period; and cause each Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the 1933 Act and
comply with the provisions of the 1933 Act, the 1934 Act and the rules and
regulations thereunder applicable to them with respect to the disposition of
all securities covered by each Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by
the selling Holders thereof (including sales by any Participating
Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities, at least five business days prior to filing,
that a Shelf Registration Statement with respect to the Registrable Securities
is being filed and advising such Holders that the distribution of Registrable
Securities will be made in accordance with the method selected by the Majority
Holders participating in the Shelf Registration; (ii) furnish to each Holder
of Registrable Securities and to each underwriter of an underwritten offering
of Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if the
Holder so requests, all exhibits in order to facilitate the public sale or
other disposition of the
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Registrable Securities; and (iii) hereby consent to the use of the Prospectus,
as amended or supplemented, in accordance with the terms and conditions of
this Agreement by each of the selling Holders of Registrable Securities in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus, as amended or supplemented;
(d) use its commercially reasonable efforts to register or
qualify the Registrable Securities under all applicable state securities or
"blue sky" laws of such jurisdictions as any Holder of Registrable Securities
covered by a Registration Statement and each underwriter of an underwritten
offering of Registrable Securities shall reasonably request in writing by the
time the applicable Registration Statement is declared effective by the SEC,
and do any and all other acts and things which may be reasonably necessary or
advisable to enable each such Holder and underwriter to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder; PROVIDED, HOWEVER, that the Company shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), or (ii) take any action which would subject it to general
service of process or taxation in any such jurisdiction where it is not then
so subject;
(e) in the case of a Shelf Registration Statement, notify
promptly each Holder of Registrable Securities or any Participating
Broker-Dealer who has notified the Company that it is utilizing the Exchange
Offer Registration Statement as provided in paragraph (f) below and, if
requested by such Holder or Participating Broker-Dealer, confirm such advice
in writing promptly (i) when a Registration Statement has become effective and
when any post-effective amendments and supplements thereto become effective,
(ii) of any request by the SEC or any state securities authority for
post-effective amendments and supplements to a Registration Statement and
Prospectus or for additional information after the Registration Statement has
become effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) if,
between the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to the offering
cease to be true and correct in all material respects, (v) of the happening of
any event or the discovery of any facts during the period a Shelf Registration
Statement is effective which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or which
requires the making of any changes in such Registration Statement or
Prospectus in order to make the statements therein not misleading, (vi) of the
receipt by the Company of any notification with respect to the suspension of
the qualification of
13
the Registrable Securities or the Exchange Securities, as the case may be, for
sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose and (vii) of any determination by the Company that a
post-effective amendment to such Registration Statement would be appropriate;
(f) in the case of the Exchange Offer Registration Statement
(i) include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution" or similarly titled Section, which section shall be
acceptable to Xxxxxxx Xxxxx on behalf of the Participating Broker-Dealers, and
which shall contain a summary statement of the positions taken or policies
made by the staff of the SEC with respect to the potential "underwriter"
status of any broker-dealer that holds Registrable Securities acquired for its
own account as a result of market-making activities or other trading
activities and that will be the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of Exchange Securities to be received by such
broker-dealer in the Exchange Offer, including a statement that any such
broker-dealer who receives Exchange Securities for Securities pursuant to the
Exchange Offer may be deemed a statutory underwriter and must deliver a
prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Securities, (ii) furnish to each Participating
Broker-Dealer who has delivered to the Company the notice referred to in
Section 3(e), without charge, as many copies of each Prospectus included in
the Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request, (iii) hereby consent to the use of the
Prospectus, as amended or supplemented, in accordance with the terms and
conditions of this Agreement by any Person subject to the prospectus delivery
requirements of the SEC, including all Participating Broker-Dealers, in
connection with the sale or transfer of the Exchange Securities covered by the
Prospectus, as amended or supplemented, and (iv) include in the transmittal
letter or similar documentation to be executed by an exchange offeree in order
to participate in the Exchange Offer (x) the following provision (or any other
provision requested by Xxxxxxx Xxxxx on behalf of the Participating
Broker-Dealers with respect to similar matters):
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of Exchange Securities received in
respect of such Registrable Securities pursuant to the Exchange
Offer;" and
(y) a statement to the effect that by a broker-dealer making the acknowledgment
described in clause (x) and by delivering a Prospectus in connection with the
exchange
14
of Registrable Securities, the broker-dealer will not be deemed to admit that
it is an underwriter within the meaning of the 1933 Act;
(g) (i) in the case of an Exchange Offer, furnish counsel
for the Initial Purchasers and (ii) in the case of a Shelf Registration,
furnish counsel for the Holders of Registrable Securities copies of any
comment letters received from the SEC or any other request by the SEC or any
state securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;
(h) make reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(i) in the case of a Shelf Registration, furnish upon
request to each Holder of Registrable Securities, and each underwriter, if
any, without charge, at least one conformed copy of each Registration
Statement and any post-effective amendment thereto (without documents
incorporated therein by reference and all exhibits thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely preparation
and delivery of a global certificate representing Registrable Securities to be
sold and not bearing any restrictive legend; and if consistent with market
practice enable such Registrable Securities to be in such denominations
(consistent with the provisions of the Indenture) and registered in such names
as the selling Holders or the underwriters, if any, may reasonably request at
least three business days prior to the closing of any sale of Registrable
Securities;
(k) in the case of a Shelf Registration, upon the occurrence
of any event or the discovery of any facts, each as contemplated by Sections
3(e)(v) and 3(e)(vi) hereof, as promptly as practicable after the occurrence
of such an event, use its commercially reasonable efforts to prepare a
supplement or post-effective amendment to the Registration Statement or the
related Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities or Participating Broker-Dealers, such Prospectus
will not contain at the time of such delivery any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading or will remain so qualified. At such time as such public
disclosure is otherwise made or the Company determines that such disclosure is
not necessary, in each case to correct any misstatement of a material fact or
to include any omitted material fact, the Company agrees promptly to notify
each Holder of such determination and to furnish each Holder
15
such number of copies of the Prospectus as amended or supplemented, as such
Holder may reasonably request;
(l) in the case of a Shelf Registration, a reasonable time
prior to the filing of any Registration Statement, any Prospectus, any
amendment to a Registration Statement or amendment or supplement to a
Prospectus or any document which is to be incorporated by reference into a
Registration Statement or a Prospectus after initial filing of a Registration
Statement, provide copies of such document to the Initial Purchasers on behalf
of such Holders; and make representatives of the Company as shall be
reasonably requested by the Holders of Registrable Securities, or the Initial
Purchasers on behalf of such Holders, available for discussion of such
document;
(m) obtain a CUSIP number for all Exchange Securities,
Private Exchange Securities or Registrable Securities, as the case may be, not
later than the effective date of a Registration Statement, and provide the
Trustee with printed certificates for the Exchange Securities, Private
Exchange Securities or the Registrable Securities, as the case may be, in a
form eligible for deposit with the Depositary;
(n) (i) cause the Indenture to be qualified under the Trust
Indenture Act of 1939 (the "TIA") in connection with the registration of the
Exchange Securities or Registrable Securities, as the case may be, (ii)
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and (iii) execute, and use its
commercially reasonable efforts to cause the Trustee to execute, all documents
as may be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so qualified
in a timely manner;
(o) in the case of a Shelf Registration Statement for an
underwritten offering, enter into customary agreements (including underwriting
agreements) and take all other customary and appropriate actions in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection:
(i) to the extent possible, make such representations and
warranties to the Holders of such Registrable Securities and
the underwriters, if any, in form, substance and scope as are
customarily made by issuers to such holders and underwriters, as
the case may be, in similar underwritten offerings as may be
reasonably requested by them;
(ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriters, addressed to each
16
selling Holder and the underwriters, if any, covering the
matters customarily covered in opinions to such holders and
underwriters, as the case may be, requested in sales of
securities or underwritten offerings and such other matters as
may be reasonably requested by such Holders and underwriters;
(iii) obtain "cold comfort" letters and updates thereof
from the Company's independent certified public accountants
(and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements are, or
are required to be, included in the Registration Statement)
addressed to the underwriters, (to the extent consistent with
Statement on Auditing Standards No. 72 of the American Institute
of Certified Public Accounts), such letters to be in customary
form and covering matters of the type customarily covered in
"cold comfort" letters to underwriters in connection with
similar underwritten offerings;
(iv) if an underwriting agreement is entered into, cause
the same to set forth indemnification provisions and procedures
substantially equivalent to the indemnification provisions and
procedures set forth in Section 4 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to
said Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of
transactions; and
(v) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
offerings to the Holders of a majority in principal amount of
the Registrable Securities being sold and the managing
underwriters, if any.
The above shall be done at (i) the pricing of any underwritten offering or (ii)
each closing under any underwriting or similar agreement as and to the extent
required thereunder;
(p) in the case of a Shelf Registration Statement for an
underwritten offering or if a Prospectus is required to be delivered by any
Participating Broker-Dealer in the case of an Exchange Offer, make available
for inspection by representatives of the Holders of the Registrable
Securities, any underwriters participating in any disposition pursuant to a
Shelf Registration Statement, any Participating Broker-Dealer and any counsel
or accountant retained by any of the foregoing, all financial and other
records, pertinent corporate documents and properties of the Company
reasonably requested by
17
any such persons, and cause the respective officers, directors, employees, and
any other agents of the Company to supply all information reasonably requested
by any such representative, underwriter, special counsel or accountant in
connection with a Registration Statement, and make such representatives of the
Company available for discussion of such documents as shall be reasonably
requested by the Holders or their representatives;
(q) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus forming a
part thereof, any amendment to such Shelf Registration Statement or amendment
or supplement to such Prospectus, provide copies of such document to counsel
for the Holders and to the underwriter or underwriters of an underwritten
offering of Registrable Securities, if any, make such changes in any such
document prior to the filing thereof as the counsel to the Holders or the
underwriter or underwriters reasonably request and not file any such document
in a form to which the Majority Holders, counsel for the Holders of
Registrable Securities or any underwriter shall not have previously been
advised and furnished a copy of or to which the Majority Holders, the Initial
Purchasers of behalf of the Holders of Registrable Securities, counsel to the
Holders of Registrable Securities or any underwriter shall reasonably object,
and make the representatives of the Company available for discussion of such
document as shall be reasonably requested by the Holders of Registrable
Securities, counsel for the Holders of Registrable Securities or any
underwriter.
(r) in the case of a Shelf Registration, use its
commercially reasonable efforts to cause all Registrable Securities to be
listed on any securities exchange on which similar debt securities issued by
the Company are then listed if requested by the underwriter or underwriters of
an underwritten offering of Registrable Securities, if any;
(s) in the case of a Shelf Registration, use its
commercially reasonable efforts to cause the Registrable Securities to be
rated by the appropriate rating agencies, if requested by the underwriter or
underwriters of an underwritten offering of Registrable Securities, if any;
(t) otherwise comply with all applicable rules and
regulations of the SEC and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering at least 12 months
which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule
158 thereunder; and
(u) cooperate and assist in any filings required to be made
with the NASD and, in the case of a Shelf Registration, in the performance of
any due diligence investigation by any underwriter and its counsel (including
any "qualified independent
18
underwriter" that is required to be retained in accordance with the rules and
regulations of the NASD).
In the case of a Shelf Registration Statement, the Company may
(as a condition to such Holder's participation in the Shelf Registration)
require each Holder of Registrable Securities to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder of
such Registrable Securities as the Company may from time to time reasonably
request in writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event or the discovery of any facts, each of the kind described in Section
3(e)(v) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(k) hereof, and, if so directed by the Company, such Holder will
deliver to the Company (at its expense) all copies in such Holder's possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice.
If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or managers that will manage such
offering will be selected by the Majority Holders of such Registrable Securities
included in such offering and shall be acceptable to the Company. No Holder of
Registrable Securities may participate in any underwritten registration
hereunder unless such Holder (a) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the 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. The Holders, as a group, will be permitted to effect two
underwritten offerings pursuant to this Agreement; provided that, the first such
underwritten offering must include at least $50.0 million of Registrable
Securities and the second such underwritten offering must include at least $25.0
million of Registrable Securities and the Company must provide reasonable notice
of such offerings to all Holders to enable them to participate in such
offerings.
4. INDEMNIFICATION; CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the
Initial Purchasers, each Holder, each Participating Broker-Dealer, each Person
who participates
19
as an underwriter (any such Person being an "Underwriter") and each Person, if
any, who controls any Holder or Underwriter within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto) pursuant
to which Exchange Securities or Registrable Securities were registered
under the 1933 Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading other than with respect to such untrue
statements or alleged untrue statements of a material fact or the
omission or alleged omission therefrom of a material fact necessary in
order to make such statements therein, in light of the circumstances
under which they were made not misleading, in the Registration Statement
or Prospectus, as the case may be, furnished in writing by any Initial
Purchaser, Holder of Participating Broker-Dealer to the Company in
writing, for use in such Registration Statement or Prospectus, as the
case may be;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 4(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any
indemnified party), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above;
20
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
of the Holders or Underwriters expressly for use in a Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and with respect to any Shelf Registration Statement, the indemnity
contained herein this Section 4(a) shall not inure to the benefit of any Initial
Purchaser, Holder or Participating Broker-Dealer from whom the person asserting
any such losses, claims, damages or liabilities purchased the Securities
concerned, to the extent that a Prospectus relating to such Securities was
required to be delivered by such Initial Purchaser, Holder or Participating
Broker-Dealer under the 1933 Act in connection with such purchase and any such
loss, claim, damage or liability of such Initial Purchaser, Holder or
Participating Broker-Dealer results solely from the fact that there was not sent
or given to such person, at or prior to the written confirmation of the sale of
such Securities to such person, a copy of the Prospectus which had been made
available on a timely basis to the Initial Purchaser, Holder or Participating
Broker-Dealer.
(b) Each Holder severally, but not jointly, agrees to
indemnify and hold harmless the Company, the Initial Purchasers, each
Underwriter and the other selling Holders, and each of their respective
directors and officers, and each Person, if any, who controls the Company, the
Initial Purchasers, any Underwriter or any other selling Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in Section 4(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Shelf Registration Statement (or any amendment thereto) or any Prospectus
included therein (or any amendment or supplement thereto) in reliance upon and
in conformity with written information with respect to such Holder furnished to
the Company by such Holder expressly for use in the Shelf Registration Statement
(or any amendment thereto) or such Prospectus (or any amendment or supplement
thereto); PROVIDED, HOWEVER, that no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Registrable Securities pursuant to such Shelf Registration
Statement.
(c) Each indemnified party shall give notice in writing
as promptly as reasonably practicable to each indemnifying party of any action
or proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure so to notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on
21
account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying party or parties be liable for the fees and expenses
of more than one counsel (in addition to any local counsel) separate from
their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether
or not the indemnified parties are actual or potential parties thereto),
unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 4(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement; provided,
that an indemnifying party shall not be liable for any such settlement effected
without its consent if such indemnifying party (1) reimburses such indemnified
party in accordance with such request to the extent it considers such request to
be reasonable and (2) provides written notice to the indemnified party
describing any unpaid balance it believes is unreasonable and the reasons
therefore, in each case prior to the date of such settlement.
(e) If the indemnification provided for in this Section
4 is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand, the
Initial Purchasers on a second hand and the Holders and Participating
Broker-Dealers on a third
22
hand in connection with 82 the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative fault of the Company on the one hand and the Holders and
the Initial Purchasers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Holders or the Initial Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders'
obligations to contribute pursuant to this Section 4 are several in proportion
to the aggregate principal amount at maturity of Registrable Securities of such
Holder that were registered pursuant to the Registration Statement.
The Company, the Holders and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 4. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
4 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 4, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities sold by it were offered exceeds the amount
of any damages which such Initial Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Company, and each Person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company. The Initial Purchasers'
23
respective obligations to contribute pursuant to this Section 7 are several
in proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A to the Purchase Agreement and not joint.
5. MISCELLANEOUS.
5.1. RULE 144 AND RULE 144A. For so long as the Company
is subject to the reporting requirements of Section 13 or 15 of the 1934 Act,
the Company covenants that it will file the reports required to be filed by it
under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. If the Company ceases to be so
required to file such reports, the Company covenants that it will upon the
request of any Holder of Registrable Securities (a) make publicly available such
information as is necessary to permit sales pursuant to Rule 144 under the 1933
Act, (b) deliver such information to a prospective purchaser as is necessary to
permit sales pursuant to Rule 144A under the 1933 Act and it will take such
further action as any Holder of Registrable Securities may reasonably request,
and (c) take such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the 1933 Act within
the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act,
as such Rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
5.2. NO INCONSISTENT AGREEMENTS. The Company has not entered
into and the Company will not after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not and
will not for the term of this Agreement in any way conflict with the rights
granted to the holders of the Company's other issued and outstanding
securities under any such agreements.
5.3. AMENDMENTS AND WAIVERS. 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 unless the Company has obtained the
written consent of Holders of at least a majority in aggregate principal
amount of the outstanding Registrable Securities affected by such amendment,
modification, supplement, waiver or departure.
5.4. NOTICES. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
registered first-class
24
mail, telex, telecopier, or any courier guaranteeing overnight delivery (a)
if to a Holder, at the most current address given by such Holder to the
Company by means of a notice given in accordance with the provisions of this
Section 5.4, which address initially is the address set forth in the Purchase
Agreement with respect to the Initial Purchasers; and (b) if to the Company,
initially at the Company's address set forth in the Purchase Agreement, and
thereafter at such other address of which notice is given in accordance with
the provisions of this Section 5.4.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; two business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the person giving the same to the Trustee
under the Indenture, at the address specified in such Indenture.
25
5.5. SUCCESSOR AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and transferees of
each of the parties, including, without limitation and without the need for
an express assignment, subsequent Holders; provided that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase
Agreement, and such person shall be entitled to receive the benefits hereof.
5.6. THIRD PARTY BENEFICIARIES. The Initial Purchasers (even
if the Initial Purchasers are not Holders of Registrable Securities) shall be
third party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and the Holders, on the other hand, and shall have
the right to enforce such agreements directly to the extent they deem such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder. Each Holder of Registrable Securities shall be a third
party beneficiary to the agreements made hereunder between the Company, on
the one hand, and the Initial Purchasers, on the other hand, and shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights hereunder.
5.7. SPECIFIC ENFORCEMENT. Without limiting the remedies
available to the Initial Purchasers and the Holders, the Company acknowledges
that any failure by the Company to comply with its obligations under Sections
2.1 through 2.4 hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
would not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the Company's
obligations under Sections 2.1 through 2.4 hereof.
5.8. RESTRICTION ON RESALES. Until the expiration of two
years after the original issuance of the Securities, the Company will not,
and will cause its "affiliates" (as such term is defined in Rule 144(a)(1)
under the 0000 Xxx) not to, resell any Securities which are "restricted
securities" (as such term is defined under Rule 144(a)(3) under the 0000 Xxx)
that have been reacquired by any of them.
5.9. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when
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so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
5.10. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
5.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.12. SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
MICHAELS STORES, INC.
By: /s/ Xxxxx X. XxXxxxxxx
-----------------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Executive Vice President-
Chief Financial Officer
Confirmed and accepted as
of the date first above
written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANC ALEX. XXXXX INC.
FLEET SECURITIES, INC.
XXXXX FARGO BROKERAGE SERVICES, LLC
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxx Xxxxx
---------------------------------------
Name: Xxxxx Xxxxx
Title: Director
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