Exhibit 4.5
REGISTRATION RIGHTS AGREEMENT
DATED AS OF FEBRUARY 26, 2004
AMONG
XX-XXX STORES, INC. (AN OHIO CORPORATION),
XX-XXX STORES SUPPLY CHAIN MANAGEMENT, INC. (AN OHIO CORPORATION),
TEAM XX-XXX, INC. (AN OHIO CORPORATION),
FCA OF OHIO, INC. (AN OHIO CORPORATION) AND
HOUSE OF FABRICS, INC. (A DELAWARE CORPORATION)
AND
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED,
WACHOVIA CAPITAL MARKETS, LLC
XX XXXXX SECURITIES CORPORATION
MCDONALD INVESTMENTS INC.
TABLE OF CONTENTS
PAGE
----
1. Definitions...................................................... 1
2. Registration Under the 1933 Act.................................. 5
2.1 Exchange Offer.......................................... 5
2.2 Shelf Registration...................................... 7
2.3 Expenses................................................ 8
2.4. Effectiveness........................................... 9
2.5 Interest................................................ 9
3. Registration Procedures.......................................... 10
4. Indemnification; Contribution.................................... 18
5. Miscellaneous.................................................... 21
5.1 Rule 144 and Rule 144A.................................. 21
5.2 No Inconsistent Agreements.............................. 21
5.3 Amendments and Waivers.................................. 22
5.4 Notices................................................. 22
5.5 Successor and Assigns................................... 22
5.6 Third Party Beneficiaries............................... 22
5.7. Specific Enforcement.................................... 23
5.8. Restriction on Resales.................................. 23
5.9 Counterparts............................................ 23
5.10 Headings................................................ 23
5.11 GOVERNING LAW........................................... 23
5.12 Severability............................................ 23
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made
and entered into this 26th day of February, 2004, among Xx-Xxx Stores, Inc., an
Ohio corporation (the "Company"), Xx-Xxx Stores Supply Chain Management, Inc.
(an Ohio corporation), Team Xx-Xxx, Inc. (an Ohio corporation), FCA of Ohio,
Inc. (an Ohio corporation) and House of Fabrics, Inc. (a Delaware corporation)
(collectively, the "Guarantors"), and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Wachovia Capital Markets, LLC, XX Xxxxx Securities Corporation and
McDonald Investments Inc. (collectively the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement,
dated February 19, 2004, among the Company, the Guarantors and the Initial
Purchasers (the "Purchase Agreement"), which provides for (i) the sale by the
Company to the Initial Purchasers of an aggregate of $100 million principal
amount of the Company's 7.50% Senior Subordinated Notes due 2012, Series A (the
"Securities") and (ii) the issue and sale by the Guarantors and the purchase by
the Initial Purchasers of the guarantees (the "Guarantees") of the Company's
obligations under the Securities. In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company and the Guarantors have 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.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"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 and the Guarantors, provided,
however, that such depositary must have an address in the Borough of
Manhattan, in the City of New York.
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"Exchange Offer" shall mean the exchange offer by the Company
and the Guarantors of Exchange Securities (and related Guarantees) for
Registrable 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, collectively, the 7.50%
Senior Subordinated Notes due 2012, Series B issued by the Company
under the Indenture and the related guarantees issued by the Guarantors
under the Indenture, containing terms identical to the Securities and
the Guarantees 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 and
Guarantees in exchange for Registrable Securities pursuant to the
Exchange Offer.
"Guarantors" shall have the meaning set forth in the preamble
and shall also include the Guarantors' successors.
"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 and the Guarantees, dated as of February 26, 2004, among the
Company, the Guarantors and National City Bank, as trustee, and 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.
"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, the
Guarantors and other obligors on the Securities or Guarantees or any
Affiliate (as defined
2
in the Indenture) of the Company or any Guarantor 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, Wachovia Capital Markets, LLC, XX
Xxxxx Securities Corporation and McDonald Investments Inc. and any
other broker-dealer which makes a market in the Securities and
Guarantees and exchanges Registrable 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, collectively, the
Securities, the Guarantees, and, if issued, the Private Exchange
Securities; provided, however, that Securities, Guarantees and, if
issued, the Private Exchange Securities, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such
Securities and Guarantees shall have been declared effective under the
1933 Act and such Securities and Guarantees shall have been disposed of
pursuant to such Registration Statement, (ii) such Securities and
Guarantees have been sold to the public pursuant to Rule 144 (or any
similar provision then in force, but not Rule 144A) under the 1933 Act,
(iii) such Securities and Guarantees shall have ceased to be
outstanding or (iv) the Exchange Offer is consummated (except in the
case of Securities and Guarantees purchased from the Company and the
Guarantors and continued to be held by the Initial Purchasers or other
Securities which may not be exchanged in the Exchange Offer).
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company and the
Guarantors with this Agreement, including without limitation: (i) all
SEC, stock exchange or National Association of Securities
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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 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 the Guarantors and of the independent public
accountants of the Company and the Guarantors, 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) the reasonable fees
and disbursements of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, special
counsel representing the Holders of Registrable Securities and (ix) any
fees and disbursements of the underwriters customarily required to be
paid by issuers or sellers of securities and the fees and expenses of
any special experts retained by the Company and the Guarantors in
connection with any Registration Statement, but excluding 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 and the Guarantors 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.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency or government body performing the functions currently
performed by the United States 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 and the Guarantors 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
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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 and the Guarantees under the Indenture.
2. Registration Under the 0000 Xxx.
2.1 Exchange Offer. The Company and the Guarantors shall,
for the benefit of the Holders, at the Company's cost, (A) prepare and, as soon
as practicable but not later than 90 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 best efforts to cause the Exchange Offer Registration Statement to
be declared effective under the 1933 Act within 180 days of the Closing Date,
(C) use its best efforts to keep the Exchange Offer Registration Statement
effective until the closing of the Exchange Offer and (D) use its best efforts
to cause the Exchange Offer to be consummated not later than 210 days following
the Closing Date. The Exchange Securities will be issued under the Indenture.
Upon the effectiveness of the Exchange Offer Registration Statement, the Company
and the Guarantors shall commence the Exchange Offer as promptly as practicable,
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 or any of the Guarantors
within the meaning of Rule 405 under the 1933 Act, (b) is not a broker-dealer
tendering Registrable Securities acquired directly from the Company or any of
the Guarantors for its own account, (c) acquired or will acquire the Exchange
Securities in the ordinary course of such Holder's business and (d) 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 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 and the
Guarantors shall:
(a) mail, as promptly as practicable after the
effectiveness of the Exchange Offer Registration Statement, 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 20 business 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;
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(d) permit Holders to withdraw tendered Registrable
Securities at any time prior to 11:59 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 and Guarantees 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 (which securities may not be
exchanged in the Exchange Offer), 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, guaranteed by the
Guarantors, that are identical (except that such securities shall bear
appropriate transfer restrictions) to the Exchange Securities (the "Private
Exchange Securities").
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. The
Indenture or such indenture shall provide that the Exchange Securities, the
Private Exchange Securities and the Securities (and related Guarantees) 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 (and
related Guarantees) 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,
and the Company and the Guarantors 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 and the Guarantors
shall:
(i) accept for exchange all Registrable
Securities validly 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;
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(ii) accept for exchange all Securities validly
tendered pursuant to the Private Exchange;
(iii) deliver to the Trustee for cancellation all
Registrable 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 Registrable
Securities so accepted for exchange in a principal amount
equal to the principal amount of the Registrable Securities of
such Holder so accepted for exchange.
Interest on each Exchange Security and Private Exchange
Security will accrue from the last date on which interest was paid on the
Registrable Securities surrendered in exchange therefor or, if no interest has
been paid on the Registrable Securities, from the date of original issuance of
the Registrable Securities. 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 valid tendering of Registrable Securities in accordance with the Exchange
Offer and the Private Exchange, (iii) that each Holder of Registrable Securities
exchanged in the Exchange Offer shall have represented that 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 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 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 and the Guarantors' judgment, would reasonably
be expected to impair the ability of the Company and the Guarantors to proceed
with the Exchange Offer or the Private Exchange. The Company and the Guarantors
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 or the Guarantors are 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 180 days following the Closing Date or the Exchange Offer is not
consummated within 210 days after the Closing Date, (iii) upon the request of
any of the Initial Purchasers or (iv) upon the request of any Holder that is not
permitted to participate in the Exchange Offer or does not receive fully
tradeable Exchange Securities pursuant to the Exchange Offer, then in case of
each of clauses (i) through (iv) the Company and the Guarantors shall, at their
cost:
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(a) As promptly as practicable, file with the
SEC, and thereafter shall use their best efforts to cause to
be declared effective as promptly as practicable but no later
than 210 days after Closing Date or 45 days after the
occurrence of any of the events listed above, whichever is
later, 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 their best 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 years from the date the Shelf
Registration Statement is declared effective by the SEC, 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; provided, further, that any such
extension pursuant to the preceding proviso shall extend no
more than 90 days.
(c) Notwithstanding any other provisions hereof,
use their best 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.
The Company and the Guarantors shall not permit any securities
other than Registrable Securities to be included in the Shelf Registration
Statement. The Company and the Guarantors further agree, 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 and the Guarantors shall pay
all Registration Expenses in connection with the registration pursuant to
Section 2.1 or 2.2. Each Holder shall
8
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) The Company and the Guarantors
will be deemed not to have used their best efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite period if the Company or
any Guarantor voluntarily takes any action that would, or omits to take any
commercially reasonable action which omission would, result in any such
Registration Statement not being declared or remaining effective or in the
Holders of Registrable Securities covered thereby not being able to exchange or
offer and sell such Registrable Securities during that period as and to the
extent contemplated hereby, unless such action is required by applicable law.
(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 and the Guarantees 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 90th calendar day following the Closing Date, (b) the Exchange Offer
Registration Statement has not been declared effective on or prior to the 180th
calendar day following Closing Date, (c) the Exchange Offer is not consummated
on or prior to the 210th calendar day following the Closing Date, or (d) a Shelf
Registration Statement required to be filed pursuant to Section 2.2 is not
declared effective on or prior to the later of 210 days after the original
issuance of the Registrable Securities or 45 days after the occurrence of the
applicable event listed in clauses (i) to (iv) of Section 2.2, whichever is
later, (each such event referred to in clauses (a) through (d) 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 (as so increased) 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 under this
Agreement exceed one percent (1%) per annum. Immediately following the cure of a
Registration Default the accrual of Additional Interest with respect to that
particular Registration Default will cease.
If the Shelf Registration Statement is unusable by the Holders
for any reason during the period it is required to be effective, and the
aggregate 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
9
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 under this Agreement 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.
Immediately upon the Shelf Registration Statement once again becoming usable,
the interest rate borne by the Securities will be reduced to the original
interest rate. 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. 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 and the
Guarantors with respect to Registration Statements pursuant to Sections 2.1 and
2.2 hereof, the Company and the Guarantors 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 and the Guarantors, (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 their best 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 required by this Agreement or by law; 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
10
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
affected 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 to the related registration statement in order
to facilitate the public sale or other disposition of the Registrable
Securities; and (iii) hereby consent to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of Registrable
Securities in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement thereto;
(d) use their best 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 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 and the Guarantors 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) notify promptly each Holder of Registrable Securities
under a Shelf Registration or any Participating Broker-Dealer who has notified
the Company and the Guarantors 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 notice 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) in the case of a Shelf Registration,
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 or any Guarantor contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to
11
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 or any Guarantor of any notification with respect to the
suspension of the qualification of 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 or any Guarantor 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" 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, whether
such positions or policies have been publicly disseminated by the staff of the
SEC or such positions or policies, in the judgment of Xxxxxxx Xxxxx on behalf of
the Participating Broker-Dealers and its counsel, represent the prevailing views
of the staff of the SEC, including a statement that any such broker-dealer who
receives Exchange Securities for Registrable 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 and the Guarantors 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 forming
part of the Exchange Offer Registration Statement or any amendment or supplement
thereto, 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 such Prospectus or any amendment
or supplement thereto, 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 similar provision
requested by Xxxxxxx Xxxxx on behalf of the Participating Broker-Dealers):
"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 must 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
12
(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 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 best 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 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, including financial statements and schedules
(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 certificates representing Registrable Securities to
be sold and not bearing any restrictive legends; and 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 their best 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 and the Guarantors agree promptly to notify each Holder of
such determination and to furnish each Holder 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
13
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 and the Guarantors 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 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 best 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, enter into
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 whether or not an underwriting
agreement is entered into and whether or not the registration is an underwritten
registration:
(i) 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 underwriters in similar
underwritten offerings as may be reasonably requested by them;
(ii) obtain opinions of counsel to the Company
and the Guarantors and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the
holders of a majority in principal amount of the Registrable
Securities being sold) addressed to each selling Holder and
the underwriters, if any, covering the matters customarily
covered in opinions 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 and the Guarantors' 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
14
statements are, or are required to be, included in the
Registration Statement) addressed to the underwriters, if any,
and use reasonable efforts to have such letter addressed to
the selling Holders of Registrable Securities (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) enter into a securities sales agreement with
the Holders and an agent of the Holders providing for, among
other things, the appointment of such agent for the selling
Holders for the purpose of soliciting purchases of Registrable
Securities, which agreement shall be in form, substance and
scope customary for similar offerings;
(v) 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
(vi) 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 effectiveness of such Registration Statement
(and each post-effective amendment thereto) and (ii) each closing under any
underwriting or similar agreement as and to the extent required thereunder;
(p) in the case of a Shelf Registration 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 and the Guarantors reasonably requested by any such persons, and
cause the respective officers, directors, employees, and any other agents of the
Company and the Guarantors 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 and
the Guarantors available for discussion of such documents as shall be reasonably
requested by the Initial Purchasers;
(q) (i) in the case of an Exchange Offer Registration
Statement, a reasonable time prior to the filing of any Exchange Offer
Registration Statement, any Prospectus forming a
15
part thereof, any amendment to an Exchange Offer Registration Statement or
amendment or supplement to such Prospectus, provide copies of such document to
the Initial Purchasers and to counsel to the Holders of Registrable Securities
and make such changes in any such document prior to the filing thereof as the
Initial Purchasers or counsel to the Holders of Registrable Securities may
reasonably and timely request and, except as otherwise required by applicable
law, not file any such document in a form to which the Initial Purchasers on
behalf of the Holders of Registrable Securities and counsel to the Holders of
Registrable Securities shall not have previously been advised and furnished a
copy of or to which the Initial Purchasers on behalf of the Holders of
Registrable Securities or counsel to the Holders of Registrable Securities shall
reasonably and timely object, and make the representatives of the Company and
the Guarantors available for discussion of such documents as shall be reasonably
and timely requested by the Initial Purchasers; and
(ii) 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
the Holders of Registrable Securities, to the Initial Purchasers, 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 Initial Purchasers, the counsel to the Holders or
the underwriter or underwriters reasonably and timely request and not file any
such document in a form to which the Majority Holders, the Initial Purchasers on
behalf of the Holders of Registrable Securities, 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
on behalf of the Holders of Registrable Securities, counsel to the Holders of
Registrable Securities or any underwriter shall reasonably and timely object,
and make the representatives of the Company and the Guarantors available for
discussion of such document as shall be reasonably and timely requested by the
Holders of Registrable Securities, the Initial Purchasers on behalf of such
Holders, counsel for the Holders of Registrable Securities or any underwriter.
(r) in the case of a Shelf Registration, use its best
efforts to cause all Registrable Securities to be listed on any securities
exchange on which similar debt securities issued by the Company or any Guarantor
are then listed if requested by the Majority Holders, or 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 best
efforts to cause the Registrable Securities to be rated by the appropriate
rating agencies, if so requested by the Majority Holders, or 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;
16
(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 underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD); and
(v) upon consummation of an Exchange Offer or a Private
Exchange, obtain a customary opinion of counsel to the Company and the
Guarantors addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer or Private Exchange,
and which includes an opinion that (i) the Company, and the Guarantors, as the
case may be, have duly authorized, executed and delivered the Exchange
Securities and/or Private Exchange Securities, as applicable, and the related
indenture, and (ii) each of the Exchange Securities and related indenture
constitute a legal, valid and binding obligation of the Company and the
Guarantors, as the case may be, enforceable against the Company and the
Guarantors, as the case may be, in accordance with its respective terms (with
customary exceptions).
If following the date hereof there has been a change in SEC
policy with respect to exchange offers such as the Exchange Offer, such that in
the opinion of counsel to the Company or the Holders there is a substantial
question as to whether the Exchange Offer is permitted by applicable federal
law, the Company and the Guarantors hereby agree, if reasonable under the
circumstances, to seek a no-action letter or other favorable decision from the
SEC allowing the Company and the Guarantors to consummate an Exchange Offer for
the Notes. The Company and the Guarantors hereby agree to pursue the issuance of
such a decision to the SEC staff level. In connection with the foregoing, the
Company and the Guarantors hereby agree to take all such other actions as are
requested by the SEC or otherwise required in connection with the issuance of
such decision, including without limitation (A) participating in telephonic
conferences with the SEC, (B) delivering to the SEC staff an analysis prepared
by counsel to the Company and the Guarantors, setting forth the legal basis, if
any, upon which such counsel has concluded that such an Exchange Offer shall be
permitted and (C) diligently pursuing a resolution (which need not be favorable)
by the SEC staff of such submission.
In the case of a Shelf Registration Statement, the Company and
the Guarantors may (as a condition to such Holder's participation in the Shelf
Registration) require each Holder of Registrable Securities to furnish to the
Company and the Guarantors such information regarding the Holder and the
proposed distribution by such Holder of such Registrable Securities as the
Company and the Guarantors 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 and the Guarantors 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 and the
Guarantors, such Holder will deliver to the Company and the Guarantors (at their
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.
17
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 and the
Guarantors. 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.
4. Indemnification; Contribution.
(a) The Company and the Guarantors agree, jointly and
severally, to indemnify and hold harmless the Initial Purchasers, each Holder,
each Participating Broker-Dealer, each Person who participates 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;
(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
18
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;
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 or the
Guarantors by the Initial Purchaser, Holder, Participating Broker-Dealer or
Underwriter expressly for use in a Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto).
(b) Each Holder severally, but not jointly, agrees to
indemnify and hold harmless the Company, the Guarantors, 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, any
of the Guarantors, 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 or the Guarantors 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 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 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
19
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.
(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 and the Guarantors on
the one hand and the Holders and the Initial Purchasers on the other hand in
connection with 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 and the Guarantors 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
Guarantors, 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 Company, the Guarantors, 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 and Guarantees sold by it were
offered exceeds the amount of any damages which such
20
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
under this Section 4 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 or any Guarantor, and each Person, if any, who controls the Company or
any Guarantor 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 or such
Guarantor. The Initial Purchasers' respective obligations to contribute pursuant
to this Section 4 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 or
any Guarantor is subject to the reporting requirements of Section 13 or 15 of
the 1934 Act, the Company and each Guarantor covenants that they will file the
reports required to be filed by them 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 and the Guarantors cease to be so required to file
such reports, the Company and the Guarantors covenant that they 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 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 and the Guarantors will deliver to such
Holder a written statement as to whether they have complied with such
requirements.
5.2 No Inconsistent Agreements. The Company and each
Guarantor have not entered into and the Company and each Guarantor 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 and
each Guarantors' other issued and outstanding securities under any such
agreements.
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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 and the Guarantors have
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 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 and the Guarantors 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 or any Guarantor, initially at the
Company's or such Guarantor'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.
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 and the Guarantors, 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
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Holders hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder between the Company and the
Guarantors, 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 and the
Guarantors acknowledge that any failure by the Company and the Guarantors to
comply with their 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 and the Guarantors' 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 and the Guarantees, the
Company and the Guarantors will not, and will cause their "affiliates" (as such
term is defined in Rule 144(a)(1) under the 0000 Xxx) not to, resell any
Securities and Guarantees 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 and shall immediately upon any purchase of any such Securities and
Guarantees submit such Securities and Guarantees to the Trustee for
cancellation.
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 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.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
Very truly yours,
XX-XXX STORES
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By /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President, Finance
XX-XXX STORES SUPPLY CHAIN MANAGEMENT, INC.
TEAM XX-XXX, INC.
FCA OF OHIO, INC.
HOUSE OF FABRICS, INC.
By /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
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CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
WACHOVIA CAPITAL MARKETS, LLC
XX XXXXX SECURITIES CORPORATION
MCDONALD INVESTMENTS INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By /s/ Xxxxxxxxxxx X. Xxxxx
------------------------------
Authorized Signatory
Name: Xxxxxxxxxxx X. Xxxxx
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