Exhibit 10.22
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AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
DATED AS OF APRIL 12, 2002
BY AND AMONG
XXXXXX SERVICES CORPORATION
AND
EACH SECURITIES HOLDER REFERRED TO HEREIN
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TABLE OF CONTENTS
Page
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Section 1. Definitions.....................................................................................3
1.1. Defined Terms...................................................................................3
Section 2. Demand Registration Rights of Securities Holders................................................9
2.1. Demand Registration Rights......................................................................9
2.2. Determination...................................................................................9
2.3. Notices; Minimum Registerable Amounts..........................................................10
2.4. Discretion of Securities Holder................................................................11
2.5. Allocation Among Initiating Securities Holders.................................................12
2.6. Piggyback Rights of Securities Holders and the Company.........................................12
2.7. Limitation on Registration Rights..............................................................13
Section 3. Company Sale Events............................................................................13
3.1. Determination..................................................................................13
3.2. Notice Registerable............................................................................13
3.3. Piggyback Rights of Securities Holders.........................................................13
3.4. Discretion of the Company......................................................................14
Section 4. Black-Out Periods..............................................................................14
4.1. Black-Out Periods for Securities Holders.......................................................14
Section 5. Agreements Concerning Offerings................................................................15
5.1. Obligations of Securities Holders..............................................................15
5.2. Obligations of the Company.....................................................................15
5.3. Agreements Related to Offerings................................................................17
5.4. Certain Expenses...............................................................................19
5.5. Public Reporting; Rule 144.....................................................................19
5.6. Limitations on Subsequent Registration Rights..................................................20
5.7. Indemnification and Contribution...............................................................20
5.8. Underwritten Offerings.........................................................................26
5.9. Transfer of Rights Under this Agreement; Transfers of Registerable Common......................27
5.10. Termination of Rights..........................................................................27
Section 6. Sequencing of Public Sale Events...............................................................27
6.1. Effective Notice Period........................................................................27
6.2. Restrictive Legend on Certificates.............................................................28
Section 7. Representations and Warranties of the Company..................................................28
Section 8. Representations and Warranties of the Securities Holders.......................................32
Section 9. Delivery of Comfort Letter and Legal Opinion...................................................33
(i)
Section 10. Preemptive Rights..............................................................................34
Section 11. Miscellaneous..................................................................................35
11.1. Notices........................................................................................35
11.2. Amendments and Waivers.........................................................................35
11.3. Termination....................................................................................36
11.4. Survival of Representations and Warranties.....................................................36
11.5. Headings.......................................................................................36
11.6. Counterparts...................................................................................36
11.7. GOVERNING LAW..................................................................................36
11.8. Adjustment of Shares...........................................................................36
11.9. No Inconsistent Agreements.....................................................................36
11.10. Severability...................................................................................37
11.11. Nominee; Benefits..............................................................................37
11.12. ENTIRE AGREEMENT...............................................................................37
11.13. Listing of PIK Notes Common Stock..............................................................37
11.14. No Required Sale...............................................................................37
(ii)
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the
"Registration Rights Agreement"), dated as of April 12, 2002, by and among
XXXXXX SERVICES CORPORATION, a corporation organized under the laws of the State
of Delaware (the "Company"), and each SECURITIES HOLDER (as defined in
subsection 1.1).
W I T N E S S E T H:
WHEREAS, the Company entered into (i) a registration rights
agreement (the "PIK Notes Original Registration Rights Agreement"), dated as of
March 31, 2000, with certain holders of the PIK Notes (as herein defined), and
(ii) a registration rights agreement (the "Common Stock Original Registration
Rights Agreement"), dated March 31, 2000, with certain holders of the Company's
Common Stock, in each case pursuant to the First Amended Joint Plan of
Reorganization of Philips Services (Delaware), Inc. et al., dated as of
September 21, 1999 (the "Plan"); and
WHEREAS, the Company and the parties to the PIK Notes Original
Registration Rights Agreement and the Common Stock Original Registration Rights
Agreement wish to terminate such agreements, and amend and restate those
agreements as in their entirety as set forth herein, and to provide registration
rights with respect to the Company's securities to certain additional parties.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, the parties hereto hereby agree as follows:
Section 1. Definitions.
1.1. Defined Terms. (a) As used in this Agreement, the terms
defined in the caption and the recitals shall have the meanings set forth
therein, and the following terms shall have the following meanings:
"Affiliate" shall have the meaning ascribed thereto in Rule
12b-2 under the Exchange Act as in effect on the date hereof.
"Agreement" shall mean this Amended and Restated Registration
Rights Agreement, as amended, supplemented or otherwise modified from time to
time.
"Canadian Prospectus" shall mean a Preliminary Prospectus or
Prospectus, as applicable, in respect of which a receipt has been issued by the
Canadian Securities Authority in each of the provinces of Canada in which the
document has been filed.
"Canadian Securities Authorities" shall mean the securities
regulatory authorities in each of the provinces of Canada, and "Canadian
Securities Authority" shall mean any one of the Canadian Securities Authorities.
"Canadian Securities Laws" shall mean the securities
legislation of each of the provinces of Canada and the respective regulations
thereunder and the published rules, policy statements, blanket rulings, orders,
notices or national instruments applicable therein.
"Canadian Shelf Procedures" shall mean the procedures
contemplated by National Policy 47 of the Canadian Securities Administrators for
the distribution of securities of eligible issuers under the prompt offering
qualification system, as the same may be amended or superseded from time to
time.
"Cerberus Group" shall mean Xxxxxxxxx, L.L.C., Cerberus
Partners, L.P., Cerberus International, Ltd., their respective Transferee
Affiliates, if any, and any fund or account managed by the foregoing entities.
"Commission" shall mean the United States Securities and
Exchange Commission or any successor thereto.
"Common Stock" shall mean the common stock, par value $0.01
per share, of the Company.
"Company Private Sale Event" shall mean any sale of Common
Stock by the Company which sale is not effected pursuant to a Registration
Statement; excluding, however, any sale or related series of sales of Common
Stock by the Company (a) in connection with the acquisition by the Company of
another company or business or investment by the Company in any joint venture or
(b) pursuant to any "employee benefit plan" within the meaning of Rule 405 under
the Securities Act adopted by the Company or any other member of the Xxxxxx
Group.
"Company Public Sale Event" shall mean any sale by the Company
of Common Stock pursuant to (i) a Registration Statement filed by the Company
(other than a Registration Statement filed by the Company on Form S-4 or Form
S-8) or (ii) a Canadian Prospectus filed by the Company (other than in respect
of shares of Common Stock issued (a) in connection with an acquisition by the
Company of another company or business or an investment by the Company in a
joint venture or (b) pursuant to an "employee benefit plan" within the meaning
of Rule 405 under the Securities Act adopted by the Company or any other member
of the Xxxxxx Group.)
"Company Sale Notice" shall mean a Notice of Offering from the
Company to each Securities Holder stating that the Company proposes to effect a
Company Public Sale Event or a Company Private Sale Event, as the case may be.
"Currently-Held Common Stock" shall mean Common Stock held by
the Securities Holders originally party to this Agreement as of the date hereof.
"Demand Registration" shall mean any Registration and/or
Qualification of Registerable Common pursuant to a Registration Statement filed
by the Company in accordance with the provisions of subsection 2.2.
"Effective Notice Period" shall have the meaning assigned to
such term in subsection 6.1.
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"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any successor legislation thereto.
"Form S-3" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any successor form
thereto.
"Form S-4" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any successor form
thereto.
"Form S-8" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any successor form
thereto.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Group" shall mean each of the Icahn Group and the Cerberus
Group.
"Icahn Group" shall mean American Real Estate Holdings, L.P.,
High River Limited Partnership, Meadow Walk Limited Partnership, and their
respective Transferee Affiliates, if any.
"Initiating Securities Holders" shall have the meaning
assigned to such term in subsection 2.3(b).
"Material Adverse Change" shall mean, for purposes of
subsections 2.4(b) and (c), any material adverse change in, or the occurrence of
any event which would reasonably be expected to have a material adverse effect
on, the business, condition (financial or otherwise) or prospects of the Xxxxxx
Group taken as a whole (it being understood that a change in general political,
financial, banking or capital market conditions shall not be a "Material Adverse
Change" unless such change has, or would reasonably be expected to have, a
material adverse effect on the Xxxxxx Group as described above).
"Minimum Registerable Amount" shall mean, on any date of
determination thereof, (i) in the case of a Demand Registration other than a
Shelf Registration, twenty-five percent (25%) of the Registerable Common or (ii)
in the case of a Demand Registration that is a Shelf Registration, thirty-seven
and one-half percent (37.5%) of the Registerable Common; provided, that
notwithstanding the foregoing, subject to subsection 5.10, if (x) the Icahn
Group, or (y) the Cerberus Group, owns less than what would otherwise be the
Minimum Registerable Amount, the Minimum Registerable Amount with respect to the
Icahn Group or the Cerberus Group, as applicable, shall be fifty percent (50%)
of the aggregate number of shares of Registerable Common owned thereby.
"NASD" shall mean the National Association of Securities
Dealers, Inc. or any successor thereto.
"Notice of Offering" shall mean a written notice with respect
to (a) a proposed Sale Event pursuant to a Demand Registration, (b) a Company
Public Sale Event or (c) a
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Company Private Sale Event, in each case setting forth (i) the expected maximum
and minimum number of shares of Registerable Common or Common Stock proposed to
be offered and sold, (ii) the lead managing underwriter, if applicable and known
and (iii) the proposed method of distribution and the expected timing of the
offering, including whether the proposed offering will be registered in the
United States, qualified for distribution in Canada, or both.
"Person" shall mean any individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority, limited liability company or other entity of
whatever nature.
"Xxxxxx Group" shall mean the Company together with each
Subsidiary of the Company.
"Piggybacking Notice" shall have the meaning assigned to such
term in subsection 2.6(a).
"Piggybacking Securities Holder" shall have the meaning
assigned to such term in subsection 2.6(a).
"PIK Notes" shall mean the "PIK Notes" issued pursuant to the
Secured PIK/Term Credit Agreement.
"PIK Notes Common Stock" shall mean Common Stock issued or to
be issued upon conversion of interests in the PIK Notes, and any
reclassification thereof.
"Preliminary Prospectus" shall mean (i) each preliminary
prospectus included in a Registration Statement or in any amendment thereto
prior to the date on which such Registration Statement is declared effective
under the Securities Act, including any prospectus filed with the Commission
pursuant to Rule 424(a) under the Securities Act or (ii) each preliminary
prospectus, as the same may be amended prior to the issuance of the final
receipt by the applicable Canadian Securities Authority.
"Prospectus" shall mean each prospectus (i) included in a
Registration Statement at the time it becomes effective (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective Registration Statement in accordance
with Rule 430A), together with any supplement thereto, as filed with, or
transmitted for filing to the Commission pursuant to Rule 424(b) under the
Securities Act or (ii) for which a receipt is issued by the Canadian Securities
Authority in each province in which such document is filed pursuant to any
applicable Canadian Securities Laws (and including, without limitation, the
information that is permitted to have been omitted by National Policy Statement
No. 44 of the Canadian Securities Administrators for the pricing of securities
after the final prospectus is receipted, as the same may be amended or
superseded from time to time).
"Public Sale Event" shall mean a Securities Holder Public Sale
Event or a Company Public Sale Event, as the case may be.
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"Purchase Agreement" shall mean, in connection with any Sale
Event, any written agreement entered into by any Securities Holder providing for
the sale of Registerable Common and/or the Company providing for the sale of
Common Stock.
"Qualification" shall mean the qualification of securities
pursuant to a Canadian Prospectus, for which a final receipt has been issued by
the Securities Regulatory Authority in each province in which such document is
filed.
"Qualifying Common Stock" shall mean (i) Currently-Held Common
Stock, and (ii) Subscription Agreement Common Stock.
"Registerable Common" shall mean with respect to each
Securities Holder (a) Qualifying Common Stock, (b) the shares of PIK Notes
Common Stock issued or issuable upon the conversion of such Securities Holder's
interest in the PIK Notes held by the Securities Holders originally party to
this Agreement as of the date hereof, and (c) any other securities issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, such shares of Registerable Common; excluding
in all cases, however, any shares of Registerable Common from and after the
transfer thereof pursuant to a Registration Statement, a Canadian Prospectus or
Rule 144.
"Registration" shall mean a registration of securities
pursuant to the Securities Act.
"Registration Statement" shall mean (i) any registration
statement (including the Preliminary Prospectus, the Prospectus, any amendments
(including any post-effective amendments) thereto, any supplements and all
exhibits thereto and any documents incorporated therein by reference pursuant to
the rules and regulations of the Commission or any applicable Canadian
securities laws), filed by the Company in connection with any Public Sale Event
with the Commission or (ii) a Canadian Prospectus filed with any Canadian
Securities Authority any amendments or supplements thereto and any documents,
incorporated by reference therein pursuant to the rules of the applicable
Canadian Securities Authority, which in either case complies with all applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder and all applicable Canadian Securities Laws.
"Responsible Officer" shall mean with respect to any Person,
the president, chief executive officer, chief operating officer, chief financial
officer or treasurer of such Person.
"Rule 144", shall mean Rule 144 promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Rule 415" shall mean Rule 415 promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Rule 424" shall mean Rule 424 promulgated by the Commission
under the Securities Act, or any successor to such Rule.
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"Rule 430A" shall mean Rule 430A promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Sale Event" shall mean any sale by the Company of Common
Stock pursuant to a Company Private Sale Event or a Company Public Sale Event or
any sale by any Securities Holder of Registerable Common pursuant to any
Registration Statement.
"Secured PIK/Term Credit Agreement" shall mean the Secured
PIK/Term Credit Agreement, dated as of March 31, 2000, among the Company,
Canadian Imperial Bank of Commerce, as administrative agent, and the various
lenders from time to time party thereto.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor legislation thereto.
"Securities Holder" shall mean (i) with respect to each entity
set forth on the signature pages of this Agreement under the heading "SECURITIES
HOLDERS," each such entity together with any members of the respective of Group
of which such entity is a member who holds Registerable Common, and (ii) a
holder of Registerable Common to whom the rights and obligations conferred by
this Agreement have been transferred pursuant to subsection 5.9.
"Securities Holder Public Sale Event" shall mean any sale of
Registerable Common by a Securities Holder pursuant to a Demand Registration.
"Securities Holder Sale Notice" shall mean a Notice of
Offering to the Company from a Securities Holder requesting the Company to
effect a Demand Registration of Registerable Common and any other shares of
Common Stock held by such Securities Holder (to which such Securities Holder is
at the time entitled pursuant to subsection 2.1) and stating whether such
Securities Holder is requesting that such Demand Registration be a Shelf
Registration; provided that if more than one Notice of Offering is required to
aggregate the Minimum Registerable Amount, the term "Securities Holder Sale
Notice" shall refer collectively to all such Notices of Offering delivered by
Securities Holders to the Company in accordance with subsection 2.3(b).
"Shelf Registration" shall mean any Qualification or
Registration of Registerable Common and, if applicable, Common Stock, pursuant
to (i) a Registration Statement filed by the Company in accordance with the
provisions of subsection 2.2 and which provides for the offering of Registerable
Common to be made on a continuous basis pursuant to Rule 415 or (ii) a
Prospectus filed by the Company in accordance with the provisions of Section 2.2
and which provides for the Offering of Registerable Common to be made on a
continuous basis pursuant to national Policy Statement No. 44 of the Canadian
Securities Administrators.
"Subscription Agreement Common Stock" shall mean Common Stock
issued by the Company to the Securities Holders pursuant to the Subscription
Agreement, dated as of the date hereof, by and among, the Company and each of
the purchasers party thereto.
"Subsidiary" shall mean, as to any Person, a corporation,
partnership or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening
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of a contingency) to elect the majority of the board of directors or other
managers of such corporation, partnership or other entity are at that time owned
directly or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise qualified, all references to a "Subsidiary" or
"Subsidiaries" in this Agreement shall refer to a subsidiary or Subsidiaries of
the Company.
"Supplemental Addendum" shall mean a Supplemental Addendum,
substantially in the form of Exhibit A to this Agreement.
"Termination Date" shall mean, as to each Securities Holder,
the date on which counsel to the Company delivers an opinion in accordance with
subsection 5.10 to such Securities Holder.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section, subsection, schedule and exhibit references are to this Agreement.
Section 2. Demand Registration Rights of Securities Holders.
2.1. Demand Registration Rights. At any time prior to the
Termination Date, subject to subsections 2.3, 2.4(b) and (c) and 6.1, in case
the Company shall receive from a Securities Holder or Securities Holders a
Securities Holder Sale Notice, the Company shall be obligated to effect a Demand
Registration in response to each such request; provided that the Company shall
not be obligated to effect a Demand Registration after the Company has already
effected two (2) Demand Registrations if the Registration Statements filed
pursuant to each such Demand Registration have been declared effective, and
provided, further, that if the Company delivers a Piggybacking Notice after
receiving a Securities Holder Sale Notice and the Company is permitted to offer
and sell at least fifty percent (50%) of the shares of Common Stock that it
desired to include in such Securities Holder Public Sale Event as set forth in
its Piggybacking Notice, each Securities Holder who delivered such Securities
Holder Sale Notice shall not be deemed to have requested a Demand Registration
under this subsection 2.1 for purposes of calculating the limitations on Demand
Registrations set forth in this subsection 2.1.
2.2. Determination. Subject to the terms and conditions
hereof, if the Company shall at any time receive one or more Securities Holder
Sale Notices in accordance with subsection 2.3 representing, in the aggregate,
at least the Minimum Registerable Amount, then the Company shall (a) use its
best efforts to file a Registration Statement within forty-five (45) days, and
in any event, but subject to subsection 5.3(b), make such filing within sixty
(60) days (provided that such time periods shall begin on the date of the
Company's receipt of the Securities Holder Sale Notice which, together with any
earlier delivered Securities Holder Sale Notice, represents the applicable
Minimum Registerable Amount), which Registration Statement shall cover the
maximum number of shares of Registerable Common or other Common Stock set forth
in such Securities Holder Sale Notice, and, if applicable, such additional
shares of Registerable Common or Common Stock as permitted under subsection 2.6
and (b) use its best efforts to facilitate such Demand Registration as provided
herein. Notwithstanding the foregoing, the Company may delay the filing of (but
not its obligation to expeditiously prepare)
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any Registration Statement relating to a Demand Registration for a reasonable
period of time (not in excess of 90 days) if the Board of Directors of the
Company reasonably determines to delay such filing and, within ten (10) days of
such determination, the Company provides each Securities Holder that delivered a
Securities Holder Sale Notice with a certificate signed by the Chairman of the
Board of Directors of the Company or the Chief Executive Officer of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, the filing of such Registration Statement would adversely affect any
material business situation, transaction or negotiation then contemplated by the
Company or materially and adversely affect the Company. The Company shall
promptly give notice to each such Securities Holder of the end of any delay
period under this subsection. Subject to any extension under subsection 4.1(b),
the Company shall keep any Registration Statement effective for a period of (i)
in the case of a Demand Registration other than a Shelf Registration, until the
earlier of (x) the three (3) month anniversary of the date that the Registration
Statement with respect thereto is declared effective by the Commission or a
final receipt is issued by the applicable Canadian Securities Authority, as
applicable, and (y) the date on which all of the Registerable Common covered by
such Registration Statement has been sold and (ii) in the case of a Shelf
Registration, until the earlier of (x) two (2) years following the date the
Registration Statement with respect thereto is declared effective by the
Commission or a final receipt is issued by the applicable Canadian Securities
Authority, as applicable, and (y) the date on which all of the Registerable
Common covered by such Registration Statement has been sold or, in each case,
such shorter period if any such Registration is terminated in accordance with
the terms hereof prior to the end of the applicable period.
2.3. Notices; Minimum Registerable Amounts. (a) Subject to
subsection 2.1, any Securities Holder may send a Securities Holder Sale Notice
to the Company in respect of a Demand Registration. Simultaneously with the
delivery to the Company of a Securities Holder Sale Notice, the Securities
Holder so requesting a Demand Registration shall deliver to each other
Securities Holder a copy of such Securities Holder Sale Notice and such other
information as such requesting Securities Holder may deem appropriate.
(b) Notwithstanding subsection 2.3(a), no Securities Holder
Sale Notice delivered by a Securities Holder shall be effective to require the
Company to provide a Demand Registration, unless (i) the aggregate number of
shares of Registerable Common represented by such Securities Holder Sale Notice
equals or exceeds the Minimum Registerable Amount or (ii) within twenty (20)
days of the delivery to the Company of the first Securities Holder Sale Notice
in respect of an aggregate number of shares of Registerable Common that does not
equal or exceed the minimum Registerable Amount, one or more additional
Securities Holder Sale Notices are delivered by Securities Holders then entitled
to request a Demand Registration pursuant to subsection 2.1(a) such that the
aggregate number of shares of Registerable Common represented by all such
Securities Holder Sale Notices (including the Securities Holder Sale Notice
which commenced such twenty (20) day period) is at least equal to the Minimum
Registerable Amount. All Securities Holders delivering Securities Holder Sale
Notices in accordance with the immediately preceding sentence are hereinafter
referred to as the "Initiating Securities Holders." Subject to subsection 2.4,
the delivery of any Securities Holder Sale Notice pursuant to this subsection
2.3(b), shall be deemed a request by each Initiating Securities Holder under
subsection 2.1 for a Demand Registration, provided that if all Securities Holder
Sale Notices so delivered do not represent at least the Minimum Registerable
Amount, then all such
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Securities Holder Sale Notices shall be deemed null and void and shall not
constitute a request for Demand Registration under subsection 2.1 by any
Initiating Securities Holder.
(c) Any Securities Holder Sale Notice may be revised from time
to time prior to the earlier of (i) the execution of the Purchase Agreement, if
any, for such offering and (ii) the effectiveness of the Registration Statement
for, or date of final receipt for the Canadian Prospectus relating to, as
applicable, such offering.
2.4. Discretion of Securities Holder. (a) In connection with
any Securities Holder Public Sale Event, subject to the provisions of this
Agreement, the Securities Holder requesting a Demand Registration (if such
Public Sale Event was initiated by an individual Securities Holder) or the
Initiating Securities Holders owning a majority of the aggregate number of
shares of Registerable Common that all such Initiating Securities Holders are
seeking to include in such Public Sale Event (if such Public Sale Event was
initiated by Initiating Securities Holders), in its or their sole discretion, as
the case may be, shall determine whether (i) to proceed with, withdraw from or
terminate such proposed Securities Holder Public Sale Event, (ii) to enter into
one or more Purchase Agreements for such Securities Holder Public Sale Event and
(iii) to take such actions as may be necessary to close the sale of Registerable
Common contemplated by such offering, including, without limitation, waiving any
conditions to closing such sale which have not been fulfilled.
(b) Subject to subsection 2.4(c), in the event that the
Securities Holder or the Initiating Securities Holders, as the case may be,
determine(s) pursuant to subsection 2.4(a) not to proceed with a Demand
Registration of Registerable Common at any time before (i) the Registration
Statement with respect to such Demand Registration has been declared effective
by the Commission or (ii) a final receipt has been issued by the applicable
Canadian Securities Authority for the Canadian Prospectus, as applicable, and
such Securities Holder or Initiating Securities Holders, as the case may be,
reimburse(s) the Company for all reasonable fees, costs and expenses in
connection therewith, then all Securities Holder Sale Notices delivered in
respect of such Demand Registration shall be deemed null and void and shall not
constitute a request for Demand Registration under subsection 2.1 by any
Securities Holder or Initiating Securities Holders.
(c) If the Securities Holder or the Initiating Securities
Holders, as the case may be, determine(s) pursuant to subsection 2.4(a) not to
proceed with a Demand Registration (i) at any time at the request of the Company
or (ii) as a result of a Material Adverse Change at any time, then, in either
such case, such Securities Holder or Initiating Securities Holders, as the case
may be, will not be required to reimburse the Company for the fees, costs and
expenses in connection with such Demand Registration and all Securities Holder
Sale Notices delivered in respect of such Demand Registration shall be deemed
null and void and shall not constitute a request for Demand Registration under
subsection 2.1 by any Securities Holder or Initiating Securities Holders.
2.5. Allocation Among Initiating Securities Holders. In
connection with any Demand Registration requested by Initiating Securities
Holders in accordance with subsection 2.3, if the lead managing underwriter
selected by such Initiating Securities Holders in accordance with subsection 5.8
with respect to such offering (or, if the offering is not underwritten, if a
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financial advisor to such Initiating Securities Holders) determines that
marketing factors require a limitation on the number of shares of Registerable
Common to be offered and sold in such offering, there shall be included in the
offering only that number of shares of Registerable Common that such lead
managing underwriter or financial advisor, as the case may be, reasonably and in
good faith believes will not jeopardize the success of the offering, which
shares of Registerable Common shall be allocated among the Initiating Securities
Holders on a pro rata basis based on the number of shares of Registerable Common
each such Initiating Securities Holder seeks to include in such offering.
2.6. Piggyback Rights of Securities Holders and the Company.
(a) In connection with any Demand Registration that has been requested by a
Securities Holder or Initiating Securities Holders, as the case may be, in
accordance with subsections 2.1 and 2.3, any other Securities Holder then
holding Registerable Common (a "Piggybacking Securities Holder") and the Company
shall be entitled, subject to subsection 2.6(b), to participate on the same
terms and conditions as such Securities Holder in the Securities Holder Public
Sale Event relating thereto and offer and sell shares of Registerable Common or
shares of Common Stock, respectively, therein as provided in this subsection
2.6. Any party desiring to so participate shall give written notice (a
"Piggybacking Notice") to the Securities Holder requesting such Demand
Registration and, if such party is not the Company, to the Company no later than
fifteen (15) days following receipt of a Securities Holder Sale Notice, of the
aggregate number of shares of Registerable Common that such Piggybacking
Securities Holder or shares of Common Stock that the Company, as the case may
be, then desires to offer and sell in such Securities Holder Public Sale Event.
(b) The extent to which a Piggybacking Securities Holder or
the Company may participate in any Securities Holder Public Sale Event in
accordance with paragraph (a) of this subsection 2.6 shall be limited to that
number of shares of Registerable Common or shares of Common Stock that will not
require a reduction in the number of shares of Registerable Common of the
Initiating Securities Holders or the Securities Holder requesting such Demand
Registration to be included therein or change in a manner materially adverse to
such Initiating Securities Holders or Securities Holder, as the case may be, the
proposed method of the offering, including, without limitation, the economic
benefits to such Initiating Securities Holders or Securities Holder. If the lead
managing underwriter selected by the Initiating Securities Holders or the
Securities Holder initiating such Securities Holder Public Sale Event (or, if
the offering is not underwritten, a financial advisor to such Initiating
Securities Holders or Securities Holder) determines that marketing factors
require a limitation on the number of shares of Registerable Common or shares of
Common Stock to be offered and sold in such offering, there shall be included in
the Registration Statement with respect to such offering only that number of
shares of Registerable Common held by such Piggybacking Securities Holders or
shares of Common Stock to be sold by the Company, if any, that such lead
managing underwriter or financial advisor, as the case may be, reasonably and in
good faith believes will not jeopardize the success of the offering, which
shares shall be allocated first among the Piggybacking Securities Holders on a
pro rata basis based on the number of shares of Registerable Common each such
Securities Holder is seeking to include in such offering and second to the
Company.
2.7. Limitation on Registration Rights. Notwithstanding any
other provision of this Agreement, no Person shall have the right to cause the
Company to file a Canadian
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Prospectus unless such Person provides evidence reasonably satisfactory to the
Company that a proposed trade in securities by such Person would be a
"distribution" as such term is used under applicable Canadian Securities Laws or
would otherwise require the filing of a Canadian Prospectus with any one or more
of the Canadian Securities Authorities under applicable Canadian Securities Laws
and the issuance of a final receipt therefor from such authorities in order to
permit the proposed trade.
Section 3. Company Sale Events.
3.1. Determination. (a) Subject to subsection 6.1, the Company
may at any time effect a Company Public Sale Event pursuant to a Registration
Statement filed by the Company, provided that the Company gives each Securities
Holder a Company Sale Notice, no less than thirty (30) days prior to the filing
of the related Registration Statement.
(b) The Company may at any time effect a Company Private Sale
Event, provided that the Company gives each Securities Holder a Company Sale
Notice, so as to be received no less than fifteen (15) days prior to the
anticipated closing date of such Company Private Sale Event.
3.2. Notice Registerable. The Company Sale Notice shall
contain a statement that the Securities Holders are entitled to participate in
such offering and the number of shares of Registerable Common which represents
the best estimate of the lead managing underwriter (or, if not known or
applicable, the Company) that will be available for sale by the Securities
Holders in the proposed offering, if any.
3.3. Piggyback Rights of Securities Holders. (a) If the
Company shall have delivered a Company Sale Notice, Securities Holders shall be
entitled to participate on the same terms and conditions as the Company in the
Company Public Sale Event or the Company Private Sale Event, as the case may be,
to which such Company Sale Notice relates and to offer and sell shares of
Registerable Common therein only to the extent provided in this subsection 3.3.
Each Securities Holder desiring to participate in such offering shall notify the
Company in writing, by delivering a Piggybacking Notice no later than ten (10)
days following receipt of a Company Sale Notice, of the aggregate number of
shares of Registerable Common that such Securities Holder then desires to sell
in the offering.
(b) Each Securities Holder desiring to participate in a
Company Public Sale Event or a Company Private Sale Event may include shares of
Registerable Common in (i) any Registration Statement relating to a Company
Public Sale Event or (ii) in a Company Private Sale Event, in each case to the
extent that the inclusion of such shares shall not reduce the number of shares
of Common Stock to be offered and sold by the Company to be included therein or
change in a manner materially adverse to the Company the proposed method of the
offering, including, without limitation, the economic benefits to the Company.
If the lead managing underwriter selected by the Company for such offering (or,
if the offering is not underwritten, a financial advisor to the Company)
determines that marketing factors require a limitation on the number of shares
of Registerable Common to be offered and sold in such Company Public Sale Event
or Company Private Sale Event, as the case may be, there shall be included in
the offering only that number of shares of Registerable Common, if any, that
such
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lead managing underwriter or financial advisor, as the case may be, reasonably
and in good faith believes will not jeopardize the success of the offering,
which shares of Registerable Common shall be allocated among such Securities
Holders on a pro rata basis based on the number of shares of Registerable Common
each such Securities Holder is seeking to include in such Sale Event.
3.4. Discretion of the Company. In connection with any Company
Public Sale Event or Company Private Sale Event, subject to the provisions of
this Agreement, the Company, in its sole discretion, shall determine whether (a)
to proceed with, withdraw from or terminate such Company Public Sale Event or
Company Private Sale Event, as the case may be, (b) to enter into the Purchase
Agreement for such Company Public Sale Event or Company Private Sale Event, as
the case may be, and (c) to take such actions as may be necessary to close the
sale of Common Stock contemplated by such offering, including, without
limitation, waiving any conditions to closing such sale which have not been
fulfilled.
Section 4. Black-Out Periods.
4.1. Black-Out Periods for Securities Holders. (a) No
Securities Holder shall offer to sell or sell any shares of Registerable Common
pursuant to a Demand Registration, and the Company shall not be required to
supplement or amend any Registration Statement or otherwise facilitate the sale
of Registerable Common pursuant thereto, during the 90-day period immediately
following the receipt by each Securities Holder of a certificate of an
authorized officer of the Company to the effect that the Board of Directors of
the Company has in good faith and for valid business reasons requested that the
Securities Holders refrain from selling shares of Registerable Common; provided,
however, that the identity of a potential purchaser or purchasers of
Registerable Common from a Securities Holder shall not constitute a valid
business reason. Any period described in this subsection 4.1(a) during which
Securities Holders are not able to sell shares of Registerable Common pursuant
to a Demand Registration is herein referred to as a "black-out" period. The
Company shall notify each Securities Holder of the expiration or earlier
termination of any `black-out" period (the nature and pendency of which need not
be disclosed during such "black-out" period).
(a) The period during which the Company is required pursuant
to subsection 2.2 to keep any Demand Registration effective shall be extended by
a number of days equal to the number of days, if any, of any "black-out" period
applicable to Securities Holders pursuant to this subsection 4.1 occurring
during such period, plus a number of days equal to the number of days during
such period, if any, of any period during which the Securities Holders are
unable to sell any shares of Registerable Common pursuant to a Demand
Registration as a result of the happening of any event of the nature described
in subsection 5.3(c) (ii), 5.3(c) (iii) or 5.3(c)(v).
Section 5. Agreements Concerning Offerings.
5.1. Obligations of Securities Holders. (a) Each Securities
Holder shall, upon the reasonable request of the Company, advise the Company of
the number of shares of Registerable Common then held or beneficially owned by
it.
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(b) It shall be a condition precedent to the obligations of
the Company to effect a Registration of any shares of Registerable Common or to
include shares of Registerable Common in a Company Private Sale Event that each
Securities Holder desiring to participate in a Public Sale Event or a Company
Private Sale Event, as the case may be, shall have furnished to the Company such
information regarding itself, the Registerable Common held by it and the
intended method of disposition of such securities as shall be required by law,
the Commission or any applicable Canadian Securities Authority, to effect the
Registration or private sale of their Registerable Common and any other
information relating to such Registration or private sale reasonably requested
by the Company.
5.2. Obligations of the Company. Whenever required under this
Agreement to proceed with a Registration of any Registerable Common, the Company
shall, subject to the terms and conditions of this Agreement, as expeditiously
as reasonably possible:
(a) In accordance with subsection 2.2, prepare and file with
the Commission and/or the applicable Canadian Securities Authority, as
appropriate, a Registration Statement with respect to such Registerable Common
and use its best efforts to cause such Registration Statement to become
effective and/or a final receipt to be issued with respect to the Canadian
Prospectus.
(b) Prepare and file with the Commission and/or the applicable
Canadian Securities Authority, as appropriate, such amendments (including
post-effective amendments) to such Registration Statement, supplements to the
related Prospectus used in connection with such Registration Statement, and
otherwise use its best efforts, to the end that such Registration Statement
reflects the plan of distribution of the securities registered thereunder that
is included in the relevant Notice of Offering, if any, in respect of a Demand
Registration and, subject to subsection 2.2, is effective until the completion
of the distribution contemplated by such Registration Statement or so long
thereafter as a dealer is required by law to deliver a Prospectus in connection
with the offer and sale of the shares of Registerable Common covered by such
Registration Statement.
(c) Notify the Securities Holders selling Registerable Common,
at any time when a Prospectus relating thereto is required to be delivered under
the Securities Act, when the Company becomes aware of the occurrence of any
event, as a result of which the Prospectus included in such Registration
Statement (as then in effect) contains an untrue statement of material fact or
omits to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
(subject to subsection 4.1(a)) use its best efforts to prepare and file promptly
with the Commission and/or the applicable Canadian Securities Authority, as
appropriate, a supplement or amendment to such Prospectus so that, as thereafter
delivered to purchasers of such Registerable Common, such Prospectus will not
contain an 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.
(d) Provide to any Securities Holder requesting to include
Registerable Common in such Registration Statement and any managing underwriter
participating in any distribution thereof, and to any attorney, accountant or
other agent retained by such Securities
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Holder or managing underwriter, reasonable access to appropriate officers and
directors of the Company to ask questions and to obtain information reasonably
requested by any such Person in connection with such Registration Statement or
any amendment thereto, provided, however, that (i) in connection with any such
access or request, any such requesting Persons shall cooperate to the extent
reasonably practicable to minimize any disruption to the operation by the
Company of its business and (ii) any records, information or documents shall be
kept confidential by such requesting Persons, unless (x) such records,
information or documents are in the public domain or otherwise publicly
available other than through disclosure by such requesting party or (y)
disclosure of such records, information or documents is required by court or
administrative order or by applicable law (including, without limitation, the
Securities Act).
(e) Furnish to the participating Securities Holders, such
number of copies of a Prospectus, including a Preliminary Prospectus, in
conformity with the requirements of the Securities Act and/or applicable
Canadian Securities Laws, and such other documents as they may reasonably
request in order to facilitate the disposition of Registerable Common owned by
them.
(f) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such other securities or
"Blue Sky" laws of such jurisdictions in the United States as shall be
reasonably requested by the Securities Holders, provided that the Company shall
not be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any such
states or jurisdictions or to make any filing or take any other action which
could subject it to taxation as a result of such filing.
(g) Enter into and perform its obligations under a Purchase
Agreement, if the offering is an underwritten offering, in usual and customary
form, with the managing underwriter of such underwritten offering; provided,
however, that each Securities Holder participating in such Public Sale Event
shall also enter into and perform its obligations under such Purchase Agreement
so long as such obligations are usual and customary obligations of selling
stockholders in a registered public offering.
5.3. Agreements Related to Offerings. Subject to the terms and
conditions hereof, in connection with any Demand Registration:
(a) The Company will cooperate with any underwriters for, and
the Securities Holders of, the shares of Registerable Common proposed to be sold
pursuant to a Registration Statement, and will, unless the parties to the
Purchase Agreement otherwise agree, enter into a Purchase Agreement not
inconsistent with the terms and conditions of this Agreement and containing such
other terms and conditions of a type and form reasonable and customary for
companies of similar size and credit rating (including, but not limited to, such
provisions for delivery of a "comfort letter" and legal opinion as are
customary), and take all such other reasonable actions as are necessary or
advisable to permit, expedite and facilitate the disposition of such shares of
Registerable Common in the manner contemplated by such Registration Statement in
each case to the same extent as if all the shares of Registerable Common then
being offered were for the account of the Company.
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(b) Neither a Registration Statement nor any amendment or
supplement thereto will be filed by the Company until counsel for the Initiating
Securities Holder or the Securities Holder delivering the relevant effective
Securities Holder Sale Notice shall have had a reasonable opportunity to review
the same and each Securities Holder participating in such Sale Event shall have
had a reasonable opportunity to exercise its rights under subsection 5.2(d) with
respect thereto. No amendment to such Registration Statement naming any
Securities Holder as a selling security holder shall be filed with the
Commission and/or the applicable Canadian Securities Authority, as applicable,
until such Securities Holder shall have had a reasonable opportunity to review
such Registration Statement as originally filed. Neither such Registration
Statement nor any related Prospectus or any amendment or supplement thereto
shall be filed by the Company with the Commission and/or the applicable Canadian
Securities Authority, as applicable, which shall be disapproved (for reasonable
cause) by the managing underwriters named therein or any participating
Securities Holders within a reasonable period after notice thereof.
(c) The Company will use its reasonable efforts to keep the
Securities Holders informed of the Company's best estimate of the earliest date
on which such Registration Statement or any post-effective amendment thereto
will become effective and/or the Canadian Prospectus will be receipted and will
notify each Securities Holder and the managing underwriters participating in the
distribution pursuant to such Registration Statement promptly (i) when such
Registration Statement or any post-effective amendment to such Registration
Statement becomes effective and/or when a final receipt is issued in respect of
such Canadian Prospectus, (ii) of any request by the Commission and/or the
applicable Canadian Securities Authority, as applicable, for an amendment or any
supplement to such Registration Statement or any related Prospectus, (iii) of
the issuance by the Commission or any Canadian Securities Authority of any stop
order suspending the effectiveness of such Registration Statement or of any
order preventing or suspending the use of any related Prospectus or the
initiation or threat of any proceeding for that purpose, (iv) of the suspension
of the qualification of any shares of Common Stock included in such Registration
Statement for sale in any jurisdiction or the initiation or threat of a
proceeding for that purpose, (v) of any determination by the Company that an
event has occurred (the nature and pendency of which need not be disclosed
during a "black-out period" pursuant to subsection 4.1) which makes untrue any
statement of a material fact made in such Registration Statement or any related
Prospectus or which requires the making of a change in such Registration
Statement or any related Prospectus in order that the same will not contain any
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
otherwise comply with applicable securities laws and (vi) of the completion of
the distribution contemplated by such Registration Statement if it relates to a
Company Sale Event.
(d) In the event of the issuance of any stop order suspending
the effectiveness of such Registration Statement or of any order suspending or
preventing the use of any related Prospectus or suspending the qualification of
any shares of Common Stock included in such Registration Statement for sale in
any jurisdiction, the Company will use its reasonable best efforts promptly to
obtain its withdrawal.
(e) The Company agrees to otherwise use its best efforts to
comply with all applicable rules and regulations of the Commission and any
Canadian Securities Authorities, and
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make available to its security holders (within the meaning of Rule 158 under the
Securities Act), as soon as reasonably practicable, but not later than fifteen
months after the effective date of such Registration Statement, an earnings
statement covering the period of at least twelve months beginning with the first
full fiscal quarter after the effective date of such Registration Statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder.
(f) The Company shall, subject to permitted "black-out"
periods, upon the happening of any event of the nature described in subsection
5.3(c) (ii), 5.3(c) (iii) or 5.3(c)(v), as expeditiously as reasonably possible
prepare a supplement or post-effective amendment to the applicable Registration
Statement or a supplement to the related Prospectus, any document incorporated
therein by reference or file any other required documents and deliver a copy
thereof to each Securities Holder so that, as thereafter delivered to the
purchasers of the Registerable Common being sold thereunder, such Prospectus
will not 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, in light of the circumstances under which they were made, not
misleading and shall otherwise comply with all applicable securities laws.
(g) Upon receipt of any notice from the Company of the
happening of any event of the kind described in subsection 5.2(c), each
Securities Holder will immediately discontinue disposition of the Registerable
Common pursuant to the Registration Statement relating to such Registerable
Common until such Securities Holder's receipt of the copies of the supplemented
or amended Prospectus contemplated by subsection 5.2(c), or until such
Securities Holder has been advised in writing by the Company that the use of the
Prospectus may be resumed and has received copies of any additional or
supplemental filings which are incorporated by reference therein. If reasonably
requested by the Company, the Securities Holders will, or will request the
managing underwriter or underwrites, if any, to, deliver to the Company all
copies, other than permanent file copies, of the Prospectus covering the
Registerable Common current at the time of receipt of such notice.
(h) The Securities Holders acknowledge that audited
financial statements covering the Company's 2000 fiscal year do not currently
exist and that any Demand Registration requiring such audited financial
statements will be subject to the Company's ability to produce such audited
financial statements prior to the filing of the related Registration Statement.
5.4. Certain Expenses. Subject to subsection 2.4(b), the
Company shall pay all fees, disbursements and expenses in connection with the
performance of its obligations hereunder, including, without limitation, all
registration and filing fees, printing expenses, auditors' fees, listing fees,
registrar and transfer agents' fees, reasonable fees and disbursements of
counsel to the Securities Holders (provided that the Company need not pay for
more than one U.S. counsel and/or one Canadian counsel for such Securities
Holders) and counsel for the Company, expenses (including reasonable fees and
disbursements of counsel) of complying with applicable securities or "Blue Sky"
laws and the fees of the NASD or other governing body of any securities exchange
on which the Common Stock or PIK Notes Common Stock is listed in connection with
its review of any offering contemplated in such Registration Statement, but not
including underwriting fees, discounts and commissions.
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5.5. Public Reporting; Rule 144. (a) The Company agrees to:
(i) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act or
the Exchange Act;
(ii) file with any applicable Canadian Governmental
Authorities in a timely manner all documents required of the company by
such Governmental Authorities and of any securities exchange on which
the securities of the Company are listed or quoted under any applicable
Canadian securities laws; and
(iii) or furnish to any Securities Holder forthwith upon
request (A) a written statement by the Company that it has complied
with the current public information and reporting requirements of Rule
144 or any similar rule or regulation hereafter adopted by the
Commission and the Exchange Act, (B) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents
required to be filed by the Company pursuant to subsection 5.5(a)(i) or
5.5(a) (ii), and (C) such other information as is available to the
Company without unreasonable cost or expense and may be reasonably
requested in connection with availing any Securities Holder of any rule
or regulation of the Commission which permits the selling of any such
securities without Registration or pursuant to such rule or regulation.
(b) During any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act, the Company shall, upon the request of
any Securities Holder, make available to such Securities Holder and any
prospective purchaser of Registerable Common designated by such Securities
Holder the information required by Rule 144(c) in order to permit resales of the
Registerable Common held by such Securities Holder pursuant to Rule 144.
(c) Any Securities Holder selling shares of Registerable
Common shall promptly deliver to the Company a copy of any other documentation
required to be filed by such Securities Holder with any Governmental Authority
in connection with such sale, including, with respect to sales under Rule 144, a
copy of the completed Form 144 filed by such Securities Holder with the
Commission.
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5.6. Limitations on Subsequent Registration Rights. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of Securities Holders owning a majority of the Registerable
Common held by Securities Holders at such time, enter into any agreement which
would allow any holder or prospective holder of Registerable Common (a) to
include such securities in any Registration Statement filed under subsection 2.2
hereof to the exclusion of shares of Registerable Common that any Securities
Holder desires to include in any such offering or (b) to include such securities
in any Company Public Sale Event or Company Private Sale Event to the exclusion
of shares of Registerable Common that any Securities Holder desires to include
in any such offering.
5.7. Indemnification and Contribution. (a) In connection with
a Demand Registration, provisions substantially in conformity with the following
provisions shall be contained in the related Purchase Agreement unless the
parties to such Purchase Agreement agree otherwise:
(i) The Company shall agree to indemnify and hold harmless
each Securities Holder and each Person, if any, who controls such
Securities Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities, joint or several, or actions in respect thereof
to which such Securities Holder or controlling Person may become
subject under the Securities Act, or otherwise (collectively,
"Losses"), insofar as such Losses arise out of, or are based upon, any
untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, any related Preliminary
Prospectus or any related Prospectus, or any amendment or supplement
thereto, or arise out of, or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse such Securities Holder or controlling Person for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such Loss; provided, however, that the
Company shall not be so liable to the extent that any such Loss arises
out of, or is based upon, an untrue statement or alleged untrue
statement of a material fact or an omission or alleged omission to
state a material fact in said Registration Statement, said Preliminary
Prospectus, said Prospectus or any said amendment or supplement in
reliance upon, and in conformity with, written information furnished to
the Company by or on behalf of a Securities Holder specifically for use
therein. Notwithstanding the foregoing, the Company shall not be liable
in any such case to the extent that any such Loss arises out of, or is
based upon, an untrue statement or alleged untrue statement or omission
or alleged omission made in any Preliminary Prospectus if (A) such
Securities Holder failed to send or deliver a copy of the Prospectus
with or prior to the delivery of written confirmation of the sale of
Registerable Common to the Person asserting such Loss or who purchased
such Registerable Common which is the subject thereof if, in either
case, such delivery is required by the Securities Act and (B) the
Prospectus would have corrected such untrue statement or omission or
alleged untrue statement or alleged omission; and the Company shall not
be liable in any such case to the extent that any such Loss arises out
of, or is based upon, an untrue statement or alleged untrue statement
of a material fact or omission or alleged omission to state a material
fact in the Prospectus, if such untrue statement or alleged untrue
statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and if, having previously been furnished
by
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or on behalf of the Company with copies of the Prospectus as so amended
or supplemented, such Securities Holder thereafter fails to deliver
such Prospectus as so amended or supplemented, prior to or concurrently
with the sale of Registerable Common to the Person asserting such Loss
or who purchased such Registerable Common which is the subject thereof
if, in either case, such delivery is required by the Securities Act.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(ii) Each Securities Holder severally shall agree to indemnify
and hold harmless the Company, each of its officers and directors who
sign the Registration Statement, each other Securities Holder and each
Person, if any, who controls the Company or such other Securities
Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any Losses to which the Company,
such officers or directors, such other Securities Holder or such
controlling Person may become subject under the Securities Act, or
otherwise, insofar as such Losses arise out of, or are based upon, any
untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, any related Preliminary
Prospectus or any related Prospectus, or any amendment or supplement
thereto, or arise out of, or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse the Company, such officers or directors, such other
Securities Holder or such controlling Person for any legal or other
expenses reasonably incurred by them in connection with investigating
or defending any such Loss, in each case to the extent, but only to the
extent, that any such Loss arises out of, or is based upon, an untrue
statement or alleged untrue statement of a material fact or an omission
or alleged omission to state a material fact in said Registration
Statement, said Preliminary Prospectus or said Prospectus, or any said
amendment or supplement in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of such
Securities Holder specifically for use therein; provided, however, that
the liability of each Securities Holder on account of the foregoing
shall be limited to an amount equal to the net proceeds of the sale of
shares of Registerable Common by such Securities Holder in the offering
which gave rise to the liability.
(iii) The Company shall agree to indemnify and hold harmless
each underwriter and each Person, if any, who controls any such
underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any Losses to which such
underwriter or controlling Person may become subject under the
Securities Act, or otherwise, insofar as such Losses arise out of, or
are based upon, any untrue statement or alleged untrue statement of any
material fact contained in such Registration Statement, any related
Preliminary Prospectus or any related Prospectus, or any amendment or
supplement thereto, or arise out of, or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse such underwriter or controlling Person for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such Loss; provided, however, that the
Company shall not be so liable to the extent that any such Loss arises
out of, or is based upon, an untrue statement or alleged untrue
statement of a material fact or an omission or alleged omis-
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sion to state a material fact in said Registration Statement, said
Preliminary Prospectus or said Prospectus or any said amendment or
supplement in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of such
underwriter specifically for use therein. Notwithstanding the
foregoing, the Company shall not be liable in any such case to the
extent that any such Loss arises out of, or is based upon, an untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus if (A) such underwriter failed to
send or deliver a copy of the Prospectus with or prior to the delivery
of written confirmation of the sale of Registerable Common to the
Person asserting such Loss or who purchased such Registerable Common
which is the subject thereof if, in either case, such delivery is
required by the Securities Act and (B) the Prospectus would have
corrected such untrue statement or omission or alleged untrue statement
or alleged omission; and the Company shall not be liable in any such
case to the extent that any such Loss arises out of, or is based upon,
an untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in the
Prospectus, if such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in an amendment or supplement
to the Prospectus and if, having previously been furnished by or on
behalf of the Company with copies of the Prospectus as so amended or
supplemented, such underwriter thereafter negligently fails to deliver
such Prospectus as so amended or supplemented, prior to or concurrently
with the sale of Registerable Common to the Person asserting such Loss
or who purchased such Registerable Common which is the subject thereof
if, in either case, such delivery is required by the Securities Act.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have, provided that the Company shall only be
required to provide the indemnification described in this subsection
5.7(a) (iii) to an underwriter and each Person, if any, who controls
such underwriter if such underwriter agrees to indemnification
provisions substantially in the form set forth in subsection 5.7(b).
(iv) Each Securities Holder severally shall agree to indemnify
and hold harmless each underwriter and each Person, if any, who
controls such underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any Losses,
joint or several, or actions in respect thereof to which such
underwriter or such controlling Person may become subject under the
Securities Act, or otherwise, insofar as such Losses arise out of, or
are based upon, any untrue statement or alleged untrue statement of any
material fact contained in such Registration Statement, any related
Preliminary Prospectus or any related Prospectus or any amendment or
supplement thereto, or arise out of, or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse such underwriter or such controlling Person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss, in each case to the extent,
but only to the extent, that any such Loss arises out of, or is based
upon, an untrue statement or alleged untrue statement of a material
fact or an omission or alleged omission to state a material fact in
said Registration Statement, said Preliminary Prospectus or said
Prospectus or any said amendment or supplement in reliance upon, and in
conformity with, written information furnished to the Company by or on
behalf of such Securities Holder specifically for use therein; provided
that the liability of such Securities Holder on account of the
foregoing
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shall be limited to an amount equal to the net proceeds of the sale of
shares of Registerable Common by such Securities Holder in the offering
which gave rise to the liability. Notwithstanding the foregoing, such
Securities Holder shall not be liable in any such case to the extent
that any such Loss arises out of, or is based upon, an untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus if (A) such underwriter failed to send or
deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale of Registerable Common to the Person
asserting such Loss or who purchased such Registerable Common which is
the subject thereof if, in either case, such delivery is required by
the Securities Act and (B) the Prospectus would have corrected such
untrue statement or omission or alleged untrue statement or alleged
omission; and such Securities Holder shall not be liable in any such
case to the extent that any such Loss arises out of, or is based upon,
an untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in the
Prospectus, if such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in an amendment or supplement
to the Prospectus and if, having previously been furnished with copies
of the Prospectus as so amended or supplemented, such underwriter
thereafter negligently fails to deliver such Prospectus as so amended
or supplemented, prior to or concurrently with the sale of Registerable
Common to the Person asserting such Loss or who purchased such
Registerable Common which is the subject thereof if, in either case,
such delivery is required by the Securities Act. No Securities Holder
shall be required to provide the indemnification described in this
subsection 5.7(a) (iv) to an underwriter or any Person who controls
such underwriter if such underwriter has not agreed to indemnification
provisions substantially in the form set forth in subsection 5.7(b).
(v) Promptly after receipt by an indemnified party pursuant to
the indemnification provisions of such Purchase Agreement of notice of
any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to such indemnification provisions, notify
the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to the indemnified party otherwise than pursuant to the
indemnification provisions of such Purchase Agreement unless the
indemnifying party is materially prejudiced by such lack of notice. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate in defense of such claim, and,
to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, (x) the indemnifying party shall
not be liable to the indemnified party pursuant to the indemnification
provisions hereof or of such Purchase Agreement for any legal or other
expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation,
(y) the indemnifying party shall not be liable for the costs and
expenses of or Losses arising out of any settlement of such claim or
action unless such settlement was effected with the consent of the
indemnifying party and (z) the indemnified party shall be obligated to
cooperate with the indemnifying party in the investigation of such
claim or
-23-
action; provided, however, that the Securities Holders (together with
their respective controlling Persons) and the underwriters (together
with their respective controlling Persons) shall each as a separate
group have the right to employ one separate counsel to represent such
Securities Holders and such underwriters (and their respective
controlling Persons) who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by such Securities
Holders and underwriters against the Company pursuant to the
indemnification provisions of such Purchase Agreement if, in the
reasonable judgment of either Securities Holders' counsel or counsel
for the underwriters, there exists an actual or potential conflict of
interest between such Securities Holders (and its controlling persons)
on the one hand and such underwriters (and their controlling persons)
on the other, and in that event the reasonable fees and expenses of
both such separate counsel shall also be paid by the Company.
(b) As a condition to agreeing in any Purchase Agreement to
the indemnification provisions described in subsections 5.7(a) (iii) and 5.7(a)
(iv) in favor of an underwriter participating in the offering covered by the
related Registration Statement and its controlling Persons, the Company and the
Securities Holders participating in an offering pursuant to such Registration
Statement may require that such underwriter agree in the Purchase Agreement to
provisions substantially in the form set forth in subsection 5.7(a) (v) and to
severally indemnify and hold harmless the Company, each of its officers and
directors who sign such Registration Statement, each Securities Holder
participating in such offering and each Person, if any, who controls the Company
or such Securities Holder within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act against any Losses to which the Company, such
officers and directors, such Securities Holder or such controlling Person may
become subject under the Securities Act, or otherwise, insofar as such Losses
arise out of, or are based upon, any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement in which
such underwriter is named as an underwriter, any related Preliminary Prospectus
or any related Prospectus, or any amendment or supplement thereto, or arise out
of, or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and to reimburse the Company, such officers and
directors, such Securities Holder or such controlling Person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such Loss in each case to the extent, but only to the extent, that
any such Loss arises out of, or is based upon, an untrue statement or alleged
untrue statement of a material fact or an omission or alleged omission to state
a material fact in said Registration Statement, said Preliminary Prospectus or
said Prospectus or any said amendment or supplement in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
such underwriter specifically for use therein.
(c) In order to provide for just and equitable contribution
between the Company and such Securities Holders in circumstances in which the
indemnification provisions described in this subsection 5.7 and contained in any
Purchase Agreement are for any reason insufficient or inadequate to hold the
indemnified party harmless (other than as a result of their nonapplicability in
accordance with their terms), the Company and such Securities Holders shall
contribute to the aggregate Losses (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution actually received from
-24-
Persons other than the Company and such Securities Holders) incurred by the
Company and one or more of its directors or its officers who sign such
Registration Statement or such Securities Holders or any controlling Person of
any of them, in such proportion as is appropriate to reflect their relative
degrees of fault in connection with the actions which resulted in such Losses,
as well as any other relevant equitable considerations. The relative fault of
the Company and of such Securities Holder shall be determined by reference to,
among other things, whether the untrue or allegedly untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Securities Holder and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided, however, that the
liability of each such Securities Holder to make such contribution shall be
limited to an amount equal to the net proceeds of the sale of shares of
Registerable Common by such Securities Holder in the offering which gave rise to
the liability. As among themselves, such Securities Holders agree to contribute
to amounts payable by other such Securities Holders in such manner as shall, to
the extent permitted by law, give effect to the provisions in such Purchase
Agreement comparable to subsection 5.7(a) (ii). The Company and such Securities
Holders agree that it would not be just and equitable if their respective
obligations to contribute pursuant to this subsection 5.7(c) were to be
determined by pro rata allocation (other than as set forth above) of the
aggregate Losses by reference to the proceeds realized by such Securities
Holders in a sale pursuant to said Registration Statement or said Prospectus or
by any other method of allocation which does not take account of the
considerations set forth in this subsection 5.7(c). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution under this subsection from any
Person who was not guilty of such fraudulent misrepresentation.
(d) The Company and the Securities Holders participating in an
offering pursuant to a Registration Statement agree that, if the underwriters
participating in a Public Sale Event are agreeable, the Purchase Agreement, if
any, relating to such Registration Statement shall contain provisions to the
effect that in order to provide for just and equitable contribution between such
underwriters on the one hand and the Company and such Securities Holders on the
other hand in circumstances in which the indemnification provisions of such
Purchase Agreement are for any reason insufficient or inadequate to hold the
indemnified party harmless (other than as a result of their non-applicability in
accordance with their terms), the Company and such Securities Holders on the one
hand and such underwriters on the other hand will contribute on the basis herein
set forth to the aggregate Losses (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or claims asserted, but after deducting any
contribution actually received from Persons other than the Company and such
Securities Holders and such underwriters), incurred by the Company and one or
more of its directors or its officers who sign such Registration Statement or
such Securities Holders or such underwriters, or any controlling Person of any
of them, in such proportion as is appropriate to reflect their relative degrees
of fault in connection with the actions which resulted in such Losses, as well
as any other relevant equitable considerations. The relative fault of the
Company, of such Securities Holders and of such underwriter shall be determined
by reference to, among other things, whether the untrue or allegedly untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, by such Securities
Holders or by such underwriter and the parties, relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. Notwithstanding the provisions set forth
-25-
above, (x) no underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the shares of Common Stock and
PIK Notes Common Stock underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and (y) the liability of each such
Securities Holder to make such contribution shall be limited to an amount equal
to the net proceeds of the sale of shares of Registerable Common by such
Securities Holder in the offering which gave rise to the liability. As among
themselves, such Securities Holders agree to contribute to amounts payable by
other such Securities Holders in such manner as shall, to the extent permitted
by law, give effect to the provisions in such Purchase Agreement comparable to
subsection 5.7(a) (ii). As between the Company and such Securities Holders, such
parties agree that it would not be just and equitable if their respective
obligations to contribute pursuant to this subsection 5.7(d) were to be
determined by pro rata allocation (other than as set forth above) of the
aggregate Losses by reference to the proceeds realized by such Securities
Holders in a sale pursuant to said Registration Statement or said Prospectus or
by any other method of allocation which does not take account of the
considerations set forth in this subsection 5.7(d). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution under the provisions set forth
above from any Person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and the Securities Holders
participating in any distribution of shares of Registerable Common under the
provisions of this subsection 5.7 and provisions in any Purchase Agreement
substantially similar to subsection 5.7(a), 5.7(b), 5.7(c) or 5.7(d) shall
survive the termination of any or all of the other provisions of this Agreement
or such Purchase Agreement.
5.8. Underwritten Offerings. If at any time any of the
Securities Holders participating in a Demand Registration desire to sell
Registerable Common in an underwritten offering, the investment banker or
investment bankers that will manage the offering will be selected by (a) if such
Demand Registration was initiated by Initiating Securities Holders, the
Initiating Securities Holders owning a majority of the aggregate number of
shares of Registerable Common that all such Initiating Securities Holders are
seeking to include in the related Sale Event and (b) if such Demand Registration
was initiated by an individual Securities Holder, the Securities Holder
requesting such Securities Holder Public Sale Event, provided that in any event,
such investment banker or bankers must be reasonably satisfactory to the
Company.
5.9. Transfer of Rights Under this Agreement; Transfers of
Registerable Common. (a) At any time, the rights and obligations of a Securities
Holder under this Agreement may be transferred by a Securities Holder to a
transferee of Registerable Common, provided that, except in the case of a
transfer to a Group of which such Securities Holder is a member, within a
reasonable period of time after such transfer, (i) the transferring Securities
Holder shall have furnished the Company and the other Securities Holders written
notice of the name and address of such transferee and the Registerable Common
with respect to which such rights are being transferred and (ii) such transferee
shall furnish the Company and the Securities Holders (other than the
transferring Securities Holder) a copy of a duly executed Supplemental Addendum
by which such transferee (A) assumes all of the obligations and liabilities of
its transferor hereunder, (B) enjoys all of the rights of its transferor
hereunder and (C) agrees to be
-26-
bound hereby; provided, however, that except in the case of a transfer to a
Group of which such Securities Holder is a member, any such transfer shall not
be effective until the notice required by clause (i) above and the Supplemental
Addendum required by clause (ii) above have been so furnished. Notwithstanding
the foregoing, the rights and obligations of a Securities Holder hereunder may
only be transferred: (x) to an Affiliate of the Transferee (a "Transferee
Affiliate"), (y) to any other person or entity provided that such transfer is:
(i) in connection with a transfer of all of the Registerable Common owned by the
transferor, or (ii) in connection with shares representing at least ten percent
(10%) of the Registerable Common.
(a) Except with respect to transfers pursuant to subsection
5.9(a), a transferee of Registerable Common shall neither assume any liabilities
or obligations nor enjoy any rights hereunder and shall not be bound by any of
the terms hereof.
5.10. Termination of Rights. The rights granted under this
Agreement shall terminate as to each Securities Holder at such time as such
Securities Holder shall receive, either before or after the Company's receipt of
a Securities Holder Sale Notice or a Piggybacking Notice, an opinion of counsel
to the Company in form reasonably satisfactory to counsel to such Securities
Holder that all of the Registerable Common then held by such Securities Holder
can be sold under Rule 144 within a three (3) month period commencing on the
date of such opinion in a transaction or transactions exempt from the
Registration requirements of the Securities Act.
Section 6. Sequencing of Public Sale Events.
6.1. Effective Notice Period. Subject to the last sentence of
this subsection 6.1, during the term of this Agreement, no priority of right
shall exist between or among Securities Holders or between any Securities
Holder, on the one hand, and the Company, on the other, with respect to
providing a Notice of Offering with respect to, and effecting, a Public Sale
Event. Once properly given, a Securities Holder Sale Notice or a Company Sale
Notice regarding a Company Public Sale Event, as the case may be, shall be
effective (and shall preclude any such Notice of Offering by another party
except in accordance with clause (ii) of Section 2.3(b)) during the period (the
"Effective Notice Period") commencing on the date of such Notice of Offering and
ending on the earliest of (a) withdrawal of such Notice of Offering (notice of
which shall be promptly effected in the same manner as such Notice of Offering),
(b) the abandonment of the Public Sale Event to which such Notice of Offering
relates (notice of which shall be promptly effected in the same manner as such
Notice of Offering) and (c) the later of (i) one-hundred fifty (150) days after
such a Notice of Offering has been given, provided that the Registration
Statement relating to such Notice of Offering has been declared effective within
ninety (90) days of such Notice of Offering, and (ii) ninety (90) days after the
closing date of the Public Sale Event to which such Notice of Offering relates
(except in the case of a Shelf Registration, ninety (90) days after the
effectiveness of the Shelf Registration); provided that nothing in this
subsection 6.1 shall limit the Company's right to give a Notice of Offering with
respect to, and effect, a Company Private Sale Event. Upon the termination of an
Effective Notice Period, any Securities Holder so entitled pursuant to
subsection 2.1 or the Company can provide a Notice of Offering, provided that if
such Notice of Offering is given within twelve (12) months after the end of an
Effective Notice Period by the party that gave the immediately preceding Notice
of Offering, any other party shall, for the forty-five (45)-day period following
-27-
its receipt of such Notice of Offering, have the right to preempt such Notice of
Offering by itself delivering a Notice of Offering.
6.2. Restrictive Legend on Certificates. (a) Each Certificate
evidencing shares of Registerable Common distributed to the Securities Holders
shall, subject to paragraph (b) below, be stamped or otherwise imprinted with a
conspicuous legend in the following form:
"The securities evidenced by this certificate were issued
pursuant to an exemption from registration under the Securities Act of 1933, as
amended (the "Act"), and may be offered, sold or otherwise transferred only
pursuant to a Registration Statement effective under the Act or an exemption
from the provisions of Section 5 of the Act."
(a) A holder of a certificate evidencing shares of
Registerable Common bearing the legend specified in paragraph (a) shall be
entitled to receive from the Company, whether or not in connection with a sale
or proposed sale, a new certificate or certificates evidencing an identical
number of shares (the transfer expenses for which shall be paid by the Company)
but without such legend at such time as (i) such shares are sold pursuant to a
Registration Statement effective under the Securities Act, (ii) with respect to
PIK Notes Common Stock and Common Stock issued pursuant to the Plan, such holder
furnishes the Company with a certificate to the effect that such holder is not
an Affiliate or an "underwriter" within the meaning of Section 1145(b) of the
Bankruptcy Code and, upon the request of the Company, an opinion of counsel
reasonably satisfactory to the Company to such effect and to the effect that
such shares may be sold without registration under the Securities Act or (iii)
the registration rights granted in this Agreement otherwise terminate in
accordance with subsection 5.10. The shares of Registerable Common represented
by any such replacement certificate issued without the legend specified in
paragraph (a) pursuant to the immediately preceding sentence shall cease to be
Registerable Common for all purposes of this Agreement.
Section 7. Representations and Warranties of the Company. In
connection with the Registration Statement in respect of any Demand
Registration, the Company shall, on the date of effectiveness of such
Registration Statement or the date of the final receipt for the Canadian
Prospectus (the "effective date"), certify to each Securities Holder in a
certificate of a Responsible Officer of the Company to the effect that the
representations and warranties set forth below are true and correct at and as of
the effective date. In connection with any other Sale Event in which Securities
Holders participate, except as otherwise may be agreed upon by such
participating Securities Holders and the Company, the Company shall represent
and warrant in the Purchase Agreement relating to such Sale Event to the
Securities Holders and any underwriters participating in such Sale Event as
follows (except as otherwise indicated, each reference in this Section to "the
Registration Statement" shall refer to a Registration Statement in respect of
any Demand Registration or other such Sale Event in which Securities Holders
participate, including all information deemed to be a part thereof, as amended,
and each reference to "the Prospectus" shall refer to the related Prospectus):
(a) (i) When the Registration Statement became (in the case of
a Demand Registration to be filed pursuant to a Shelf Registration) or shall
become effective, the Registration Statement did or will comply as of its
effective date in all material respects with the applicable requirements of the
Securities Act and the rules and regulations thereunder; (ii) when the
-28-
Prospectus is filed in accordance with Rule 424(b) and/or in accordance with
applicable Canadian Securities Laws, the Prospectus (and any supplements
thereto) will comply in all material respects with the applicable requirements
of the Securities Act and/or applicable Canadian Securities Laws and the rules
and regulations thereunder; (iii) the Registration Statement did not or will not
as of its effective date contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and (iv) the Prospectus, if not
filed pursuant to Rule 424(b), did not or will not as of the date thereof, and
on the date of any filing pursuant to Rule 424 (b), the Prospectus (together
with any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and if filed pursuant to Canadian Securities Law will
constitute full, true and plain disclosure of all material facts relating to the
securities offered thereunder; provided, however, that the Company makes no
representations or warranties as to the information contained in or omitted from
the Registration Statement, or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Securities Holder specifically for use in
connection with the preparation of the Registration Statement or the Prospectus
(or any supplement thereto) or any information furnished in writing to the
Company by or on behalf of any underwriter specifically for use in connection
with the preparation of the Registration Statement or the Prospectus (or any
supplement thereto), other than that the Company has no knowledge of any such
untrue statement or omission in respect of such information.
(b) The public accountants who certified the Company's
financial statements in the Registration Statement are independent certified
public accountants within the meaning of the Securities Act and the applicable
published rules and regulations thereunder, or, to the extent that Canadian law
is deemed to control pursuant to the terms of the Securities Act, within the
meaning of such controlling Canadian law; the historical consolidated financial
statements, together with the related schedules and notes, forming part of the
Registration Statement and the Prospectus comply in all material respects with
the requirements of the Securities Act and/or applicable Canadian Securities
Laws and the rules and regulations thereunder and have been prepared, and
present fairly in all material respects the consolidated financial condition,
results of operations and changes in financial condition of the Company and its
consolidated Subsidiaries at the respective dates and for the respective periods
indicated, in accordance with generally accepted accounting principles applied
consistently throughout such periods (except as specified therein); and the
historical consolidated financial data set forth in the Prospectus are derived
from the accounting records of the Company and its consolidated Subsidiaries,
and are a fair presentation of the data purported to be shown; and the pro forma
consolidated financial statements (if any), together with the related notes,
forming part of the Registration Statement and the Prospectus, comply in all
material respects with the requirements of all applicable securities laws,
including, without limitation, Regulation S-X of the Securities Act, to the
extent applicable.
(c) Except as may be set forth in the Prospectus, each member
of the Xxxxxx Group has been duly organized and is validly existing as a
corporation, limited or general partnership, limited liability company or other
similar entity in good standing under the laws of the jurisdiction in which it
is organized, with the corporate or other analogous power and author-
-29-
ity to own its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign corporation or
other analogous entity and is in good standing under the laws of each
jurisdiction which requires such qualification where the failure to be so
qualified could materially adversely affect the business, operations, property
or financial condition of the Xxxxxx Group taken as a whole.
(d) Except as may be set forth in the Prospectus, all the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued and are fully paid and nonassessable by the issuer, and all
outstanding shares of capital stock of the Subsidiaries are owned by the Company
either directly or through Subsidiaries free and clear of any security
interests, claims, liens or encumbrances (other than those granted to secure the
obligations of the Xxxxxx Group in respect of the Secured PIK/Term Credit
Agreement or the Exit Facility or other secured debt as permitted therein),
except in each case where the failure to so own the capital stock of a
Subsidiary could materially adversely affect the business, operations, property
or financial condition of the Xxxxxx Group taken as a whole.
(e) Except as may be set forth in the Prospectus, no member of
the Xxxxxx Group is in violation of any term or provision of any charter,
by-law, franchise, license, permit, judgment, decree or order or any applicable
statute, rule or regulation, which violation could be material to the business,
operations, property or financial condition of the Xxxxxx Group taken as a
whole.
(f) Except as may be set forth in the Prospectus, no default
exists and no event has occurred which with notice, lapse of time, or both,
would constitute a default, in the due performance and observance of any term,
covenant or condition of any agreement to which the Company or any of the
Subsidiaries is a party or by which it or any of them is bound, which default
could materially adversely affect the business, operations, property or
financial condition of the Xxxxxx Group taken as a whole.
(g) Except as may be set forth in the Prospectus, each member
of the Xxxxxx Group has all requisite corporate or other analogous power and
authority and has received and is operating in compliance in all material
respects with all governmental or regulatory or other franchises, grants,
authorizations, approvals, licenses, permits, easements, consents, certificates
and orders, necessary to own its properties and conduct businesses as currently
owned and conducted and as proposed to be conducted, except where the failure to
do so could not materially adversely affect the business, operations, property
or financial condition of the Xxxxxx Group, taken as a whole.
(h) Except as may be described in the Prospectus, since the
date of the most recent financial statements included in the Prospectus, there
has been no material adverse change in the business, operations, property or
financial condition of the Xxxxxx Group taken as a whole, whether or not arising
from transactions in the ordinary course of business.
(i) Except as may be described in the Prospectus, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the best knowledge of the Company,
threatened against any member of the Xxxxxx Group or against any of their
respective properties or revenues, existing or future which, if adversely
determined, could
-30-
have a material adverse effect on the business, property or financial condition
of the Xxxxxx Group taken as a whole, or which otherwise is of a character
required to be disclosed in the Prospectus; there is no franchise, contract or
other document of a character required to be described in the Registration
Statement or the Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the descriptions of such franchises,
contracts and other documents described in the Prospectus fairly summarize the
matters purported to be described therein.
(j) Except as may be described in the Prospectus, there is no
pending or, to the best knowledge of the Company, threatened action, suit, or
judicial, arbitral, rule-making or other administrative or other proceeding
against the Company which challenges the validity of (i) this Agreement or (ii)
any Purchase Agreement entered into in connection with the offering or any
action taken or to be taken pursuant to or in connection with such agreements.
(k) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus; all of
the issued and outstanding shares of capital stock of the Company have been duly
authorized and validly issued and, except as set forth in the Prospectus, are
fully paid and nonassessable.
(l) The Company has all requisite corporate power and
authority, has taken all requisite corporate action, and has received and is in
compliance with all governmental, judicial and other authorizations, approvals
and orders, necessary in connection with the offering, and to carry out the
provisions and conditions of this Agreement and the Purchase Agreement, if any,
related thereto, except for such approvals and conditions that need to be
obtained or satisfied as are set forth in the Prospectus and such approvals or
authorizations as may be required under the Securities Act, the securities or
"Blue Sky" laws of any jurisdiction or the rules of any securities exchange on
which the securities of the Company are listed in connection with the purchase
and distribution of shares of Common Stock and PIK Notes Common Stock in the
offering. The Purchase Agreement, if any, entered into in connection with the
offering has been duly authorized, executed and delivered by the Company and is
a valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles; provided, that no representation is made as to the
validity, binding effect or enforceability of any provision that purports to
provide indemnification of any Person for any Losses resulting from violation by
such person of any applicable securities or "Blue Sky" laws.
(m) To the best knowledge of the Company, neither the sale of
the Common Stock and PIK Notes Common Stock to be sold pursuant to the
Registration Statement, nor the execution, delivery or performance by the
Company of the Purchase Agreement, if any, entered into in connection with the
offering or the consummation of any other of the transactions contemplated in
such Purchase Agreement, if any, will conflict with, result in a breach of, or
constitute a default under, the charter or by-laws of the Company or any of the
Subsidiaries or the terms of any material indenture or other material agreement
or instrument to which the Company or any of the Subsidiaries is a party or by
which it or any of them is bound, or any
-31-
material statute applicable to the Company or any of the Subsidiaries or any
material order, decree, rule or regulation applicable to the Company or any of
the Subsidiaries of any Governmental Authority.
(n) Except (i) as set forth in the Prospectus and (ii) to the
extent permitted under subsection 5.6, no holders of securities of the Company
have rights to the registration of such securities under any Registration
Statement except the Securities Holders.
For purposes of the foregoing representations and warranties,
the Company may assume that any agreement is the valid and binding obligation of
any other parties to such agreement.
Section 8. Representations and Warranties of the Securities Holders.
Each participating Securities Holder shall, in connection with a Sale Event, if
required by the terms of a Purchase Agreement relating to such Sale Event, for
itself severally and not jointly represent and warrant to (i) in the case of an
underwritten Public Sale Event, the Company, the underwriter or underwriters and
each other Securities Holder participating in such underwritten Public Sale
Event or (ii) in the case of a non-underwritten Sale Event, the Company and the
purchaser or purchasers and each other Securities Holder participating in such
non-underwritten Sale Event, as follows:
(a) Such Securities Holder has all requisite power and
authority to enter into and carry out the terms of this Agreement and such
Purchase Agreement and the other agreements and instruments related to such
agreements to which it is a party.
(b) Each of this Agreement and such Purchase Agreement has
been duly authorized, executed and delivered by or on behalf of such Securities
Holder, and constitutes the valid and binding obligation of such Securities
Holder enforceable against such Securities Holder in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles; provided, that
no representation is made as to the validity, binding effect or enforceability
of any provision purporting to provide indemnification of any person for any
Losses resulting from violation by such person of any applicable securities or
"Blue Sky" laws.
(c) Such Securities Holder, immediately prior to any sale of
shares of Registerable Common pursuant to such Purchase Agreement, will have
good and marketable title to such shares of Registerable Common, free and clear
of all liens, security interests, encumbrances, equities, claims or other
defects in title (other than those created by this Agreement); and, upon payment
therefor, good and marketable title to such shares of Registerable Common will
pass to the purchaser thereof, free and clear of any lien, security interest,
encumbrance, equity, claims or other defect in title.
(d) Such Securities Holder has not taken and will not take,
directly or indirectly, any action designed to constitute or which has
constituted or which might reasonably be expected to cause or result in, under
the Exchange Act or the rules or regulations promulgated
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thereunder or other applicable law, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of shares of
Registerable Common.
(e) Written information furnished by or on behalf of such
Securities Holder to the Company expressly for use in the Registration
Statement, any related Preliminary Prospectus, or any related Prospectus or any
amendment or supplement thereto will not contain, in each case as of the date
such information was furnished, any untrue statement of a material fact or omit
to state any material fact required to be stated or necessary to make the
statements in such information not misleading.
(f) To the best knowledge of such Securities Holder, neither
the sale of the Registerable Common to be sold pursuant to the Registration
Statement, nor the execution, delivery or performance by such Securities Holder
of the Purchase Agreement, if any, entered into in connection with the offering
or the consummation of any other of the transactions contemplated in such
Purchase Agreement, if any, will conflict with, result in a breach of, or
constitute a default under, the charter or by-laws of such Securities Holder or
the terms of any material indenture or other material agreement or instrument to
which such Securities Holder is a party or by which it is bound, or any material
statute applicable to such Securities Holder or any material order, decree, rule
or regulation applicable to such Securities Holder of any Governmental
Authority.
(g) Such Securities Holder will deliver to any underwriter a
properly completed and executed United States Treasury Department Form W-8 or
Form W-9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
Section 9. Delivery of Comfort Letter and Legal Opinion. On the date
that a Registration Statement relating to a Sale Event in which Securities
Holders participate is declared effective by the Commission or any Canadian
Securities Authority, the Company shall comply with the following:
(a) The Company shall have received, and delivered to each
Securities Holder participating in such Sale Event, a copy of the "comfort"
letter or letters, or updates thereof according to customary practice, of the
independent certified public accountants who have certified the Company's
financial statements included in the Registration Statement covering
substantially the same matters with respect to the Registration Statement
(including the Prospectus) and with respect to events subsequent to the date of
the Company's financial statements as are customarily covered in accountants'
letters delivered to underwriters in underwritten public offerings of
securities. The Company will use its reasonable best efforts to cause such
"comfort" letters to be addressed to such Securities Holders.
(b) Each Securities Holder and any underwriters participating
in such offering shall have received an opinion and any updates thereof of
outside counsel to the Company reasonably satisfactory to such Securities
Holders and underwriters covering substantially the same matters as are
customarily covered in opinions of issuer's counsel delivered to underwriters in
underwritten public offerings of securities, addressed to each of such
Securities Holders and underwriters participating in such offering and dated the
closing date thereof.
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Section 10. Preemptive Rights. (a) In case the Company proposes to
issue or sell any Common Stock or any rights, warrants, options, convertible
securities or indebtedness, exchangeable securities or indebtedness, or other
rights, exercisable for or convertible or exchangeable into, directly or
indirectly, any equity security of the Company, whether at the time of issuance,
upon the passage of time, or upon the occurrence of some future event (the
"Proposed Securities"), the Company shall, no later than thirty (30) calendar
days prior to the consummation of such transaction, notify the Securities
Holders in writing of such transaction (the "First Company Notice"). In
addition, the Company shall, no later than twenty (20) days prior to the
proposed sale or issuance, identify the proposed purchaser, and offer to sell to
each Securities Holder, at the same price and for the same consideration to be
paid by the proposed purchaser (including in the case of a Company Public Sale
Event, an estimate by the underwriter, if any, of the range of prices likely to
be paid in such public offering), a fraction of the Proposed Securities, the
numerator of which is the total number of shares of Registerable Common owned by
such Securities Holder, and the denominator of which is the total number of
outstanding shares of equity securities of the Company, assuming the exercise of
any outstanding PIK Notes and any other securities convertible into Common
Stock. In the event that any Securities Holder fails to fully exercise its
preemptive rights hereunder within fifteen (15) days of the First Company Notice
(the "Initial Preemption Period"), each other Securities Holder shall have a
right of over-allotment whereby such other Securities Holder may purchase any
non-purchasing Securities Holder's portion of the Proposed Securities on a pro
rata basis prior to the expiration of the five (5) day period immediately
following the Initial Preemption Period (the "Second Preemption Period").
Following the expiration of the Second Preemption Period, the Company may
proceed with such proposed issue, sale, or grant of any remaining Proposed
Securities.
(b) Notwithstanding the foregoing, the definition of
"Proposed Securities" shall not include (i) shares of common stock issued upon
the conversion of the PIK Notes, (ii) any other securities issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, any shares of Registrable Common, (iii) any
security issued in connection with a bona fide acquisition by the Company of an
unrelated company or business or a bona fide investment by the Company in a
joint venture with an unrelated third party, or (iv) any security issued
pursuant to an "employee benefit plan" within the meaning of Rule 405 under the
Securities Act.
(c) The preemptive rights set forth in this Section 10
may not be assigned or transferred, except that (i) such rights are assignable
by a Securities Holder to a Transferee Affiliate, and (ii) such rights are
assignable among Securities Holders.
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Section 11. Miscellaneous.
11.1. Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when actually delivered or, in the
case of notice by facsimile transmission, when sent and confirmation of receipt
is received. Notices to the Securities Holders shall be deemed to have been
given or made when sent. All notices shall be addressed as follows or to such
other address as may be hereafter designated in writing by the respective
parties hereto:
The Company: Xxxxxx Services Corporation
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
The Securities Holders: The address of each Securities Holder
as set forth on the signature
pages hereof.
11.2. Amendments and Waivers. The Securities Holders of not
less than 75% of the Registerable Common held by Securities Holders at any point
in time and the Company may from time to time enter into written amendments,
supplements or modifications to this Agreement for the purpose of adding any
provisions hereto or thereto or changing in any manner the rights of the
Securities Holders or the Company hereunder or thereunder, provided, however,
that the Securities Holders of not less than 66?% of the Registrable Common held
by Securities Holders at any point in time and the Company may from time to time
enter into written amendments, supplements or modifications to this Agreement
for the purpose of adding any provisions hereto or thereto or changing in any
manner the rights of the Securities Holders or the Company hereunder or
thereunder, provided that such provisions or changes do not adversely affect the
rights of the Securities Holders, and provided, further, that the Securities
Holders of not less than 75% of the Registerable Common held by Securities
Holders at any point in time may execute a written instrument waiving, on such
terms and conditions as may be specified therein, any of the requirements of
this Agreement which are solely for the benefit of the Securities Holders and
where such waiver does not adversely affect the interests of the Company;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) adversely affect the rights of a Securities Holder under
Section 2 hereof or (ii) amend, modify or waive any provision of Section 5 or
this subsection 11.2, in each case without the written consent of each
Securities Holder. Any such waiver and any such amendment, modification or
supplement shall apply equally to each of the Securities Holders and the
Company.
11.3. Termination. This Agreement and the respective
obligations and agreements of the parties hereto, except as otherwise expressly
provided herein, shall terminate on the Termination Date.
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11.4. Survival of Representations and Warranties. Except as
they may by their terms relate to an earlier date, all representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the termination of any or all of the
provisions of this Agreement.
11.5. Headings. The descriptive headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
11.6. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of such counterparts shall together constitute one and the same
agreement.
11.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCLUDING ITS
CONFLICT OF LAWS PROVISIONS.
11.8. Adjustment of Shares. Each reference to a number of
shares of PIK Notes Common Stock in this Agreement shall be adjusted
proportionately to reflect any stock dividend, split or reverse split or the
like affected with respect to all outstanding shares of PIK Notes Common Stock.
11.9. No Inconsistent Agreements. The Company will not on or
after the date of this Agreement enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the Securities
Holders in this Agreement or otherwise conflicts with the provisions hereof.
11.10. Severability. Any provision of this Agreement
prohibited or rendered unenforceable by any applicable law of any jurisdiction
shall as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability, without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
11.11. Nominee; Benefits. All references to Securities Holders
in this Agreement shall include the Person or Persons for whom the Securities
Holders act as a nominee, and the benefits of and rights and obligations under
the Agreement shall accrue to such Person or Persons which have a beneficial
interest in the Registrable Common and for whom the Securities Holders are a
nominee.
11.12. ENTIRE AGREEMENT. THIS AGREEMENT CONSTITUTES THE ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE COMPANY AND
THE PARTIES SIGNATORIES TO THIS AGREEMENT HEREBY AGREE THAT THE PIK NOTE
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ORIGINAL REGISTRATION RIGHTS AGREEMENT AND THE COMMON STOCK ORIGINAL
REGISTRATION RIGHTS AGREEMENT ARE HEREBY TERMINATED.
11.13. Listing of PIK Notes Common Stock. The Company shall
use its commercially reasonable efforts following the effective date of a
Registration Statement with respect to Registerable Common to cause such
Registerable Common to be listed or admitted to trading on the same exchange or
national trading market on which its Common Stock is then listed, and if its
Common Stock is not so listed, then on the New York Stock Exchange, Inc. and The
Toronto Stock Exchange, and if such securities cannot be listed on the New York
Stock Exchange, Inc., then on the Nasdaq National Market.
11.14. No Required Sale. Nothing in this Agreement shall be
deemed to create an independent obligation on the part of any of the Securities
Holders to sell any Registerable Common pursuant to any Registration Statement
or otherwise.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
COMPANY:
XXXXXX SERVICES CORPORATION
By:_______________________________________
Name:
Title:
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SECURITIES HOLDERS:
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.,
its General Partner
By:___________________________________
Name:
Title:
Address for notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC, its General Partner
By:___________________________________
Name:
Title:
Address for notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
MEADOW WALK LIMITED PARTNERSHIP
By: BARBERRY CORP., its General Partner
By:___________________________________
Name:
Title:
Address for notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
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XXXXXXXXX L.L.C.
By:___________________________________
Name:
Title:
Address for notices:
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.X.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
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SUPPLEMENTAL ADDENDUM
The undersigned is a holder of Registerable Common of Xxxxxx
Services Corporation. The undersigned hereby agrees as follows:
The undersigned hereby accepts the terms of and becomes a
party to (as a Securities Holder) the Amended and Restated Registration Rights
Agreement dated as of April 12, 2002, by and among Xxxxxx Services Corporation
(the "Company") and each Securities Holder named therein. In connection
therewith, the undersigned agrees to (A) assume all obligations and liabilities
thereunder, (B) enjoy all of the rights thereunder, (C) be bound thereby and (D)
perform and comply with the agreements and commitments on the part of the
undersigned, as assignee, set forth in the Registration Rights Agreement.
As used in this Supplemental Addendum, capitalized terms
defined in the Registration Rights Agreement shall have their respective defined
meanings.
Name of
Address Institution:____________________________
By:_____________________________________
Name:
Title:
Date: ______________
