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EXHIBIT 4.3
EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
Dated as of July 21, 1998
by and among
AAi.FosterGrant, Inc.
The Guarantors Signatories Hereto
and
NationsBanc Xxxxxxxxxx Securities LLC
Prudential Securities Incorporated
and
BancBoston Securities Inc.
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This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of July 21, 1998, by and among AAi.FosterGrant, Inc., a Rhode
Island corporation (the "COMPANY"), the Guarantors signatories hereto (each a
"GUARANTOR" and, collectively, the "GUARANTORS"), and NationsBanc Xxxxxxxxxx
Securities LLC, Prudential Securities Incorporated and BancBoston Securities
Inc. (each an "INITIAL PURCHASER" and, collectively, the "INITIAL PURCHASERS"),
each of whom has agreed to purchase the Company's 10 3/4 % Senior Notes due 2006
(the "SERIES A NOTES") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to that certain Purchase Agreement,
dated July 16, 1998 (the "PURCHASE AGREEMENT"), by and among the Company, the
Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers
to purchase the Series A Notes, the Company and the Guarantors have agreed to
provide the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in Section 7 of the Purchase Agreement. Capitalized terms
used herein and not otherwise defined shall have the meaning assigned to them in
the Indenture, dated July 21, 1998, among the Company, the Guarantors and IBJ
Xxxxxxxx Bank & Trust Company, as Trustee, relating to the Series A Notes and
the Series B Notes (the "INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
BUSINESS DAY: Any day except a Saturday, Sunday or other day in the
City of New York on which banks are authorized or ordered to close.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer,
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(b) the maintenance of such Exchange Offer Registration Statement as
continuously effective and the keeping of the Exchange Offer open for a period
not less than the period required pursuant to Section 3(b) hereof and (c) the
delivery by the Company to the Registrar under the Indenture of Series B Notes
in the same aggregate principal amount as the aggregate principal amount of
Series A Notes tendered by Holders thereof pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The exchange and issuance by the Company of a principal
amount of Series B Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of
Series A Notes that are tendered by such Holders in connection with such
exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act and pursuant to Regulation S
under the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
INDEMNIFIED HOLDER: As defined in Section 8(a) hereof.
INDEMNIFIED PARTY: As defined in Section 8(c) hereof.
INDEMNIFYING PARTY: As defined in Section 8(c) hereof.
INDENTURE: The Indenture, dated as of the Closing Date, among the
Company, the Guarantors and the Trustee, pursuant to which the Notes are to be
issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms therein.
LIQUIDATED DAMAGES: As defined in Section 5 hereof.
MANAGING UNDERWRITERS: As defined in Section 10 hereof.
NOTES: Series A and Series B Notes.
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PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
REGULATION S: Regulation S promulgated under the Act.
RESTRICTED BROKER-DEALER: Any Broker-Dealer that holds Series B Notes
that were acquired in the Exchange Offer in exchange for Series A Notes that
such Broker-Dealer acquired for its own account as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its affiliates).
RULE 144: Rule 144 promulgated under the Act.
SERIES B NOTES: The Company's 10 3/4 % Series B Senior Notes due 2006
to be issued pursuant to tHe Indenture in the Exchange Offer or as contemplated
by Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77a-77b) as in
effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note, until the earliest to occur
of (a) the date on which such Note is exchanged in the Exchange Offer for a
Series B Note and entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Act, (b) the
date on which such Note has been disposed of in accordance with a Shelf
Registration Statement, (c) the date on which such Series A Note is disposed of
by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein) or (d) the date on which such Series A Note is distributed to
the public pursuant to Rule 144 under the Act.
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TRUSTEE: IBJ Xxxxxxxx Bank & Trust Company and any of its successors.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (a
"HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company and the Guarantors shall (i) cause the Exchange
Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 45 days after the
Closing Date (such 45th day being the "FILING DEADLINE"), (ii) use their best
efforts to cause such Exchange Offer Registration Statement to become effective
at the earliest possible time, but in no event later than 135 days after the
Closing Date (such 135th day being the "EFFECTIVENESS DEADLINE"), (iii) in
connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause it
to become effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) cause all necessary filings, if any, in connection with the registration and
qualification of the Series B Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting (i) registration of the Series B Notes to be offered
in exchange for the Series A Notes that are Transfer Restricted Securities and
(ii) resales of Series B Notes by Broker-Dealers that tendered into the Exchange
Offer Series A Notes that such Broker-Dealers acquired for its own account as a
result of market-making activities or other trading activities (other than
Series A Notes acquired directly from the Company or any of its Affiliates) as
contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective best
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Series B Notes and the guarantees
thereof shall be included in the Exchange Offer Registration Statement. The
Company and the Guarantors shall use their respective best efforts to cause the
Exchange Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 30 Business Days thereafter (such 30th day being the "CONSUMMATION
DEADLINE").
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(c)
(i) The Company and the Guarantors shall include a "Plan
of Distribution" section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Broker-Dealer who holds
Transfer Restricted Securities that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities (other than Transfer Restricted Securities acquired directly from the
Company or any Affiliate of the Company) may exchange such Transfer Restricted
Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and must, therefore,
deliver a prospectus meeting the requirements of the Act in connection with its
initial resale of any Series B Notes received by such Broker-Dealer in the
Exchange Offer, and that the Prospectus contained in the Exchange Offer
Registration Statement may be used to satisfy such prospectus delivery
requirement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales by such Broker-Dealers that the
Commission may require in order to permit such sales pursuant thereto, but such
"Plan of Distribution" shall not name any such Broker-Dealer or disclose the
amount of Transfer Restricted Securities held by any such Broker-Dealer, except
to the extent required by the Commission as a result of a change in policy,
rules or regulations after the date of this Agreement.
(ii) To the extent necessary to ensure that the Exchange
Offer Registration Statement is available for sales of Series B Notes by
Broker-Dealers, upon the reasonable request of any Broker-Dealer who certifies
in writing to the Company that it anticipates it will be a Restricted
Broker-Dealer, the Company and the Guarantors agree to use their respective best
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) hereof and in conformity with the requirements of this Agreement, the Act
and the policies, rules and regulations of the Commission as announced from time
to time, for a period of 180 days from the date on which the Exchange Offer is
Consummated (unless extended pursuant to Section 6(d) hereof), or such shorter
period as will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Company and the
Guarantors shall promptly provide sufficient copies of the latest version of
such Prospectus to such Broker-Dealers promptly upon request, at any time during
such period.
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Exchange Offer is not permitted
by applicable law (after the Company and the Guarantors have complied with the
procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of Transfer
Restricted Securities shall notify the Company within 20 Business Days following
the Consummation Deadline that (A) such Holder was prohibited by law or
Commission policy from participating in the Exchange Offer or (B) such Holder
may not resell the Series B Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration
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Statement is not appropriate or available for such resales by such Holder or (C)
such Holder is a Broker-Dealer and holds Series A Notes acquired directly from
the Company or any of its Affiliates, then the Company and the Guarantors shall:
(x) cause to be filed, on or prior to 30 days after the earlier of (i)
the date on which the Company determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Company receives the notice specified in clause (a)(ii) above,
(such earlier date, the "FILING DEADLINE"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the Exchange
Offer Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating to
all Transfer Restricted Securities, and
(y) shall use their respective best efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after the
earlier of (i) the date on which the Company determines that the Exchange Offer
Registration Statement cannot be filed as a result of clause (a)(i) above and
(ii) the date on which the Company receives the notice specified in clause
(a)(ii) above (such 90th day the "EFFECTIVENESS DEADLINE").
If, after the Company and the Guarantors have filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) above,
the Company and the Guarantors are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under
applicable federal law (i.e., clause (a)(i) above), then the filing of the
Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; provided that, in such event, the Company and
the Guarantors shall remain obligated to meet the Effectiveness Deadline set
forth in clause (y).
The Company and the Guarantors shall use their respective best efforts
to keep any Shelf Registration Statement required by this Section 4(a)
continuously effective, supplemented and amended as required by and subject to
the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for sales of Transfer Restricted Securities by the Holders
thereof entitled to the benefit of this Section 4(a), and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the Transfer Restricted Securities are available for sale under Rule 144(k)
under the Act (as extended pursuant to Section 6(d)), or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder agrees in
writing to be bound by all the provisions of this Agreement applicable to such
Holder and furnishes to the Company in writing, within 20 days after receipt of
a request therefor, the information specified in Item 507 or 508 of Regulation
S-
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K, as applicable, of the Act for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. No Holder of
Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
agreement and information. Each selling Holder agrees to promptly furnish
additional information required to be disclosed in order to make the information
previously furnished to the Company by such Holder not materially misleading.
(c) BLACK OUT PERIOD. During any consecutive 365 day period, the
Company may suspend the effectiveness of the Shelf Registration Statement on two
occasions for a period of not more than 45 consecutive days if there is a
possible acquisition or business combination or other transaction, business
development or event involving the Company that may require disclosure in the
Shelf Registration Statement and the Board of Directors of the Company
determines in the exercise of its reasonable judgment that such disclosure is
not in the best interests of the Company and its shareholders or obtaining any
financial statements relating to an acquisition or business combination required
to be included in the Shelf Registration Statement would be impracticable. In
such a case, the Company shall promptly notify the Holders of the suspension of
the Shelf Registration Statements' effectiveness, provided that such notice
shall not require the Company to disclose the possible acquisition or business
combination or other transaction, business development or event if the Board of
Directors of the Company determines in good faith that such acquisition or
business combination or other transaction, business development or event should
remain confidential. Upon the abandonment, consummation or termination of the
possible acquisition or business combination or other transaction, business
development or event, or the availability of the required financial statements
with respect to a possible acquisition or business combination, the suspension
of the use of the Shelf Registration Statement pursuant to this Section 4(c)
shall cease and the Company shall promptly comply with Section 6(c)(ii) hereof
and notify the Holders that disposition of Transfer Restricted Securities may be
resumed.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (iv) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose during the periods specified in this Agreement
without being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective immediately (each such event referred to in clauses (i) through (iv),
a "REGISTRATION DEFAULT"), then the Company and the Guarantors hereby jointly
and severally agree to pay to each Holder of Transfer Restricted Securities
affected thereby Liquidated Damages in an amount equal to $.05 per week per
$1,000 in principal amount of Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration
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Default continues for the first 90-day period immediately following the
occurrence of such Registration Default ("LIQUIDATED DAMAGES"). The amount of
the Liquidated Damages shall increase by an additional $.05 per week per $1,000
in principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of Liquidated Damages of $.30 per week per $1,000 in principal
amount of Transfer Restricted Securities; provided that the Company and the
Guarantors shall in no event be required to pay Liquidated Damages for more than
one Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement and/or, if applicable, the Shelf Registration Statement, in the case
of (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement and/or, if applicable, the Shelf Registration Statement, in the case
of (ii) above, (3) upon consummation of the Exchange Offer, in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement and/or, if applicable, the Shelf Registration Statement
to again be declared effective or made usable in the case of (iv) above, the
Liquidated Damages payable with respect to the Transfer Restricted Securities as
a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued Liquidated Damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective best
efforts to effect such exchange and to permit the resale of Series B Notes by
Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof and (z) comply with
all of the following provisions:
(i) If, following the Closing Date, there has been
announced a change in Commission policy with respect to exchange offers
such as the Exchange Offer, that in the reasonable opinion of counsel
to the Company raises a substantial question as to whether the Exchange
Offer is permitted by applicable federal law, the Company and the
Guarantors hereby agree to seek a no-action letter or other favorable
decision from the Commission allowing the Company and the Guarantors to
Consummate an Exchange
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Offer for such Transfer Restricted Securities. The Company and the
Guarantors hereby agree to pursue the issuance of such a decision to
the Commission staff level. In connection with the foregoing, the
Company and the Guarantors hereby agree to take all such other actions
as may be requested by the Commission or otherwise required in
connection with the issuance of such decision, including without
limitation (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis prepared
by counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursuing a resolution (which need not be
favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange
Offer, each Holder of Transfer Restricted Securities (including,
without limitation, any Holder who is a Broker- Dealer) shall furnish,
upon the request of the Company, prior to the Consummation of the
Exchange Offer, a written representation to the Company and the
Guarantors (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an Affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Series B Notes to be issued in the Exchange Offer and (C) it is
acquiring the Series B Notes in its ordinary course of business. As a
condition to its participation in the Exchange Offer, each Holder using
the Exchange Offer to participate in a distribution of the Series B
Notes shall acknowledge and agree that, if the resales are of Series B
Notes obtained by such Holder in exchange for Series A Notes acquired
directly from the Company or an Affiliate thereof, it (1) could not,
under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in XXXXXX XXXXXXX AND
CO., INC. (available June 5, 1991) and EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), as interpreted in the
Commission's letter to SHEARMAN & STERLING dated July 2, 1993, and
similar no-action letters (including, if applicable, any no-action
letter obtained pursuant to clause (i) above) and (2) must comply with
the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Guarantors shall provide a
supplemental letter to the Commission (A) stating that the Company and
the Guarantors are registering the Exchange Offer in reliance on the
position of the Commission enunciated in EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), XXXXXX XXXXXXX AND CO., INC.
(available June 5, 1991), as interpreted in the Commission's letter to
SHEARMAN & STERLING dated July 2, 1993, and, if applicable, any
no-action letter obtained pursuant to clause (i) above, (B)
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including a representation that neither the Company nor any Guarantor
has entered into any arrangement or understanding with any Person to
distribute the Series B Notes to be received in the Exchange Offer and
that, to the best of the Company's and each Guarantor's information and
belief, each Holder participating in the Exchange Offer is acquiring
the Series B Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Series B Notes received in the Exchange Offer and
(C) any other undertaking or representation required by the Commission
as set forth in any no-action letter obtained pursuant to clause (i)
above, if applicable.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their respective best efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the Company
pursuant to Section 4(b) hereof), and pursuant thereto the Company and the
Guarantors shall prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the Act, which form
shall be available for the sale of the Transfer Restricted Securities in
accordance with the intended method or methods of distribution thereof within
the time periods and otherwise in accordance with the provisions hereof.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company and
the Guarantors shall:
(i) use their respective best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain an untrue statement of material fact or omit to
state any material fact necessary to make the statements therein not
misleading or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the periods required by this Agreement,
the Company and the Guarantors shall file promptly an appropriate
amendment to such Registration Statement curing such defect and, if
Commission review is required, use their respective best efforts to
cause such amendment to be declared effective as soon as practicable;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the applicable Registration Statement
as may be necessary to keep such Registration Statement effective for
the applicable period set forth in Section 3 or 4 hereof; cause the
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act,
and to comply fully with Rules 424, 430A and 462, as applicable, under
the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities
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covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) advise the Initial Purchasers, and in the case of a
Shelf Registration Statement, each selling Holder promptly and, if
requested by such Holder, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has
been filed and, with respect to any applicable Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes and (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, then the Company and the
Guarantors shall use their respective best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i) hereof, if any fact or
event contemplated by Section 6(c)(iii)(D) hereof shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to each Initial Purchaser, and in the case of
a Shelf Registration Statement, to each Holder in connection with such
exchange or sale, if any, before filing with the Commission, a copy of
any Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of
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such Registration Statement), which documents shall be subject to the
review and comment of such Initial Purchasers, and, in the case of a
Shelf Registration Statement, such Holders in connection with such
sale, if any, for a period of at least three Business Days, and the
Company and the Guarantors shall not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which such Initial Purchasers, or, in the
case of a Shelf Registration Statement, such Holders shall reasonably
object within three Business Days after the receipt thereof. An Initial
Purchaser or selling Holder shall be deemed to have reasonably objected
to such filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains an untrue
statement of material fact or omits to state any material fact
necessary to make the statements therein not misleading or fails to
comply with the applicable requirements of the Act;
(vi) promptly prior to the filing of any document that is
to be incorporated by reference into a Registration Statement or
Prospectus, provide a copy of such document to each Initial Purchaser,
and in the case of a Shelf Registration Statement, to the
representative of the Holders included within the coverage of the Shelf
Registration Statement, if any, make the Company's and the Guarantors'
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such Initial Purchasers or the
representative of the Holders may reasonably request;
(vii) in the case of a Shelf Registration Statement make
available, at reasonable times, for inspection by a representative of
the Holders and an attorney and accountant retained by such Holders, in
a manner designed to permit underwriters to satisfy their due diligence
investigation under the Act, all financial and other records and
pertinent corporate documents of the Company and the Guarantors
customarily inspected by underwriters in primary underwritten offerings
and cause the Company's and the Guarantors' officers, directors and
employees to supply all information reasonably requested by and
customarily supplied in connection with primary underwritten offerings
to, any such representative, attorney or accountant in connection with
such Shelf Registration Statement or any post-effective amendment
thereto subsequent to the filing thereof and prior to its
effectiveness; PROVIDED, HOWEVER, that any records, information or
documents that are designated by the Company or any of the Guarantors
as confidential at the time of delivery of such records, information or
documents shall be kept confidential by such persons, unless (i) such
records, information or documents are in the public domain or otherwise
publicly available, (ii) disclosure of such records, information or
documents is required by court or administrative order or (iii)
disclosure of such records, information or documents, in the opinion of
counsel to such Person, is otherwise required by law (including,
without limitation, pursuant to the requirements of the Act).
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(viii) if requested by the Initial Purchasers or in the case
of a Shelf Registration Statement, by any Holder of Notes included
within the coverage of the Shelf Registration Statement, promptly
include in any Registration Statement or related Prospectus, pursuant
to a supplement or post-effective amendment if necessary, such
information as such Initial Purchasers or such Holders may reasonably
request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company and the Guarantors are notified of the matters to be included
in such Prospectus supplement or post-effective amendment;
(ix) furnish to each Holder of Notes included within the
coverage of the Shelf Registration Statement, without charge, at least
one conformed copy of the Shelf Registration Statement, as first filed
with the Commission, and of each amendment thereto, without documents
incorporated by reference therein or exhibits thereto, unless a Holder
so requests in writing.
(x) deliver to the Initial Purchasers, and to any other
Holder that so requests, without charge, at least one conformed copy of
the Exchange Offer Registration Statement and any post-effective
amendment thereto, including financial statements and schedules,
without documents incorporated therein by reference or exhibits
thereto, unless the Initial Purchasers or any such Holder so request in
writing.
(xi) deliver to each Holder of Notes included within the
coverage of the Shelf Registration Statement, without charge, as many
copies of the Prospectus (including each preliminary prospectus)
included in the Shelf Registration Statement and any amendment or
supplement thereto as such Persons reasonably may request; the Company
and the Guarantors hereby consent, subject to the provisions of this
Agreement, to the use (in accordance with law) of the Prospectus and
any amendment or supplement thereto by each selling Holder in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(xii) deliver to the Initial Purchasers or any Restricted
Broker-Dealer, without charge, as many copies of the final prospectus
included in the Exchange Offer Registration Statement and any amendment
or supplement thereto as such Person may reasonably request; the
Company and the Guarantors hereby consent, subject to the provisions of
this Agreement, to the use (in accordance with law) of the prospectus
or any amendment or supplement thereto by the Initial Purchasers, if
necessary, any Restricted Broker-Dealer and such other Persons required
to deliver a prospectus following the Exchange Offer in connection with
the offering and sale of the Notes covered by the Prospectus, or any
amendment or supplement thereto, included in such Exchange Offer
Registration Statement;
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(xiii) upon the request of any Holder of Notes included
within the coverage of the Shelf Registration Statement, enter into
such agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any Shelf
Registration Statement contemplated by this Agreement as may be
reasonably requested by any such Holder in connection with any sale or
resale pursuant to any Shelf Registration Statement, and in such
connection the Company and the Guarantors shall:
(A) upon the request of any Holder, furnish (or
in the case of paragraphs (2) and (3) below, use their
respective best efforts to cause to be furnished) to each
Holder, upon the effectiveness of the Shelf Registration
Statement:
(1) a certificate, dated such date,
signed on behalf of the Company and the Guarantors by
(x) a principal operating or executive officer of the
Company and the Guarantors and (y) a principal
financial or accounting officer of the Company and
the Guarantors, confirming, as of the date thereof,
the matters set forth in paragraphs (a), (c), (d) and
(e) of Section 7 of the Purchase Agreement and such
matters customarily given in underwritten offerings;
(2) an opinion, dated the date of
effectiveness of the Shelf Registration Statement, of
counsel for the Company and the Guarantors covering
matters customarily covered in opinions requested in
underwritten offerings and similar to those set forth
in Section 7(h) of the Purchase Agreement, and in any
event including a statement to the effect that such
counsel has participated in conferences with officers
and representatives of the Company and the Guarantors
and representatives of the independent public
accountants for the Company and the Guarantors and
has considered the matters required to be stated
therein and the statements contained therein, and
although such counsel is not passing upon and does
not assume the responsibility for, the accuracy,
completeness or fairness of such statements; and has
not made any independent check or verification
thereof, that such counsel advises that, on the basis
of the foregoing, no facts have come to the attention
of such counsel that lead such counsel to believe
that the Shelf Registration Statement, at the time
such Shelf Registration Statement or any
post-effective amendment thereto became effective,
contained an untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading, or that the Prospectus
contained in such Shelf Registration Statement as of
its date, contained an untrue statement of a material
fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of
the circumstances under which
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they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or
fairness of the financial statements and other
financial data included in any Registration Statement
contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated
as of the date of effectiveness of the Shelf
Registration Statement, from the Company's
independent accountants, in the customary form and
covering matters of the type customarily covered in
comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set
forth in the comfort letters delivered pursuant to
Section 7(n) of the Purchase Agreement, subject to
receipt of appropriate documentation, if required by,
and only if permitted by, Statement of Auditing
Standards No. 72; and
(B) deliver such other documents and
certificates as may be reasonably requested by the
representative of the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any
customary conditions contained in any agreement entered into
by the Company and the Guarantors pursuant to this clause
(xiii);
(xiv) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the applicable Registration Statement; provided, however, that neither
the Company nor any Guarantor shall be required to register or qualify
as a foreign corporation where it is not now so qualified or to take
any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xv) issue, upon the request of any Holder of Series A
Notes covered by any Shelf Registration Statement contemplated by this
Agreement, Series B Notes having an aggregate principal amount equal to
the aggregate principal amount of Series A Notes surrendered to the
Company by such Holder in exchange therefor or being sold by such
Holder; such Series B Notes to be registered in the name of such Holder
or in the name of the purchaser(s) of such Series B Notes, as the case
may be; in return, the Series A Notes held by such Holder shall be
surrendered to the Company for cancellation;
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(xvi) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the selling Holders may request at
least two Business Days prior to the closing of any such sale of
Transfer Restricted Securities;
(xvii) use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to Consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xiv) above;
(xviii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with The
Depository Trust Company;
(xix) otherwise use their respective best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to their security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in paragraph (c) of Rule 158 under the Act);
(xx) in the case of a Shelf Registration Statement, make
appropriate officers of the Company available to the selling Holders
for meetings with prospective purchasers of the Transfer Restricted
Securities and prepare and present to potential investors customary
"road show" material in a manner consistent with other new issuances of
other securities similar to the Transfer Restricted Securities;
(xxi) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute, and use best efforts to cause
the Trustee to execute, all documents that may be required to effect
such changes and all other forms and documents required to be filed
with the Commission to enable such Indenture to be so qualified in a
timely manner; and
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(xxii) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of
a Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
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 that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
All expenses incident to the Company's and the Guarantors' performance
of or compliance with this Agreement shall be borne by the Company, regardless
of whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses, (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws, (iii) all expenses of printing (including printing certificates for the
Series B Notes to be issued in the Exchange Offer and printing of Prospectuses,
messenger and delivery services and telephone, (iv) all fees and disbursements
of counsel for the Company and the Guarantors and in the event of a Shelf
Registration Statement, the reasonable fees and disbursements of one firm of
counsel for the Holders of Transfer Restricted Securities (who shall be Xxxxxx &
Xxxxxxx, unless another firm shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit such
Shelf Registration Statement is being prepared) and fees and disbursements of
the Trustee and counsel, (v) all application and filing fees in connection with
listing the Series B Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof and (vi) all fees and
disbursements of independent certified public accountants of the Company and the
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance) but excluding fees and expenses of
counsel to the underwriters and underwriting
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discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of the Series B Notes by a Holder.
The Company shall, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally,
to indemnify and hold harmless (i) each Holder, (ii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) any Holder (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "INDEMNIFIED HOLDER") from
and against any and all losses, claims, damages, liabilities, judgments,
(including without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Company to any holder
or any prospective purchaser of Series B Notes, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the Company
by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company and the
Guarantors, and their respective directors, officers, employees, agents and
representatives, and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company or the
Guarantors, to the same extent as the foregoing indemnity from the Company and
the Guarantors to each of the Indemnified Holders, but only with reference to
information relating to such Indemnified Holder furnished in writing to the
Company by such Indemnified Holder expressly for use in any Registration
Statement. In no event shall any Indemnified Holder be liable or responsible for
any amount in excess of the amount by which the total amount received by such
Indemnified Holder with respect to its sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds the amount of any damages that such
Indemnified Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.
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(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the Indemnified Party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the Indemnifying Party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), an Indemnified Holder shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Indemnified Holder). Any Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Indemnified
Party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the Indemnifying Party, (ii) the Indemnifying Party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the Indemnified Party or (iii) the named parties to
any such action (including any impleaded parties) include both the Indemnified
Party and the Indemnifying Party, and the Indemnified Party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
Indemnifying Party (in which case the Indemnifying Party shall not have the
right to assume the defense of such action on behalf of the Indemnified Party).
In any such case, the Indemnifying Party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all Indemnified Parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Indemnified Holders, in the case of the parties
indemnified pursuant to Section 8(a), and by the Company, in the case of parties
indemnified pursuant to Section 8(b). The Indemnifying Party shall indemnify and
hold harmless the Indemnified Party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than 50 days after the Indemnifying Party
shall have received a request from the Indemnified Party for reimbursement for
the fees and expenses of counsel (in any case where such fees and expenses are
at the expense of the Indemnifying Party) and, prior to the date of such
settlement, the Indemnifying Party shall have failed to comply with such
reimbursement request. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the Indemnified Party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
Indemnified Party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the Indemnified Party from all liability on claims
that are or could
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have been the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of the Indemnified Party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an Indemnified Party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and of the Indemnified Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Indemnified Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or such Guarantors, on the one
hand, or by the Indemnified Holder, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and judgments referred to above shall
be deemed to include, subject to the limitations set forth in the second
paragraph of Section 8(a), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder or its
related Indemnified Holders shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the total received by such Holder
with respect to the sale of its Transfer Restricted Securities pursuant to a
Registration Statement exceeds the sum of (A) the amount paid by such Holder for
such Transfer Restricted Securities plus (B) the amount of any damages which
such Holder has otherwise been required to pay by reason of such
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untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(c) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each of the Holders
hereunder and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company and each Guarantor agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available, upon request of any Holder, to such Holder
or beneficial owner of Transfer Restricted Securities in connection with any
sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
SECTION 10. UNDERWRITTEN REGISTRATIONS
If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering ("MANAGING UNDERWRITERS") will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Securities included in such offering; provided, however, that the Managing
Underwriters shall be reasonably satisfactory to the Company.
No Person may participate in any underwritten registration hereunder
unless such Person (i) agrees to sell such Person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
SECTION 11. MISCELLANEOUS
(a) REMEDIES. The Company and the Guarantors acknowledge and agree
that any failure by the Company and/or the Guarantors to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
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Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Guarantors' obligations under
Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive
the defense in any action for specific performance that a remedy at law would be
adequate.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any
Guarantor shall, on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's and the Guarantors' securities under any agreement in effect on
the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless (i) in the case
of Section 5 hereof and this Section 10(c)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted Securities and
(ii) in the case of all other provisions hereof, the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities (excluding Transfer Restricted Securities held by
the Company or its Affiliates). Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose Transfer Restricted Securities are being tendered
pursuant to the Exchange Offer, and that does not affect directly or indirectly
the rights of other Holders whose Transfer Restricted Securities are not being
tendered pursuant to such Exchange Offer, may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
subject to such Exchange Offer.
(d) THIRD PARTY BENEFICIARY. The Holders of Transfer Restricted
Securities participating in the Exchange Offer shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights or the
rights of Holders hereunder.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company or the Guarantors:
AAi.FosterGrant, Inc.
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000 Xxxxxx Xxxxxxxxxx Xxx.
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxxxx, Xxxxx & Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
Upon the date of filing of the Exchange Offer or a Shelf Registration
Statement, as the case may be, notice shall be delivered to the Initial
Purchasers in the form attached hereto as Exhibit A.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided, that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Holder shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Holder shall be entitled to receive the benefits hereof.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
24
25
(h) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
26
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AAI.FOSTERGRANT, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
GUARANTORS
XXXXXX XXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
THE XXXXXXX COMPANY
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
OPTI-RAY, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXXX GENERAL, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
27
XXXXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
O-RAY HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
F.G.G. INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXX XXXXX GROUP, L.P.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President AND Chief
Executive Officer
FANTASMA, LLC
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
28
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: /s/ J. Xxxxx Xxxxxx
------------------------------
Name: J. Xxxxx Xxxxxx
Title: Principal
PRUDENTIAL SECURITIES INCORPORATED
By: /s/
------------------------------
Name:
Title:
BANCBOSTON SECURITIES INC.
By: /s/
------------------------------
Name:
Title:
29
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: /s/
------------------------------
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxxxxxx X'Xxxxx
------------------------------
Name: Xxxxxxx X'Xxxxx
Title: Director
BANCBOSTON SECURITIES INC.
By: /s/
------------------------------
Name:
Title:
30
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: /s/
------------------------------
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/
------------------------------
Name:
Title:
BANCBOSTON SECURITIES INC.
By: /s/ Xxxxxxx X. Xxx
------------------------------
Name: Xxxxxxx X. Xxx
Title: Managing Director
31
EXHIBIT A
NOTICE OF FILING OF REGISTRATION STATEMENT
To: NationsBanc Xxxxxxxxxx Securities LLC
Prudential Securities Incorporated
BancBoston Securities Inc.
From: AAi.FosterGrant, Inc.
Re: 10 3/4% Series A Senior Notes Due 2006
Date: ____________, 199__
For your information only (NO ACTION REQUIRED):
Today, ________________, 199__, we filed [an Exchange
Registration Statement] [a Shelf Registration Statement] with the Securities and
Exchange Commission. We currently expect this registration statement to be
declared effective by __________________________, 199__.
A-1
