EXHIBIT 4.2
$150,000,000
UNISOURCE ENERGY CORPORATION
4.50% CONVERTIBLE SENIOR NOTES DUE 2035
REGISTRATION RIGHTS AGREEMENT
-----------------------------
March 1, 2005
Credit Suisse First Boston LLC
As Representative of the several Initial Purchasers
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
UniSource Energy Corporation, an Arizona corporation (the "COMPANY"),
proposes to issue and sell to Credit Suisse First Boston LLC ("CSFB LLC"), BNY
Capital Markets, Inc, Wedbush Xxxxxx Securities Inc. and Xxxxx Fargo Securities,
LLC (the "INITIAL PURCHASERS"), upon the terms set forth in a purchase agreement
effective February 24, 2005 (the "PURCHASE AGREEMENT"), $150,000,000 aggregate
principal amount of its 4.50% Convertible Senior Notes due 2035 (the "INITIAL
SECURITIES"). The Initial Securities will be convertible into shares of common
stock, no par value per share, of the Company (the "COMMON STOCK") at the
conversion rate set forth in the Offering Circular dated February 24, 2005 (the
"OFFERING CIRCULAR"). The Initial Securities will be issued pursuant to an
Indenture, dated as of March 1, 2005 (the "INDENTURE"), between the Company and
The Bank of New York, as trustee (the "TRUSTEE"). As an inducement to the
Initial Purchasers to enter into the Purchase Agreement, the Company agrees with
the Initial Purchasers, for the benefit of (i) the Initial Purchasers and (ii)
the holders of the Initial Securities and the Common Stock issuable upon
conversion of the Initial Securities (collectively, the "SECURITIES") from time
to time until such time as such Securities have been sold pursuant to a Shelf
Registration Statement (as defined below) (each of the forgoing a "HOLDER" and
collectively the "Holders"), as follows:
1. Shelf Registration. (a) The Company shall, at its cost, prepare and,
as promptly as practicable (but in no event more than 120 days after so required
or requested pursuant to this Section 1) file with the Securities and Exchange
Commission (the "COMMISSION") and thereafter use its commercially reasonable
efforts to cause to be declared effective as soon as practicable a registration
statement (the "SHELF REGISTRATION STATEMENT") relating to the offer and sale of
the Transfer Restricted Securities (as defined in Section 5 hereof) by the
Holders thereof from time to time in accordance with the methods of distribution
set forth in the Shelf Registration Statement and Rule 415 under the Securities
Act of 1933, as amended (the "SECURITIES ACT") (hereinafter, the "SHELF
REGISTRATION"); provided, however, that no Holder (other than an Initial
Purchaser) shall be entitled to have the Securities held by it covered by such
Shelf Registration Statement unless such Holder agrees in writing to be bound by
all the provisions of this Agreement applicable to such Holder by delivering to
the Company a written notice containing substantially the information called for
by the Selling Securityholder Notice and Questionnaire attached as Annex A to
the Offering Circular (a "NOTICE AND QUESTIONNAIRE").
(b) The Company shall use its commercially reasonable efforts to keep
the Shelf Registration Statement continuously effective in order to permit the
prospectus included therein (the "PROSPECTUS") to be lawfully delivered by the
Holders of the relevant Securities, for a period of two years (or for such
longer period if extended pursuant to Section 2(h) below) from the date of
original issuance of the Securities or such shorter period that will terminate
when all the Securities covered by the Shelf Registration Statement (i) have
been sold pursuant thereto or (ii) are no longer restricted securities (as
defined in Rule 144(k) under the Securities Act, or any successor rule thereof),
assuming for this purpose that the Holders thereof are not affiliates of the
Company (in any such case, such period being called the "SHELF REGISTRATION
PERIOD"). The Company shall be deemed not to have used its commercially
reasonable efforts to keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in Holders
of Securities covered thereby not being able to offer and sell such Securities
during that period, unless such action is (i) required by applicable law or (ii)
taken by the Company in good faith and contemplated by Section 2(b)(v) below,
and the Company thereafter complies with the requirements of Section 2(h).
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and the
Prospectus and any amendment or supplement thereto, as of the effective date of
the Shelf Registration Statement, amendment or supplement, (i) to comply in all
material respects with the applicable requirements of the Securities Act and the
rules and regulations of the Commission and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
2. Registration Procedures. In connection with the Shelf Registration
contemplated by Section 1 hereof, the following provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to
the filing thereof with the Commission, a copy of the Shelf Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and, in the event that an Initial Purchaser (with
respect to any portion of an unsold allotment from the original offering) is
participating in the Shelf Registration Statement, shall use its best efforts to
reflect in each such document, when so filed with the Commission, such comments
as such Initial Purchaser reasonably may propose (provided, however, that with
respect to Current Reports on Form 8-K, such comments must be provided by such
Initial Purchaser within 2 business days of receiving the draft of the Current
Report on Form 8-K); and (ii) include the names of the Holders who have
delivered to the Company a completed Notice and Questionnaire (the "SELLING
SECURITYHOLDERS").
(b) The Company shall give written notice to the Initial Purchasers and
the Selling Securityholders (which notice pursuant to clauses (ii)-(v) hereof
shall be accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made):
(i) when the Shelf Registration Statement or any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the prospectus
included therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Shelf Registration Statement or the Prospectus in
order that the Shelf Registration Statement or the Prospectus does not
contain an untrue statement of a material fact nor omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(c) The Company shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Shelf Registration Statement.
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(d) The Company shall furnish to each Selling Securityholder, without
charge, at least one copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits thereto (including
those, if any, incorporated by reference).
(e) The Company shall, during the Shelf Registration Period, deliver to
each Selling Securityholder, 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 person may reasonably
request. The Company consents, subject to the provisions of this Agreement, to
the use of the Prospectus or any amendment or supplement thereto by each of the
Selling Securityholders in connection with the offering and sale of the
Securities covered by the Prospectus, or any amendment or supplement thereto,
included in the Shelf Registration Statement.
(f) Prior to any public offering of the Securities pursuant to the
Shelf Registration Statement, the Company shall use its commercially reasonable
efforts to register or qualify or cooperate with the Holders of the Securities
included therein and their respective counsel in connection with the
registration or qualification of the Securities for offer and sale under the
securities or "blue sky" laws of such states of the United States as any Selling
Securityholder reasonably requests in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the Securities covered by such Registration Statement; provided, however,
that the Company shall not be required to (i) qualify generally to do business
in any jurisdiction where it is not then so qualified or (ii) take any action
which would subject it to general service of process or to taxation in any
jurisdiction where it is not then so subject.
(g) The Company shall cooperate with the Selling Securityholders to
facilitate the timely preparation and delivery of certificates representing the
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names as
the Selling Securityholders may request a reasonable period of time prior to
sales of the Securities pursuant to the Shelf Registration Statement.
(h) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 2(b) above during the period for which the Company is
required to maintain an effective Shelf Registration Statement, the Company
shall promptly prepare and file a post-effective amendment to the Shelf
Registration Statement or an amendment or supplement to the Prospectus and any
other required document so that, as thereafter delivered to the Selling
Securityholders or purchasers of the Securities, the Prospectus will not contain
an untrue statement of a material fact or omit to state any 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.
Notwithstanding anything else to the contrary contained herein, after the
effectiveness of the Shelf Registration Statement, the Company may suspend the
availability of the Shelf Registration Statement and the use of any prospectus
by written notice to the holders for a period or periods not to exceed an
aggregate of 45 calendar days in any 90 calendar day period, and not to exceed
90 calendar days in any twelve month period (each such period, a "DEFERRAL
PERIOD") without incurring any Additional Interest if an event occurs and is
continuing as a result of which the Shelf Registration Statement or any related
prospectus would, in the Company's good faith judgment, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading; and(a) the Company determines in
its good faith judgment that the disclosure of such event at such time would
have a material adverse effect on the Company's business, operations or
prospects and such disclosure is not otherwise required to be made under
applicable law or (b) the disclosure otherwise relates to a pending material
business transaction of the Company that has not yet been publicly disclosed. To
the extent the Deferral Period exceeds either the 45-day or 90-day limitations
in the preceding sentence, the Company shall pay Additional Interest (as defined
below) to the Selling Securityholders otherwise entitled to such payments
thereunder. If the Company notifies the Initial Purchasers and the Selling
Securityholders in accordance with paragraphs (ii) through (v) of Section 2(b)
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above to suspend the use of the Prospectus until the requisite changes to the
Prospectus have been made, then the Initial Purchasers and the Selling
Securityholders shall suspend use of such prospectus, and the period of
effectiveness of the Shelf Registration Statement provided for in Section 1(b)
above shall be extended by the number of days from and including the date of the
giving of such notice to and including the date when the Initial Purchasers and
the Selling Securityholders shall have received such amended or supplemented
prospectus pursuant to this Section 2(h).
(i) Not later than the effective date of the Shelf Registration
Statement, the Company will provide CUSIP numbers for the Initial Securities and
the Common Stock registered under the Shelf Registration Statement, and provide
the Trustee with printed certificates for the Initial Securities, in a form
eligible for deposit with The Depository Trust Company.
(j) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act) an
earning statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the Shelf
Registration Statement, which statement shall cover such 12-month period.
(k) The Company shall cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended, (the "TRUST INDENTURE ACT") in a timely
manner and containing such changes, if any, as shall be necessary for such
qualification. In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.
(l) The Company may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of the Securities as the
Company may from time to time reasonably require for inclusion in the Shelf
Registration Statement, and the Company may exclude from such registration the
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.
(m) The Company shall enter into such customary agreements (including,
if requested, an underwriting agreement in customary form) and take all such
other actions, if any, as any Holder shall reasonably request in order to
facilitate the disposition of the Securities pursuant to the Shelf Registration.
(n) The Company shall (i) make reasonably available for inspection by
the Selling Securityholders, any underwriter participating in any disposition
pursuant to the Shelf Registration Statement and any attorney, accountant or
other agent retained by the Selling Securityholders or any such underwriter, all
relevant financial and other records, pertinent corporate documents and
properties of the Company and (ii) cause the Company's officers, directors,
employees, accountants and auditors to supply all relevant information
reasonably requested by the Selling Securityholders or any such underwriter,
attorney, accountant or agent in connection with the Shelf Registration
Statement, in each case, as shall be reasonably necessary to enable such
persons, to conduct a reasonable investigation within the meaning of Section 11
of the Securities Act; provided, however, that the foregoing inspection and
information gathering shall be coordinated on behalf of the Initial Purchasers
by CSFB LLC and on behalf of the other parties, by one counsel designated by and
on behalf of such other parties as described in Section 3 hereof; and provided,
further that such parties shall first agree in writing with the Company that any
information that is reasonably and in good faith designated by the Company in
writing as confidential at the time of delivery of such information shall be
kept confidential by such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to federal
securities laws in connection with the filling of the Registration Statement or
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the use of any Prospectus), (iii) such information becomes generally available
to the public other than as a result of a disclosure or failure to safeguard
such information by such persons or (iv) such information becomes available to
such persons from a source other than the Company and its subsidiaries and such
source is not know by such persons to be bound by a confidentiality agreement.
(o) The Company, if requested by any Selling Securityholder, shall
cause (i) its counsel to deliver an opinion and updates thereof relating to the
Securities in customary form addressed to such Selling Securityholders and the
managing underwriters, if any, thereof, and dated, in the case of the initial
opinion, the effective date of such Shelf Registration Statement (it being
agreed that the matters to be covered by such opinion shall include, without
limitation, the due incorporation and good standing of the Company and its
"significant subsidiaries" (as such term is defined in Rule 405 of the rules and
regulations promulgated under the Securities Act); the qualification of the
Company and its significant subsidiaries to transact business as foreign
corporations; the due authorization, execution and delivery of the relevant
agreement of the type referred to in Section 2(m) hereof; the due authorization,
execution, authentication and issuance, and the validity and enforceability, of
the Securities; the absence of material legal or governmental proceedings
involving the Company and its subsidiaries; the absence of governmental
approvals required to be obtained in connection with the Shelf Registration
Statement, the offering and sale of the Securities, or any agreement of the type
referred to in Section 2(m) hereof; the compliance as to form of the Shelf
Registration Statement and any documents incorporated by reference therein and
of the Indenture with the requirements of the Securities Act and the Trust
Indenture Act, respectively; and a statement that nothing has come to the
attention of such counsel that gives it reason to believe that, as of the date
of the opinion and as of the effective date of the Shelf Registration Statement
or most recent post-effective amendment thereto, as the case may be, the Shelf
Registration Statement and the prospectus included therein, as then amended or
supplemented, including any documents incorporated by reference therein contain
an untrue statement of a material fact or omit to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading (in the case of the prospectus, as so amended or supplemented,
included therein, in the light of the circumstances under which they were made);
(ii) its officers to execute and deliver all customary documents and
certificates and updates thereof requested by any underwriters of the Securities
and (iii) its independent public accountants to provide to the Selling
Securityholders and any underwriter therefor a comfort letter in customary form
and covering matters of the type customarily covered in comfort letters in
connection with primary underwritten offerings, subject to receipt of
appropriate documentation as contemplated, and only if permitted, by Statement
of Auditing Standards No. 72.
(p) In the event that any broker-dealer registered under the Exchange
Act shall underwrite any Securities or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution" (within
the meaning of the Conduct Rules (the "RULES") of the National Association of
Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such
Securities or as an underwriter, a placement or sales agent or a broker or
dealer in respect thereof, or otherwise, the Company will assist such
broker-dealer in complying with the requirements of such Rules, including,
without limitation, by (i) if such Rules, including Rule 2720, shall so require,
engaging a "qualified independent underwriter" (as defined in Rule 2720) to
participate in the preparation of the Shelf Registration Statement relating to
such Securities, to exercise usual standards of due diligence in respect thereto
and, if any portion of the offering contemplated by such Registration Statement
is an underwritten offering or is made through a placement or sales agent, to
recommend the yield of such Securities, (ii) indemnifying any such qualified
independent underwriter to the extent of the indemnification of underwriters
provided in Section 5 hereof and (iii) providing such information to such
broker-dealer as may be required in order for such broker-dealer to comply with
the requirements of the Rules.
(q) The Company shall use its commercially reasonable efforts to take
all other steps necessary to effect the registration of the Securities covered
by a Registration Statement contemplated hereby.
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3. Registration Expenses. (a) All expenses incident to the Company's
performance of and compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement is ever filed or 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 Securities to be issued and printing of
Prospectuses), messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel for the Company;
(v) all application and filing fees in connection with
listing the Common Stock 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 (including the expenses of any
special audit and comfort letters required by or incident to such
performance).
The Company will bear its 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.
(b) In connection with the Shelf Registration Statement required by
this Agreement, the Company will reimburse the Initial Purchasers and the
Selling Securityholders, for the reasonable fees and disbursements of not more
than one counsel, designated by the Holders of a majority in principal amount of
the Securities covered by the Shelf Registration Statement (provided that
Holders of Common Stock issued upon the conversion of the Initial Securities
shall be deemed to be Holders of the aggregate principal amount of Initial
Securities from which such Common Stock was converted) to act as counsel for the
Holders in connection therewith, regardless of whether a Registration Statement
is ever filed or becomes effective.
4. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Holder and each person, if any, who controls such Holder within
the meaning of the Securities Act or the Exchange Act (each Holder, and such
controlling persons are referred to collectively as the "INDEMNIFIED PARTIES")
from and against any losses, claims, damages or liabilities, joint or several,
or any actions in respect thereof (including, but not limited to, any losses,
claims, damages, liabilities or actions relating to purchases and sales of the
Securities) to which each Indemnified Party may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement or prospectus including any document incorporated by
reference therein, or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration, 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 shall reimburse, as incurred, the Indemnified Parties for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action in
respect thereof; provided, however, that (i) the Company shall not be liable in
any such case to the extent that such loss, claim, damage or liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in the Shelf Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to the Shelf Registration in reliance upon and in conformity
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with written information pertaining to such Holder and furnished to the Company
by or on behalf of such Holder specifically for inclusion therein and (ii) with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus relating to the Shelf Registration
Statement, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Holder from whom the person asserting any such
losses, claims, damages or liabilities purchased the Securities concerned, to
the extent that a prospectus relating to such Securities was required to be
delivered by such Holder under the Securities Act in connection with such
purchase and any such loss, claim, damage or liability of such Holder results
from the fact that there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Securities to such person, a copy
of the final prospectus if the Company had previously furnished copies thereof
to such Holder; provided further, however, that this indemnity agreement will be
in addition to any liability which the Company may otherwise have to such
Indemnified Party. The Company shall also indemnify underwriters, their officers
and directors and each person who controls such underwriters within the meaning
of the Securities Act or the Exchange Act to the same extent as provided above
with respect to the indemnification of the Holders of the Securities if
requested by such Holders.
(b) Each Holder, severally and not jointly, will indemnify and hold
harmless the Company, its officers and directors and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act from and against any losses, claims, damages or liabilities or any actions
in respect thereof, to which the Company or any such controlling person may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Shelf Registration Statement or prospectus or in any amendment
or supplement thereto or in any preliminary prospectus relating to the Shelf
Registration, or arise out of or are based upon the omission or alleged omission
to state therein a material fact necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
omission or alleged untrue statement or omission was made in reliance upon and
in conformity with written information pertaining to such Holder and furnished
to the Company by or on behalf of such Holder specifically for inclusion
therein; and, subject to the limitation set forth immediately preceding this
clause, shall reimburse, as incurred, the Company for any legal or other
expenses reasonably incurred by the Company or any such controlling person in
connection with investigating or defending any loss, claim, damage, liability or
action in respect thereof. This indemnity agreement will be in addition to any
liability which such Holder may otherwise have to the Company or any of its
controlling persons.
(c) Promptly after receipt by an indemnified party under this Section 4
of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 4,
notify the indemnifying party of the commencement thereof; but the failure to
notify the indemnifying party shall not relieve it from any liability that it
may have under subsection (a) or (b) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided further that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to
an indemnified party otherwise than under subsection (a) or (b) above. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this
Section 4 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
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party unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on any claims that are 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 any indemnified party.
(d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (a) or (b) above in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable considerations. The
relative fault of the parties 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 on the one hand or such Holder or such other indemnified
party, as the case may be, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding any other provision of this Section 4(d), the Holders shall not
be required to contribute any amount in excess of the amount by which the net
proceeds received by such Holders from the sale of the Securities pursuant to
the Shelf Registration Statement exceeds the amount of damages which such
Holders have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each person,
if any, who controls such indemnified party within the meaning of the Securities
Act or the Exchange Act shall have the same rights to contribution as such
indemnified party and each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.
(e) The agreements contained in this Section 4 shall survive the sale
of the Securities pursuant to the Shelf Registration Statement and shall remain
in full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.
5. Additional Interest Under Certain Circumstances. (a) Additional
interest (the "ADDITIONAL INTEREST") with respect to the Initial Securities
shall be assessed as follows if any of the following events occur (each such
event in clauses (i) through (iii) below being herein called a "REGISTRATION
DEFAULT"):
(i) the Shelf Registration Statement has not been filed with
the Commission by the 120th day after the first date of original
issuance of the Initial Securities;
(ii) the Shelf Registration Statement has not been declared
effective by the Commission by the 210th day after the first date of
original issue of the Initial Securities; or
(iii) the Shelf Registration Statement is declared effective
by the Commission but (A) the Shelf Registration Statement thereafter
ceases to be effective or (B) the Shelf Registration Statement or the
Prospectus ceases to be usable in connection with resales of Transfer
Restricted Securities (as defined below) during the periods specified
herein because either (1) any event occurs as a result of which the
Prospectus forming part of such Shelf Registration Statement would
include 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, or (2) it
shall be necessary to amend such Shelf Registration Statement or
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supplement the related prospectus, to comply with the Securities Act or
the Exchange Act or the respective rules thereunder.
Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Company or pursuant to operation of law or as a result of any
action or inaction by the Commission .
Additional Interest shall accrue on the Initial Securities over and
above the interest set forth in the title of the Initial Securities from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all such Registration Defaults have been cured, at a
rate of 0.50% per annum (the "ADDITIONAL INTEREST RATE").
(b) A Registration Default referred to in Section 5(a)(iii) hereof
shall be deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to the Shelf Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related prospectus or (y) other material events, with respect
to the Company that would need to be described in such Shelf Registration
Statement or the related prospectus and (ii) in the case of clause (y), the
Company is proceeding promptly and in good faith to amend or supplement the
Shelf Registration Statement and related prospectus to describe such events as
required by paragraph 2(h) hereof; provided, however, that in any case if such
Registration Default occurs for a continuous period in excess of 30 days,
Additional Interest shall be payable in accordance with the above paragraph from
the day such Registration Default occurs until such Registration Default is
cured.
(c) Any amounts of Additional Interest due pursuant to Section 5(a)
will be payable in cash on the regular interest payment dates with respect to
the Initial Securities. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest Rate by the principal amount of
the Initial Securities, further multiplied by a fraction, the numerator of which
is the number of days such Additional Interest Rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
(d) "TRANSFER RESTRICTED SECURITIES" means each Security until (i) the
date on which such Security has been effectively registered under the Securities
Act and disposed of in accordance with the Shelf Registration Statement or (ii)
the date on which such Security is distributed to the public pursuant to Rule
144 under the Securities Act or is saleable pursuant to Rule 144(k) under the
Securities Act.
6. Rules 144 and 144A. The Company shall use its best efforts to file
the reports required to be filed by it under the Securities Act and the Exchange
Act in a timely manner and, if at any time the Company is not required to file
such reports, it will, upon the request of any Holder, make publicly available
other information so long as necessary to permit sales of their securities
pursuant to Rules 144 and 144A. The Company covenants that it will take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Transfer Restricted Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A (including the requirements of Rule
144A(d)(4)). The Company will provide a copy of this Agreement to prospective
purchasers of Securities identified to the Company by the Initial Purchasers
upon request. Upon the request of any Holder, the Company shall deliver to such
Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 6 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
7. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by the Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
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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 to be included in such offering (provided that holders of
Common Stock issued upon conversion of the Initial Securities shall not be
deemed holders of Common Stock, but shall be deemed to be holders of the
aggregate principal amount of Initial Securities from which such Common Stock
was converted).
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.
8. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Section 1 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 Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Company's obligations under Sections 1 hereof. The
Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not 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 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 departures from
the provisions hereof may not be given, except by the Company and the written
consent of the holders of a majority in principal amount of the Securities
affected by such amendment, modification, supplement, waiver or consents
(provided that holders of Common Stock issued upon conversion of Initial
Securities shall not be deemed holders of Common Stock, but shall be deemed to
be holders of the aggregate principal amount of Initial Securities from which
such Common Stock was converted). Without the consent of the Holder of each
Initial Security, however, no modification may change the provisions relating to
the payment of Additional Interest.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:
(1) if to a Holder of the Securities, at the most current
address given by such Holder to the Company.
(2) if to the Initial Purchasers;
Credit Suisse First Boston LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Transactions Advisory Group
10
with a copy to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: J. Xxxxxxx Xxxxxxx
(3) if to the Company, at its address as follows:
UniSource Energy Corporation
Xxx Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Fax No.: (000) 000-0000
Attention: Treasurer
with a copy to:
Xxxxxx Xxxx & Priest LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxx X. Xxxx
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
(e) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder.
(f) Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(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.
(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
PRINCIPLES OF CONFLICTS OF LAWS.
By the execution and delivery of this Agreement, the Company submits to
the nonexclusive jurisdiction of any federal or state court in the State of New
York.
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(j) Severability. If 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) Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the several Initial Purchasers and the Company in accordance with its
terms.
Very truly yours,
UNISOURCE ENERGY CORPORATION
by: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President, Chief
Financial Officer & Treasurer
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first above
written.
CREDIT SUISSE FIRST BOSTON LLC
By /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Director
Acting on behalf of itself
and as the Representative
of the several Purchasers
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