EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
Dated as of January 22, 2003
among
CITIZENS BANKING CORPORATION,
XXXXXX XXXXXXX & CO. INCORPORATED
and
The other Initial Purchasers referred to herein
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of
January 22, 2003 among Citizens Banking Corporation, a Michigan corporation (the
"Company"), Xxxxxx Xxxxxxx & Co. Incorporated (the "Representative"), and the
other parties referred to in Annex A hereto (each, an "Initial Purchaser" and
collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
January 22, 2003, by and among the Company and the Initial Purchasers (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $125,000,000 aggregate principal amount of the Company's 5.75%
Subordinated Notes due 2013 (the "Notes"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the Initial Purchasers' obligations thereunder, the Company has
agreed to provide to the Initial Purchasers and their respective direct and
indirect transferees and assigns the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the SEC
promulgated thereunder.
"Additional Interest" shall have the meaning set forth in
Section 2(e) hereof.
"Closing Time" shall mean January 27, 2003.
"Company" shall have the meaning set forth in the preamble of
this Agreement.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Company, including any agent thereof;
provided, however, that any such depositary must at all times have an
address in the Borough of Manhattan, The City of New York.
"Event Date" shall have the meaning set forth in Section 2(e).
"Exchange Offer" shall mean the exchange offer by the Company
of Exchange Securities for Registrable Securities pursuant to Section
2(a) hereof.
"Exchange Offer Registration" shall mean a registration under
the 1933 Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form) covering the Registrable Securities, and all
amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and
all material incorporated or deemed to be incorporated by reference
therein.
"Exchange Securities" shall mean the Notes, issued by the
Company under the Indenture containing terms identical to the Notes
(except that (i) interest thereon shall accrue from the last date to
which interest has been paid or duly provided for on the Securities or,
if no such interest has been paid or duly provided for, from the
Interest Accrual Date, (ii) provisions relating to an increase in the
stated rate of interest thereon upon the occurrence of a Registration
Default shall be eliminated and (iii) the transfer restrictions,
minimum purchase requirements and legends relating to restrictions on
ownership and transfer thereof as a result of the issuance of the
Securities without registration under the 1933 Act shall be eliminated.
"Holders" shall mean (i) the Initial Purchasers, for so long
as they own any Registrable Securities, and each of their respective
successors, assigns and direct and indirect transferees who become
registered owners of Registrable Securities under the Indenture and
(ii) each Participating Broker-Dealer that holds Exchange Securities
for so long as such Participating Broker-Dealer is required to deliver
a prospectus meeting the requirements of the 1933 Act in connection
with any resale of such Exchange Securities.
"Indenture" shall mean the Indenture, to be dated as of the
Closing Time, by and between the Company and JPMorgan Chase Bank, as
trustee, as the same may be further amended or supplemented from time
to time in accordance with the terms thereof.
"Interest Accrual Date" means January 27, 2003.
"Initial Purchasers" shall have the meaning set forth in the
preamble of this Agreement.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Registrable Securities outstanding,
excluding Exchange Securities referred to in clause (ii) of the
definition of "Holders" above; provided that whenever the consent or
approval of Holders of a specified percentage of Registrable Securities
or Exchange Securities is required hereunder, Registrable Securities
and Exchange Securities held by the Company or any of its affiliates
(as such term is defined in Rule 405 under the 0000 Xxx) shall also be
disregarded in determining whether such consent or approval was given
by the Holders of such required percentage.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Notes" shall have the meaning set forth in the preamble of
this Agreement.
"Notifying Broker-Dealer" shall have the meaning set forth in
Section 3(f).
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(f).
"Person" shall mean an individual, partnership, joint venture,
limited liability company, corporation, trust or unincorporated
organization, or a government or agency or political subdivision
thereof.
"Private Exchange Securities" shall have the meaning set forth
in Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with
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respect to the terms of the offering of any portion of the Registrable
Securities covered by a Shelf Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated or
deemed to be incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Registrable Securities" shall mean the Notes; provided,
however, that any Notes shall cease to be Registrable Securities when:
(i) a Registration Statement with respect to such
Notes shall have been declared effective under the 1933 Act and such
Notes shall have been disposed of pursuant to such Registration
Statement,
(ii) such Notes shall have been sold to the public
pursuant to Rule 144 (or any similar provision then in force, but not
Rule 144A) under the 1933 Act,
(iii) such Notes shall have ceased to be outstanding,
(iv) such Notes have been exchanged for Exchange
Securities which have been registered pursuant to the Exchange Offer
Registration Statement upon consummation of the Exchange Offer unless,
in the case of any Exchange Securities referred to in this clause (iv),
such Exchange Securities are held by Participating Broker-Dealers or
otherwise are not freely tradable without any limitations or
restrictions under the 1933 Act (in which case such Exchange Securities
will be deemed to be Registrable Securities until the earlier of (A)
180 days after the completion of the Exchange Offer and (B) such time
as such Exchange Securities are sold to a purchaser in whose hands such
Exchange Securities are freely tradeable without any limitations or
restrictions under the 1933 Act), or
(v) such Notes have been exchanged for Private
Exchange Securities under this Agreement (in which case such Private
Exchange Securities will be deemed to be Registrable Securities until
the earlier of (A) 180 days after the completion of the Exchange Offer
and (B) such time as such Private Exchange Securities are sold to a
purchaser in whose hands such Private Exchange Securities are freely
tradeable without any limitations or restrictions under the 1933 Act).
"Registration Default" shall have the meaning set forth in
Section 2(e).
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this
Agreement, including without limitation:
- all SEC, stock exchange or NASD registration and
filing fees,
- all fees and expenses incurred in connection with
compliance with state or other securities or blue sky
laws and compliance with the rules of the NASD
(including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection
with qualification of any of the Exchange Securities
or Registrable Securities under state or other
securities or blue sky laws and any filing with and
review by the NASD),
- all expenses of any Persons in preparing, printing
and distributing any Registration Statement, any
Prospectus, any amendments or supplements
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thereto, any underwriting agreements, securities
sales agreements, and certificates representing the
Notes, Private Exchange Securities (if any) or
Exchange Securities and other documents relating to
the performance of and compliance with this
Agreement,
- all rating agency fees,
- all fees and expenses incurred in connection with the
listing, if any, of any of the Notes or Exchange
Securities on any securities exchange or exchanges or
on any quotation system,
- all fees and disbursements relating to the
qualification of the Indenture under applicable
securities laws,
- the fees and disbursements of counsel for the Company
and the fees and expenses of independent public
accountants for the Company or for any other Person,
business or assets whose financial statements are
included in any Registration Statement or Prospectus,
including the expenses of any special audits or "cold
comfort" letters required by or incident to such
performance and compliance,
- the fees and expenses of a "qualified independent
underwriter" as defined by Conduct Rule 2720 of the
NASD (if required by the NASD rules) and the
reasonable fees and disbursements of its counsel,
- the fees and expenses of the Trustee, any registrar,
any depositary, any paying agent, any escrow agent or
any custodian, in each case including reasonable fees
and disbursements of their respective counsel,
- the reasonable fees and expenses of the Initial
Purchasers in connection with the Exchange Offer,
including the reasonable fees and disbursements of
one counsel to the Initial Purchasers in connection
therewith,
- the reasonable fees and disbursements, if any, of
special counsel representing the Holders of
Registrable Securities in connection with the
preparation and filing of a Shelf Registration
Statement or any amendments or supplements thereto,
but not in connection with any underwritten offering
under the Shelf Registration Statement, and
- in the case of an underwritten offering, any fees and
disbursements of the underwriters customarily paid by
issuers and sellers of securities and the fees and
expenses of any special experts retained by the
Company in connection with any Registration Statement
but excluding (except as otherwise provided herein)
fees and disbursements of counsel to the underwriters
and the Holders and underwriting discounts and
commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by
a Holder.
"Registration Statement" shall mean any registration statement
of the Company relating to any offering of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement
(including, without limitation, any Exchange Offer Registration
Statement and any Shelf Registration Statement), and all amendments and
supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated
or deemed to be incorporated by reference therein.
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"Representative" shall have the meaning set forth in the
preamble of this Agreement.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of
Section 2(b) of this Agreement which covers all of the Registrable
Securities or Private Exchange Securities (if any), as the case may be,
on an appropriate form under Rule 415 under the 1933 Act, or any
similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated or deemed to be
incorporated by reference therein.
"TIA" shall mean the Trust Indenture Act of 1939, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"Trustee" shall mean the trustee with respect to the Notes,
the Private Exchange Securities (if any) and the Exchange Securities
under the Indenture.
For purposes of this Agreement, (i) all references in this Agreement to
any Registration Statement, Prospectus or any amendment or supplement to any of
the foregoing shall be deemed to include the copy filed with the SEC pursuant to
its Electronic Data Gathering, Analysis and Retrieval system ("XXXXX"); (ii) all
references in this Agreement to financial statements and schedules and other
information which is "contained", "included" or "stated" in any Registration
Statement or Prospectus (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated or deemed to be incorporated by reference in
such Registration Statement or Prospectus, as the case may be; (iii) all
references in this Agreement to amendments or supplements to any Registration
Statement or Prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is incorporated or deemed to be incorporated
by reference in such Registration Statement or Prospectus, as the case may be;
(iv) all references in this Agreement to Rule 144, Rule 144A or Rule 405 under
the 1933 Act, and all references to any sections or subsections thereof or terms
defined therein, shall in each case include any successor provisions thereto;
and (v) all references in this Agreement to days (but not to business days)
shall mean calendar days.
2. Registration Under the 1933 Act.
(a) Exchange Offer Registration. The Company shall (i) file
with the SEC on or prior to the 90th day after the Closing Time an Exchange
Offer Registration Statement covering the offer by the Company to the Holders to
exchange all of the Registrable Securities for a like aggregate principal amount
of Exchange Securities, (iii) use its reasonable best efforts to cause such
Exchange Offer Registration Statement to be declared effective by the SEC no
later than the 180th day after the Closing Time, (iv) use its reasonable best
efforts to cause such Registration Statement to remain effective until the
closing of the Exchange Offer and (v) use its reasonable best efforts to
consummate the Exchange Offer no later than 45 days after the
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effective date of the Exchange Offer Registration Statement. Upon the
effectiveness of the Exchange Offer Registration Statement, the Company shall
promptly commence the Exchange Offer, it being the objective of such Exchange
Offer to enable each Holder eligible and electing to exchange Registrable
Securities for Exchange Securities (assuming that such Holder is not an
affiliate of the Company within the meaning of Rule 405 under the 1933 Act,
acquires the Exchange Securities in the ordinary course of such Holder's
business and has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing such Exchange
Securities) to transfer such Exchange Securities from and after their receipt
without any limitations or restrictions under the 1933 Act or under the
securities or blue sky laws of the states of the United States.
In connection with the Exchange Offer, the Company shall:
(i) promptly mail to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related
documents;
(ii) keep the Exchange Offer open for not less than
20 business days (or longer, if required by applicable law) after the
date notice thereof is mailed to the Holders and, during the Exchange
Offer, offer to all Holders who are legally eligible to participate in
the Exchange Offer the opportunity to exchange their Registrable
Securities for Exchange Securities;
(iii) use the services of a depositary with an
address in the Borough of Manhattan, New York, for the Exchange Offer;
(iv) permit Holders to withdraw tendered Registrable
Securities at any time prior to the close of business, New York City
time, on the last business day on which the Exchange Offer shall remain
open, by sending to the institution specified in the Prospectus or the
related letter of transmittal or related documents a facsimile
transmission or letter setting forth the name of such Holder, the
principal amount of Registrable Securities delivered for exchange, and
a statement that such Holder is withdrawing its election to have such
Notes exchanged;
(v) notify each Holder that any Registrable Security
not tendered will remain outstanding and continue to accrue interest,
but will not retain any rights under this Agreement (except in the case
of the Initial Purchasers, and Participating Broker-Dealers as provided
herein and any Holder who is not eligible to participate in the
Exchange Offer); and
(vi) otherwise comply in all material respects with
all applicable laws relating to the Exchange Offer.
If, at or prior to the consummation of the Exchange Offer, any of the
Initial Purchasers holds any Notes acquired by it and having the status of an
unsold allotment in the initial distribution, the Company shall, upon the
request of any such Initial Purchaser, simultaneously with the delivery of the
Exchange Securities in the Exchange Offer, issue and deliver to such Initial
Purchaser in exchange for such Notes a like principal amount of debt securities
of the Company that are identical (except that such debt securities shall be
subject to transfer restrictions and minimum purchase requirements, and shall
bear a legend relating to restrictions on ownership and transfer, identical to
those applicable to the Notes as a result of the issuance
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thereof without registration under the 1933 Act and shall provide for the
payment of Additional Interest) to the Exchange Securities (the "Private
Exchange Securities"). The Company shall use its reasonable best efforts to have
the Private Exchange Securities bear the same CUSIP number as the Exchange
Securities and, if unable to do so, the Company will, at such time as any
Private Exchange Security may be sold publicly pursuant to Rule 144(k) under the
1933 Act, permit any such Private Exchange Security to be exchanged for a like
principal amount of Exchange Securities. The Company shall not have any
liability under this Agreement solely as a result of any such Private Exchange
Securities not bearing the same CUSIP number as the Exchange Securities.
The Exchange Securities and the Private Exchange Securities (if any)
shall be issued under the Indenture, which shall be qualified under the TIA and
shall provide that the Exchange Securities shall not be subject to the transfer
restrictions set forth in the Indenture. The Indenture shall provide that the
Exchange Securities issued in respect thereof, the Private Exchange Securities
(if any) issued in respect thereof and the Notes shall vote or consent together
on all matters as a single class and shall constitute a single series of debt
securities issued under the Indenture.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(i) accept for exchange all Registrable Securities
duly tendered and not validly withdrawn pursuant to the Exchange Offer
in accordance with the terms of the Exchange Offer Registration
Statement and the letter of transmittal which shall be an exhibit
thereto;
(ii) deliver, or cause to be delivered, to the
Trustee for cancellation all Registrable Securities so accepted for
exchange by the Company; and
(iii) cause the Trustee promptly to authenticate and
deliver Exchange Securities to each Holder of Registrable Securities so
accepted for exchange in a principal amount equal to the principal
amount of the Registrable Securities of such Holder so accepted for
exchange.
Interest on each Exchange Security and each Private Exchange Security
(if any) will accrue from the last date on which interest was paid or duly
provided for on the Securities surrendered in exchange therefor or, if no
interest has been paid or duly provided for on such Securities, from the
Interest Accrual Date. The Exchange Offer shall not be subject to any
conditions, other than (i) that the Exchange Offer, or the making of any
exchange by a Holder, does not violate any applicable law or any applicable
interpretation of the staff of the SEC, (ii) that no action or proceeding shall
have been instituted or threatened in any court or by or before any governmental
agency with respect to the Exchange Offer which, in the Company's judgment,
would reasonably be expected to impair the ability of the Company to proceed
with the Exchange Offer, and (iii) that the Holders tender the Registrable
Securities to the Company in accordance with the Exchange Offer. Each Holder of
Registrable Securities (other than Participating Broker-Dealers) who wishes to
exchange such Registrable Securities for Exchange Securities in the Exchange
Offer will be required to represent that (i) it is not an affiliate (as defined
in Rule 405 under the 0000 Xxx) of the Company, (ii) any Exchange Securities to
be received by it will be acquired in the ordinary course of business and (iii)
it has no arrangement with any Person to participate in the distribution (within
the meaning of the 0000 Xxx) of the Exchange Securities, and shall be required
to make such other representations as may be
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reasonably necessary under applicable SEC rules, regulations or interpretations
to render the use of Form S-4 or another appropriate form under the 1933 Act
available. To the extent permitted by law, the Company shall inform the Initial
Purchasers of the names and addresses of the Holders of Securities to whom the
Exchange Offer is made and, to the extent such information is available to the
Company, the names and addresses of the beneficial owners of such Securities,
and the Initial Purchasers shall have the right to contact such Holders and
beneficial owners and otherwise facilitate the tender of Registrable Securities
in the Exchange Offer.
(b) Shelf Registration.
(i) If, because of any change in law or applicable
interpretations thereof by the staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a)
hereof, or
(ii) if for any other reason (A) the Exchange Offer
Registration Statement is not declared effective within 180 days
following the Closing Time or (B) the Exchange Offer is not consummated
within 45 days after effectiveness of the Exchange Offer Registration
Statement (provided that if the Exchange Offer Registration Statement
shall be declared effective after such 180-day period or if the
Exchange Offer shall be consummated after such 45-day period, then the
Company's obligations under this clause (ii) arising from the failure
of the Exchange Offer Registration Statement to be declared effective
within such 180-day period or the failure of the Exchange Offer to be
consummated within such 45-day period, respectively, shall terminate),
or
(iii) upon the request of any Holder (other than an
Initial Purchaser holding Notes acquired directly from the Company)
within 30 days following the consummation of the Exchange Offer who is
not eligible to participate in the Exchange Offer or who elects to
participate in the Exchange Offer but does not receive Exchange
Securities which are freely transferable without any limitations or
restrictions under the 1933 Act, or
(iv) upon the request of any of the Initial
Purchasers within 90 days following the consummation of the Exchange
Offer (provided that, in the case of this clause (iv), such Initial
Purchaser shall hold Registrable Securities (including, without
limitation, Private Exchange Securities) from an initial allotment that
it acquired directly from the Company),
then the Company shall, at its cost:
(A) as promptly as practicable, but no later
than (a) the 180th day after the Closing Time or (b)
the 60th day after any such filing obligation arises,
whichever is later, file with the SEC a Shelf
Registration Statement relating to the offer and sale
of the Registrable Securities by the Holders from
time to time in accordance with the methods of
distribution elected by the Majority Holders of such
Registrable Securities and set forth in such Shelf
Registration Statement;
(B) use its reasonable best efforts to cause
such Shelf Registration Statement to be declared
effective by the SEC as promptly as practicable, but
in no event later than the 60th day after the filing
of such Shelf Registration Statement (or, in the case
of a request by any of the
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Initial Purchasers pursuant to clause (iv) above,
within 90 days after such request). In the event that
the Company is required to file a Shelf Registration
Statement pursuant to clause (iii) or (iv) above, the
Company shall file and use its reasonable best
efforts to have declared effective by the SEC both an
Exchange Offer Registration Statement pursuant to
Section 2(a) with respect to all Registrable
Securities and a Shelf Registration Statement (which
may be a combined Registration Statement with the
Exchange Offer Registration Statement) with respect
to offers and sales of Registrable Securities held by
such Holder or such Initial Purchaser, as applicable;
(C) use its reasonable best efforts to keep
the Shelf Registration Statement continuously
effective, supplemented and amended as required, in
order to permit the Prospectus forming part thereof
to be usable by Holders for a period that will
terminate when all of the Registrable Securities
covered by such Shelf Registration Statement (i) have
been sold pursuant to the Shelf Registration
Statement in accordance with the intended method of
distribution thereunder, (ii) become eligible for
resale pursuant to Rule 144(k) under the 1933 Act or
(iii) cease to be Registrable Securities; and
(D) notwithstanding any other provisions
hereof, use its reasonable best efforts to ensure
that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming a part
thereof and any supplements thereto comply in all
material respects with the 1933 Act and the rules and
regulations thereunder, (ii) any Shelf Registration
Statement and any amendment or supplement thereto
does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state
a material fact required to be stated therein or
necessary to make the statements therein not
misleading and (iii) any Prospectus forming part of
any Shelf Registration Statement and any amendment or
supplement to such Prospectus does not include an
untrue statement of a material fact or omit to state
a material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.
The Company shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration Statement without the prior
written consent of the Representative. The Company further agrees, if necessary,
to supplement or amend the Shelf Registration Statement, if reasonably requested
by the Majority Holders with respect to information relating to the Holders, and
otherwise as required by Section 3(b) below, to use its reasonable best efforts
to cause any such amendment to become effective and such Shelf Registration
Statement to become usable as soon as practicable thereafter and to furnish to
the Holders of Registrable Securities copies of any such supplement or amendment
promptly after its being used or filed with the SEC.
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(c) Expenses. The Company shall pay all Registration Expenses
in connection with any registration pursuant to Section 2(a) and 2(b) and, in
the case of any Shelf Registration Statement, will reimburse the Holders or the
Initial Purchasers for the reasonable fees and disbursements of one counsel
designated in writing by the Majority Holders (or, if a Shelf Registration
Statement is filed solely pursuant to clause (iv) of the first paragraph of
Section 2(b), designated by the Initial Purchasers) to act as counsel for the
Holders of the Registrable Securities in connection therewith. Each Holder shall
pay all fees and disbursements of its counsel other than as set forth in the
preceding sentence or in the definition of Registration Expenses and all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to a
Shelf Registration Statement.
(d) Effective Registration Statement.
(i) The Company shall be deemed not to have used its
reasonable best efforts to cause the Exchange Offer Registration
Statement or any Shelf Registration Statement, as the case may be, to
become, or to remain, effective during the requisite periods set forth
herein if the Company voluntarily takes any action or omits to take any
action which would result in any such Registration Statement not being
declared effective or remaining effective or in the Holders of
Registrable Securities (including, under the circumstances contemplated
by Section 3(f) hereof, Exchange Securities) covered thereby not being
able to exchange or offer and sell such Registrable Securities during
that period unless (A) such action is required by applicable law or (B)
such action is taken by the Company in good faith and for valid
business reasons (but not including avoidance of the Company's
obligations hereunder), so long as the Company promptly complies with
the notification requirements of Section 3 hereof, if applicable.
Nothing in this paragraph shall prevent the accrual of Additional
Interest on any Registrable Securities.
(ii) An Exchange Offer Registration Statement
pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof shall not be deemed to have become
effective unless it has been declared effective by the SEC; provided,
however, that if, after such Registration Statement has been declared
effective, the offering of Registrable Securities pursuant to a
Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement shall be deemed not to
have been effective during the period of such interference until the
offering of Registrable Securities pursuant to such Registration
Statement may legally resume.
(iii) The Company may, by notice as described in
Section 3(e), suspend the availability of a Shelf Registration
Statement (and, if the Exchange Offer Registration Statement is being
used in connection with the resale of Exchange Securities by
Participating Broker Dealers as contemplated by Section 3(f), the
Exchange Offer Registration Statement) and the use of the related
Prospectus for up to 45 consecutive days each, but no more than an
aggregate of 90 days, upon the happening of any event or the discovery
of any fact or the taking of any action referred to in Section
3(e)(vi), but subject to compliance by the Company with its obligations
under the last paragraph of Section 3.
(e) Increase in Interest Rate. In the event that:
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(i) the Exchange Offer Registration Statement is not
filed with the SEC on or prior to the 90th day following the Closing
Time, or
(ii) the Exchange Offer Registration Statement is not
declared effective by the SEC on or prior to the 180th day following
the Closing Time, or
(iii) the Exchange Offer is not consummated on or
prior to the 45th day following the effective date of the Exchange
Offer Registration Statement, or
(iv) if required, a Shelf Registration Statement is
not filed with the SEC on or prior to (A) the 180th day following the
Closing Time or (B) the 60th day after the filing obligation arises,
whichever is later, or
(v) if required, a Shelf Registration Statement is
not declared effective on or prior to the 60th day after the filing of
the Shelf Registration Statement (or, if a Shelf Registration Statement
is required to be filed upon the request of any Initial Purchaser,
within 90 days after such request), or
(vi) a Shelf Registration Statement is declared
effective by the SEC but such Shelf Registration Statement ceases to be
effective or such Shelf Registration Statement or the Prospectus
included therein ceases to be usable in connection with resales of
Registrable Securities for any reason and (A) the aggregate number of
days for which the Shelf Registration Statement or such Prospectus
shall not be effective or usable exceeds 90 days, (B) the Shelf
Registration Statement or such Prospectus shall not be effective or
usable for more than two periods (regardless of duration) or (C) the
Shelf Registration Statement or such Prospectus shall not be effective
or usable for a period of more than 45 consecutive days, or
(vii) the Exchange Offer Registration Statement is
declared effective by the SEC but, if the Exchange Offer Registration
Statement is being used in connection with the resale of Exchange
Securities as contemplated by Section 3(f)(B) of this Agreement, the
Exchange Offer Registration Statement ceases to be effective or the
Exchange Offer Registration Statement or the Prospectus included
therein ceases to be usable in connection with resales of Exchange
Securities for any reason during the 180-day period referred to in
Section 3(f)(B) of this Agreement (as such period may be extended
pursuant to the last paragraph of Section 3 of this Agreement) and (A)
the aggregate number of days for which the Exchange Offer Registration
Statement or such Prospectus shall not be effective or usable exceeds
90 days, (B) the Exchange Offer Registration Statement or such
Prospectus shall not be effective or usable for more than two periods
(regardless of duration) or (C) the Exchange Offer Registration
Statement or the Prospectus shall not be effective or usable for a
period of more than 30 consecutive days,
(each of the events referred to in clauses (i) through (vii) above being
hereinafter called a "Registration Default"), the per annum interest rate borne
by the Registrable Securities shall be increased ("Additional Interest") by
one-quarter of one percent (0.25%) per annum immediately following such 90-day
period in the case of clause (i) above, immediately following such 180-day
period in the case of clause (ii) above, immediately following such 45-day
period in the case of clause (iii) above, immediately following any such 180-day
period or 60-day period, whichever ends later, in the case of clause (iv) above,
immediately following any such 225-day
11
period or 90-day period, whichever ends first, in the case of clause (v) above,
immediately following the 90th day, as of the first day of the third period or
immediately following the 45th consecutive day, whichever occurs first, that a
Shelf Registration Statement shall not be effective or a Shelf Registration
Statement or the Prospectus included therein shall not be usable as contemplated
by clause (vi) above, or immediately following the 90th day, as of the first day
of the third period or immediately following the 30th consecutive day, whichever
occurs first, that the Exchange Offer Registration Statement shall not be
effective or the Exchange Offer Registration Statement or the Prospectus
included therein shall not be usable as contemplated by clause (vii) above,
which rate will be increased by an additional one-quarter of one percent (0.25%)
per annum immediately following the first 90-day period that any Additional
Interest continues to accrue under any circumstances; provided that the
aggregate increase in such annual interest rate under this Section 2(e) may in
no event exceed one-half of one percent (0.50%) per annum.
Upon the filing of the Exchange Offer Registration Statement after the
90-day period described in clause (i) above, the effectiveness of the Exchange
Offer Registration Statement after the 180-day period described in clause (ii)
above, the consummation of the Exchange Offer after the 45-day period described
in clause (iii) above, the filing of the Shelf Registration Statement after the
180-day period or 60-day period day, as the case may be, described in clause
(iv) above, the effectiveness of a Shelf Registration Statement after the
225-day period or 90-day period, as the case may be, described in clause (v)
above, the Shelf Registration Statement once again being effective or the Shelf
Registration Statement and the Prospectus included therein becoming usable in
connection with resales of Registrable Securities, as the case may be, in the
case of clause (vi) above, or the Exchange Offer Registration Statement once
again becoming effective or the Exchange Offer Registration Statement and the
Prospectus included therein becoming usable in connection with resales of
Exchange Securities, as the case may be, in the case of clause (vii) thereof,
the interest rate borne by the Securities from the date of such filing,
effectiveness, consummation or resumption of effectiveness or useability, as the
case may be, shall be reduced to the original interest rate so long as no other
Registration Default shall have occurred and shall be continuing at such time
and the Company is otherwise in compliance with this paragraph; provided,
however, that, if after any such reduction in interest rate, one or more
Registration Defaults shall again occur, the interest rate shall again be
increased pursuant to the foregoing provisions.
The Company shall notify the Trustee within three business days after
each and every date on which an event occurs or fails to occur in respect of
which Additional Interest is required to be paid (an "Event Date"). Additional
Interest shall be paid by depositing with the Trustee, in trust, for the benefit
of the Holders of Registrable Securities, on or before the applicable
semi-annual interest payment date, immediately available funds in sums
sufficient to pay the Additional Interest then due. The Additional Interest due
shall be computed on the basis of a 360-day year of twelve 30-day months and
shall be payable on each interest payment date to the record Holder of
Securities entitled to receive the interest payment to be paid on such date as
set forth in the Indenture. Each obligation to pay Additional Interest shall be
deemed to accrue from and including the day following the applicable Event Date.
Anything herein to the contrary notwithstanding, any Holder who was, at
the time the Exchange Offer was pending and consummated, eligible to exchange,
and did not validly tender its Notes for Exchange Securities in the Exchange
Offer will not be entitled to receive any
12
Additional Interest. For purposes of clarity, it is hereby acknowledged and
agreed that, under current interpretations of law by the SEC, Initial Purchasers
holding unsold allotments of Notes acquired from the Company are not eligible to
participate in the Exchange Offer.
(f) Specific Enforcement. Without limiting the remedies
available to the Initial Purchasers and the Holders, the Company acknowledges
that any failure by the Company to comply with its obligations under Sections
2(a) through 2(d) hereof may result in material irreparable injury to the
Initial Purchasers, the Holders or the Participating Broker-Dealers 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, any Holder and any Participating Broker-Dealer may
obtain such relief as may be required to specifically enforce the Company's
obligations under Sections 2(a) through 2(d) hereof.
3. Registration Procedures. In connection with the obligations of the
Company with respect to the Registration Statements pursuant to Sections 2(a)
and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement or,
if required, Registration Statements, within the time periods specified in
Section 2, on the appropriate form under the 1933 Act, which form (i) shall be
selected by the Company, (ii) shall, in the case of a Shelf Registration
Statement, be available for the sale of the Registrable Securities by the
selling Holders thereof, (iii) shall comply as to form in all material respects
with the requirements of the applicable form and include or incorporate by
reference all financial statements required by the SEC to be filed therewith or
incorporated by reference therein, and (iv) shall comply in all respects with
the requirements of Regulation S-T under the 1933 Act and the Company shall use
its reasonable best efforts to cause such Registration Statement to become
effective and remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary
under applicable law to keep such Registration Statement effective for the
applicable period; cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the 1933 Act; and comply with the provisions of the 1933 Act and the 1934
Act with respect to the disposition of all Notes covered by each Registration
Statement during the applicable period in accordance with the plan of
distribution described in such Registration Statement;
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities, at least ten business days prior to filing,
that a Shelf Registration Statement with respect to the Registrable Securities
is being filed and advising such Holders that the distribution of Registrable
Securities will be made in accordance with the method elected by the Majority
Holders; (ii) furnish to each Holder of Registrable Securities, to counsel for
the Initial Purchasers, to counsel for the Holders, if any, and to each
underwriter of an underwritten offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder, counsel or underwriter may reasonably request, including financial
statements and schedules and, if such Holder, counsel or underwriter so
requests, all exhibits (including those incorporated by reference) in order to
facilitate the public sale or other disposition of the Registrable Securities;
and (iii) subject to the penultimate paragraph of this
13
Section 3, the Company hereby consents to the use of the Prospectus, including
each preliminary Prospectus, or any amendment or supplement thereto by each of
the Holders and underwriters of Registrable Securities in connection with the
offering and sale of the Registrable Securities covered by any Prospectus or any
amendment or supplement thereto;
(d) use its reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue sky" laws
of such jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement and each underwriter of an underwritten offering of
Registrable Securities shall reasonably request, to cooperate with the Holders
and the underwriters of any Registrable Securities in connection with any
filings required to be made with the NASD, to keep each such registration or
qualification effective during the period such Registration Statement is
required to be effective and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder; provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d) or (ii) take any action which would subject it to general service
of process or taxation in any such jurisdiction if it is not then so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities and counsel for such Holders promptly and, if requested
by such Holder or counsel, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments or
supplements to a Registration Statement or Prospectus or for additional
information after a Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) if between the effective date of a
Registration Statement and the closing of any sale of Registrable Securities
covered thereby the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to such offering cease to be true and correct, (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (vi) of the
happening of any event or the discovery of any facts or the taking of any action
during the period a Shelf Registration Statement is effective which is
contemplated in Section 2(d)(i)(A) or 2(d)(i)(B) or which makes any statement
made in such Shelf Registration Statement or the related Prospectus untrue in
any material respect or which constitutes an omission to state a material fact
in such Shelf Registration Statement or Prospectus and (vii) of any
determination by the Company that a post-effective amendment to a Registration
Statement would be appropriate. Without limitation to any other provisions of
this Agreement, the Company agrees that this Section 3(e) shall also be
applicable, mutatis mutandis, with respect to the Exchange Offer Registration
Statement and the Prospectus included therein to the extent that such Prospectus
is being used by Participating Broker-Dealers as contemplated by Section 3(f);
(f) (A) in the case of an Exchange Offer, (i) include in the
Exchange Offer Registration Statement (x) a "Plan of Distribution" section
substantially in the form set forth in Annex B hereto or other such form as is
reasonably acceptable to the Representative covering the
14
use of the Prospectus included in the Exchange Offer Registration Statement by
broker-dealers who have exchanged their Registrable Securities for Exchange
Securities for the resale of such Exchange Securities and (y) a statement to the
effect that any such broker-dealers who wish to use the related Prospectus in
connection with the resale of Exchange Securities acquired as a result of
market-making or other trading activities will be required to notify the Company
to that effect, together with instructions for giving such notice (which
instructions shall include a provision for giving such notice by checking a box
or making another appropriate notation on the related letter of transmittal)
(each such broker-dealer who gives notice to the Company as aforesaid being
hereinafter called a "Notifying Broker-Dealer"), (ii) furnish to each Notifying
Broker-Dealer who desires to participate in the Exchange Offer, without charge,
as many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or supplement
thereto, as such broker-dealer may reasonably request, (iii) include in the
Exchange Offer Registration Statement a statement that any broker-dealer who
holds Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities (a "Participating
Broker-Dealer"), and who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer, may be deemed to be a statutory underwriter and
must deliver a prospectus meeting the requirements of the 1933 Act in connection
with any resale of such Exchange Securities, subject to the penultimate
paragraph of this Section 3, the Company hereby consents to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto by any Person subject to the prospectus delivery
requirements of the SEC in connection with the sale or transfer of Exchange
Securities, and (v) include in the transmittal letter or similar documentation
to be executed by an exchange offeree in order to participate in the Exchange
Offer the following provision:
"If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to
engage in, a distribution of Exchange Securities. If the
undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Registrable
Securities, it represents that the Registrable Securities to
be exchanged for Exchange Securities were acquired by it as a
result of market-making activities or other trading activities
and acknowledges that it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of
such Exchange Securities pursuant to the Exchange Offer;
however, by so acknowledging and by delivering a prospectus,
the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act;"
(B) to the extent any Notifying Broker-Dealer participates in
the Exchange Offer, (i) the Company shall use its reasonable best efforts to
maintain the effectiveness of the Exchange Offer Registration Statement for a
period of 180 days (subject to extension pursuant to the last paragraph of this
Section 3) following the last date on which exchanges are accepted pursuant to
the Exchange Offer, and (ii) in addition to its other duties under this
Agreement, the Company will comply, insofar as relates to the Exchange Offer
Registration Statement, the Prospectus included therein and the offering and
sale of Exchange Securities pursuant thereto, with its obligations under Section
2(b)(D), the last paragraph of Section 2(b), Section 3(c), 3(d), 3(e), 3(i),
3(j), 3(k), 3(o) and 3(p), and the last two paragraphs of this Section 3 as if
all
15
references therein to a Shelf Registration Statement, the Prospectus included
therein and the Holders of Registrable Securities referred, mutatis mutandis, to
the Exchange Offer Registration Statement, the Prospectus included therein and
the applicable Notifying Broker-Dealers and, for purposes of this Section 3(f),
all references in any such paragraphs or sections to the "Majority Holders"
shall be deemed to mean, solely insofar as relates to this Section 3(f), the
Notifying Broker-Dealers who are the Holders of the majority in aggregate
principal amount of the Exchange Securities which are Registrable Securities;
(C) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement as would
otherwise be contemplated by Section 3(b) or 3(k) hereof, or take any other
action as a result of this Section 3(f), at any time after the 180th day
(subject to extension pursuant to the last paragraph of this Section 3) after
the last date on which exchanges are accepted pursuant to the Exchange Offer,
and neither Notifying Broker-Dealers nor any other Person shall be authorized by
the Company to, and shall not, deliver such Prospectus after such period in
connection with resales contemplated by this Section 3; and
(D) In the case of any Exchange Offer Registration Statement,
the Company agrees to deliver to the Initial Purchasers on behalf of the
Participating Broker-Dealer upon the effectiveness of the Exchange Offer
Registration Statement (i) an opinion of counsel or opinions of counsel
reasonably satisfactory to the Initial Purchasers, (ii) officers' certificates
substantially in the form customarily delivered in a public offering of debt
securities and (iii) a comfort letter or comfort letters in customary form to
the extent permitted by Statement on Auditing Standards No. 72 of the American
Institute of Certified Public Accountants (or if such a comfort letter is not
permitted, an agreed upon procedures letter in customary form) from the
Company's independent certified public accountants (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements are, or are
required to be, included in the Registration Statement) at least as broad in
scope and coverage as the comfort letter or comfort letters delivered to the
Initial Purchasers in connection with the initial sale of the Notes to the
Initial Purchasers;
(g) (i) in the case of an Exchange Offer, furnish counsel for
the Initial Purchasers and (ii) in the case of a Shelf Registration, furnish
counsel for the Holders of Registrable Securities and counsel for any
underwriters of Registrable Securities copies of any comment letters received
from the SEC or any other request by the SEC or any state securities authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information;
(h) use its reasonable best effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement as soon as
practicable and provide immediate notice to each Holder of the withdrawal of any
such order;
(i) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities and each underwriter, if any, without charge,
at least one conformed copy of each Registration Statement and any
post-effective amendments thereto (without documents incorporated or deemed to
be incorporated therein by reference or exhibits thereto, unless requested);
16
(j) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and cause such Registrable Securities to be
in such denominations (consistent with the provisions of the Indenture) and in a
form eligible for deposit with the Depositary and registered in such names as
the selling Holders or the underwriters, if any, may reasonably request in
writing at least two business days prior to the closing of any sale of
Registrable Securities;
(k) in the case of a Shelf Registration, upon the occurrence
of any event or the discovery of any facts as contemplated by Section 3(e)(vi)
hereof, use its reasonable best efforts to prepare and file a supplement or
post-effective amendment to each effective Registration Statement or the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, such Prospectus will not
contain at the time of such delivery any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. At
such time as such public disclosure is otherwise made or the Company determines
that such disclosure is not necessary, in each case to correct any misstatement
of a material fact or to include any omitted material fact, the Company agrees
to promptly notify each Holder of such determination and to furnish each Holder
such number of copies of the Prospectus, as amended or supplemented, as such
Holder may reasonably request;
(l) obtain CUSIP numbers for all Exchange Securities or
Registrable Securities, as the case may be, not later than the effective date of
a Registration Statement, and provide the Trustee with any certificates and
opinion reasonably required by the Trustee and printed or word-processed
certificates for the Exchange Securities or Registrable Securities, as the case
may be, in a form eligible for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the TIA in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, (ii) cooperate with the Trustee and the Holders
to effect such changes, if any, to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA and (iii)
execute, and use its best efforts to cause the Trustee to execute, all documents
as may be required to effect such changes, if any, and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(n) in the case of a Shelf Registration, the holders of a
majority in principal amount of the Registrable Securities registered pursuant
to such Shelf Registration Statement shall have the right to direct the Company
to effect not more than one underwritten registration and, in connection with
such underwritten registration, the Company shall enter into agreements
(including underwriting agreements or similar agreements containing usual and
customary terms) and take all other customary and appropriate actions (including
those reasonably requested by the holders of a majority in principal amount of
the Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities and in such connection, in a manner
that is reasonable and customary:
(i) make representations and warranties to the
Holders of such Registrable Securities and the underwriters in such
form, substance and scope as are
17
customarily made by issuers to underwriters in similar underwritten
offerings as may be reasonably requested by such Holders and the
managing underwriter(s);
(ii) obtain opinions of counsel to the Company (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriter(s), and the Holders of a
majority in principal amount of the Registrable Securities being sold)
addressed to each selling Holder and the underwriters, covering the
matters customarily covered in opinions requested in sales of debt
securities or underwritten offerings of debt securities and such other
matters as may be reasonably requested by such Holders and the managing
underwriter(s);
(iii) obtain "cold comfort" letters and updates
thereof with respect to such Shelf Registration Statement and the
Prospectus included therein, all amendments and supplements thereto and
all documents incorporated or deemed to be incorporated by reference
therein from the Company's independent certified public accountants and
from the independent certified public accountants for any other Person
or any business or assets whose financial statements are included or
incorporated by reference in the Shelf Registration Statement, each
addressed to the underwriters, and use reasonable best efforts to have
such letters addressed to the selling Holders of Registrable
Securities, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters to
underwriters in connection with similar underwritten offerings and such
letters to be delivered at the time of the pricing of such underwritten
registration with an update to such letter to be delivered at the time
of closing of such underwritten registration;
(iv) if an underwriting agreement or other similar
agreement is entered into, cause the same to set forth indemnification
and contributions provisions and procedures substantially equivalent to
the indemnification and contributions provisions and procedures set
forth in Section 5 hereof with respect to the underwriters and all
other parties to be indemnified pursuant to Section 5 hereof or, at the
request of any underwriters, in the form customarily provided to such
underwriters in similar types of transactions; and
(v) deliver such other documents and certificates as
may be reasonably requested and as are customarily delivered in similar
underwritten offerings of debt securities.
The documents referred to in Sections 3(n)(ii) and 3(n)(v) shall be
delivered at the closing under any underwriting or similar agreement as and to
the extent required thereunder. In the case of any such underwritten offering,
the Company shall provide written notice to the Holders of all Registrable
Securities of such underwritten offering at least 30 days prior to the filing of
a prospectus supplement for such underwritten offering. Such notice shall (x)
offer each such Holder the right to participate in such underwritten offering,
(y) specify a date, which shall be no earlier than 15 days following the date of
such notice, by which such Holder must inform the Company of its intent to
participate in such underwritten offering and (z) include the instructions such
Holder must follow in order to participate in such underwritten offering;
(o) in the case of a Shelf Registration, make available for
inspection by representatives of the Holders of the Registrable Securities and
any underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any counsel or accountant
18
retained by such Holders or underwriters, all financial statements and other
records, documents and properties of the Company reasonably requested by any
such Persons to conduct a reasonable due diligence investigation of the Company,
and cause the respective officers, directors, employees, and any other agents of
the Company to supply all information reasonably requested by any such Persons
in connection with a Shelf Registration Statement and make such representatives
of the Company available, by telephone or at the principal executive office of
the Company in Flint, Michigan, for discussion of such documents as shall
reasonably be requested by any Holder, Initial Purchaser or an underwriter;
(p) (i) in the case of an Exchange Offer, a reasonable time
prior to the filing of any Exchange Offer Registration Statement, any Prospectus
forming a part thereof, any amendment to an Exchange Offer Registration
Statement or amendment or supplement to such Prospectus, provide copies of such
documents to the Initial Purchasers, and make such changes in any such documents
prior to the filing thereof as the Initial Purchasers or their counsel may
reasonably request; (ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the Holders of
Registrable Securities, to the Initial Purchasers, to the underwriter or
underwriters, of an underwritten offering of Registrable Securities, and to
counsel for any such Holders, Initial Purchasers or underwriters, and make such
changes in any such document prior to the filing thereof as the Holders of
Registrable Securities, the Initial Purchasers, any such underwriter or
underwriters or any of their respective counsel may reasonably request prior to
filing such document; and (iii) cause the representatives of the Company to be
available for discussion of such documents as shall be reasonably requested by
the Holders of Registrable Securities, the Initial Purchasers on behalf of such
Holders or the underwriters, and shall not at any time make any filing of any
such document of which such Holders, the Initial Purchasers on behalf of such
Holders, their counsel or any underwriter shall not have previously been advised
and furnished a copy or to which such Holders, the Initial Purchasers on behalf
of such Holders, their counsel or any underwriter shall reasonably object within
a reasonable time period;
(q) in the case of a Shelf Registration, use its reasonable
best efforts to cause the Registrable Securities to be rated with the
appropriate rating agencies, if so requested by the Majority Holders or by the
underwriters of an underwritten offering, unless the Registrable Securities are
already so rated;
(r) otherwise comply with all applicable rules and regulations
of the SEC and, with respect to each Registration Statement and each
post-effective amendment, if any, thereto and each filing by the Company of an
Annual Report on Form 10-K, make available to its security holders, as soon as
reasonably practicable, an earnings statement covering at least twelve months
which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
thereunder;
(s) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by any
underwriter and its counsel (including any "qualified independent underwriter"
that is required to be retained in accordance with the rules and regulations of
the NASD);
19
(t) in the case of a Shelf Registration, a reasonable time
prior to the filing of any Registration Statement, any Prospectus, any amendment
to a Registration Statement or amendment or supplement to a Prospectus or any
document which is to be incorporated by reference into a Registration Statement
or a Prospectus after the initial filing of a Registration Statement, provide
copies of such document to the Initial Purchasers on behalf of such Holders; and
make representatives of the Company as shall be reasonably requested by the
Holders of Registrable Securities, or the Initial Purchasers on behalf of such
Holders, available for discussion of such document; and
(u) in the case of a Shelf Registration, use its reasonable
best efforts to cause all Registrable Securities to be listed on any securities
exchange or quotation system on which similar debt securities issued by the
Company are then listed if requested by the Majority Holders or by the
underwriters of an underwritten offering of Registrable Securities, if any.
In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Registrable Securities to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing and require such Holder to agree in writing to be bound by all
provisions of this Agreement applicable to such Holder.
In the case of a Shelf Registration Statement, each Holder agrees and,
in the event that any Participating Broker-Dealer is using the Prospectus
included in the Exchange Offer Registration Statement in connection with the
sale of Exchange Securities pursuant to Section 3(f), each such Participating
Broker-Dealer agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts of the kind described in
Section 3(e)(ii), (iii), (v), (vi) or (vii) hereof, such Holder or Participating
Broker-Dealer, as the case may be, will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until receipt by
such Holder or Participating Broker-Dealer, as the case may be, of (i) the
copies of the supplemented or amended Prospectus contemplated by Section 3(k)
hereof or (ii) written notice from the Company that the Shelf Registration
Statement or the Exchange Offer Registration Statement, respectively, are once
again effective or that no supplement or amendment is required. If so directed
by the Company, such Holder or Participating Broker-Dealer, as the case may be,
will deliver to the Company (at the Company's expense) all copies in its
possession, other than permanent file copies then in its possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice. Nothing in this paragraph shall prevent the accrual of
Additional Interest on any Notes or Exchange Securities.
If the Company shall give any such notice to suspend the disposition of
Registrable Securities pursuant to the immediately preceding paragraph, the
Company shall use its reasonable best efforts to file and have declared
effective (if an amendment) as soon as practicable thereafter an amendment or
supplement to the Shelf Registration Statement or the Exchange Offer
Registration Statement or both, as the case may be, or the Prospectus included
therein and shall extend the period during which the Shelf Registration
Statement or the Exchange Offer Registration Statement or both, as the case may
be, shall be maintained effective pursuant to this Agreement (and, if
applicable, the period during which Participating Broker-Dealers may use the
Prospectus included in the Exchange Offer Registration Statement pursuant to
Section 3(f) hereof) by the number of days during the period from and including
the date of
20
the giving of such notice to and including the earlier of (x) the date when the
Holders or Participating Broker-Dealers, respectively, shall have received
copies of the supplemented or amended Prospectus necessary to resume such
dispositions and (y) the effective date of written notice from the Company to
the Holders or Participating Broker-Dealers, respectively, that the Shelf
Registration Statement or the Exchange Offer Registration Statement,
respectively, are once again effective or that no supplement or amendment is
required.
4. Underwritten Registrations. In the event that the Company fails to
effect the Exchange Offer or file any Shelf Registration Statement and maintain
the effectiveness of any Shelf Registration Statement as provided herein, the
Company shall not file any Registration Statement with respect to any securities
(within the meaning of Section 2(1) of the 0000 Xxx) of the Company other than
Registrable Securities.
If any of the Registrable Securities covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Majority Holders of such Registrable Securities included in such
offering, subject to the consent of the Company, which consent shall not be
unreasonably withheld.
No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Initial Purchaser, Holder, Participating Broker-Dealer, underwriter who
participates in an offering of Registrable Securities (each, an "Underwriter"),
and each Person, if any, who controls any Initial Purchaser, Holder,
Participating Broker-Dealer or Underwriter within the meaning of either Section
15 of the 1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment or supplement thereto)
pursuant to which Exchange Securities or Registrable Securities were
registered under the 1933 Act, including all documents incorporated
therein by reference, or any omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or Prospectus (or any amendment or
supplement thereto) or any omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
21
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 5(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of one counsel chosen by
any indemnified party), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written
information furnished to the Company by any Initial Purchaser, Holder,
Participating Broker-Dealer or Underwriter with respect to such Initial
Purchaser, Holder, Participating Broker-Dealer or Underwriter expressly
for use in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) or made in reliance
upon the Statements of Eligibility and Qualification of Trustees (Form
T-1) under the 1939 Act filed as exhibits to the Registration
Statement.
(b) Each Initial Purchaser, Holder, Participating
Broker-Dealer and Underwriter severally but not jointly, agrees to indemnify and
hold harmless the Company, each director and officer of the Company, each other
Initial Purchaser, selling Holder, Participating Broker-Dealer and Underwriter,
and each Person, if any, who controls the Company or any Initial Purchaser,
other selling Holder, Participating Broker-Dealer or Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in Section 5(a) hereof, as incurred, with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in any
Registration Statement pursuant to which Exchange Securities or Registrable
Securities were registered under the 1933 Act (or any amendment thereto) or any
Prospectus included therein (or any amendment or supplement thereto) in reliance
upon and in conformity with written information with respect to such Initial
Purchaser, Holder, Participating Broker-Dealer or Underwriter furnished to the
Company by such Initial Purchaser, Holder, Participating Broker-Dealer, or
Underwriter, respectively, expressly for use in the Shelf Registration Statement
(or any amendment thereto) or such Prospectus (or any amendment or supplement
thereto); provided, however, that no such Initial Purchaser, Holder,
Participating Broker-Dealer or Underwriter shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Initial
Purchaser, Holder, Participating Broker-Dealer or Underwriter from the sale of
Registrable Securities pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give written notice as
promptly as reasonably practicable to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder and the indemnifying party shall assume the defense thereof, including
the employment of counsel satisfactory to the indemnified party,
22
and the payment of all expenses. However, the failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 5 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel that are to be reimbursed by such indemnifying party pursuant to this
Section 5, such indemnifying party agrees that it shall be liable for any
settlement effected without its consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 5 is
for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party or
parties on the one hand and the indemnified party or parties 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 omission or alleged omission to
state a material fact relates to information supplied in writing by such
indemnifying party or parties or such indemnified party or parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The Company, the Initial Purchasers, the Holders, the
Participating Broker-Dealers and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 5 were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (e) above. The
aggregate
23
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 5 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 5, no Initial Purchaser,
Holder, Participating Broker-Dealer or Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
Registrable Securities sold by it were offered exceeds the amount of any damages
that such Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter
has otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 5, each Person, if any, who controls an
Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Initial Purchaser, Holder, Participating
Broker-Dealer or Underwriter, as the case may be, and each director and officer
of the Company who signed the Registration Statement and each Person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The respective obligations of the Initial Purchasers, Holders,
Participating Broker-Dealers and Underwriters to contribute pursuant to this
Section 5 are several in proportion to the principal amount of Notes purchased
by them and not joint. The indemnity and contribution provisions contained in
this Section 5 shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Initial Purchaser, Holder, Participating Broker-Dealer,
Underwriter, or any Person controlling any Initial Purchaser, Holder,
Participating Broker-Dealer or Underwriter, or by or on behalf of the Company,
its officers or directors or any Person controlling the Company, (iii)
acceptance of any of the Exchange Securities and (iv) any sale of Registrable
Securities or Exchange Securities pursuant to a Shelf Registration Statement.
6. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company is
subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the
Company covenants that it will file all reports required to be filed by it under
Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by
the SEC thereunder, that if it ceases to be so required to file such reports, it
will upon the request of any Holder or beneficial owner of Registrable
Securities (i) make publicly available such information (including, without
limitation, the information specified in Rule 144(c)(2) under the 0000 Xxx) as
is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii)
deliver or cause to be delivered, promptly following a request by any Holder or
beneficial owner of Registrable Securities or any prospective purchaser or
transferee designated by such Holder or beneficial owner, such information
(including, without limitation, the information specified in Rule 144A(d)(4)
under the 0000 Xxx) as is necessary to
24
permit sales pursuant to Rule 144A under the 1933 Act, and (iii) take such
further action that is reasonable in the circumstances, in each case to the
extent required from time to time to enable such Holder to sell its Registrable
Securities without registration under the 1933 Act within the limitation of the
exemptions provided by (x) Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, (y) Rule 144A under the 1933 Act, as such Rule may be
amended from time to time, or (z) any similar rules or regulations hereafter
adopted by the SEC. Upon the request of any Holder or beneficial owner of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered
into nor will the Company on or after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof, without the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Registrable
Securities.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (i)
if to a Holder or Participating Broker-Dealer (other than an Initial Purchaser),
at the most current address set forth on the records of the registrar under the
Indenture, (ii) if to an Initial Purchaser, at the most current address given by
such Initial Purchaser to the Company by means of a notice given in accordance
with the provisions of this Section 6(d), which address initially is the address
set forth in the Purchase Agreement; and (iii) if to the Company, initially at
the address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(d). 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, first class, postage prepaid,
if mailed; when receipt is acknowledged, if telecopied; and on the next business
day if timely delivered to a 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.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Securities,
in any manner, whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Registrable Securities, such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this
25
Agreement and, if applicable, the Purchase Agreement, and such Person shall be
entitled to receive the benefits hereof.
(f) Third Party Beneficiary. Each Holder, Participating
Broker-Dealer and Underwriter shall be a third party beneficiary of the
agreements made hereunder between the Company, on the one hand, and the Initial
Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of other Holders hereunder. Each
Holder, by its acquisition of Notes, shall be deemed to have agreed to the
provisions of Section 5(b) 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.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Restriction on Resales. If (i) the Company or any of its
subsidiaries or affiliates (as defined in Rule 144 under the 0000 Xxx) shall
redeem, purchase or otherwise acquire any Registrable Security or any Exchange
Security which is a "restricted security" within the meaning of Rule 144 under
the 1933 Act, the Company will deliver or cause to be delivered such Registrable
Security or Exchange Security, as the case may be, to the Trustee for
cancellation and neither the Company nor any of its subsidiaries or affiliates
will hold or resell such Registrable Security or Exchange Security or issue any
new Security or Exchange Security to replace the same.
(j) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
(k) 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.
[SIGNATURE PAGE FOLLOWS]
26
[SIGNATURE PAGE FOR REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
CITIZENS BANKING CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: General Counsel and Secretary
This Registration Rights Agreement is confirmed and accepted as of the
date first above written by the undersigned for itself and on behalf of the
other Initial Purchasers.
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxxxx III
----------------------------
Name: Xxxxxx X. Xxxxxxxxxx III
Title: Executive Director
27
ANNEX A -- INITIAL PURCHASERS
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXX, XXXXXXXX & XXXXX, INC.
XXXXXX X. XXXXX & CO. INC.
CREDIT SUISSE FIRST BOSTON LLC
XXXXXXXXXX & CO. INC.
XXXX XXXXXX INVESTMENTS, INC.
MCDONALD INVESTMENTS INC., A KEYCORP COMPANY
A-1
ANNEX B -- DESCRIPTION OF "PLAN OF DISTRIBUTION"
PURSUANT TO SECTION 3(f)
Each broker-dealer that receives new notes for its own account under
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of those notes. This prospectus, as it may be amended
or supplemented from time to time, may be used by a broker-dealer for resales of
new notes received in exchange for original notes that had been acquired as a
result of market-making or other trading activities. We have agreed that, for a
period of 180 days after the expiration date of the exchange offer, we will make
this prospectus, as it may be amended or supplemented, available to any
broker-dealer for use in connection with any such resale. Any broker-dealers
required to use this prospectus and any amendments or supplements to this
prospectus for resales of the new notes must notify us of this fact by checking
the box on the letter of transmittal requesting additional copies of these
documents.
Notwithstanding the foregoing, we are entitled under the registration
rights agreement to suspend the use of this prospectus by broker-dealers under
specified circumstances. For example, we may suspend the use of this prospectus
if:
- the SEC or any state securities authority requests an
amendment or supplement to this prospectus or the related
registration statement or additional information;
- the SEC or any state securities authority issues any stop
order suspending the effectiveness of the registration
statement or initiates proceedings for that purpose;
- we receive notification of the suspension of the qualification
of the new notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for that purpose;
- the suspension is required by law; or
- an event occurs which makes any statement in this prospectus
untrue in any material respect or which constitutes an
omission to state a material fact in this prospectus.
If we suspend the use of this prospectus, the 180-day period referred
to above will be extended by a number of days equal to the period of the
suspension.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account under
the exchange offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on those notes or a combination of those methods, at market prices
prevailing at the time of resale, at prices related to prevailing market prices
or at negotiated prices. Any resales may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from the selling broker-dealer or the purchasers of
the new notes. Any broker-dealer that resells new notes received by it for its
own account under the exchange offer and any broker or dealer that participates
in a distribution of the new notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any resale of new notes and
any commissions or concessions received by these persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that, by acknowledging that it will deliver and
B-1
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. We have agreed to
pay all expenses incidental to the exchange offer other than commissions and
concessions of any broker or dealer and will indemnify holders of the notes,
including any broker-dealers, against certain liabilities, including liabilities
under the Securities Act.
B-2
