EXHIBIT 99.3
EXECUTION COPY
Registration Rights Agreement
dated as of February 8, 2005
among
Pinnacle Airlines Corp.
and
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
and
Xxxxxxx Xxxxx & Associates, Inc.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into this 8th day of February, 2005, among Pinnacle Airlines Corp., a Delaware
corporation (the "Company"), and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and Xxxxxxx Xxxxx & Associates, Inc. (collectively, the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated as of
February 3, 2005, among the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of $110,000,000 million principal amount at maturity
($121,000,000 principal amount at maturity if the Initial Purchasers exercise
their option in full) of the Company's 3.25% Senior Convertible Notes due 2025
(the "Securities"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide to the Initial Purchasers
and their direct and indirect transferees the registration rights set forth in
this Agreement. The execution of this Agreement is a condition to the closing
under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 Act" shall mean the Securities Exchange Act of l934, as amended from
time to time.
"1939 Act" shall mean the Trust Indenture Act of 1939, as amended from time
to time.
"Closing Date" shall mean the Closing Time as defined in the Purchase
Agreement.
"Common Stock" shall mean any shares of common stock, $.01 par value, of
the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture.
"Company" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
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"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that such depositary
must have an address in the Borough of Manhattan, in the City of New York.
"Holder" shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture.
"Indenture" shall mean the Indenture relating to the Securities, dated as
of February 8, 2005, between the Company and Deutsche Bank National Trust
Company, as trustee, as the same may be amended, supplemented, waived or
otherwise modified from time to time in accordance with the terms thereof.
"Initial Purchaser" or "Initial Purchasers" shall have the meaning set
forth in the preamble.
"Majority Holders" shall mean the Holders of a majority of the outstanding
Registrable Securities (assuming conversion of all Securities into Common
Stock); provided that whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company or any Affiliate (as defined in the Indenture) of
the Company shall be disregarded in determining whether such consent or approval
was given by the Holders of such required percentage amount.
"Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Shelf Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
"Registrable Securities" shall mean all or any of the Securities issued
from time to time under the Indenture in registered form, and the shares of
Common Stock issuable upon conversion of such Securities; provided, however,
that any such Securities shall cease to be Registrable Securities when (i) a
Shelf Registration Statement with respect to such Securities shall have been
declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Shelf Registration Statement, (ii) such Securities
have been or may be sold to the public pursuant to Rule l44 (or any similar
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provision then in force, but not Rule 144A) under the 1933 Act, (iii) such
Securities shall have ceased to be outstanding or (iv) such Securities may be
sold or transferred, other than by the Company's Affiliates, pursuant to Rule
144(k) (or any similar provision then in force) under the 1933 Act.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees, including,
if applicable, the fees and expenses of any "qualified independent underwriter"
(and its counsel) that is required to be retained by any holder of Registrable
Securities in accordance with the rules and regulations of the NASD, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws and compliance with the rules of the NASD (including reasonable
fees and disbursements of counsel for any underwriters or Holders in connection
with blue sky qualification of any of the Registrable Securities and any filings
with the NASD), (iii) all expenses of the Company in preparing or assisting in
preparing, word processing, printing and distributing any Shelf Registration
Statement, any Prospectus, any amendments or supplements thereto, any securities
sales agreements and other documents relating to the performance of and
compliance with this Agreement, (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Securities on any
securities exchange or exchanges, (v) all rating agency fees, (vi) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any special audits or
"comfort" letters required by or incident to such performance and compliance,
(vii) the reasonable fees and expenses of the Trustee, and any escrow agent or
custodian, (viii) the reasonable fees and expenses of a single counsel to the
Holders in connection with the Shelf Registration, which counsel shall be
selected by the Majority Holders, and (ix) any fees and expenses of any special
experts retained by the Company in connection with any Shelf Registration
Statement, but excluding any underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of Registrable Securities by
a Holder.
"SEC" shall mean the Securities and Exchange Commission or any successor
agency or government body performing the functions currently performed by the
United States Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to Section
2.1 hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2.1 of this Agreement which
covers all of the Registrable Securities 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
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therein, all exhibits thereto and all material incorporated by reference
therein.
"Trustee" shall mean the trustee with respect to the Securities under the
Indenture.
2. Registration Under the 0000 Xxx.
2.1 Shelf Registration.
(a) The Company shall, at its cost, no later than 90 days after the
Closing Date, file with the SEC, and thereafter shall use reasonable best
efforts to cause to be declared effective as promptly as practicable but no
later than 180 days after the Closing Date, a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the Holders
that have provided the information pursuant to Section 2.1(d).
(b) The Company shall, at its cost, use reasonable best efforts,
subject to Section 2.5, to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming part
thereof to be usable by Holders for a period of two years from the date the
Shelf Registration Statement is declared effective by the SEC, or for such
shorter period that will terminate when all Registrable Securities covered
by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding or otherwise to be
Registrable Securities (the "Effectiveness Period").
(c) Notwithstanding any other provisions hereof, the Company shall use
reasonable best efforts to ensure that (i) any Shelf Registration Statement
and any amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (ii) any Shelf Registration Statement
and any amendment thereto does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(d) Notwithstanding any other provision hereof, no Holder of
Registrable Securities may include any of its Registrable Securities in the
Shelf Registration Statement pursuant to this Agreement unless the Holder
furnishes to the Company a fully completed notice and questionnaire in the
form attached as Annex A to the Offering Memorandum (the "Questionnaire")
and such other information in writing as the Company may reasonably request
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in writing for use in connection with the Shelf Registration Statement or
Prospectus included therein and in any application to be filed with or
under state securities laws. In order to be named as a selling
securityholder in the Prospectus at the time of effectiveness of the Shelf
Registration Statement, each Holder must, before the effectiveness of the
Shelf Registration Statement and no later than the 20th day after the
issuance of a press release by the Company announcing the initial filing of
the Registration Statement (or the filing of the first amendment to the
Shelf Registration Statement in the event the Company promptly files the
Shelf Registration Statement following the date of this Agreement), furnish
the completed Questionnaire and such other information that the Company may
reasonably request in writing, if any, to the Company in writing and the
Company will include the information from the completed Questionnaire and
such other information, if any, in the Shelf Registration Statement and the
Prospectus in a manner so that upon effectiveness of the Shelf Registration
Statement the Holder will be permitted to deliver the Prospectus to
purchasers of the Holder's Registrable Securities. From and after the date
that the Registration Statement is first declared effective by the SEC,
upon receipt of a completed Questionnaire and such other information that
the Company may reasonably request in writing, if any, the Company will use
reasonable best efforts to file within 20 business days any amendments or
supplements to the Shelf Registration Statement necessary for such Holder
to be named as a selling securityholder in the Prospectus contained therein
to permit such Holder to deliver the Prospectus to purchasers of the
Holder's Securities (subject to the Company's right to suspend the Shelf
Registration Statement as described in Section 2.5 below); provided that
the Company shall not be required to file more than one such amendment to
the Shelf Registration Statement in any calendar quarter for all such
Holders. Holders that do not deliver a completed written Questionnaire and
such other information, as provided for in this Section 2.1(d), will not be
named as selling securityholders in the Prospectus. Each Holder named as a
selling securityholder in the Prospectus agrees to promptly furnish to the
Company all information required to be disclosed in order to make
information previously furnished to the Company by the Holder not
materially misleading and any other information regarding such Holder and
the distribution of such Holder's Registrable Securities as the Company may
from time to time reasonably request in writing.
(e) Each Holder agrees not to sell any Registrable Securities pursuant
to the Shelf Registration Statement without delivering, or causing to be
delivered, a Prospectus to the purchaser thereof and, following termination
of the Effectiveness Period, to notify the Company, within ten days of a
written request by the Company, of the amount of Registrable Securities
sold pursuant to the Shelf Registration Statement and, in the absence of a
response, the Company may assume that all of such Holder's Registrable
Securities have been so sold; provided that the Company shall use
reasonable best efforts to confirm that all of such Holder's Registrable
Securities have been so sold prior to making such assumption.
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The Company shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration Statement. The Company
further agrees, if necessary, to supplement or amend the Shelf Registration
Statement, as required by Section 2.3(b) below, and to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly after
its being used or filed with the SEC.
2.2 Expenses. The Company shall pay all Registration Expenses in connection
with the registration pursuant to Section 2.1. Each Holder shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to the
Shelf Registration Statement.
2.3. Effectiveness. (a) The Company will be deemed not have used its
reasonable best efforts to cause the Shelf Registration Statement to become, or
to remain, effective during the requisite period if the Company voluntarily
takes any action that would, or, or fails to take any action which failure would
result in any such Shelf Registration Statement not being declared effective or
the Holders of Registrable Securities covered thereby not being able to offer
and sell such Registrable Securities during that period as and to the extent
contemplated hereby, unless such action is required by applicable law.
(b) A Shelf Registration Statement pursuant to Section 2.1 hereof will not
be deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Shelf Registration
Statement will be deemed not to have been effective during the period of such
interference, until the offering of Registrable Securities pursuant to such
Shelf Registration Statement may legally resume.
2.4 Interest. In the event that (a) a Shelf Registration Statement is not
filed with the SEC on or before the 90th calendar day following the Closing
Date, (b) a Shelf Registration Statement is not declared effective on or prior
to the 180th calendar day following the Closing Date, (c) after effectiveness,
subject to Section 2.5, the Shelf Registration Statement fails to be effective
or usable by the Holders without being succeeded within seven business days by a
post-effective amendment or a report filed with the SEC pursuant to the 1934 Act
that cures the failure to be effective or usable, or (d) the Shelf Registration
Statement is unusable by the Holders for any reason, and the aggregate number of
days in any consecutive twelve-month period for which the Shelf Registration
Statement shall not be usable exceeds the Suspension Period (as defined in
Section 2.5 hereof) (each such event being a "Registration Default"), additional
interest, as liquidated damages ("Liquidated Damages"), will accrue at a rate
per annum of one-quarter of one percent (0.25%) of the principal amount of the
Securities for the first 90-day period from day following the Registration
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Default, and thereafter at a rate per annum of one-half of one percent (0.50%)
of the principal amount of the Securities, provided that in no event shall
Liquidated Damages accrue at a rate per annum exceeding one half of one percent
(0.50%) of the issue price of the Securities, provided further that no
Liquidated Damages shall accrue after the second anniversary of the date of this
Agreement. Upon the cure of all Registration Defaults then continuing, the
accrual of Liquidated Damages will automatically cease and the interest rate
borne by the Securities will revert to the original interest rate at such time.
Liquidated Damages shall be computed based on the actual number of days elapsed
in each 90-day period in which the Shelf Registration Statement is not effective
or is unusable. Holders who have converted Securities into Common Stock will not
be entitled to receive any Liquidated Damages with respect to such Common Stock
or the issue price of the Securities converted.
The Company shall notify the Trustee within ten business days after each
and every date on which an event occurs in respect of which Liquidated Damages
are required to be paid. Liquidated Damages shall be paid by depositing with the
Trustee, in trust, for the benefit of the Holders of Registrable Securities, on
or before the applicable semiannual interest payment date, immediately available
funds in sums sufficient to pay the Liquidated Damages then due. The Liquidated
Damages due shall be payable on each interest payment date to the record Holder
of Registrable Securities entitled to receive the interest payment to be paid on
such date as set forth in the Indenture. Each obligation to pay Liquidated
Damages shall be deemed to accrue from and including the day following the
Registration Default to but excluding the day on which the Registration Default
is cured.
A Registration Default under clause (a) above shall be cured on the date
that the Registration Statement is filed with the SEC. A Registration Default
under clause (b) above shall be cured on the date that the Registration
Statement is declared effective by the SEC. A Registration Default under clauses
(c) or (d) above shall be cured on the date an amended Registration Statement is
declared effective by the SEC or the Company otherwise declares the Registration
Statement and the Prospectus useable, as applicable. The Company will have no
liabilities for monetary damages with respect to any Registration Default for
which Liquidated Damages are expressly provided for herein.
2.5. Suspension. The Company may suspend the use of any Prospectus, without
incurring or accruing any obligation to pay Liquidated Damages pursuant to
Section 2.4 hereof, for a period not to exceed 45 calendar days in any
three-month period, or an aggregate of 120 calendar days in any twelve-month
period, (each, a "Suspension Period") if the Board of Directors of the Company
shall have determined in good faith that because of valid business reasons (not
including avoidance of the Company's obligations hereunder), including without
limitation proposed or pending corporate developments and similar events or
because of filings with the SEC, it is in the best interests of the Company to
suspend such use, and prior to suspending such use the Company provides the
Holders with written notice of such suspension, which notice need not specify
the nature of the event giving rise to such suspension. Each Holder shall keep
confidential any communications received by it from the Company regarding the
suspension of the use of the Prospectus, except as required by applicable law.
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3. Registration Procedures.
In connection with the obligations of the Company with respect to the Shelf
Registration, the Company shall:
(a) prepare and file with the SEC a Shelf Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form under
the 1933 Act, which form (i) shall be selected by the Company, (ii) shall 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 material respects with the
applicable requirements of Regulation S-T under the 1933 Act, if any, and use
reasonable best efforts to cause such Shelf 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 the Shelf Registration Statement as may be necessary under
applicable law to keep the Shelf Registration Statement effective for the
Effectiveness Period, subject to Section 2.5; and cause each Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provision then in force) under the
1933 Act and comply during the Effectiveness Period with the provisions of the
1933 Act, the 1934 Act and the rules and regulations thereunder required to
enable the disposition of all Registrable Securities covered by the Shelf
Registration Statement in accordance with the intended method or methods of
distribution by the selling Holders thereof;
(c) (i) notify each Holder of Registrable Securities of the filing, by
issuing a press release, of a Shelf Registration Statement with respect to the
Registrable Securities; (ii) furnish to each Holder of Registrable Securities
that has provided the information required by Section 2.1(d) and to each
underwriter of an underwritten offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder or underwriter may reasonably request, including financial
statements and schedules and, if the Holder so requests, all exhibits in order
to facilitate the unrestricted sale or other disposition of the Registrable
Securities; and (iii) subject to Section 2.5 hereof and to any notice by the
Company in accordance with Section 3(e) hereof of the existence of any fact of
the kind described in Sections 3(e)(ii), (iii), (iv), (v) and (vi) hereof,
hereby consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Registrable Securities that has
provided the information required by Section 2.1(d) in connection with the
offering and sale of the Registrable Securities;
(d) use 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 Shelf
Registration Statement and each underwriter of an underwritten offering of
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Registrable Securities shall reasonably request, and do any and all other acts
and things which may be reasonably necessary or advisable to enable each such
Holder and underwriter to consummate the disposition in each such jurisdiction
of such Registrable Securities owned by such Holder; provided, however, that the
Company shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), or (ii) take any action which
would subject it to general service of process or taxation in any such
jurisdiction where it is not then so subject;
(e) notify promptly each Holder of Registrable Securities under a Shelf
Registration that has provided the information required by Section 2.1(d) and,
if requested by such Holder, confirm such advice in writing promptly (i) when a
Shelf Registration Statement has become effective and when any post-effective
amendments thereto become effective, (ii) of any request by the SEC or any state
securities authority for post-effective amendments and supplements to a Shelf
Registration Statement and Prospectus or for additional information after the
Shelf 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 Shelf Registration Statement or the initiation of any
proceedings for that purpose, (iv) of the happening of any event or the
discovery of any facts during the period a Shelf Registration Statement is
effective which makes any statement of a material fact made in such Shelf
Registration Statement or the related Prospectus untrue or which requires the
making of any changes in such Shelf Registration Statement or Prospectus in
order to make the statements therein not misleading, (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 and (vi) of any determination by
the Company that a post-effective amendment to such Shelf Registration Statement
would be appropriate;
(f) furnish special counsel for the Holders of Registrable Securities
copies of any comment letters received from the SEC or any other request by the
SEC or any state securities authority for amendments or supplements to a Shelf
Registration Statement and Prospectus or for additional information;
(g) use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Shelf Registration Statement at the earliest
possible moment;
(h) furnish to each Holder of Registrable Securities that has provided the
information required by Section 2.1(d), and each underwriter, if any, without
charge, at least one conformed copy of each Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
(without documents incorporated therein by reference and all exhibits thereto,
unless requested);
(i) 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 (other
than as required by the Company's certificate of incorporation or bylaws or
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applicable law); and enable such Registrable Securities to be in such
denominations (consistent with the provisions of the Indenture) and registered
in such names as the selling Holders or the underwriters, if any, may reasonably
request at least three business days prior to the closing of any sale of
Registrable Securities;
(j) upon the occurrence of any event or the discovery of any facts, each as
contemplated by Sections 3(e)(ii), (iii), (iv), (v) and (vi) hereof, as promptly
as practicable after the occurrence of such an event, use reasonable best
efforts to prepare a supplement or post-effective amendment to the Shelf
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such Prospectus will
not contain at the time of such delivery any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or will
remain so qualified. At such time as such public disclosure is otherwise made or
the Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder that has provided the
information required by Section 2.1(d) 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;
(k) no less than three business days prior to the filing of any Shelf
Registration Statement, any Prospectus, any amendment to a Shelf Registration
Statement or amendment or supplement to a Prospectus (other than amendments and
supplements that do nothing more than name Holders and provide information with
respect thereto), provide copies of such document to the Initial Purchasers on
behalf of such Holders;
(l) provide the Trustee with printed certificates for the Registrable
Securities in a form eligible for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the 1939 Act in
connection with the registration of the Registrable Securities, (ii) cooperate
with the Trustee and the Holders to effect such changes to the Indenture as may
be required for the Indenture to be so qualified in accordance with the terms of
the 1939 Act, and (iii) execute, and use reasonable best efforts to cause the
Trustee to execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner;
(n) enter into such customary agreements and take all other customary and
appropriate actions in order to expedite or facilitate the disposition of such
Registrable Securities including but not limited to:
(i) obtain opinions of counsel to the Company and updates thereof
addressed to each selling Holder and the underwriters, if any, covering the
matters set forth in the opinion of such counsel delivered on the Closing
Date;
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(ii) obtain "comfort" letters and updates thereof 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 Shelf Registration Statement)
addressed to the underwriters, if any, and use reasonable efforts to have
such letter addressed to the selling Holders of Registrable Securities (to
the extent consistent with Statement on Auditing Standards No. 72 of the
American Institute of Certified Public Accounts), such letters
substantially in the form and covering the matters covered in the comfort
letter delivered on the Closing Date; and
(iii) if an underwriting agreement is entered into, cause the same to
set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth in
Section 4 hereof with respect to the underwriters and all other parties to
be indemnified pursuant to said Section or, at the request of any
underwriters, in the form customarily provided to such underwriters in
similar types of transactions.
The above shall be done solely in connection with the underwritten offering of
Registrable Securities off of such Shelf Registration Statement pursuant to an
underwriting or similar agreement as and to the extent required thereunder, and
reasonably requested by any of the parties thereto;
(o) if reasonably requested in connection with a disposition of Registrable
Securities, make available for inspection during business hours by
representatives of the Holders of the Registrable Securities, any underwriters
participating in any disposition pursuant to a Shelf Registration Statement, and
any counsel or accountant retained by any of the foregoing, all financial and
other records, pertinent corporate documents and properties of the Company
reasonably requested by any such persons, and cause the respective officers,
directors, employees, and any other agents of the Company to supply all
information reasonably requested by any such representative, underwriter,
special counsel or accountant in connection with a Shelf Registration Statement,
and make such representatives of the Company available for discussion of such
documents as shall be reasonably requested by the Initial Purchasers, in each
case as is customary for "due diligence" investigations; provided that, to the
extent the Company, in its reasonable discretion, agrees to disclose non-public
information, such persons shall first agree in writing with the Company that any
such non-public information shall be kept confidential by such persons and shall
be used solely for the purposes of exercising rights under this Agreement and
such person shall not engage in trading any securities of the Company until such
material non-public information becomes properly publicly available, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities, (ii) disclosure
of such information is required by law (including any disclosure requirements
pursuant to federal securities laws in connection with the filing of any
Registration Statement or the use of any Prospectus referred to in this
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Agreement upon a customary opinion of counsel for such persons delivered and
reasonably satisfactory to the Company), (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement, and provided further, that
the foregoing inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of all the Holders and the other parties
entitled thereto by special counsel to the Holders;
(p) a reasonable time prior to filing the Shelf Registration Statement, any
Prospectus forming a part thereof, any amendment to the Shelf Registration
Statement or amendment or supplement to such Prospectus (other than amendments
and supplements that do nothing more than name Holders and provide information
with respect thereto), provide copies of such document to the Holders of
Registrable Securities that have provided the information required by Section
2.1(d), to the Initial Purchasers, to special counsel for the Holders and to the
underwriter or underwriters of an underwritten offering of Registrable
Securities, if any, make such changes in any such document prior to the filing
thereof as the Initial Purchasers, the counsel to the Holders or the underwriter
or underwriters reasonably request within three business days of delivery of
such copies and not file any such document in a form to which the Majority
Holders, the Initial Purchasers on behalf of the Holders of Registrable
Securities, special counsel for the Holders of Registrable Securities or any
underwriter shall not have previously been advised and furnished a copy of or to
which the Majority Holders, the Initial Purchasers of behalf of the Holders of
Registrable Securities, counsel to the Holders of Registrable Securities or any
underwriter shall reasonably object within three business days of delivery of
such copies, and make the representatives of the Company available for
discussion of such document as shall be reasonably requested by the Holders of
Registrable Securities, the Initial Purchasers on behalf of such Holders,
counsel for the Holders of Registrable Securities or any underwriter;
(q) use reasonable best efforts to cause all Registrable Securities to be
listed on any securities exchange or inter-dealer quotation system on which
similar debt securities issued by the Company are then listed if requested by
the Majority Holders, or if requested by the underwriter or underwriters of an
underwritten offering of Registrable Securities, if any;
(r) if the Securities are rated, use reasonable best efforts to cause the
Registrable Securities to be rated by the appropriate rating agencies;
(s) otherwise comply with all applicable rules and regulations of the SEC
and make available to its security holders, as soon as reasonably practicable,
an earnings statement covering at least 12 months which shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder; and
(t) 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).
12
34
Without limiting Section 2.1(d), 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 the
Holder and the proposed distribution by such Holder of such Registrable
Securities as the Company may from time to time reasonably request in writing.
Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts, each of the kind described
in Section 3(e)(ii), (iii), (iv), (v) and (vi) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Prospectus included in the Shelf Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(j) hereof or written notice from the Company that the Shelf
Registration Statement is again effective and no amendment or supplement is
needed, and, if so directed by the Company, such Holder will deliver to the
Company (at its expense) all copies in such Holder's possession, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
In the event that a Registration Default has occurred and is continuing,
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
Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage such offering will be
selected by the Majority Holders of such Registrable Securities included in such
offering and shall be acceptable to the Company. No Holder of Registrable
Securities may participate in any underwritten registration hereunder unless
such Holder (a) agrees to sell such Holder's Registrable Securities on the basis
provided in any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
4. Indemnification; Contribution.
(a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder who has provided information to the Company in
accordance with Section 2.1(d) hereof, each Person who participates as an
underwriter (any such Person being an "Underwriter") and each Person, if any,
who controls any Holder or Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration
Statement (or any amendment or supplement thereto) pursuant to which
Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
13
35
necessary to make the statements therein not misleading, or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
4(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all out-of-pocket expense whatsoever, as
incurred (including the reasonable fees and disbursements of counsel chosen
by any indemnified party), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or 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 or
on behalf of any Holder or Underwriter expressly for use in a Shelf Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto); provided, further, that this indemnity provision shall not
apply to any loss, liability, claim, damage or expense if the Holder fails to
deliver at or prior to the written confirmation of sale the most recent
Prospectus furnished to such Holder by the Company and such Prospectus, as
amended or supplemented as of the time of such confirmation of sale, including
any amendment or supplement filed with the SEC that is incorporated by reference
in the Prospectus), would have corrected such untrue statement or omission or
alleged untrue statement or omission of a material fact and delivery thereof was
required by law.
(b) Each Holder who has provided information to the Company in accordance
with Section 2.1(d) hereof, severally, but not jointly, agrees to indemnify and
hold harmless the Company, the Initial Purchasers, each Underwriter and the
other selling Holders who have provided information to the Company in accordance
with Section 2.1(d) hereof, and each of their respective directors and officers,
and each Person, if any, who controls the Company, the Initial Purchasers, any
Underwriter or any other selling Holder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 4(a)
hereof, as incurred, but only with respect to untrue statements or omissions, or
14
alleged untrue statements or omissions, made in the Shelf Registration Statement
(or any amendment thereto) or any Prospectus included therein (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information with respect to such Holder furnished to the Company by or on behalf
of such Holder expressly for use in the Shelf Registration Statement (or any
amendment thereto) or such Prospectus (or any amendment or supplement thereto);
provided, however, that no such Holder shall be liable for any claims hereunder
in excess of the amount of net proceeds received by such Holder from the sale of
Registrable Securities pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced
against it in respect of which indemnity may be sought hereunder, but failure so
to notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 4 is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
15
party, as incurred, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party or parties on one hand and the indemnified party
or party on the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative fault of Company on the one hand and the Holders and the
Initial Purchasers on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Holder or the Initial Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Holders and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 4 were determined
by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
4. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 4 shall
be deemed to include any out-of-pocket legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 4, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities sold by it were offered exceeds the amount
of any damages which such Initial Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Company, 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 Initial Purchasers' respective obligations to contribute
pursuant to this Section 4 are several in proportion to the principal amount of
Securities set forth opposite their respective names in Schedule A to the
Purchase Agreement and not joint.
16
5. Miscellaneous.
5.1 Rule 144 and Rule 144A. For so long as the Company is subject to the
reporting requirements of Section 13 or 15(d) of the 1934 Act, the Company
covenants that it will file the 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. If the Company ceases to be so required to file such reports, the
Company covenants that it will upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales pursuant
to Rule 144A under the 1933 Act and take such further action as any Holder of
Registrable Securities may reasonably request for such purpose, and (c) take
such further action that is reasonable in the circumstances, in each case, to
the extent required from time to time to enable such Holder to sell its
Registrable Securities without registration under the 1933 Act within the
limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act,
as such Rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements. Notwithstanding
the foregoing, nothing in this Section 5.1 shall be deemed to require the
Company to register any of its securities (other than the Common Stock) under
the 1934 Act.
5.2 No Inconsistent Agreements. The Company has not entered into and the
Company will not after the date of this Agreement enter into any agreement which
is inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not and will not for the term of this
Agreement in any way conflict with the rights granted to the holders of any of
the Company's other issued and outstanding securities under any such agreements.
5.3 Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company has obtained the written consent of Holders of at least a
majority of the outstanding Registrable Securities (with Holders of Securities
deemed to be the Holders, for purposes of this Section 5.3, of the number of
outstanding shares of Common Stock into which such Registrable Securities are or
could be convertible on the date that consent would be required) affected by
such amendment, modification, supplement, waiver or departure. Notwithstanding
the foregoing, this Agreement may be amended by a written agreement between the
Company and the Initial Purchasers, without the consent of the Holders of the
Registrable Securities, in order to cure any ambiguity or to correct or
supplement any provision contained herein, provided that no such amendment shall
adversely affect the interest of the Holders of Registrable Securities. Each
Holder of Registrable Securities outstanding at the time of any amendment,
17
modification, waiver or consent pursuant to this Section 5.3, shall be bound by
such amendment, modification, waiver or consent, whether or not any notice or
writing indicating such amendment, modification, waiver or consent is delivered
to such Holder.
5.4 Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, registered first-class
mail, facsimile, or any courier guaranteeing overnight delivery (a) if to a
Holder, at the most current address given by such Holder to the Company in a
Questionnaire or by means of a notice given in accordance with the provisions of
this Section 5.4, which address initially is the address set forth in the
Purchase Agreement with respect to the Initial Purchasers; and (b) if to the
Company, initially at the Company's address set forth in the Purchase Agreement,
and thereafter at such other address of which notice is given in accordance with
the provisions of this Section 5.4.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two business days
after being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if sent by facsimile; and on the next business day if timely
delivered to an overnight courier.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.
5.5 Successor and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors, assigns and transferees of each of the parties,
including, without limitation and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Registrable Securities in violation
of the terms of the Purchase Agreement or the Indenture. If any transferee of
any Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject
to all of the terms of this Agreement, and by taking and holding such
Registrable Securities such person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such person shall be entitled to receive
the benefits hereof.
5.6 Third Party Beneficiaries. The Initial Purchasers (even if the Initial
Purchasers are not Holders of Registrable Securities) shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Holders, on the other hand, and shall have the right to enforce
such agreements directly to the extent they deem such enforcement necessary or
advisable to protect their rights or the rights of Holders hereunder. Each
Holder of Registrable Securities shall be a third party beneficiary to the
agreements made hereunder between the Company, on the one hand, and the Initial
Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights hereunder.
18
5.7 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 Section 2.1 hereof may result
in material irreparable injury to the Initial Purchasers or the Holders for
which there is no adequate remedy at law, that it may not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may seek such relief as may be required to
specifically enforce the Company's obligations under Section 2.1 hereof.
5.8 Restriction on Resales. Until the expiration of two years after the
original issuance of the Securities, the Company will not, and will cause its
Affiliates not to, resell any Securities which are "restricted securities" (as
such term is defined under Rule 144(a)(3) under the 0000 Xxx) that have been
reacquired by any of them and shall immediately upon any purchase of any such
Securities submit such Securities to the Trustee for cancellation.
5.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
5.10 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.12 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
5.13 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Issuer with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
PINNACLE AIRLINES CORP.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
Confirmed and accepted as
of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
20
