Exhibit 4.10
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
Dated as of May 29, 2007
by and among
CLAIRE'S STORES, INC.
THE GUARANTORS LISTED ON SCHEDULE I HERETO
and
BEAR, XXXXXXX & CO. INC.
CREDIT SUISSE SECURITIES (USA) LLC
XXXXXX BROTHERS INC.
ABN AMRO INCORPORATED
MIZUHO SECURITIES USA INC.
NATEXIS BLEICHROEDER INC.
This Registration Rights Agreement (this "Agreement") is made and entered
into as of May 29, 2007 by and among Claire's Stores, Inc., a Florida
corporation (the "Company" or "Claire's"), each of the guarantors listed on
Schedule I hereto (the "Guarantors") and Bear, Xxxxxxx & Co. Inc., Credit Suisse
Securities (USA) LLC, Xxxxxx Brothers Inc., ABN AMRO Incorporated, Mizuho
Securities USA Inc. and Natexis Bleichroeder Inc. (collectively, the "Initial
Purchasers"). The Initial Purchasers have, jointly and not severally, agreed to
purchase the Company's 9.25% Senior Notes due 2015 (the "Senior Cash Pay Notes")
and 9.625%/10.375% Senior Toggle Notes due 2015 (the "Senior Toggle Notes" and,
together with the Senior Cash Pay Notes, the "Senior Notes") pursuant to the
Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated May 22,
2007, by and among Bauble Acquisition Sub, Inc., a Florida corporation, Bauble
Holdings Corp., a Delaware corporation, and the Initial Purchasers, as amended
by the Joinder and Assumption Agreement, dated May 29, 2007, by and among the
Company and the Guarantors (together, the "Purchase Agreement"). In order to
induce the Initial Purchasers to purchase the Senior Notes, the Company and the
Guarantors have agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers set forth in Section 10 of the Purchase
Agreement. Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the indentures, each to be dated as of the date
hereof, (both, an "Indenture"), by the Company and The Bank of New York, as
Trustee, relating to the Senior Notes and the Exchange Notes (as defined below).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Affiliate: An Affiliate of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Business Day: A day other than a Saturday, Sunday or other day on which
banking institutions are authorized or required by law to close in New York
City.
Closing Date: The date hereof.
Commission: The United States Securities and Exchange Commission.
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Consummate: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness under
the Securities Act of the Exchange Offer Registration Statement relating to the
Exchange Notes to be issued in the Exchange Offer, (b) the maintenance of such
Exchange Offer Registration Statement continuously effective and the keeping of
the Exchange Offer open for a period not less than the period required pursuant
to Section 3(b) hereof and (c) the delivery by the Company to the Registrar (as
defined in the applicable Indenture) under such Indenture of Exchange Notes in
the same aggregate principal amount as the aggregate principal amount of Senior
Notes tendered by Holders thereof pursuant to the Exchange Offer.
Consummation Deadline: As defined in Section 3(b) hereof.
Effectiveness Deadline: As defined in Sections 3(a) and 4(a) hereof.
Exchange Act: The United States Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: The Senior Cash Pay Exchange Notes together with the
Senior Toggle Exchange Notes.
Exchange Offer: The exchange and issuance by the Company of a principal
amount of Exchange Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of
Senior Notes that are tendered by such Holders in connection with such exchange
and issuance, and evidencing the same continuing Indebtedness.
Exchange Offer Effectiveness Deadline: As defined in Section 3(a) hereof.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Senior Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Securities Act and pursuant to Regulation
S under the Securities Act.
Filing Deadline: As defined in Section 4(a) hereof.
Holders: As defined in Section 2 hereof.
Issue Date: The date on which the Senior Notes are originally issued.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus
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supplement and by all other amendments thereto, including post-effective
amendments, and all material incorporated by reference into such Prospectus.
Recommencement Date: As defined in Section 6(d) hereof.
Registration Actions: As defined in Section 4(c) hereof.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company and the
Guarantors relating to (a) an offering of Exchange Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, in each case, (i) that is filed
pursuant to the provisions of this Agreement and (ii) including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Regulation S: Regulation S promulgated under the Securities Act.
Rule 144: Rule 144 promulgated under the Securities Act.
Securities Act: The United States Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Senior Cash Pay Exchange Notes: The Company's 9.25% Senior Notes due 2015
and the related guarantees to be issued pursuant to the applicable Indenture (i)
in the Exchange Offer or (ii) as contemplated by Section 4 hereof.
Senior Toggle Exchange Notes: The Company's 9.625%/10.375% Senior Toggle
Notes due 2015 and the related guarantees to be issued pursuant to the
applicable Indenture (i) in the Exchange Offer or (ii) as contemplated by
Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
Shelf Registration Statement Effectiveness Deadline: As defined in Section
4(a) hereof.
Suspension Notice: As defined in Section 4(c) hereof.
Suspension Period: As defined in Section 4(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
Transfer Restricted Securities: Each (A) Senior Note, until the earliest
to occur of (i) the date on which such Senior Note is exchanged in the Exchange
Offer for an Exchange Note which is entitled to be resold to the public by the
Holder thereof without complying with the prospectus delivery requirements of
the Securities Act, (ii) the date on which such Senior Note has been disposed of
in accordance with a Shelf Registration Statement (and the purchasers thereof
have been issued Exchange Notes) or (iii) the date on which such Senior Note is
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distributed to the public pursuant to Rule 144 under the Securities Act and (B)
Exchange Note held by a Broker Dealer until the date on which such Exchange Note
is disposed of by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable law or
Commission policy (after the procedures set forth in Section 6(a)(i) below have
been complied with), the Company and the Guarantors shall (i) use their
commercially reasonable efforts to cause the Exchange Offer Registration
Statement to be filed with the Commission as soon as practicable after the
Closing Date, (ii) use commercially reasonable efforts to cause such Exchange
Offer Registration Statement to be declared effective by the Commission on or
prior to 365 days after the Issue Date (such 365th day being the "Effectiveness
Deadline"), (iii) in connection with the foregoing, use their respective
commercially reasonable best efforts to (A) file all pre-effective amendments to
such Exchange Offer Registration Statement as may be necessary in order to cause
the Exchange Offer Registration Statement to be declared effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Securities Act and (C) cause all
necessary filings, if any, in connection with the registration and qualification
of the Exchange Notes to be made under the Blue Sky laws of such jurisdictions
as are necessary to permit Consummation of the Exchange Offer; provided, however
that neither the Company nor the Guarantors shall be required to take any action
that would subject them to general service of process or taxation in any
jurisdiction where they are not already so subject, and (iv) as promptly as
practicable following the effectiveness of such Exchange Offer Registration
Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall
be on the appropriate form permitting (i) registration of the Exchange Notes to
be offered in exchange for the Senior Notes that are Transfer Restricted
Securities and (ii) resales of Exchange Notes by Broker-Dealers that tendered
into the Exchange Offer Senior Notes that such Broker-Dealer acquired for its
own account as a result of market making activities or other trading activities
(other than Senior Notes acquired directly from the Company or any of its
Affiliates) as contemplated by Section 3(c) below.
(b) Unless the Exchange Offer shall not be permitted by applicable law or
Commission policy, the Company and the Guarantors shall use their respective
commercially reasonable efforts to cause the Exchange Offer Registration
Statement to be effective continuously, and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 Business Days. The
Company and the Guarantors shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other than the
Exchange Notes and the Company's 10.50% Senior Subordinated Notes due 2017
issued on the date hereof shall be
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included in the Exchange Offer Registration Statement. The Company and the
Guarantors shall use commercially reasonable efforts to cause the Exchange Offer
to be Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
Business Days thereafter, or longer, if required by the federal securities laws
(the last day of such period being the "Consummation Deadline").
(c) The Company and the Guarantors shall include a "Plan of Distribution"
section in the Prospectus contained in the Exchange Offer Registration Statement
and indicate therein that any Broker-Dealer who holds Senior Notes that are
Transfer Restricted Securities that were acquired for the account of such
Broker-Dealer as a result of market making activities or other trading
activities (other than Senior Notes that are Transfer Restricted Securities
acquired directly from the Company or any Affiliate of the Company), may
exchange such Transfer Restricted Securities pursuant to the Exchange Offer.
Such "Plan of Distribution" section shall also contain all other information
with respect to such sales by such Broker-Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
such Transfer Restricted Securities held by any such Broker-Dealer, except to
the extent required by the Commission as a result of a change in policy, rules
or regulations after the date of this Agreement. See the Shearman & Sterling
no-action letter (available July 2, 1993).
Because such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Securities Act and must, therefore, deliver a prospectus meeting
the requirements of the Securities Act in connection with its initial sale of
any Exchange Notes received by such Broker-Dealer in the Exchange Offer, the
Company and the Guarantors shall permit the use of the Prospectus contained in
the Exchange Offer Registration Statement by such Broker-Dealer to satisfy such
prospectus delivery requirement. To the extent necessary to ensure that the
prospectus contained in the Exchange Offer Registration Statement is available
for sales of Exchange Notes by Broker-Dealers, the Company and the Guarantors
agree to use their respective commercially reasonable efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented and
amended as required by and subject to the provisions of Section 6(a) and (c)
hereof and in conformity with the requirements of this Agreement, the Securities
Act and the policies, rules and regulations of the Commission as announced from
time to time, for a period of 180 days from the Consummation Deadline or such
shorter period as will terminate when all Transfer Restricted Securities covered
by such Registration Statement have been sold pursuant thereto. The Company and
the Guarantors shall provide sufficient copies of the latest version of such
Prospectus to such Broker-Dealers, promptly upon request at any time during such
period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company and the Guarantors are not (A)
required to file the Exchange Offer Registration Statement or (B) permitted to
Consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy or (ii) any Holder of Transfer Restricted
Securities notifies the Company within 20 days following the consummation of the
Exchange Offer that (A) such Holder was prohibited by law or Commission policy
from participating in the Exchange Offer; (B) such Holder may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a
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prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder; or
(C) such Holder is a Broker-Dealer and holds Senior Notes acquired directly from
the Company or any of its Affiliates, then the Company and the Guarantors shall
use their respective commercially reasonable efforts to file with the Commission
a Shelf Registration Statement (as defined below) to cover resales of the Senior
Notes by Holders of the Senior Notes who satisfy certain conditions relating to
the provision of information in connection with the Shelf Registration
Statement. If obligated to file a Shelf Registration Statement, the Company and
the Guarantors shall use their respective commercially reasonable efforts to:
(x) file, on or prior to 180 days after the earlier of (i) the date on
which the Company determines that the Exchange Offer Registration Statement
cannot be filed as a result of clause (a)(i) above and (ii) the date on which
the Company receives the notice specified in clause (a)(ii) above (such earlier
date, the "Filing Deadline"), a shelf registration statement pursuant to Rule
415 under the Securities Act (which may be an amendment to the Exchange Offer
Registration Statement (the "Shelf Registration Statement")), relating to all
Transfer Restricted Securities of Holders that have provided the information
required pursuant to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be declared effective by
the Commission on or prior to 185 days after the Filing Deadline (such 185th day
the "Effectiveness Deadline").
If, after the Company and the Guarantors have filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) above,
the Company and the Guarantors are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under
applicable federal law (i.e., clause (a)(i)(B) above), then the filing of the
Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; provided that, in such event, the Company and
the Guarantors shall remain obligated to meet the Effectiveness Deadline set
forth in clause (y) above.
To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their respective commercially reasonable efforts to
keep any Shelf Registration Statement required by this Section 4(a) continuously
effective, supplemented and amended as required by and subject to the provisions
of Sections 6(b) and (c) hereof and in conformity with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of at least two years
(as extended pursuant to Section 6(c)(i) hereof) following the Closing Date, or
such shorter period as will terminate when all Transfer Restricted Securities
covered by such Shelf Registration Statement have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until (i) such Holder furnishes
to the Company in writing, within 20 days after receipt of a request therefor,
the information specified in Item 507 or Item 508 of Regulation S-K promulgated
by the Commission, as applicable, for use in connection with any Shelf
Registration
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Statement or Prospectus or preliminary prospectus included therein, and (ii) in
the case of an underwritten offering, such Holder completes and executes all
questionnaires, powers of attorney, underwriting agreements, lock-up letters and
other documents reasonably requested by the Company in connection with the terms
of such underwritten offering. Furthermore, no Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within five Business Days after receipt of
a request therefor, such Holder's comments to the disclosure relating to such
Holder in the Shelf Registration Statement.. No Holder of Transfer Restricted
Securities shall be entitled to additional interest pursuant to Section 5 hereof
unless such Holder shall have provided all such information in the required
times. Each selling Holder agrees to promptly furnish additional information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
(c) Suspension. Notwithstanding anything to the contrary and subject to
the limitation set forth in the next succeeding paragraph, at any time after the
effectiveness of the Shelf Registration Statement, the Company shall be entitled
to suspend its obligation to file any amendment to the Shelf Registration
Statement, furnish any supplement or amendment to a Prospectus included in the
Shelf Registration Statement, make any other filing with the Commission, cause
the Shelf Registration Statement or other filing with the Commission to remain
effective or take any similar action (collectively, "Registration Actions") upon
(A) the issuance by the Commission of a stop order suspending the effectiveness
of the Shelf Registration Statement or the initiation of proceedings with
respect to the Shelf Registration Statement under Section 8(d) or 8(e) of the
Securities Act, (B) the occurrence of any event or the existence of any fact as
a result of which the Shelf Registration Statement would or shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading or (C) the
occurrence or existence of any corporate development that, in the discretion of
the Company, makes it appropriate to postpone or suspend the availability of the
Shelf Registration Statement and the related Prospectus. Upon the occurrence of
any of the conditions described in clause (A), (B) or (C) above, the Company
shall give prompt notice (a "Suspension Notice") thereof to the Holders. Upon
the termination of such condition, the Company shall give prompt notice thereof
to the Holders and shall promptly proceed with all Registration Actions that
were suspended pursuant to this paragraph.
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(d) The Company may only suspend Registration Actions pursuant to the
preceding paragraph for one or more periods (each, a "Suspension Period") not to
exceed, in the aggregate, (x) 45 days in any three month period or (y) 90 days
in any two-year period, during which no additional interest (as described in
Section 5) shall be payable. Each Suspension Period shall be deemed to begin on
the date of the relevant Suspension Notice is given to the Holders and shall be
deemed to end on the earlier to occur of (1) the date on which the Company gives
the Holders a notice that the Suspension Period has terminated and (2) the date
on which the number of days during which a Suspension Period has been in effect
exceeds, in the aggregate, (x) 45 days in any three month period or (y) 90 days
in any two-year period. SECTION 5. ADDITIONAL INTEREST
Subject to the Company's rights set forth in Sections 4(c), 4(d) and 6(d)
hereof, if (i) any Registration Statement required by this Agreement has not
been declared effective by the Commission on or prior to the applicable
Effectiveness Deadline, (ii) the Exchange Offer has not been Consummated on or
prior to the Consummation Deadline or (iii) any Shelf Registration Statement
required by this Agreement is filed and declared effective but shall thereafter
cease to be effective or fail to be usable for its intended purpose, except
during any Suspension Period, without being succeeded within 10 Business Days by
a post-effective amendment to such Shelf Registration Statement that cures such
failure and that is filed and itself declared effective within such 10 Business
Day period (each such event referred to in clauses (i) through (iii), a
"Registration Default"), then the Company and the Guarantors hereby jointly and
severally agree to pay to each Holder of Transfer Restricted Securities affected
thereby additional interest in an amount equal to 0.25% per annum of the
principal amount of Transfer Restricted Securities held by such Holder for the
first 90-day period immediately following the occurrence of such Registration
Default. The amount of the additional interest shall increase by an additional
0.25% per annum of the principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of additional interest for all Registration
Defaults of 1% per annum of the principal amount of Transfer Restricted
Securities; provided that the Company and the Guarantors shall in no event be
required to pay additional interest for more than one Registration Default at
any given time and, in the case of a Shelf Registration Statement, it is
expressly understood that additional interest would be payable only with respect
to Transfer Restricted Securities so requested to be registered pursuant to
Section 4(a)(ii) of this Agreement. Notwithstanding anything to the contrary set
forth herein, (1) upon filing of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of (i)
above, (2) upon the effectiveness of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of (ii)
above, (3) upon Consummation of the Exchange Offer, in the case of (iii) above,
or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable in the case of (iv) above, the
additional interest payable with respect to the Transfer Restricted Securities
as a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease
on the date of such cure and the interest rate on such Transfer Restricted
Securities will revert to the interest rate on such Transfer Restricted
Securities prior to the applicable Registration Default.
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All accrued additional interest shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indentures,
on each Interest Payment Date (as defined in the applicable Indenture), as more
fully set forth in the Indentures and the Senior Notes. Notwithstanding the fact
that any securities for which additional interest is due cease to be Transfer
Restricted Securities, all obligations of the Company and the Guarantors to pay
additional interest with respect to securities shall survive until such time as
such obligations with respect to such securities shall have been satisfied in
full. Notwithstanding anything contained herein or in the Indentures to the
contrary, the payment of additional interest shall be the only remedy available
to holders of Senior Notes for any Registration Default. Furthermore,
notwithstanding the fact that any securities for which additional interest is
due cease to be Transfer Restricted Securities, all obligations of the Company
and the Guarantors to pay additional interest with respect to securities shall
survive until such time as such obligations with respect to such securities
shall have been satisfied in full.
The amount of additional interest payable shall not increase because more
than one Registration Default has occurred and is continuing, and a Holder of
Senior Notes or Exchange Notes who is not entitled to the benefits of a Shelf
Registration Statement shall not be entitled to additional interest with respect
to a Registration Default that pertains to such Shelf Registration Statement.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Guarantors shall (x) comply with all applicable
provisions of Section 6(c) below, (y) use their respective reasonable efforts to
effect such exchange and to permit the resale of Exchange Notes by
Broker-Dealers that tendered in the Exchange Offer Senior Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Senior Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof set forth in the
Registration Statement, and (z) comply with all of the following provisions:
(i) As a condition to its participation in the Exchange Offer, each
Holder of Transfer Restricted Securities (including, without limitation,
any Holder who is a Broker Dealer) shall furnish, upon the request of the
Company, prior to the Consummation of the Exchange Offer, a written
representation to the Company and the Guarantors (which may be contained
in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an Affiliate of
the Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any Person to participate in,
a distribution of the Exchange Notes to be issued in the Exchange Offer
and (C) it is acquiring the Exchange Notes in its ordinary course of
business. As a condition to its participation in the Exchange Offer each
Holder using the Exchange Offer to participate in a distribution of the
Exchange Notes shall acknowledge and agree that, if the resales are of
Exchange Notes obtained by such Holder in exchange for Senior Notes
acquired directly from the Company or an Affiliate thereof, it (1) could
not, under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in Xxxxxx Xxxxxxx and
Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted
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in the Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters, and (2) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with
a secondary resale transaction and that such a secondary resale
transaction must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or
508, as applicable, of Regulation S-K.
(ii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available May
13, 1988), Xxxxxx Xxxxxxx and Co., Inc. (available June 5, 1991) as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993 and (B) including a representation that neither the Company nor
any of the Guarantors has entered into any arrangement or understanding
with any Person to distribute the Exchange Notes to be received in the
Exchange Offer and that, to the Company's and the Guarantors' knowledge
and belief, each Holder participating in the Exchange Offer is acquiring
the Exchange Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall:
(i) comply with all the provisions of Section 6(c) below and use
their respective commercially reasonable efforts to effect such
registration to permit the sale of the Transfer Restricted Securities
being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the
Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
and the Guarantors will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate
form under the Securities Act, which form shall be available for the sale
of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof within the time periods and
otherwise in accordance with the provisions hereof; and
(ii) issue, upon the request of any Holder or purchaser of Senior
Notes covered by any Shelf Registration Statement contemplated by this
Agreement; provided that such Holder provides all documentation reasonably
requested by the Company in connection with such issuance, Exchange Notes
having an aggregate principal amount equal to the aggregate principal
amount of Senior Notes sold pursuant to the Shelf Registration Statement
and surrendered to the Company for cancellation; the Company shall
register Exchange Notes on the Shelf Registration Statement for this
purpose and issue the Exchange Notes to the purchaser(s) of securities
subject to the Shelf Registration Statement in the names as such
purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement, the Company and the
Guarantors shall:
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(i) use their respective commercially reasonable efforts to keep
such Registration Statement continuously effective and provide all
requisite financial statements for the period specified in Section 3 or 4
of this Agreement, as applicable. Upon the occurrence of any event that
would cause any such Registration Statement or the Prospectus contained
therein (A) to contain an untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading or (B) not to be effective and usable for resale
of Transfer Restricted Securities during the period required by this
Agreement, the Company and the Guarantors shall file as promptly as
practicable an appropriate amendment to such Registration Statement curing
such defect, and, if Commission review is required, use their respective
commercially reasonable efforts to cause such amendment to be declared
effective as soon as practicable.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may be;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Securities Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the disposition of
all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise each Holder promptly and, if requested by such Holder,
confirm such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect
to any applicable Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the
Securities Act or of the suspension by any state securities commission of
the qualification of the Transfer Restricted Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any of
the preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement in order to make the statements therein not misleading, or that
requires the making of any additions to or changes in the Prospectus in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided, however, that no
advice by the Company shall be required pursuant to this clause (D) in the
event that the Company either promptly files a Prospectus supplement to
update the Prospectus or a Form 8-K or other appropriate Exchange Act
report that is incorporated by reference into such Registration Statement,
which, in either
11
case, contains the requisite information with respect to such event or
facts that results in such Registration Statement no longer containing any
untrue statement of material fact or omitting to state a material fact
necessary to make the statements contained therein not misleading). If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company
and the Guarantors shall use their respective commercially reasonable
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) subject to Section 6(c)(i), if any fact or event contemplated
by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(v) in the case of a Shelf Registration Statement, furnish to each
Holder named in any such Registration Statement in connection with such
exchange or sale, if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or Prospectus
(including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to
the review and comment of such Holders in connection with such sale, if
any, for a period of at least five Business Days, and the Company will not
file any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including all
such documents incorporated by reference) to which such Holders shall
reasonably object within five Business Days after the receipt thereof. A
Holder shall be deemed to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, not misleading or
fails to comply with the applicable requirements of the Securities Act.
Notwithstanding the foregoing, the Company shall not be required to take
any actions under this Section 6(c)(v) that are not, in the reasonable
opinion of counsel for the Company, in compliance with applicable law;
(vi) in the case of a Shelf Registration Statement, promptly prior
to the filing of any document that is to be incorporated by reference into
a Shelf Registration Statement or Prospectus, provide a copy of such
document to each Holder that made a request in writing described in (v)
above in connection with such exchange or sale, if any, make the Company's
and the Guarantors' representatives available for discussion of such
document and other customary due diligence matters, subject to
negotiation, execution and delivery of customary confidentiality
agreements, and include such information in such document prior to the
filing thereof as such Holders may reasonably request;
12
(vii) make available, at reasonable times, for inspection by each
Holder named in any applicable Registration Statement and any attorney or
accountant retained by such Holder, all financial and other records,
pertinent corporate documents of the Company and the Guarantors reasonably
requested by such Person and cause the Company's and the Guarantors'
officers, directors and employees to supply all information reasonably
requested by any such Holder, attorney or accountant in connection with
such Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness; provided,
however, that any information that is designated in writing by the Company
or the Guarantors as confidential at the time of delivery of such
information shall be kept confidential by the Holders or any such attorney
or accountant, unless such disclosure is made in connection with a court
proceeding or required by law;
(viii) in the case of a Shelf Registration Statement, if requested
by any Holders named in such Registration Statement in connection with
such exchange or sale, promptly include in any Shelf Registration
Statement or Prospectus, pursuant to a supplement, document incorporated
by reference or post-effective amendment if necessary, such information as
such Holders may reasonably request to have included therein, including,
without limitation, information relating to the "Plan of Distribution" of
the Transfer Restricted Securities, information with respect to the
principal amount of Transfer Restricted Securities being sold, the
purchase price being paid therefor and any other terms of the offering of
the Transfer Restricted Securities to be sold in such offering; and make
all required filings of such Prospectus supplement, document incorporated
by reference or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(ix) in the case of a Shelf Registration Statement, use its
commercially reasonable efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be rated with the
appropriate rating agencies, if so requested by the Holders of a majority
in aggregate principal amount of Transfer Restricted Securities covered
thereby;
(x) in the case of a Shelf Registration Statement, upon request,
furnish to each Holder named in any such Registration Statement in
connection with such exchange or sale, without charge, at least one copy
of the Shelf Registration Statement, as first filed with the Commission,
and of each amendment thereto, without all documents incorporated by
reference therein and all exhibits thereto, unless requested;
(xi) in the case of a Shelf Registration Statement, upon request,
deliver to each Holder named in such Registration Statement without
charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or
13
supplement thereto as such Persons reasonably may request; provided that
if no Registration Statement is effective or no Prospectus is usable in
accordance with the provisions of Section 6(b) hereof, the Issuers shall
deliver to each Holder named in any such Registration Statement a notice
to that effect; the Company and the Guarantors hereby consent to the use
(in accordance with law) of the Prospectus and any amendment or supplement
thereto by each selling Holder in connection with the offering and the
sale of the Transfer Restricted Securities covered by the Prospectus or
any amendment or supplement thereto;
(xii) in the case of a Shelf Registration Statement, upon the
reasonable request of any Holder named in such Registration Statement,
enter into such agreements (including underwriting agreements containing
customary terms) and make such representations and warranties customary
for offerings of such type as may be reasonably requested and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities pursuant
to such Shelf Registration Statement as may be reasonably requested by any
Holder in connection with any sale or resale pursuant to such Shelf
Registration Statement. In such connection, the Company and the Guarantors
shall:
(A) upon the reasonable request of any Holder named in such
Registration Statement, use its commercially reasonable efforts to
cause to be furnished, upon the effectiveness of the Shelf
Registration Statement:
(1) a certificate in customary form, dated such date,
signed on behalf of the Company and each Guarantor by two
officers of each of the Company and the Guarantors;
(2) an opinion, in customary form, dated the date of
effectiveness of the Shelf Registration Statement of counsel
for the Company and the Guarantors; and
(3) a customary comfort letter, dated the date of
effectiveness of the Shelf Registration Statement from the
Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in connection with underwritten
offerings; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders named in any such
Registration Statement and as are customarily delivered in similar
offerings to evidence compliance with the matters covered in clause
(A) above and with any customary conditions contained in the any
agreement entered into by the Company and the Guarantors pursuant to
this clause (xi);
(xiii) prior to any public offering of Transfer Restricted
Securities, use their respective commercially reasonable efforts to
cooperate with the selling Holders named in the applicable Registration
Statement and their counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the state
securities or Blue Sky laws of such jurisdictions as the selling Holders
may reasonably request and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the applicable Registration
Statement, but in no event for longer than 365 days from the
14
effective date of the Registration Statement; provided, however, that
neither the Company nor any Guarantor shall be required to register or
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits
or to taxation in any jurisdiction where it is not now so subject;
(xiv) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, reasonably cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to
register such Transfer Restricted Securities in such denominations and
such names as the selling Holders may request at least five Business Days
prior to such sale of Transfer Restricted Securities;
(xv) use their respective commercially reasonable efforts to cause
the disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Transfer
Restricted Securities, but in no event for longer than 365 days from the
effective date of the Registration Statement, subject to the proviso
contained in clause (xii) above;
(xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of a Registration Statement covering
such Transfer Restricted Securities and provide the Trustee under the
applicable Indenture with any necessary printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit
with The Depository Trust Company;
(xvii) otherwise use their respective commercially reasonable
efforts to comply with all applicable rules and regulations of the
Commission, and with regard to any Shelf Registration Statement for which
an underwriter has been engaged, use their commercially reasonable efforts
to make generally available to its security holders, as soon as
practicable, a consolidated earnings statement meeting the requirements of
Rule 158 under the Securities Act (which need not be audited) covering a
12 month period beginning after the effective date of the Registration
Statement (as such term is defined in paragraph (c) of Rule 158 under the
Securities Act); and
(xviii) cause the applicable Indenture to be qualified under the TIA
not later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders to effect such changes to the applicable
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its commercially
reasonable efforts to cause the Trustee to execute, all documents that may
be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of a Suspension Notice, such
Holder will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration
15
Statement until (i) such Holder has received copies of the supplemented or
amended Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder
is advised in writing by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus (in each case, the
"Recommencement Date"). Each Holder receiving a Suspension Notice hereby agrees
that it will either (i) destroy any Prospectuses, other than permanent file
copies, then in such Holder's possession which have been replaced by the Company
with more recently dated Prospectuses or (ii) deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of the Suspension Notice. The
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by a number of days
equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors' performance
of or compliance with this Agreement (other than any underwriting discounts and
commissions) will be borne by the Company, regardless of whether a Registration
Statement becomes effective, including without limitation: (i) all registration
and filing fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses of
printing (including printing certificates for the Exchange Notes to be issued in
the Exchange Offer and printing of Prospectuses), messenger and delivery
services and telephone; (iv) all fees and disbursements of outside counsel for
the Company and the Guarantors and (v) fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement) regardless of whether a
Registration Statement becomes effective, the Company and the Guarantors will
reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Senior Notes into in the Exchange Offer and/or
selling or reselling Senior Notes or Exchange Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable and actual
documented fees and disbursements of not more than one counsel, which firm shall
be chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared; provided that the Company's and Guarantors' reimbursement obligation
with respect to such fees and disbursements shall not exceed $25,000.
16
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act), from and against any and
all losses, claims, damages, liabilities, judgments and expenses (including
without limitation, any reasonable legal or other expenses reasonably incurred
in connection with investigating or defending any matter, including any action
that could give rise to any such losses, claims, damages, liabilities or
judgments) to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities,
judgments and expenses are caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto)
provided by the Company to any Holder or any prospective purchaser of Exchange
Notes or registered Senior Notes, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by an untrue statement or omission or
alleged untrue statement or omission that is based upon information relating to
any of the Holders furnished in writing to the Company by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and the Guarantors, and
their respective directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) the Company or the Guarantors to the same extent as the foregoing
indemnity from the Company and the Guarantors set forth in section (a) above,
but only with reference to information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in any Registration
Statement. In no event shall any Indemnified Holder, its directors, officers or
any Person who controls such Holder be liable or responsible for any amount in
excess of the amount by which the total amount received by such Indemnified
Holder with respect to its sale of Transfer Restricted Securities pursuant to a
Registration Statement exceeds (i) the amount paid by such Indemnified Holder
for such Transfer Restricted Securities and (ii) the amount of any damages that
such Indemnified Holder, its directors, officers or any Person who controls such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any Person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"Indemnified Party"), the Indemnified Party shall promptly notify the Person
against whom such indemnity may be sought (the "Indemnifying Person") in writing
and the Indemnifying Person shall assume and control the defense of such action,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required
to assume the defense of such action pursuant to this Section 8(c), but may
employ separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Holder). Any Indemnified Party shall have the right to employ separate
counsel
17
in any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Indemnified Party unless
(i) the employment of such counsel shall have been specifically authorized in
writing by the Indemnifying Person, (ii) the Indemnifying Person shall have
failed to assume the defense of such action or employ counsel reasonably
satisfactory to the Indemnified Party or (iii) the named parties to any such
action (including any impleaded parties) include both the Indemnified Party and
the Indemnifying Person, and the Indemnified Party shall have been advised by
such counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Indemnifying Person
(in which case the Indemnifying Person shall not have the right to assume the
defense of such action on behalf of the Indemnified Party). In any such case,
the Indemnifying Person shall not, in connection with any one action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by a
majority of the Holders, in the case of the parties indemnified pursuant to
Section 8(a), and by the Company and Guarantors, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if (A) such settlement is entered into more than 60 days after receipt by the
indemnifying party of a request from the indemnified party for reimbursement for
the fees and expenses of counsel (in any case where such fees and expenses are
at the expense of the indemnifying party), (B) the indemnifying party shall not
have reimbursed the indemnified party in accordance with such request or
disputed in good faith the indemnified party's entitlement to such reimbursement
prior to the date of such settlement, and (C) such indemnified party shall have
given the indemnifying party at least 30 days prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the Indemnified Party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the Indemnified
Party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the Indemnified Party from all liability on claims that
are the subject matter of such action and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act, by or on behalf of
the Indemnified Party.
(d) To the extent that the indemnification provided for in this Section 8
is unavailable to an Indemnified Party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each Indemnifying
Person, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, from their sale
of Transfer Restricted Securities or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations.
18
The relative fault of the Company and the Guarantors, on the one hand, and of
the Holder, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or such Guarantors, on the one hand, or by the Holder,
on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 8(a)
above, any outside legal counsel or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or claim.
The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any outside legal counsel or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any matter,
including any action that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section 8, no
Holder, its directors, its officers or any Person, if any, who controls such
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the total received by such Holder with respect to the
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages which such Holder 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 8(d) are several in proportion to the respective principal amount of
Transfer Restricted Securities held by each Holder hereunder and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company and the Guarantors agree with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in which
the Company or the Guarantors (i) are not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to such Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A under the Securities Act, and (ii)
are subject to Section 13 or 15 (d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.
19
SECTION 10. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an underwritten offering. In any such underwritten offering, the
investment banker(s) and managing underwriter(s) that will administer such
offering will be selected by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities included in such offering;
provided, however, that such investment banker(s) and managing underwriter(s)
must be reasonably satisfactory to the Company.
SECTION 11. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors acknowledge and agree that
any failure by the Company and the Guarantors to comply with their obligations
under Sections 3 and 4 hereof may result in material irreparable injury to the
Initial Purchasers or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the Company's
obligations under Sections 3 and 4 hereof. The Company further agrees to waive
the defense in any action for specific performance that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. Neither the Company nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person
that would require such securities to be included in any Registration Statement
filed hereunder. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's and the Guarantors' securities under any agreement in effect on
the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities (excluding Transfer Restricted Securities held by
the Company or its Affiliates). Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose Transfer Restricted Securities are being tendered
pursuant to the Exchange Offer, and that does not affect directly or indirectly
the rights of other Holders whose Transfer Restricted Securities are not being
tendered pursuant to such Exchange Offer, may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
subject to such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
20
By acquiring Transfer Restricted Securities, a Holder will be deemed to
have agreed to indemnify and hold harmless the Company, the Guarantors and their
respective directors and officers, and each Person, if any, who controls (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as the indemnity from the Company and the Guarantors set
forth in Section 8(a) hereof, but only with reference to information relating to
such Holder and provided in writing by such Holder for inclusion in any Shelf
Registration Statement. In no event shall any such Holder be liable or
responsible for any amount in excess of the amount by which such Holder with
respect to its sale of Transfer Restricted Securities pursuant to a Shelf
Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages that such
Holder, its directors, officers or any Person who controls such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the applicable Indenture, with a copy to the Registrar
under such Indenture; and
(ii) if to the Company or the Guarantors:
Claire's Stores, Inc.
0 X.X. 000xx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Xxx X. Xxxxxx
With a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
21
(iii) if to the Initial Purchasers:
Bear, Xxxxxxx & Co. Inc.
Credit Suisse Securities (USA) LLC
Xxxxxx Brothers Inc.
c/o Bear Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention:
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; five Business Days
after being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the applicable Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the Indentures. If any
transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such 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.
(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.
22
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF. TIME IS OF THE ESSENCE IN THIS AGREEMENT.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[Signature Pages Follow]
23
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CLAIRE'S STORES, INC.
By: /s/ Xxx X. Xxxxxx
---------------------------------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice President and Chief
Financial Officer
AFTERTHOUGHTS MERCHANDISING CORP.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and Secretary
BMS DISTRIBUTING CORP.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and Secretary
CBI DISTRIBUTING CORP.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and Secretary
CLAIRE'S BOUTIQUES, INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and Secretary
CLAIRE'S CANADA CORP.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and Secretary
[Signature Page to Senior Subordinated Note Registration Rights Agreement]
CLAIRE'S PUERTO RICO CORP.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and Secretary
SASSY DOO!, INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and Secretary
[Signature Page to Senior Subordinated Note Registration Rights Agreement]
Accepted and agreed to as of
the date first above written:
BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Senior Managing Director
CREDIT SUISSE SECURITIES (USA) LLC
By: /s/ Xxxxxxx XxXxxxxxx
-----------------------------------------
Name: Xxxxxxx XxXxxxxxx
Title: Director
XXXXXX BROTHERS INC.
By: /s/ Xxxxx X. Xxxx
-----------------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
ABN AMRO INCORPORATED
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
MIZUHO SECURITIES USA INC.
By: /s/ X.X. Xxxxxxx
-----------------------------------------
Name: X.X. Xxxxxxx
Title: Executive Director
NATEXIS BLEICHROEDER INC.
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Head of U.S. Capital Markets
SCHEDULE I
GUARANTORS
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Jurisdiction of
Entity Organization
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Afterthoughts Merchandising Corp. Delaware
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BMS Distributing Corp. Delaware
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CBI Distributing Corp. Delaware
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Claire's Boutiques, Inc. Colorado
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Claire's Canada Corp. Delaware
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Claire's Puerto Rico Corp. Delaware
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Sassy Doo!, Inc. Delaware
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