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REGISTRATION RIGHTS AGREEMENT
Dated as of June 19, 1997
by and among
XXXXXXX SPORTS INC.,
as Issuer
XXXXXXX, INC., ALL AMERICAN SPORTS CORPORATION,
EQUILINK LICENSING CORPORATION. PROACQ CORP.,
RHC LICENSING CORPORATION., RIDMARK CORPORATION,
CHEER ACQUISITION CORP., VARSITY SPIRIT CORPORATION,
VARSITY SPIRIT FASHIONS & SUPPLIES, INC.
VARSITY USA, INC., VARSITY/INTROPA TOURS, INC.
and INTERNATIONAL LOGOS, INC.
as Guarantors
and
NATIONSBANC CAPITAL MARKETS, INC., AND
FIRST CHICAGO CAPITAL MARKETS, INC.
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THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of June 19, 1997 by and among Xxxxxxx Sports Inc., a Delaware
corporation (the "Company"), and each of the existing and future domestic
subsidiaries of the Company (each a "Guarantor" and, collectively the
"Guarantors," each existing Guarantor being listed on Schedule I of the
Indenture), and NationsBanc Capital Markets, Inc. and First Chicago Capital
Markets, Inc. (each a "Purchaser" and, collectively, the "Purchasers"), each of
whom has agreed to purchase the Company's 10 1/2% Senior Notes due 2007 (the
"Senior Notes") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated June
13, 1997 (the "Purchase Agreement"), by and among the Company, the Guarantors
and the Purchasers. In order to induce the Purchasers to purchase the Senior
Notes, the Company has 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 Purchasers set forth in the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Broker-Dealer Exchange Notes: Any Exchange Notes acquired by a
Participating Broker-Dealer in an Exchange Offer in exchange for Transfer
Restricted Notes that such Broker-Dealer acquired for its own account as a
result of market-making activities or other trading activities (other than
Transfer Restricted Notes acquired directly from the Company or any of its
affiliates).
Business Day: Any day except a Saturday, Sunday or other day in The
City of New York or in the city of the corporate trust office of the Trustee on
which banks are authorized to close.
Closing Date: The Closing Date as defined in the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Company: The meaning set forth in the preamble and shall also
include the Company's successors.
Consummate: An Exchange Offer shall be deemed to be "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(c) hereof, and (iii) the delivery by the Company
to the Registrar under the Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Senior Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Senior Notes, each
Interest Payment Date.
Effectiveness Target Date: As defined in Section 6.
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Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: Notes issued by the Company under the Indenture
containing terms substantially identical to the Senior Notes (except that
interest shall accrue on the Exchange Notes from the last interest payment date
on which interest was paid on the Transfer Restricted Notes surrendered in
exchange therefor, or if no interest was paid, from the date of original
issuance of the Senior Notes and Holders whose Transfer Restricted Notes are
accepted in exchange therefore pursuant to the provisions of this Agreement will
be deemed to have waived the right to receive any payment in respect of interest
on the Senior Notes accrued after the date of the issuance of such notes) and to
be offered to Holders of Senior Notes in exchange for Senior Notes pursuant to
the Indenture (i) in the Exchange Offer or (ii) upon the request of any Holder
of Transfer Restricted Notes covered by a Shelf Registration Statement, in
exchange for such Transfer Restricted Notes.
Exchange Offer: The registration by the Company under the Act of the
Exchange Notes pursuant to the Exchange Offer Registration Statement pursuant to
which the Company shall offer the Holders of all outstanding Transfer Restricted
Notes, so entitled to participate under applicable law and Commission policy,
the opportunity to exchange all such outstanding Transfer Restricted Notes held
by such Holders for Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Notes tendered in such
exchange offer by such Holders.
Exchange Offer Registration: A registration under the 1933 Act
effected pursuant to Section 3(a) hereof.
Exchange Offer Registration Statement: A Registration Statement on
Form S-4 (or, if applicable, on another appropriate form) relating to the
Exchange Offer, including the related Prospectus contained therein.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of June 19, 1997, among the
Company, the Guarantors and Midland Marine Bank, as trustee (the "Trustee"),
pursuant to which the Senior Notes and the Exchange Notes are to be issued, as
such Indenture is amended or supplemented from time to time in accordance with
the terms thereof.
Interest Payment Date: As defined in the Indenture and the Senior
Notes.
Issuers: The Company and the Guarantors.
Liquidated Damages: As defined in Section 6 hereof.
NASD: National Association of Securities Dealers, Inc.
Participating Broker-Dealer: The meaning set forth in Section 5(a)
hereof.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement,
at the time such Registration Statement is declared effective and any such
prospectus as amended or supplemented by any prospectus
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supplement and by all other amendments and supplements thereto, including
post-effective amendments, and in each case including all material incorporated
by reference into such Prospectus.
Purchase Agreement: The meaning set forth in the preamble to this
Agreement.
Purchaser: As defined in the preamble hereto.
Record Holder: With respect to any Damages Payment Date relating to
Senior Notes, each Person who is a Holder of Senior Notes on the record date
with respect to the Interest Payment Date on which such Damages Payment Date
shall occur.
Registration Default: As defined in Section 6 hereof.
Registration Statement: Any registration statement of the Company
relating to (i) an offering of Exchange Notes pursuant to an Exchange Offer or
(ii) the registration for resale of Transfer Restricted Notes (but no other
securities) unless approved by the Holders whose Transfer Restricted Notes are
covered hereby) pursuant to the Shelf Registration Statement, in each case,
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Securities Act: The Securities Act of 1933, as amended.
Senior Notes: The Company's 10 1/2% Senior Notes issued pursuant to
the Indenture.
Shelf Filing Deadline: As defined in Section 4(a) hereof.
Shelf Registration Statement: A Registration Statement of the Company
pursuant to the provisions of Section 4(a) of this Agreement with respect to all
of the Transfer Restricted Notes (but no other securities unless approved by the
Holders whose Transfer Restricted Notes are covered by such Shelf Registration
Statement) on an appropriate form under Rule 415 under the 1933 Act, or any
similar rule that may be adopted by the Commission (which may be an amendment to
the Exchange Offer Registration Statement).
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 Notes: Each Senior Note until the earliest of (a)
the date on which such Senior Note is exchanged in the Exchange Offer by a
person other than a Participating Broker Dealer, and entitled to be resold to
the public by the Holder thereof without complying with the prospectus delivery
requirements of the Act, (b) the date on which such Senior Note has been
disposed of in accordance with the Shelf Registration Statement, (c) the date on
which such Senior Note is disposed of by a Participating Broker-Dealer pursuant
to the "Plan of Distribution" section contemplated by the Exchange Offer
Registration Statement (including delivery of the Prospectus contained therein)
or (d) the date on which such Senior Note is distributed to the public pursuant
to Rule 144 under the Act; provided, however, that Transfer Restricted Notes
shall not include (x) any Senior Notes not tendered for Exchange Notes after the
holder of such Senior Notes had the opportunity to tender its Senior Notes in an
Exchange Offer or (y) any Senior Notes with respect to which the holder thereof
did not deliver the notice required by Section 4(a)(ii) hereof.
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Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Notes. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Notes.
(b) Holders of Transfer Restricted Notes. A Person is deemed to be a
holder of Transfer Restricted Notes (each, a "Holder") whenever such Person owns
or beneficially owns Transfer Restricted Notes.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the Commission, the Company and the Guarantors
shall (i) cause to be filed with the Commission as soon as practicable after the
Closing Date, but in no event later than 45 days after the Closing Date, an
Exchange Offer Registration Statement under the Securities Act relating to the
Exchange Notes and the Exchange Offer, (ii) use their best efforts to cause such
Exchange Offer Registration Statement to become effective at the earliest
possible time, but in no event later than 120 days after the Closing Date, (iii)
in connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause such
Exchange Offer Registration Statement to become 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, and (iv) upon the
effectiveness of such Exchange Offer Registration Statement, commence the
Exchange Offer and use its best efforts to Consummate the Exchange Offer on the
earliest practicable date thereafter, but in no event later than 30 Business
Days after the Exchange Offer Registration Statement shall have been declared
effective. The Company shall use its best efforts to cause the Exchange Offer
Registration Statement to be effective continuously, and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20 Business
Days. The Exchange Offer shall be on the appropriate form permitting
registration of the Exchange Notes to be offered in exchange for the Transfer
Restricted Notes and to permit resales of Senior Notes held by Broker-Dealers as
contemplated by Section 5 below.
(b) The Company shall commence the Exchange Offer by mailing the
related Exchange Offer Prospectus and accompanying documents to each Holder
stating, in addition to such other disclosures as are required by applicable
law:
(i) that the Exchange Offer is being made pursuant to this Agreement
and that all Transfer Restricted Notes validly tendered will be accepted
for exchange;
(ii) the date of acceptance for exchange (which shall comprise a
period of at least 20 Business Days from the date such notice is mailed)
(the "Exchange Date");
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(iii) that any Transfer Restricted Note not tendered will remain
outstanding and continue to accrue interest, but will not retain any
rights under this Agreement;
(iv) that Holders electing to have a Transfer Restricted Note
exchanged pursuant to the Exchange Offer will be required to surrender
such Transfer Restricted Note, together with the enclosed letter of
transmittal, to the institution and at the address (located in the Borough
of Manhattan, The City of New York) specified in the notice prior to the
close of business on the Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not
later than the close of business on the Exchange Date, by sending to the
institution and at the address (located in the Borough of Manhattan, The
City of New York) specified in the notice a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the
principal amount of Transfer Restricted Notes delivered for exchange and a
statement that such Holder is withdrawing his election to have such
Transfer Restricted Notes exchanged.
As soon as practicable after the Exchange Date, the Company shall:
(i) accept for exchange Transfer Restricted Notes or portions
thereof tendered and not validly withdrawn pursuant to the Exchange Offer;
and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Transfer Restricted Notes or portions thereof so accepted
for exchange by the Company and issue, and cause the Trustee to promptly
authenticate and mail to each Holder, an Exchange Note equal in principal
amount to the aggregate principal amount of the Transfer Restricted Notes
surrendered by such Holder.
(c) The Company shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other than the
Exchange Notes shall be included for registration in the Exchange Offer
Registration Statement.
SECTION 4. SHELF REGISTRATION
(a) Filing of Shelf Registration. If (i) the Company determines that
it is not required to file the Exchange Offer Registration Statement or
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 Notes notifies the Company within 20 Business Days following
Consummation of the Exchange Offer that (A) it was prohibited by law or
Commission policy from participating in the Exchange Offer or (B) that it may
not resell the Exchange Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales or
(C) it is a broker-dealer and owns Senior Notes acquired directly from the
Company or an affiliate of the Company, the Company shall:
(x) cause to be filed a shelf registration statement pursuant to
Rule 415 under the Securities Act, which may be an amendment to the
Exchange Offer Registration Statement (in either event, the "Shelf
Registration Statement") on or prior to the earliest to occur of (1) if
the Company determines that it is not required to file the Exchange Offer
Registration Statement as contemplated by clause (i) above, the earlier of
(x) the 30th day after the date such determination is made or (y) the
150th day after the Closing Date, and (2) the 30th day after the date on
which the Company receives notice from a Holder of Transfer Restricted
Notes as
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contemplated by clause (ii) above, (such earliest date being the "Shelf
Filing Deadline"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Notes by those Holders who shall have
provided the information required pursuant to Section 4(b) hereof; and
(y) use their best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before the 30th
day after the Shelf Filing Deadline.
The Company and the Guarantors shall use their best efforts to keep
such Shelf Registration Statement continuously effective until the earlier to
occur of (i) the date on which such Transfer Restricted Notes may be resold
under Rule 144 without volume restrictions and (ii) the date as of which all
Transfer Restricted Notes registered pursuant to the Shelf Registration
Statement have been resold; provided, however, that the Company may notify the
Holders of its suspension of any such Shelf Registration Statement (and, upon
receipt of such notice, Holders shall not be authorized by the Company to resell
and shall not resell Transfer Restricted Notes pursuant to such Registration
Statement as contemplated by this Section 2(b) during such period of suspension)
if the Company's Board of Directors determines in good faith that there is a
valid purpose for the suspension (which notice may be given twice during any
365-day period and no such suspension may exceed 45 days or comprise the 45-day
period immediately preceding the maturity date of the Senior Notes), and such
suspensions shall not give rise to any right to receive Liquidated Damages
pursuant to Section 2(f) hereof. The Company further agrees (i) to supplement or
amend the Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registration or if reasonably requested by a
Holder with respect to information relating to such Holder (provided that no
amendment or supplement shall be required during any suspension period
contemplated by the proviso contained in the preceding sentence), (ii) to ensure
that the Shelf Registration Statement conforms with the terms of this Agreement
and (iii) to use its reasonable best efforts to cause any such amendment to
become effective and such Shelf Registration Statement to become usable as soon
as thereafter practicable. The Company agrees to furnish to the Holders of
Transfer Restricted Notes included in the Shelf Registration Statement copies of
any such supplement or amendment promptly after its being used or filed with the
Commission.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Notes may
include any of its Transfer Restricted Notes in any Shelf Registration Statement
pursuant to this Agreement unless and until such Holder furnishes to the Company
in writing, within 20 business days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus included
therein. No Holder of Transfer Restricted Notes shall be entitled to Liquidated
Damages pursuant to Section 6 hereof unless and until such Holder shall have
used its best efforts to provide all such reasonably requested information. Each
Holder as to which any Shelf Registration Statement is being effected agrees to
furnish promptly to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not materially misleading.
SECTION 5. PARTICIPATION OF BROKER-DEALERS IN EXCHANGE OFFER
(a) The staff of the Commission has taken the position that any
Broker-Dealer that receives Exchange Notes for its own account in the Exchange
Offer in exchange for Senior Notes that were acquired by such Broker-Dealer as a
result of market-making or other trading activities (a "Participating
Broker-Dealer"), may be deemed to be an "underwriter" within the meaning of the
Securities Act and
6
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes.
The Company and the Purchasers understand that it is the Commission
staff's position that if the Prospectus contained in the Exchange Offer
Registration Statement includes a plan of distribution containing a statement to
the above effect and the means by which Participating Broker-Dealers may resell
the Exchange Notes, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery
obligation under the Securities Act in connection with resales of Exchange Notes
for their own accounts, so long as the Prospectus otherwise meets the
requirements of the Securities Act.
(b) In light of Section 5(a) above, notwithstanding the other
provisions of this Agreement, the Company agrees that, to the extent applicable,
the provisions of Section 4(a) of this Agreement as they relate to a Shelf
Registration shall also apply to an Exchange Offer Registration if reasonably
requested by a Purchaser or one or more Participating Broker-Dealers, as
provided in clause (ii) below, in order to expedite or facilitate the
disposition of any Exchange Notes by Participating Broker-Dealers consistent
with the positions of the Commission staff recited in Section 5(a) above;
provided that:
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as
would otherwise be contemplated by Section 7(b), for a period exceeding
180 days after the Exchange Date (as such period may be extended due to
the suspension of the disposition of Senior Notes as contemplated in
Section 4(a) hereof (during which suspension Participating Broker-Dealers
shall not be authorized by the Company to resell and shall not resell
Transfer Restricted Notes pursuant to the Registration Statement)
resulting from the determination in good faith of the Board of Directors
of the Company that there is a valid purpose for such suspension and
Participating Broker-Dealers shall not be authorized by the Company to
deliver and shall not deliver such Prospectus after such period in
connection with the resales contemplated by this Section 5; and
(ii) the application of the Shelf Registration procedures set forth
in Section 7 of this Agreement to an Exchange Offer Registration, to the
extent not required by the positions of the Commission staff or the
Securities Act and the rules and regulations thereunder, will be in
conformity with the reasonable request to the Company by the Purchasers at
the request of a Participating Broker-Dealer or with the reasonable
request in writing to the Company by one or more Broker-Dealers who
certify to the Purchasers and the Company in writing that they anticipate
that they will be Participating Broker-Dealers; provided, however, that if
no Broker-Dealer who provides such notice becomes a Participating
Broker-Dealer, then the obligations of the Company pursuant to this
Section 5(b) shall cease; and provided further that, in connection with
such application of the Shelf Registration procedures set forth in Section
7 to an Exchange Offer Registration, the Company shall be obligated (x) to
deal only with one entity representing the Participating Broker-Dealers,
which shall be either of the Purchasers unless both elect not to act as
such representative and (y) to cause to be delivered only one, if any,
"cold comfort" letter with respect to the Prospectus in the form existing
on the Exchange Date and with respect to each post-effective amendment to
the Registration Statement required to be filed pursuant to Item
512(a)(1)(ii) of Regulation S-K, if any, effected during the period
specified in clause (i) above; provided, however, that any Participating
Broker-Dealer that desires to be an addressee of such "cold comfort"
letter must provide at its expense an opinion of counsel that it is an
"underwriter" entitled to the statutory due diligence defense under
Section 11 of the Securities Act or provide such letters of representation
to the accountants requested to prepare such "cold comfort" letter as are
acceptable in form and substance to such accountants.
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(c) In addition to the foregoing, if the Company is required to
comply with the provisions of Section 5(b) hereof, the Company shall include a
"Plan of Distribution" section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Participating Broker-Dealer
who holds Transfer Restricted Notes that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities, must acknowledge that it may exchange such Transfer Restricted Notes
(other than Transfer Restricted Notes acquired directly from the Company or any
affiliate thereof) pursuant to the Exchange Offer provided that such
Participating Broker-Dealer further acknowledges that it will deliver a
prospectus in connection with any resale of such Exchange Notes. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales of Broker-Dealer Exchange Notes by Participating 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 Participating Broker-Dealer
or disclose the amount of Exchange Notes held by any such Participating
Broker-Dealer, except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.
(d) The Purchasers shall have no liability to the Company or any
Holder with respect to any request that it may make pursuant to Section 5(b)
above.
SECTION 6. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any Registration Statement has not been declared effective
by the Commission on or prior to the date specified for such effectiveness in
this Agreement (the "Effectiveness Target Date"), (iii) the Exchange Offer has
not been Consummated within 30 business days after the Effectiveness Target Date
with respect to the Exchange Offer Registration Statement, or (iv) except as set
forth in Section 4 hereof, any Registration Statement required by this Agreement
is filed and declared effective but shall thereafter cease to be effective or
fail to be usable for its intended purpose (in each case prior to such time as
all Registrable Securities covered by such Registration Statement remain
outstanding or such time as is otherwise set forth in this Agreement) without
being succeeded immediately by a post-effective amendment to such Registration
Statement that cures such failure and that is itself declared effective
immediately (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the Company shall pay, or cause to be paid, and the
Guarantors hereby jointly and severally guarantee the payment of, Liquidated
Damages ("Liquidated Damages") to each Holder of Transfer Restricted Notes with
respect to the first 90-day period immediately following the occurrence of such
Registration Default, in an amount equal to $.05 per week per $1,000 principal
amount of Transfer Restricted Notes held by such Holder for each week or portion
thereof that the Registration Default continues. The amount of the Liquidated
Damages shall increase by an additional $.05 per week per $1,000 in principal
amount of Transfer Restricted Notes with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a maximum amount
of Liquidated Damages of $.50 per week per $1,000 principal amount of Transfer
Restricted Notes. All accrued Liquidated Damages shall be paid to Record Holders
by the Company by wire transfer of immediately available funds or by federal
funds check on each Damages Payment Date, as provided in the Indenture.
Notwithstanding anything herein to the contrary, upon (A) the filing by the
Issuers of such Registration Statement in the case of clause (i) above, (B) the
effectiveness of such Registration Statement after the Effectiveness Target Date
in the case of clause (ii) above, (C) Consummation of the Exchange Offer in the
case of clause (iii) above, or (D) the filing of a post-effective amendment to
the Registration Statement or an additional Registration Statement that causes
such Registration Statement to again be declared effective or made usable in the
case of clause (iv) above, the
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accrual of Liquidated Damages with respect to Transfer Restricted Notes as a
result of such clause (i), (ii), (iii) or (iv) as applicable, shall cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Security shall have been satisfied in full.
SECTION 7. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with the provisions
of Section 7(c) below to the extent applicable, shall use their best efforts to
effect such exchange to permit the sale of Transfer Restricted Notes being sold
in accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there
is a question as to whether the Exchange Offer is permitted by applicable
law, the Company and the Guarantors hereby agree to seek a no-action
letter or other favorable decision from the Commission allowing the
Company and the Guarantors to Consummate an Exchange Offer for such Senior
Notes. The Company and each Guarantor hereby agree to pursue the issuance
of such a decision to the Commission staff level but shall not be required
to take commercially unreasonable action to effect a change of Commission
policy. The Company and the each Guarantor hereby agrees, however, to (A)
participate in telephonic conferences with the Commission, (B) deliver to
the Commission staff analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursue a
resolution (which need not be favorable) by the Commission staff of such
submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Notes shall furnish, upon the request of the Company, prior to
the Consummation thereof, a written representation to the Company (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 (as defined in Rule 144(a) of the Securities
Act), (B) it does not have and will not have any arrangements or
understanding with any person to participate in the distribution of the
Transfer Restricted Notes or the Exchange Notes within the meaning of the
Securities Act, (C) it is acquiring the Exchange Notes in its ordinary
course of business, (D) if such Holder is not a broker-dealer, that it is
not engaged in, and does not intend to engage in, a distribution of the
Exchange Notes and (E) if such Holder is a broker-dealer, that it will
receive Exchange Notes in exchange for Securities that were acquired as a
result of market-making activities or other trading activities and that it
will be required to acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. In addition, all such
Holders of Transfer Restricted Notes shall otherwise cooperate in the
Company's preparations for the Exchange Offer. Each Holder hereby
acknowledges and agrees that any Broker-Dealer, any such Holder using the
Exchange Offer to participate in a distribution of the securities to be
acquired in the Exchange Offer and any affiliate of the Company (1) could
not under Commission policy as in effect on the date of this Agreement
rely on the position of the Commission enunciated in Xxxxxx Xxxxxxx and
Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including any no-action letter obtained pursuant to clause (i) above),
9
and (2) must comply with the registration and prospectus delivery
requirements of the Act in connection with a secondary resale transaction
and that such a secondary resale transaction should 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
if the resales are of Exchange Notes obtained by such Holder in exchange
for Senior Notes acquired by such Holder directly from the Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available May
13, 1988), Xxxxxx Xxxxxxx and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above and
(B) including a representation that neither the Company nor any Guarantor
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 best of the Company's information 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 a Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 7(c) below and shall use their best efforts to effect such
registration to permit the sale of the Transfer Restricted Notes being sold in
accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company and the Guarantors will as expeditiously as
possible 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 Notes in accordance
with the intended method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration Statement
and any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Notes (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Senior Notes
by Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
(including, if required by the Securities Act or any regulation
thereunder, financial statements of the Guarantors) for the period
specified in Section 3 or 4 of this Agreement, as applicable; subject to
the Company's right to suspend any Shelf Registration Statement pursuant
to Section 4(a), upon the occurrence of any event that would cause any
such Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Notes during the period required
by this Agreement, the Company shall file promptly an appropriate
amendment to such Registration Statement, in the case of clause (A),
correcting any such misstatement or omission, and, in the case of either
clause (A) or (B), use its best efforts to cause such amendment to be
declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable, or such shorter
period as will terminate when all Transfer Restricted Notes covered by
such Registration Statement have been sold;
10
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 the applicable provisions of
Rules 424 and 430A 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 the Participating Broker Dealers that have provided
in writing to the Company a telephone number facsimile number and address
for notices to be given, if any, underwriters, if any, and selling Holders
of Transfer Restricted Securities promptly, and if requested by such
Persons, to 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 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 Notes 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 or the Prospectus in order to make the statements 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 Notes under state securities or Blue Sky laws, the
Company and the Guarantors shall use their best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders of Transfer
Restricted Securities and each of the underwriters, 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, if the Holder so requests
in writing, all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to
the review of such Holders and underwriter(s), 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 a selling Holder of Transfer
Restricted Notes covered by such Registration Statement or the
underwriter(s), if any, shall reasonably object within five business days
after the receipt thereof. A selling Holder or underwriter, if any, 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 a material misstatement or omission;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Company's representatives available (and
representatives of the Guarantors) for discussion of such document and
other customary due diligence matters, and include such information in
such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request, in order to facilitate the
public sale or other
11
disposition of the Transfer Restricted Notes; and except as set forth in
the last paragraph of this Section 7, the Company consents to the use of
such Prospectus and any amendment or supplement thereto in accordance with
applicable law and in accordance herewith by each of the selling Holders
of Transfer Restricted Notes and any such underwriters in connection with
the offering and sale of the Transfer Restricted Notes covered by and in
the manner described in such Prospectus or any amendment or supplement
thereto in accordance with applicable law;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Company and
the Guarantors and cause the Company's and the Guarantors' officers,
directors and employees to supply all information reasonably requested by
any such Holder, underwriter, attorney or accountant in connection with
such Registration Statement subsequent to the filing thereof and prior to
its effectiveness;
(vii) if requested by any selling Holders of Transfer Restricted
Securities included therein or the underwriter(s), if any, promptly
incorporate in any Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as
such selling Holders and underwriter(s), if any, may reasonably request to
have included therein, including, without limitation, information relating
to the "Plan of Distribution" of the Transfer Restricted Notes,
information with respect to the principal amount of Transfer Restricted
Notes being sold to such underwriter(s), the purchase price being paid
therefor and any other terms of the offering of the Transfer Restricted
Notes to be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as practicable
after the Company is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(viii) use its best efforts to cause the Transfer Restricted
Notes 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 Senior Notes covered thereby or the
underwriter(s), if any;
(ix) furnish to each selling Holder of Transfer Restricted
Securities included in a Shelf Registration Statement and each of the
underwriter(s), if any, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including, if the Holder so requests in writing, all
documents incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
(ix) furnish to each Participating Broker-Dealer or Purchasers
which so requests, without charge, at least one copy of the Exchange Offer
Registration Statement, as first file with the Commission, and of each
amendment thereto, including, if so requested in writing, all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(x) deliver to each Participating Broker-Dealer and each selling
Holder of Transfer Restricted Securities included in a Shelf Registration
Statement and each of the underwriter(s), if any, without charge, as many
copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request;
the Company and the Guarantors hereby consent to the use of the Prospectus
and any amendment or supplement thereto by each of the Participating
Broker-Dealers, each such selling Holders and each of the
12
underwriter(s), if any, in connection with the offering and the sale of
the Transfer Restricted Notes covered by the Prospectus or any amendment
or supplement thereto;
(xi) enter into, and cause the Guarantors to enter into, such
agreements (including an underwriting agreement), and make, and cause the
Guarantors to make, such representations and warranties, and take all such
other reasonable actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Notes by Holders
selling pursuant to any Shelf Registration Statement or by any
Participating Broker-Dealer contemplated by this Agreement, all to such
extent as may be reasonably requested by any Purchaser, by any
Participating Broker-Dealer who so requests in writing, by any Holder of
Transfer Restricted Notes included in a Shelf Registration Statement or by
any underwriter of such Holder's Transfer Restricted Notes, in each case
in connection with any sale or resale pursuant to any Registration
Statement contemplated by this Agreement; and, if requested in writing by
any Purchaser, by any Participating Broker-Dealer, by any Holder of
Transfer Restricted Notes included in a Shelf Registration Statement or by
any underwriter of such Holder's Transfer Restricted Notes, the Company
and the Guarantors shall:
(A) furnish to each Purchaser, each Participating Broker-Dealer
who so requests in writing and each selling Holder of Transfer
Restricted Notes included in a Shelf Registration Statement and each
underwriter of such Holder's Transfer Restricted Notes, if any, in
such substance and scope as they may request and as are customarily
made by issuers to underwriters in primary underwritten offerings,
upon the date of the Consummation of the Exchange Offer or the
effectiveness of the Shelf Registration Statement, as applicable:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed by (y) the
President or any Vice President and (z) a principal financial or
accounting officer of the Company and each of the Guarantors,
confirming, as of the date thereof, the matters set forth in
paragraphs (b), (c), (f) and (d) of Section 7 of the Purchase
Agreement and such other matters as such parties may reasonably
request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors, covering the matters set forth in
paragraph (g) of Section 7 of the Purchase Agreement and such
other matter as such parties may reasonably request, including
the authorization, execution and delivery of the Exchange Notes
and a statement to the effect that such counsel has participated
in conferences with officers and other representatives of the
Company, representatives of the independent public accountants
for the Company, the Purchasers' representatives and the
Purchasers' counsel in connection with the preparation of such
Registration Statement and the related Prospectus and have
considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness of
such statements; and that such counsel advises that, on the
basis of the foregoing (relying as to materiality to a large
extent upon facts provided to such counsel by officers and other
representatives of the Company and without independent check or
verification), no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, and, in the
case of the Exchange Offer Registration Statement, as of the
date of Consummation, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
13
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer, as
of the date of Consummation, contained an untrue statement of a
material fact or omitted 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.
Without limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
Consummation of the Exchange Offer or the date of effectiveness
of the Shelf Registration Statement, as the case may be, from
the Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters by underwriters in connection with primary underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 7(q) of the Purchase
Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 9 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Company and
the Guarantors contemplated in clause (A)(1) above cease to be true and
correct, the Company or the Guarantors shall so advise the Purchasers, any
Participating Broker-Dealers, each selling Holder of Transfer Restricted
Notes included in a Shelf Registration Statement the underwriters, if any,
of such Holder's Transfer Restricted Notes promptly and, if requested by
such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted Notes,
cooperate with, and cause the Guarantors to cooperate with, the selling
Holders, the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the Transfer
Restricted Notes under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s) may request and do
any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Notes covered
by the Shelf Registration Statement; provided, however, that neither the
Company nor any of the Guarantors 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;
(xiii) cooperate with, and cause the Guarantors to cooperate
with, the selling Holders and the underwriter(s), if any, to facilitate
the timely preparation and delivery of certificates representing Transfer
Restricted Notes to be sold and not bearing any restrictive legends; and
enable such Transfer Restricted Notes to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any, may
request at least two business days prior to any sale of Transfer
Restricted Notes made by such underwriter(s);
14
(xiv) shall issue, upon the request of any Holder of Senior
Notes covered by a Shelf Registration Statement, Exchange Notes, having an
aggregate principal amount equal to the aggregate principal amount of
Senior Notes being sold by such Holder; such Exchange Notes to be
registered in the name of the purchaser(s) of such Senior Notes, as the
case may be; in return, the Senior Notes held by such Holder shall be
surrendered to the Company for cancellation;
(xv) use its best efforts to cause the Transfer Restricted Notes
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 or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Notes, subject to
the proviso contained in clause (xii) above;
(xvi) if any fact or event contemplated by clause (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 Notes, 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 not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted Notes
not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Notes which are in a form eligible for deposit with
The Depository Trust Company;
(xviii) 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 (including any "qualified independent underwriter") that
is required to be retained in accordance with the rules and regulations of
the NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies
or authorities as may be necessary to enable the Holders selling Transfer
Restricted Notes to consummate the disposition of such Transfer Restricted
Notes;
(xix) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable after the
effective date of the applicable Registration Statement, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) and Section 11(a) of the Securities Act;
(xx) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate, and cause the
Guarantors to cooperate, with the Trustee and the Holders of Senior Notes
to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute, and cause the Guarantors to execute, and use its best efforts to
cause the Trustee to execute, all documents that may be required to effect
such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely
manner; and
(xxi) use its best efforts to cause all Transfer Restricted
Notes covered by the Registration Statement to be listed on each
securities exchange on which similar debt securities issued by the Company
if any are then listed if requested by the Holders of a majority in
aggregate principal amount of Senior Notes or the managing underwriter(s),
if any.
15
(d) Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 7(c)(iii)(D) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Notes pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 7(c)(xvi) hereof,
or until it is advised in writing (the "Advice") 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. If so
directed by the Company, each Holder will 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 Notes
that was current at the time of receipt of such notice. In the event the Company
shall give any such 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 the number of days during the period from and including the date
of the giving of such notice pursuant to Section 7(c)(iii)(D) hereof to and
including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 7(c)(xvi) hereof or shall have received the
Advice.
SECTION 8. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and each Guarantor's
performance of or compliance with this Agreement will be borne by the Company or
the respective Guarantor, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made by any Purchaser or Holder with the NASD
(and, if applicable, the fees and expenses of any "qualified independent
underwriter" and its counsel that may be required by the rules and regulations
of the NASD)); (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 counsel for the Company, the Guarantors and,
subject to Section 8(b) below, the Holders of Transfer Restricted Notes; (v) all
application and filing fees in connection with listing the Exchange Notes on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Guarantors including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance, but excluding fees and expenses of counsel
to the underwriters or the Holders (other than fees and expenses set forth in
clauses (ii) and (vi) above) and underwriting discounts and commissions,
brokerage, finder's and similar fees, and transfer taxes, if any, relating to
the sale or disposition of Transfer Restricted Notes by a Holder.
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.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Purchasers and the Holders of Transfer Restricted Notes being tendered in the
Exchange Offer and/or resold pursuant to the "Plan of Distribution" contained in
the Exchange Offer Registration Statement or registered pursuant to the Shelf
Registration Statement, as applicable, for the reasonable fees and disbursements
of not more than one counsel, who shall be Xxxxxx & Xxxxxxx or such
16
other counsel as may be chosen by the Holders of a majority in principal amount
of the Transfer Restricted Notes for whose benefit such Registration Statement
is being prepared.
SECTION 9. INDEMNIFICATION AND CONTRIBUTION
(a) The Issuers jointly and severally agree to indemnify and hold harmless
each Holder, the directors, and each person who controls any Holder within the
meaning of either the Securities Act or the Exchange Act against any and all
losses, claims, damages, liabilities, joint or several, or judgments (including,
without limitation, the reasonable legal and other expenses incurred in
connection with any action, suit or proceeding or any claim asserted) to which
they or any of them may become subject under the Securities Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or judgments (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, Prospectus (or any amendment or supplement thereto), or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and agree to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
in the case of a Shelf Registration Statement, that the Issuers will not be
liable in any such case to any Holder (or person who controls such Holder) to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statement or in any amendment
thereto, in reliance upon and in conformity with written information furnished
to the Issuers solely by or on behalf of a Holder specifically for inclusion
therein.
The foregoing indemnity with respect to any untrue statement contained in
or omission from any preliminary prospectus shall not inure to the benefit of
any Holder (or person controlling such Holder) on account of any such losses,
claims, damages, liabilities or judgments (or actions in respect thereof)
arising from the sale of the Transfer Restricted Securities by such Holder to
any person if a copy of the final Prospectus (as supplemented or amended) shall
not have been delivered or sent to such person at or prior to the written
confirmation of the resale by the Holder of such Transfer Restricted Notes to
such person and the untrue statement or omission contained in such Preliminary
Prospectus was corrected in the Final Prospectus (as supplemented or amended),
provided that the Company has delivered the Final Prospectus (as supplemented or
amended) to such Holder in requisite quantity on a timely basis to permit such
delivery or sending.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have to the persons referred to above in this Section
9(a).
(b) In the event of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities included therein severally and not jointly agrees
to indemnify and hold harmless the Issuers, their directors, officers, and each
person, if any, who controls the Issuers within the meaning of either the
Securities Act or the Exchange Act to the same extent as the foregoing indemnity
from the Issuers to each Initial Purchaser set forth in subsection (a) but only
with respect to claims and actions based on information relating to such Holder
furnished in writing by such Holder expressly for use in any Registration
Statement. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the proceeds received by such Holder
upon the sale of the Registrable Securities giving rise to such indemnification
obligation. This indemnity agreement will be in addition
17
to any liability which any Initial Purchaser may otherwise have to the persons
referred to above in this Section 9(b).
(c) Promptly after receipt by an indemnified party under this Section 9 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party in writing of the commencement thereof,
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ not
more than one separate counsel (in addition to any local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would, in the opinion of legal counsel to the
indemnified party, present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have been informed in writing by legal counsel that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of the institution of such action or (iv) the indemnifying party shall authorize
the indemnified party to employ separate counsel at the expense of the
indemnifying party. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) (a "Settlement") unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
An indemnifying party shall be liable for any Settlement effected with the prior
written consent of the indemnifying party, which consent shall not be
unreasonably withheld or delayed, and an indemnifying party shall indemnify and
hold harmless any indemnified party from and against any loss, claim, damage,
liability or expense by reason of any Settlement effected with its written
consent.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 9 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Issuers and the Holders agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending the
same) (collectively "Losses") to which the Issuers and one or more of the
Holders may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Issuers and by the Holders from the offering
of the Securities; provided, however, that in no case shall (x) the Issuers be
responsible for any amount in excess of an amount equal to the proportion of the
gross proceeds received by the Issuers upon the original issuance of the Senior
Notes representing the Transfer Restricted Notes to be sold by the relevant
Holders and (y) any Holder (except as may be provided in any agreement among the
Holders relating to the offering of the Securities) be responsible for any
amount in excess of the total proceeds received by such Holder
18
upon its resale of Transfer Restricted Notes pursuant to a Registration
Statement hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Issuers and the Holders shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Issuers and of the Holders
in connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Issuers shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses), and benefits received by the Holders shall be
deemed to be equal to the total proceeds received by such Holder upon its resale
of Transfer Restricted Notes pursuant to a Registration Statement hereunder.
Relative fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by the Issuers or the
Holders. The Issuers and the Holders agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 9, each person who controls an Holder within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Holder shall have the same rights to contribution as such Holder,
and each person who controls the Issuers within the meaning of either the
Securities Act or the Exchange Act and each officer and director of the Issuers
shall have the same rights to contribution as the Issuers, subject in each case
to the applicable terms and conditions of this paragraph (d).
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
(a) No Holder may participate in any Underwritten Registration
hereunder unless such Holder (i) agrees to sell such Holder's Transfer
Restricted Notes on the basis provided in any underwriting arrangements approved
by the Persons entitled hereunder to approve such arrangements specified in
Section 11(b) hereof and (ii) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such
underwriting arrangements.
(b) The Holders of Transfer Restricted Notes covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Notes in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Notes included in such
offering; provided, that such investment bankers and managers must be reasonably
satisfactory to the Issuers; and provided, further, that in any event, any of
the Purchasers shall be deemed to be reasonably satisfactory to the Issuers.
SECTION 11. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided herein, in the Indentures, the Purchase Agreement or granted
by law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Company and the
Guarantors agree that monetary damages (including the liquidated damages
contemplated hereby) would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agree to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
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(b) No Inconsistent Agreements. None of the Company or the Guarantors
has entered into, nor shall it enter into on or after the date of this
Agreement, 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.
(c) Adjustments Affecting the Senior Notes. The Company shall not
take any action, or permit any change to occur, with respect to the Senior Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) 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 or departures from the provisions
hereof may not be given unless (i) in the case of Section 6 hereof and this
Section 11(d)(i), the Company has obtained the written consent of each Holder
affected thereby and (ii) in the case of all other provisions hereof, the
Company has obtained the written consent of Holders of at least a majority in
aggregate principal amount of the outstanding Transfer Restricted Notes affected
by such amendment, modification, supplement, waiver or consent; provided,
however, that no amendment, modification, supplement, waiver or consent to any
departure from the provisions of Section 5 hereof shall be effective as against
any Holder of Transfer Restricted Notes unless consented to in writing by such
Holder. Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
securities are being tendered pursuant to the Exchange Offer and that does not
affect directly or indirectly the rights of other Holders whose 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 Notes
subject to such Exchange Offer.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records
of the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
(ii) if to the Company:
Xxxxxxx Sports Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxx, Chief Financial Officer
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx 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
20
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(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 of Transfer Restricted Notes; provided, however, that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Notes in violation of the terms of the Purchase
Agreement. If any transferee of any Holder shall acquire Transfer Restricted
Notes, in any manner, whether by operation of law or otherwise, such Transfer
Restricted Notes shall be held subject to all of the terms of this Agreement,
and by taking and holding such Transfer Restricted Notes 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 and such person shall be entitled to
receive the benefits hereof.
(g) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Issuers, on the one
hand, and the Purchasers, on the other hand, and shall have the right to enforce
such agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder. In addition,
by acquiring Transfer Restricted Notes, each Holder will be bound by the
obligations of Holders set forth herein.
(h) 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.
(i) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(j) 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.
(k) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(l) 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 Company with respect to
the Transfer Restricted Notes. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
21
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
XXXXXXX SPORTS INC.
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Executive Vice President
XXXXXXX GUARANTORS:
XXXXXXX, INC.
ALL AMERICAN SPORTS CORPORATION
EQUILINK LICENSING CORPORATION
PROACQ CORP.
RHC LICENSING CORPORATION
RIDMARK CORPORATION
CHEER ACQUISITION CORP.
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President
VARSITY GUARANTORS:
VARSITY SPIRIT CORPORATION
VARSITY SPIRIT FASHIONS & SUPPLIES, INC.
VARSITY USA, INC.
VARSITY/INTROPA TOURS, INC.
INTERNATIONAL LOGOS, INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
Confirmed and accepted as of the date
first written above:
NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Managing Director
23
