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EQUITY CORPORATION INTERNATIONAL
4 1/2% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
REGISTRATION RIGHTS AGREEMENT
February 25, 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
ABN AMRO Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Equity Corporation International, a Delaware corporation (the
"Company"), proposes to issue and sell (such issuance and sale, the "Initial
Placement") to you (the "Initial Purchasers"), upon the terms set forth in a
purchase agreement dated February 19, 1998 (the "Purchase Agreement"),
$125,000,000 aggregate principal amount (plus up to an additional $18,750,000
aggregate principal amount to cover over-allotments, if any) of its 4 1/2%
Convertible Subordinated Debentures due 2004 (the "Securities"). The
Securities will be convertible into shares of common stock, par value $0.01 per
share, of the Company (the "Common Stock") at the conversion price set forth in
the Final Offering Memorandum. As an inducement to you to enter into the
Purchase Agreement and in satisfaction of a condition to your obligations
thereunder, the Company agrees with you, (i) for your benefit and (ii) for the
benefit of the holders from time to time of the Securities or the Common Stock
issuable upon conversion of the Securities (including you) (each of the
foregoing, a "Holder" and together, the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition
shall have the respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized terms shall have the
following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
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"Affiliate" of any specified person means any other person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement" means this Registration Rights Agreement as it may be
amended, qualified, modified or supplemented from time to time.
"Business Day" means any day that is neither a Saturday or a Sunday
nor a day on which banking institutions in The City of New York are authorized
or obligated by law or executive order to close.
"Closing Time" has the meaning set forth in the Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Damages Accrual Period" has the meaning set forth in Section 2(d)
hereof.
"Damages Payment Date" has the meaning set forth in Section 2(d)
hereof.
"Date of Delivery" has the meaning set forth in the Purchase
Agreement.
"Deferral Period" has the meaning set forth in Section 2(c) hereof.
"DTC" means The Depository Trust Company.
"Event" has the meaning set forth in Section 2(d) hereof.
"Event Date" has the meaning set forth in Section 2(d) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Final Offering Memorandum" has the meaning set forth in the Purchase
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture relating to the Securities dated as of
February 25, 1998, between the Company and Bankers Trust Company, as trustee,
as the same may be amended from time to time in accordance with the terms
thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Interest Payment Date" shall mean June 30 and December 31.
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"Liquidated Damages" has the meaning set forth in Section 2(d) hereof.
"Majority Holders" means the Holders of a majority of the then
outstanding aggregate principal amount of Registrable Securities; provided,
however, that Holders of Common Stock issued upon conversion of Securities
shall be deemed to be Holders of the aggregate principal amount of Securities
from which such Common Stock was converted.
"Notice Holder" has the meaning set forth in Section 2(b) hereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement, and all amendments and supplements to such prospectus, including
post-effective amendments.
"Record Date" has the meaning set forth in Section 2(d) hereof.
"Record Holder" has the meaning set forth in Section 2(d) hereof.
"Registrable Securities" means the Securities and shares of Common
Stock issued upon conversion thereof, excluding any such securities that, and
any such securities the predecessors of which, were previously sold pursuant to
a registration statement of the Company filed under the Act or pursuant to Rule
144 promulgated under the Act.
"Rule 144" means Rule 144 under the Act, as such Rule may be amended
from time to time, or any successor to such Rule.
"Securities" has the meaning set forth in the preamble hereto.
"Selling Confirmation" means, with respect to a Notice Holder and a
Selling Notice given by such Notice Holder, a written notice given by the
Company to such Notice Holder instructing and notifying such Notice Holder that
the Shelf Registration Statement and Prospectus may be used during the
applicable Selling Period to effect the transactions described in such Selling
Notice, that the Company is then currently in compliance with Section 3(b) and
that the Company reaffirms the consent granted pursuant to Section 3(f).
"Selling Notice" has the meaning set forth in Section 2(b) hereof.
"Selling Period" means, with respect to a Notice Holder and a Selling
Notice given by such Notice Holder, a period of forty-five calendar days
commencing on the date such Notice Holder receives a Selling Confirmation in
respect of the transactions described in such Selling Notice; provided,
however, that the Company may defer existing Selling Periods in accordance with
Section 3(c)(2).
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(a)
hereof.
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"Shelf Registration Statement" means a "shelf" registration statement
of the Company pursuant to the provisions of Section 2 hereof (including any
additional registration statements filed pursuant to Section 3(d)) which covers
some or all of the Securities and the Common Stock issuable upon conversion
thereof, as applicable, on an appropriate form under Rule 415 promulgated under
the Act, or any similar rule that may be adopted by the Commission, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Special Counsel" means Xxxxxx & Xxxxxx L.L.P., special counsel to the
Initial Purchasers or such other special counsel as may be designated by the
Majority Holders.
"Trustee" means the trustee with respect to the Securities under the
Indenture.
2. SHELF REGISTRATION; SUSPENSION OF USE OF PROSPECTUS;
LIQUIDATED DAMAGES.
(a) The Company shall prepare and file with the Commission, as
soon as practicable but in any event on or prior to the date 60 days following
the Closing Time, a Shelf Registration Statement under the Act registering the
resale from time to time by Holders thereof of all of the Registrable
Securities. The Shelf Registration Statement shall permit resales of
Registered Securities by Holders in the manner or manners designated by them
from time to time, which shall be set forth in such Shelf Registration
Statement. The Company shall use its reasonable efforts to cause the Shelf
Registration Statement to be declared effective under the Act as soon as
practicable but in any event on or prior to the date 120 days following such
Closing Time and, subject to the provisions contained herein, to keep the Shelf
Registration Statement continuously effective under the Act until the earliest
of (i) the second anniversary of the latest Date of Delivery, (ii) the date on
which the Securities or Common Stock issuable upon conversion thereof may be
sold by non-affiliates of the Company pursuant to paragraph (k) of Rule 144 (or
any successor provision) and (iii) such date as of which all the Securities or
the Common Stock issuable upon conversion thereof have been sold pursuant to
the Shelf Registration Statement or pursuant to Rule 144 (the period ending at
such earliest date, the "Shelf Registration Period").
(b) Each Holder of Registrable Securities agrees that if such
Holder wishes to sell its Registrable Securities pursuant to the Shelf
Registration Statement and the Prospectus, it will do so only in accordance
with this Section 2(b). Each Holder of Registrable Securities agrees to give
written notice to the Company at least five Business Days prior to any intended
resale of Registrable Securities under the Shelf Registration Statement, which
notice shall specify the date on which such Holder intends to begin such
distribution and such information with respect to such Holder and the intended
distribution as may be reasonably required to amend the Shelf Registration
Statement or supplement the Prospectus with respect to such intended
distribution (each Holder providing the notice described in this sentence and
with respect to which the related Selling Period is continuing or has been
deferred, a "Notice Holder;" each such notice, a "Selling Notice"). As soon as
practicable after the date a Selling Notice is received by the Company, and in
any event within four Business Days after such date, the Company shall either:
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(i) (A) provide a Selling Confirmation to such Notice
Holder or (B) file a supplement to the Prospectus or a post-effective
amendment to the Shelf Registration Statement as required by Section
3(b) (and use all reasonable efforts to cause any such post-effective
amendment to become effective as soon as practicable thereafter and
immediately after such post-effective amendment shall become
effective, or it shall file such supplement, to provide a Selling
Confirmation to such Notice Holder); or
(ii) in the event of the happening of any event of the
kind described in Section 3(c)(2)(i), 3(c)(2)(ii), 3(c)(2)(iii) or
3(c)(2)(iv) hereof, the Company shall deliver to such Notice Holder
the notice required by Section 3(c)(2) and notify the Holder that the
consent granted pursuant to Section 3(f) is suspended until further
notice.
(c) Each such Notice Holder may sell all or any Registrable
Securities pursuant to the Shelf Registration Statement and the Prospectus only
during the Selling Period commencing with the earlier of (x) the date on which
such Notice Holder receives a Selling Confirmation and (y) the fifth Business
Day after the related Selling Notice has been received by the Company;
provided, however, that in the event the Company elects to take the actions
permitted by Section 2(b)(ii), the commencement of the Selling Period shall be
deferred until such later date as the Company delivers a Selling Confirmation.
A Notice Holder shall not sell any Registrable Securities pursuant to the Shelf
Registration Statement or the Prospectus after the expiration of the applicable
Selling Period without giving a new Selling Notice pursuant to Section 2(b)
hereof and receiving a new Selling Confirmation. Notwithstanding the
foregoing, the aggregate number of days during which the Company shall be
entitled to exercise its right under this paragraph to defer the commencement
of a Selling Period or its rights under Section 3(c)(2) to defer existing
Selling Periods (any such period of deferral herein referred to as a "Deferral
Period") shall not exceed 60 days within any twelve-month period; provided,
however, that each day during any Deferral Period shall only be counted once in
determining the aggregate number of days in such Deferral Period
notwithstanding the occurrence of multiple concurrent deferrals; and, provided,
further, if the Company deems it necessary to file a post-effective amendment
to the Shelf Registration Statement in order to comply with Section 3(b) hereof
as a result of any Selling Notice or other information provided by a Holder for
inclusion in the Prospectus, then such period of time from the date of filing
such post-effective amendment until the date on which the Shelf Registration
Statement is declared effective by the Commission shall not be treated as a
Deferral Period.
In the event the Company elects to take the actions described in
Section 2(b)(ii), the Company will, at such time as it is in compliance with
Section 3(b) and as use of the Prospectus may be resumed, immediately provide
Selling Confirmations to all Notice Holders.
(d) The parties hereto agree that the Holders of the Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Shelf Registration
Statement has not been declared effective under the Securities Act on or before
the date 120 days following the Closing Time, or (ii) the aggregate number of
days for all Deferral Periods within any one twelve-month period exceeds the
number permitted pursuant to Section 2(c) hereof (each of the events of a type
described in either of the foregoing clause (i) or (ii) is individually
referred to herein as an "Event;" and the date 120 days following the Closing
Time
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in the case of clause (i) and the date on which the duration of all Deferral
Periods within any one twelve-month period exceeds the number of days permitted
by Section 2(c) hereof in the case of clause (ii), are referred to herein as an
"Event Date"). Events shall be deemed to continue until the date of the
termination of such Event, which shall be the following date with respect to
the respective types of Events: the date the Registration Statement is
declared effective under the Act in the case of an Event described in clause
(i) and termination of the Deferral Period which caused the aggregate number of
days for all Deferral Periods within any one twelve-month period to exceed the
number permitted by Section 2(c) in the case of Events of the type described in
clause (ii).
Accordingly, upon the occurrence of any Event and until such time as
there are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): to each Holder of Registrable
Securities (whether or not a Notice Holder), accruing during the Damages
Accrual Period at a rate equal to one-half of one percent per annum (50 basis
points) on (u) where such Registrable Securities are Securities, the aggregate
principal amount of such Securities held by such Holder and (v) where such
Registrable Securities are shares of Common Stock issued upon conversion of
Securities, the aggregate principal amount of Securities that were converted
into such shares. Notwithstanding the foregoing, no Liquidated Damages shall
accrue as to any Securities or shares of Common Stock from and after the
earlier of (x) the date such securities are no longer Registrable Securities,
or (y) the expiration of the Shelf Registration Period. The rate of accrual of
the Liquidated Damages with respect to any period shall not exceed the rate
provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events.
Liquidated Damages due on any Securities or Common Stock shall be
payable on each Interest Payment Date on the Securities occurring (of if there
are no Securities outstanding, which would have occurred) during the Damages
Accrual Period and on the Interest Payment Date immediately following (or which
would have followed) the termination of such Period (a "Damages Payment Date").
The Company shall pay the Liquidated Damages due on any Securities by
depositing with the Trustee under the Indenture, in trust, for the benefit of
the Holders of Securities or Common Stock, as the case may be, entitled
thereto, at least one Business Day prior to the applicable Damages Payment
Date, sums sufficient to pay the Liquidated Damages accrued or accruing since
the Event Date or, if later, the last preceding Damages Payment Date to such
Damages Payment Date. The Liquidated Damages shall be paid on each Damages
Payment Date to the Holders of record of the Registrable Securities (the
"Record Holders") on the 15th day of June or the 15th day of December (each a
"Record Date") immediately preceding such Damages Payment Date by wire transfer
of immediately available funds to the accounts specified by them or by mailing
checks to the registered addresses as they appear in the Securities register or
stock transfer books of the Company, if no such accounts have been specified on
or before the applicable Record Date. The Trustee shall be entitled, on behalf
of the Holders of Securities and Common Stock, to seek any available remedy for
the enforcement of this Agreement, including for the payment of such Liquidated
Damages. Notwithstanding the foregoing, the parties agree that the sole remedy
payable for a violation of the terms of this Agreement with respect to which
Liquidated Damages are expressly provided shall be such Liquidated Damages.
Nothing shall preclude a Holder of Registrable Securities from pursuing or
obtaining specific performance or other equitable relief with
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respect to any violation of this Agreement for which Liquidated Damages are not
expressly provided by this Agreement.
All of the Company's obligations set forth in this Section 2(d) which
are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement).
The parties hereto agree that the Liquidated Damages provided for in
this Section 2(d) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the occurrence of an
Event.
3. REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx") and the Special Counsel, prior to the
filing thereof with the Commission, a copy of any Shelf Registration Statement,
and each amendment thereof and each amendment or supplement, if any, to the
Prospectus included therein and shall use its reasonable efforts to reflect in
each such document, when so filed with the Commission, such comments as Xxxxxxx
Xxxxx reasonably may propose.
(b) The Company shall ensure that (i) any Shelf Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto comply in all material respects with the
Act, (ii) any Shelf Registration Statement or any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any Prospectus forming
part of any Shelf Registration Statement, or any amendment or supplement to
such Prospectus, does not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that no representation or agreement is made
hereby with respect to information with respect to you or any Holder required
to be included in any Shelf Registration Statement or Prospectus pursuant to
the Act or provided by you or any Holder.
(c) (1) The Company shall advise you and the Holders and, if
requested by you or any such Holder, confirm such advice in writing:
(i) when the Shelf Registration Statement or any
post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
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(2) During any Selling Period, during the deferral of any Selling
Period and within four Business Days of receipt by the Company of any Selling
Notice, the Company shall notify you and the Notice Holders and, if requested
by you or any such Notice Holder, confirm such notification in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or
the initiation or threat of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of the Securities or the Common Stock included in any
Shelf Registration Statement for sale in any jurisdiction or the
initiation or threat of any proceeding for such purpose;
(iii) of the existence of any fact or the happening of any
event that requires the making of any changes in the Shelf
Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading; and
(iv) of the determination by the Company, in its judgment,
that it is advisable to suspend use of the Prospectus for valid
business reasons (not including avoidance of the Company's obligations
hereunder) including, among other things, the acquisition or
divestiture of assets, public filings with the Commission, pending
corporate developments and similar events;
which notice shall be accompanied by an instruction to defer the use
of the Prospectus until the Company delivers a Selling Confirmation
whereupon any existing Selling Period shall be deferred and shall
recommence upon delivery of the aforementioned Selling Confirmation;
provided, that such Selling Period shall be extended by the number of
days elapsed during any such period of deferral.
(d) The Company shall use all reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of any Shelf Registration
Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of Registrable
Securities upon its written request, without charge, at least one copy of such
Shelf Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so requests in
such writing, all exhibits (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Securities or the Common Stock issued upon conversion
thereof included within the coverage of any Shelf Registration Statement,
without charge, as many copies of the Prospectus included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and, except during such periods as the Company shall
have suspended the use
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of the Prospectus pursuant to Section 2(b)(ii) or 3(c)(2), the Company consents
to the use of the Prospectus or any amendment or supplement thereto by each of
the selling Holders in connection with the offering and sale of the Securities
or the Common Stock issued upon conversion thereof covered by the Prospectus or
any amendment or supplement thereto.
(g) Prior to any offering of Securities or the Common Stock issued
upon conversion thereof pursuant to any Shelf Registration Statement, the
Company shall register or qualify or cooperate with the Holders of Securities
or the Common Stock issued upon conversion thereof included therein and their
respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Securities or Common
Stock for offer and sale under the securities or Blue Sky laws of such
jurisdictions as any such Holders reasonably request in writing and do any and
all other acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Securities and the Common Stock issued upon
conversion thereof covered by such Shelf Registration Statement; provided,
however, that the Company will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
(h) The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Securities (other
than Securities which are in book-entry only form) or the Common Stock issued
upon conversion thereof sold pursuant to any Shelf Registration Statement free
of any restrictive legends and in such denominations and registered in such
names as Holders may request.
(i) Upon the occurrence of any event contemplated by Section
3(c)(2)(iii) that is not also an event contemplated by Section 3(c)(2)(iv), the
Company shall promptly prepare a post-effective amendment to any Shelf
Registration Statement or an amendment or supplement to the related Prospectus
or file any other required document so that, as thereafter delivered (when and
as permitted pursuant to Section 2(c)) to purchasers of the Securities or the
Common stock issued upon conversion thereof included therein, the Prospectus
will not include 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.
(j) At such time as any of the Securities are no longer
"restricted securities" within the meaning of Rule 144, the Company shall take
such actions as may be necessary to provide, as soon as practicable, a separate
CUSIP number for such Securities and to cause such CUSIP number to be assigned
to such Securities (or to the maximum aggregate principal amount of the
Securities to which such number may be assigned). Upon compliance with the
foregoing requirements of this Section 3((j), the Company shall provide the
Trustee, upon request, with certificates for such Securities, in a form
eligible for deposit with DTC.
(k) The Company shall use all reasonable efforts to comply with
all applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Shelf Registration Statement an earnings
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statement satisfying the provisions of Section 11(a) of the Act and Rule 158
promulgated by the Commission thereunder.
(l) The Company shall use all reasonable efforts to cause the
Indenture to be qualified under the Trust Indenture Act in a timely manner.
(m) The Company may require each Holder of Securities or the
Common Stock issued upon conversion thereof to be sold pursuant to any Shelf
Registration Statement to furnish to the Company such information regarding the
Holder and the distribution of such Securities or Common Stock as may, from
time to time, be required by the Act (including the information specified in
Item 507 of Regulation S-K under the Act), and the obligations of the Company
to any Holder hereunder shall be expressly conditioned on the compliance of
such Holder with such request.
(n) The Company shall, if requested, use its reasonable efforts to
promptly incorporate in a Prospectus supplement or post-effective amendment to
a Shelf Registration Statement (i) such information as the Majority Holders
reasonably agree should be included therein as required by applicable law and
provide to the Company in writing for inclusion in the Shelf Registration
Statement or Prospectus, and (ii) such information as a Holder may provide from
time to time to the Company in writing for inclusion in a Prospectus or any
Shelf Registration Statement concerning such Holder and the distribution of
such Holder's Securities and Common Stock and, in either case, shall make all
required filings of such Prospectus supplement or post-effective amendment as
soon as practicable after being notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment.
(o) The Company shall enter into such agreements and take all
other appropriate actions in order to expedite or facilitate the registration
or the disposition of the Securities or the Common Stock issuable upon
conversion thereof; provided, however, that the Company shall not be required
to enter into an underwriting agreement or participate in a "roadshow" in
connection with any such disposition.
(p) Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that (i) such Holder will promptly (and in any case
within two Business Days after completion of such sale or distribution) notify
the Company following any sale of Registrable Securities under a Shelf
Registration and (ii) upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(c)(2)(i),
3(c)(2)(ii), 3(c)(2)(iii) or 3(c)(2)(iv) hereof, such Holder will forthwith
discontinue disposition of such Registrable Securities covered by such
Registration Statement or Prospectus and will not resume disposition of such
Registrable Securities until such Holder's receipt of one or more copies of a
supplemented or amended Prospectus contemplated by Section 3(f) hereof, or
until it is advised in writing by the Company that the use of the applicable
Prospectus may be resumed and has received copies of the Prospectus and any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus.
4. REGISTRATION EXPENSES. The Company shall pay all fees and
expenses incurred by it or the Initial Purchasers incident to the performance
of or compliance with this Agreement by the
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Company including, without limitation, (i) all Commission, stock exchange or
National Association of Securities Dealers, Inc. registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state
securities or Blue Sky laws (including reasonable fees and disbursements of the
Special Counsel in connection with Blue Sky qualification of any of the
Registrable Securities), (iii) all expenses in preparing or assisting in
preparing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, other documents relating to
the Company's performance of and compliance with this Agreement, and (iv) all
rating agency fees but excluding fees of any special accountants retained by
the Holders, counsel to the Holders other than the Special Counsel and
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by a Holder thereof.
5. INDEMNIFICATION.
(a) (i) In connection with any Shelf Registration Statement, the
Company agrees to indemnify and hold harmless each Holder of Securities or
Common Stock issued upon conversion thereof covered thereby (including the
Initial Purchasers), the directors, officers, employees and agents of each such
Holder and each person who controls any such Holder within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (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 Shelf Registration Statement as originally filed or in any
amendment thereof, or in any preliminary Prospectus or Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees 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,
that the Company will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon (A) any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any such Holder or any Initial
Purchaser, (B) use of a Shelf Registration Statement or the related Prospectus
during a period when a stop order has been issued in respect of such Shelf
Registration or any proceedings for that purpose have been initiated or use of
a Prospectus when use of such Prospectus has been deferred pursuant to Section
2(c) or 3(c)(2); provided, further, in each case, that the Company delivered
prior notice in accordance with Section 6(c) hereof of such stop order,
initiation of proceedings or deferral or (C) if the Holder fails to deliver the
then current Prospectus. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Holder of Securities or Common Stock issued upon
conversion thereof covered by a Shelf Registration Statement (including the
Initial Purchasers) severally agrees to indemnify and hold harmless the
Company, its directors, officers, employees and agents and each person who
controls the Company within the meaning of either the Act or the Exchange Act
to the same extent
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as the foregoing indemnity from the Company to each such Holder, but only with
reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder. This indemnity agreement will be in
addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 5 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 5, 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 separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel (and local counsel) if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified party
would 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 reasonably concluded 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; provided, further, that the indemnifying party shall not be responsible
for the fees and expenses of more than one separate counsel (together with
appropriate local counsel) representing all the indemnified parties under
paragraph (a)(i), paragraph (a)(ii) and paragraph (b) above. 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 may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim or action) 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.
(d) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the officers, directors or controlling persons referred
to in Section 5 hereof, and will survive the sale by a Holder of Securities
covered by a Shelf Registration Statement.
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6. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not, as of the
date hereof, entered into nor shall it, on or after the date hereof, enter into,
any agreement with respect to the Securities that is inconsistent with the
rights granted to the Holders herein or otherwise conflicts with the provisions
hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Majority Holders; provided that, with respect to any matter that
directly or indirectly affects the rights of the Initial Purchasers hereunder,
the Company shall obtain the written consent of each Initial Purchaser
originally purchasing more than a majority of the Securities against which such
amendment, qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a waiver or
consent to departure from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of securities being sold rather than registered
under such Shelf Registration Statement.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier or air courier guaranteeing overnight delivery:
1. if to you, initially at the address set forth in the
Purchase Agreement;
2. if to any other Holder, at the most current address
given by such Holder to the Company in accordance
with the provisions of this Section 6(c), which
address initially is, with respect to each Holder,
the address of such Holder maintained by the
Registrar under the Indenture, with a copy in like
manner to Xxxxxxx Xxxxx; and
3. if to the Company, initially at its address set forth
in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if
sent by first-class mail or telecopier.
The Initial Purchasers or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) 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 the need for an express assignment or any consent
by the Company thereto, subsequent Holders. The Company hereby
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agrees to extend the benefits of this Agreement to any Holder and any such
Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
(e) 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.
(f) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State, without regard to the
conflicts of law rules thereof.
(h) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances,
is held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(i) SECURITIES HELD BY THE COMPANY, ETC. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
or the Common Stock issuable upon conversion thereof is required hereunder,
Securities or the Common Stock issued upon conversion thereof held by the
Company or its Affiliates (other than subsequent Holders of Securities or the
Common Stock issued upon conversion thereof if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
EQUITY CORPORATION INTERNATIONAL
By:
-----------------------------------------
X. Xxxxxx Xxxxxx
Senior Vice President -
Chief Financial Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
ABN AMRO INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
-------------------------------------------------
Authorized Signatory
