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Execution Copy
NOTES REGISTRATION RIGHTS AGREEMENT
Dated as of October 22, 1996
By and Between
COINSTAR, INC.
and
XXXXX XXXXXX INC.
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TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. EXCHANGE OFFER. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. SHELF REGISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . 8
4. LIQUIDATED DAMAGES. . . . . . . . . . . . . . . . . . . . . . . . . 11
5. REGISTRATION PROCEDURES . . . . . . . . . . . . . . . . . . . . . . 12
6. REGISTRATION EXPENSES . . . . . . . . . . . . . . . . . . . . . . . 19
7. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8. RULES 144 AND 144A. . . . . . . . . . . . . . . . . . . . . . . . . 23
9. UNDERWRITTEN REGISTRATIONS. . . . . . . . . . . . . . . . . . . . . 24
10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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NOTES REGISTRATION RIGHTS AGREEMENT
This NOTES REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is dated as
of October 22, 1996, by and between COINSTAR, INC., a Delaware corporation (the
"COMPANY"), and XXXXX XXXXXX INC. (the "INITIAL PURCHASER").
This Agreement is made pursuant to the Purchase Agreement, dated as of
October 22, 1996 (the "PURCHASE AGREEMENT"), among the Company and the Initial
Purchaser (the "PURCHASE AGREEMENT"), relating to, among other things, the sale
by the Company to the Initial Purchaser of an aggregate of 95,000 Units,
consisting of (i) $95,000,000 aggregate principal amount at maturity of 13%
Senior Subordinated Discount Notes due October 1, 2006 (the "NOTES") and (ii)
95,000 Warrants (the "INITIAL WARRANTS"), each representing the right to
purchase initially seven shares of Common Stock, $.001 par value of the Company
(the "COMMON STOCK"). In addition, the Company will be obligated to issue
additional warrants to holders of the Notes upon the occurrence of the
Contingent Event (as defined in that certain Warrant Agreement dated as of the
date hereof between the Company and The Bank of New York as warrant agent, the
"WARRANT AGREEMENT") (the "CONTINGENT WARRANTS," and together with the Initial
Warrants, the "WARRANTS"). In order to induce the Initial Purchaser to enter
into the Purchase Agreement, the Company has agreed to provide to the Initial
Purchaser and the Holders (as defined herein), among other things, the
registration rights for the Notes set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the obligations of the Initial
Purchaser under the Purchase Agreement.
In consideration of the foregoing, the parties hereby agree as
follows:
1. DEFINITIONS
As used in this Agreement, the following defined terms shall have the
following meanings:
ACCRETED VALUE: With respect to any Note, as of any date of the
determination prior to the Full Accretion Date, the sum of (a) the Initial
Offering Price of each Note and (b) the portion of the excess of the principal
amount of such Note over the Initial Offering Price as shall have been accreted
thereto through such date, such amount to be so accreted on a daily basis at the
rate of 13% per annum, compounded semi-annually on each October 1 and April 1
from the Issue Date through the date of determination; provided that on and
after the Full Accretion Date, the Accreted Value of such Note shall be equal to
the principal amount of the outstanding such Note.
ADVICE: See Section 5 hereof.
AGREEMENT: See the introductory paragraphs hereto.
APPLICABLE PERIOD: See Section 2(b) hereof.
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COMPANY: See the introductory paragraphs hereto.
EFFECTIVENESS DATE: With respect to any Registration Statement, the
90th day after the Filing Date with respect thereto.
EFFECTIVENESS PERIOD: See Section 3 hereof.
EVENT DATE: See Section 4(b) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
EXCHANGE NOTES: See Section 2(a) hereof.
EXCHANGE OFFER: See Section 2(a) hereof.
EXCHANGE REGISTRATION STATEMENT: See Section 2(a) hereof.
FILING DATE: (A) If no Registration Statement has been filed by the
Company pursuant to this Agreement, the 30th day after the Trigger Date;
provided, however, that if a Shelf Notice is given within 10 days prior to the
Filing Date, then the Filing Date with respect to the Initial Shelf Registration
shall be the 15th calendar day after the date of the giving of such Shelf
Notice; and (B) in each other case (which may be applicable notwithstanding the
consummation of an Exchange Offer), the 30th day after the delivery of a Shelf
Notice.
FULL ACCRETION DATE: October 1, 1999.
HOLDER: Any holder of a Registrable Note or Registrable Notes.
INDEMNIFIED PERSON: See Section 7(c) hereof.
INDEMNIFYING PERSON: See Section 7(c) hereof.
INDENTURE: The Indenture, of even date herewith, between the Company
and The Bank of New York, as trustee, pursuant to which the Notes are being
issued, as amended or supplemented from time to time in accordance with the
terms thereof.
INITIAL PURCHASER: See the introductory paragraphs hereto.
INITIAL OFFERING PRICE: $690.39 for each Unit.
INITIAL SHELF REGISTRATION: See Section 3(a) hereof.
INSPECTORS: See Section 5(n) hereof.
ISSUE DATE: October 22, 1996.
LIQUIDATED DAMAGES: See Section 4(a) hereof.
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NASD: See Section 5(s) hereof.
NOTES: See the introductory paragraphs hereto.
PARTICIPANT: See Section 7(a) hereof.
PARTICIPATING BROKER-DEALER: See Section 2(b) hereof.
PERSON: An individual, trustee, corporation, partnership, joint stock
company, limited liability company, trust, unincorporated association, union,
business association, firm or other legal entity.
PRIVATE EXCHANGE: See Section 2(b) hereof.
PRIVATE EXCHANGE NOTES: See Section 2(b) hereof.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
PUBLIC OFFERING: A public offering (whether or not underwritten, but
excluding any offering pursuant to Form S-4 or S-8 under the Securities Act) of
securities of the Company pursuant to an effective registration statement under
the Securities Act, the aggregate gross proceeds of which equal or exceed $10
million.
PURCHASE AGREEMENT: See the introductory paragraphs hereto.
RECORDS: See Section 5(n) hereof.
REGISTRABLE NOTES: Each Note upon its original issuance and at all
times subsequent thereto, each Exchange Note as to which Section 2(c)(iv) hereof
is applicable upon original issuance and at all times subsequent thereto and
each Private Exchange Note upon original issuance thereof and at all times
subsequent thereto, until in the case of any such Note, Exchange Note or Private
Exchange Note, as the case may be, the earliest to occur of (i) a Registration
Statement (other than, with respect to any Exchange Note as to which Section
2(c)(iv) hereof is applicable, the Exchange Registration Statement) covering
such Note, Exchange Note or such Private Exchange Note has been declared
effective by the SEC and such Note, Exchange Note or such Private Exchange Note,
as the case may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Note, Exchange Note or Private Exchange Note,
as the case may be, may at the time of determination be sold to the public
pursuant to Rule 144(k) without the lapse of any further time or the
satisfaction of any condition, (iii) such Note has been exchanged for an
Exchange Note or Exchange Notes
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pursuant to an Exchange Offer which may be resold without restriction under
state and federal securities laws, or (iv) such Note, Exchange Note or Private
Exchange Note, as the case may be, ceases to be outstanding for purposes of the
Indenture.
REGISTRATION STATEMENT: Any registration statement of the Company,
including, but not limited to, the Exchange Registration Statement, filed with
the SEC pursuant to the provisions of this Agreement, including the Prospectus,
all amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
RULE 144: Rule 144 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
RULE 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
RULE 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
SHELF NOTICE: See Section 2(c) hereof.
SHELF REGISTRATION: See Section 3(b) hereof.
SUBSEQUENT SHELF REGISTRATION: See Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
TRIGGER DATE: The earliest to occur of (i) the consummation of Public
Offering, (ii) the Company or any of its subsidiaries shall effect any offering
of securities and immediately thereafter shall be subject to the reporting
requirements of Section 13 or 15 of the Exchange Act (whether pursuant to the
Exchange Act or by contractual obligation) or (iii) October 1, 1999; provided,
however, that October 1, 1999 shall not be a Trigger Date if, in the written
opinion of counsel to the Company (a copy of which shall be delivered to the
Holders not later than the 30th day after October 1, 1999), the Registrable
Notes may on and
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after such date be sold to the public pursuant to Rule 144(k) without the lapse
of any further time or the satisfaction of any conditions;
TRUSTEE: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Notes and Private Exchange
Notes (if any).
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. EXCHANGE OFFER
(a) The Company shall file with the SEC no later than the Filing
Date, an offer to exchange (the "EXCHANGE OFFER") any and all of the Registrable
Notes (other than Private Exchange Notes, if any) for a like aggregate Accreted
Value or principal amount of debt securities of the Company which are
substantially identical in all respects to the Notes (the "EXCHANGE NOTES"),
except that the Exchange Notes shall have been registered pursuant to an
effective Registration Statement under the Securities Act and shall contain no
restrictive legend thereon, and which are entitled to the benefits of the
Indenture, or a trust indenture which is substantially identical in all material
respects to the Indenture (other than such changes to the Indenture or any such
identical trust indenture as are necessary to comply with any requirements of
the SEC or applicable law to effect or maintain the qualification thereof under
the TIA) and which, in either case, has been qualified under the TIA. The
Exchange Offer shall be registered under the Securities Act on the appropriate
form (the "EXCHANGE REGISTRATION STATEMENT") and shall comply with all
applicable tender offer rules and regulations under the Exchange Act and other
applicable law. The Company shall use its best efforts to (x) cause the
Exchange Registration Statement to be declared effective under the Securities
Act on or before the Effectiveness Date; (y) keep the Exchange Offer open for at
least 30 days (or longer if required by applicable law) after the date that
notice of the Exchange Offer is mailed to Holders; and (z) consummate the
Exchange Offer on or prior to the 45th day following the date on which the
Exchange Registration Statement is declared effective by the SEC. The Exchange
Offer shall be deemed to have been consummated upon the earlier to occur of (i)
the Company having exchanged the Exchange Notes for all outstanding Registrable
Securities pursuant to the Exchange Offer and (ii) the Company having exchanged,
pursuant to the Exchange Offer, Exchange Notes for all Registrable Securities
that have been tendered and not withdrawn before the expiration of the Exchange
Offer, which shall be on a date that is at least 30 days following the
commencement of the Exchange Offer. For purposes of this Section 2(a) only, if
after such Exchange Registration Statement is initially declared effective by
the SEC, the Exchange Offer or the issuance of the Exchange Notes thereunder is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Exchange Registration
Statement shall be deemed not to have become effective for purposes of this
Agreement.
Each Holder who participates in the Exchange Offer will be required to
represent that any Exchange Notes received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no
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arrangement or understanding with any Person to participate in the distribution
of the Exchange Notes in violation of the provisions of the Securities Act, and
that such Holder is not an affiliate of the Company within the meaning of the
Securities Act, and to make any additional representations which may then be
required by applicable law.
Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply, MUTATIS
MUTANDIS, solely with respect to Registrable Notes that are Private Exchange
Notes and Exchange Notes held by Participating Broker-Dealers, and the Company
shall have no further obligation to register Registrable Notes (other than
Private Exchange Notes and other than in respect of any Exchange Notes as to
which clause 2(c)(iv) hereof applies) pursuant to Section 3 hereof.
No securities other than the Exchange Notes shall be included in the
Exchange Registration Statement.
(b) The Company shall include within the Prospectus contained in the
Exchange Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchaser, which shall contain a summary
statement of the positions taken or policies made by the staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Notes received by such broker-dealer in the Exchange Offer (a "PARTICIPATING
BROKER-DEALER"), whether such positions or policies have been publicly
disseminated by the staff of the SEC or such positions or policies represent the
prevailing views of the staff of the SEC. Such "Plan of Distribution" section
shall also expressly permit the use of the Prospectus by all Persons subject to
the prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange Notes.
The Company shall use its reasonable best efforts to keep the Exchange
Registration Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be lawfully delivered by
all Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as is necessary to comply with applicable law in
connection with any resale of the Exchange Notes; PROVIDED, HOWEVER, that such
period shall not exceed 180 days after the Exchange Registration Statement is
declared effective (or such longer period if extended pursuant to the last
paragraph of Section 5 hereof) (the "APPLICABLE PERIOD").
If, prior to consummation of the Exchange Offer, the Initial Purchaser
holds any Notes acquired by it and having, or which are reasonably likely to be
determined to have, the status of an unsold allotment in the initial
distribution, or any other Holder is not entitled to participate in the Exchange
Offer, the Company upon the request of the Initial Purchaser or any such Holder
shall simultaneously with the delivery of the Exchange Notes in the Exchange
Offer, issue and deliver to the Initial Purchaser and any such Holder, in
exchange (the "PRIVATE EXCHANGE") for such Notes held by the Initial Purchaser
and any such Holder, a like aggregate Accreted Value or principal amount of debt
securities of the Company that are
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substantially identical in all material respects to the Exchange Notes (the
"PRIVATE EXCHANGE NOTES") (and which are issued pursuant to the same indenture
as the Exchange Notes). The Private Exchange Notes shall bear the same CUSIP
number as the Exchange Notes.
In connection with the Exchange Offer, the Company shall:
(1) mail to each Holder a copy of the Prospectus forming part of the
Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(2) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(3) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York time, on the last business day on which the
Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Company shall:
(1) accept for exchange all Notes tendered and not validly withdrawn
pursuant to the Exchange Offer or the Private Exchange;
(2) deliver to the Trustee for cancellation all Notes so accepted for
exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may be,
equal in aggregate Accreted Value or principal amount to the Notes of such
Holder so accepted for exchange.
The Exchange Offer and the Private Exchange shall not be subject to
any conditions, other than that (i) the Exchange Offer or the Private Exchange,
as the case may be, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) no action or proceeding is
instituted or threatened in any court or by any governmental agency which might
materially impair the ability of the Company to proceed with the Exchange Offer
or the Private Exchange and no material adverse development has occurred in any
existing action or proceeding with respect to the Company and (iii) all
governmental approvals have been obtained, which approvals the Company deems
necessary for the consummation of the Exchange Offer or Private Exchange.
The Exchange Notes and the Private Exchange Notes may be issued under
(i) the Indenture or (ii) an indenture substantially identical in all material
respects to the Indenture, which in either event shall provide that the Exchange
Notes shall not be subject
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to the transfer restrictions set forth in the Indenture. The Indenture or such
indenture shall provide that the Exchange Notes, the Private Exchange Notes and
the Notes shall vote and consent together on all matters as one class and that
neither the Exchange Notes, the Private Exchange Notes or the Notes will have
the right to vote or consent as a separate class on any matter.
(c) If (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Company is not permitted to effect
an Exchange Offer, (ii) the Exchange Offer is not consummated within 135 days of
the Filing Date, (iii) any holder of Private Exchange Notes so requests, or (iv)
in the case of any Holder that participates in the Exchange Offer, such Holder
does not receive Exchange Notes on the date of the exchange that may be sold
without restriction under state and federal securities laws, in the case of each
of clauses (i) to and including (iv) of this sentence, then the Company shall
promptly deliver to the Holders and the Trustee written notice thereof (the
"SHELF NOTICE") and shall file a Shelf Registration pursuant to Section 3
hereof.
(d) In the event that no Trigger Date occurs by virtue of the proviso
to clause (iii) of the definition of Trigger Date, then the Company shall cause
a registration statement pursuant to the Exchange Act in respect of the Notes to
be filed with the SEC and to become effective, and so long as any of the Notes
shall be outstanding shall thereafter file all reports required to be filed
pursuant to Section 13 of the Exchange Act by an issuer subject to such Section
13 (whether or not the Company is then subject to the reporting requirements of
Section 13 of the Exchange Act).
3. SHELF REGISTRATION
If a Shelf Notice is delivered as contemplated by Section 2(c) hereof,
then:
(a) SHELF REGISTRATION. The Company shall file with the SEC on or
prior to the Filing Date a "shelf" Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 covering all of the Registrable
Notes (the "INITIAL SHELF REGISTRATION"). The Initial Shelf Registration shall
be on Form S-1 or another appropriate form permitting registration of such
Registrable Notes for resale by Holders in the manner or manners designated by
them (including, without limitation, one or more underwritten offerings). The
Company shall not permit any securities other than the Registrable Notes to be
included in the Initial Shelf Registration or any Subsequent Shelf Registration
(as defined below).
The Company shall use its reasonable best efforts to cause the Initial
Shelf Registration to be declared effective under the Securities Act on or prior
to the Effectiveness Date and to keep the Initial Shelf Registration
continuously effective and useable under the Securities Act until the date which
is 24 months from the Effectiveness Date; subject to extension pursuant to the
last paragraph of Section 5 hereof (the "EFFECTIVENESS PERIOD"), or such shorter
period ending when (i) all Registrable Notes covered by the Initial Shelf
Registration have been sold in the manner set forth and as contemplated in the
Initial Shelf
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Registration or (ii) a Subsequent Shelf Registration covering all of the
Registrable Notes has been declared effective under the Securities Act;
PROVIDED, HOWEVER, that the Effectiveness Period shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the Securities Act and as otherwise provided
herein.
The Company shall be entitled to suspend any Initial Shelf
Registration and the duration of such suspension shall be excluded from the
calculation of the twenty-four month period described in the previous paragraph.
Such suspension may be effected only if the Board of Directors of the Company
determines reasonably and in good faith that the Initial Shelf Registration
would materially impede, delay or interfere with any material financing, offer
or sale of securities by the Company, acquisition, corporate reorganization or
other significant transaction involving the Company or any of its Subsidiaries,
which material financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction is under active consideration by
the Company at the time of such suspension described above; PROVIDED, HOWEVER,
that the Company shall not be entitled to more than two suspensions, each of no
longer than 6 weeks duration, in such twenty-four month period. If the Company
shall so suspend the Initial Shelf Registration it shall, as promptly as
possible, deliver a certificate signed by the Chief Executive Officer or
President of the Company to the selling Holders as to such determination, and
the Holders shall receive an extension of the registration period equal to the
number of days of the suspension.
(b) SUBSEQUENT SHELF REGISTRATIONS. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within 45 days of such
cessation of effectiveness use its reasonable best efforts to amend the Initial
Shelf Registration in a manner to obtain the withdrawal of the order suspending
the effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Notes (a "SUBSEQUENT SHELF
REGISTRATION"). If a Subsequent Shelf Registration is filed, the Company shall
use its best efforts to cause the Subsequent Shelf Registration to be declared
effective under the Securities Act as soon as practicable after such filing and
to keep such Registration Statement continuously effective and usable for a
period equal to the number of days in the Effectiveness Period less the
aggregate number of days during which the Initial Shelf Registration or any
Subsequent Shelf Registration was previously continuously effective and usable.
As used herein the term "SHELF REGISTRATION" means the Initial Shelf
Registration and any Subsequent Shelf Registration.
(c) SUPPLEMENTS AND AMENDMENTS. The Company shall promptly
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement or by any underwriter
of such Registrable Notes.
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(d) HOLD-BACK AGREEMENTS
(i) RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE NOTES.
Each Holder of Registrable Notes whose Registrable Notes are covered by a
Shelf Registration filed pursuant to Section 3 hereof (which Registrable
Notes are not being sold in the underwritten offering described below)
agrees, if requested (pursuant to a timely written notice) by the managing
underwriter or underwriters in an underwritten primary offering of
nonconvertible debt securities of the Company, not to effect any public
sale or distribution of any Registrable Notes, including a sale pursuant to
Rule 144 or Rule 144A (except as part of such underwritten offering),
during the period beginning 10 days prior to, and ending 90 days after, the
closing date of such underwritten offering, to the extent timely notified
in writing by the Company or by the managing underwriter or underwriters;
PROVIDED, HOWEVER, that each holder of Registrable Notes shall be subject
to the hold-back restrictions of this Section 3(d)(i) only once during the
term of this Agreement.
The foregoing provisions shall not apply to any Holder of Registrable Notes
if such Holder is prevented by applicable statute or regulation from
entering into any such agreement; PROVIDED, HOWEVER, that any such Holder
shall undertake, in its request to participate in any such underwritten
offering, not to effect any public sale or distribution of the class of
securities covered by such Shelf Registration (except as part of such
underwritten offering) during such period unless it has provided 45 days'
prior written notice of such sale or distribution to the Company or the
managing underwriter or underwriters, as the case may be.
(ii) RESTRICTIONS ON THE COMPANY AND OTHERS. The Company agrees
(A) not to effect any public sale or distribution of any securities the
same as or similar to those covered by a Shelf Registration filed pursuant
to Section 3 hereof, or any securities convertible into or exchangeable or
exercisable for such securities, during the 10 days prior to, and during
the 90-day period beginning on, the commencement of an underwritten public
distribution of Registrable Notes, where the managing underwriter or
underwriters so requests; and (B) to include in any agreements entered into
by the Company on or after the date of this Agreement (other than any
underwriting agreement relating to a public offering registered under the
Securities Act) pursuant to which the Company issues or agrees to issue
securities the same as or similar to the Notes a provision that each holder
of such securities that are the same as or similar to Notes issued at any
time on or after the date of this Agreement agrees not to effect any public
sale or distribution, or request or demand the registration, of any such
securities (or any securities convertible into or exchangeable or
exercisable for such securities) during the period referred to in clause
(A) of this Section 3(d)(ii), including any sale pursuant to Rule 144 or
Rule 144A.
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4. LIQUIDATED DAMAGES
(a) The Company and the Initial Purchaser agree that the Holders of
Registrable Notes will suffer damages if the Company fails to fulfill its
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Company agrees to pay, as liquidated damages, in the form of additional
interest on the Notes ("LIQUIDATED DAMAGES") under the circumstances and to the
extent set forth below (each of which shall be given independent effect):
(i) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration has been filed on or prior to the applicable
Filing Date or (B) notwithstanding that the Company has consummated or will
consummate an Exchange Offer, the Company is required to file a Shelf
Registration and such Shelf Registration is not filed on or prior to the
Filing Date applicable thereto, then, commencing on the day after any
Filing Date, Liquidated Damages shall accrue on the Accreted Value (if
prior to the Full Accretion Date in effect from time to time) or principal
amount (if on or after the Full Accretion Date) of the Notes affected
thereby at a rate of .50% per annum (which shall be in addition to the
stated interest per annum for such events on or after the Full Accretion
Date) for the first 90 days immediately following each such Filing Date,
such Liquidated Damages rate increasing by an additional .50% per annum at
the beginning of each subsequent 90-day period;
(ii) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration is declared effective by the SEC on or prior to
the applicable Effectiveness Date or (B) notwithstanding that the Company
has consummated or will consummate an Exchange Offer, the Company is
required to file a Shelf Registration and such Shelf Registration is not
declared effective by the SEC on or prior to the Effectiveness Date in
respect of such Shelf Registration, then, commencing on the day after such
Effectiveness Date, Liquidated Damages shall accrue on the Accreted Value
(if prior to the Full Accretion Date in effect from time to time) or
principal amount (if on or after the Full Accretion Date) of the Notes
included or which should have been included in such Registration Statement
at a rate of .50% per annum (which shall be in addition to the stated
interest per annum for such events on or after the Full Accretion Date) for
the first 90 days immediately following the day after such Effectiveness
Date, such Liquidated Damages rate increasing by an additional .50% per
annum at the beginning of each subsequent 90-day period; and
(iii) if (A) the Company has not exchanged Exchange Notes for
all Notes validly tendered in accordance with the terms of the Exchange
Offer on or prior to the 45th day after the date on which the Exchange
Registration Statement was declared effective or (B) if applicable, the
Shelf Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period, then
Liquidated Damages shall accrue on the Accreted Value (if prior to the Full
Accretion Date) or principal amount (if on or after the Full Accretion
11
Date) of the Notes at a rate of .50% per annum (which shall be in addition
to the stated interest per annum for such events on or after the Full
Accretion Date) for the first 90 days commencing on the (x) 46th day after
such effective date, in the case of (A) above, or (y) the day such Shelf
Registration ceases to be effective in the case of (B) above, such
Liquidated Damages rate increasing by an additional .50% per annum at the
beginning of each such subsequent 90-day period;
PROVIDED, HOWEVER, that the Liquidated Damages rate may not at any one time
exceed in the aggregate 3.0% per annum; PROVIDED, FURTHER, HOWEVER, that (1)
upon the filing of the Exchange Registration Statement or the Shelf Registration
as required hereunder (in the case of clause (a)(i) of this Section 4), (2) upon
the effectiveness of the Exchange Registration Statement or the Shelf
Registration as required hereunder (in the case of clause (a)(ii) of this
Section 4), or (3) upon the exchange of Exchange Notes for all Notes tendered
(in the case of clause (a)(iii)(A) of this Section 4), or upon the effectiveness
of the Shelf Registration which had ceased to remain effective (in the case of
(a)(iii)(B) of this Section 4), Liquidated Damages on the Notes as a result of
such clause (or the relevant subclause thereof), as the case may be, shall cease
to accrue.
The Company shall notify the Trustee within one business day after
each and every date on which an event occurs in respect of which Liquidated
Damages are required to be paid (an "EVENT DATE"). Any amounts of Liquidated
Damages due pursuant to clause (a)(i), (a)(ii) or (a)(iii) of this Section 4
will be payable in cash semi-annually on each October 1 and April 1 (to the
holders of record on the September 15 and March 15 immediately preceding such
dates), commencing with the first such payment date occurring after any such
Liquidated Damages commences to accrue. The amount of Liquidated Damages will
be determined by multiplying the applicable Liquidated Damages rate by the
Accreted Value applicable to such period (if prior to the Full Accretion Date)
or the principal amount (if on or after the Full Accretion Date) of the
Registrable Notes, multiplied by a fraction, the numerator of which is the
number of days such Liquidated Damages rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months
and, in the case of a partial month, the actual number of days elapsed), and the
denominator of which is 360.
5. REGISTRATION PROCEDURES
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Company shall effect such registrations to permit
the sale of the securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto and in connection
with any Registration Statement filed by the Company hereunder the Company
shall:
(a) Prepare and file with the SEC prior to the Filing Date, a
Registration Statement or Registration Statements as prescribed by Sections 2 or
3 hereof, and use its diligent best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein; PROVIDED,
HOWEVER, that, if (1) such filing is pursuant to Section 3
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hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Company shall furnish
to and afford the Holders of the Registrable Notes covered by such Registration
Statement or each such Participating Broker-Dealer, as the case may be, not more
than one counsel and the managing underwriters, if any, a reasonable opportunity
to review copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be filed
(in each case at least five business days prior to such filing). The Company
shall not file any Registration Statement or Prospectus or any amendments or
supplements thereto if the Holders of a majority in aggregate principal amount
of the Registrable Notes covered by such Registration Statement, or any such
Participating Broker-Dealer, as the case may be, their counsel, or the managing
underwriters, if any, shall reasonably object in writing to any information
contained therein.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Registration Statement, as the
case may be, as may be necessary to keep such Registration Statement
continuously effective and usable for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented by
any Prospectus supplement required by applicable law, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus. The Company shall be deemed not to have used
its diligent best efforts to keep a Registration Statement effective and usable
during the Applicable Period if the Company voluntarily takes any action that
would result in selling Holders of the Registrable Notes covered thereby or
Participating Broker-Dealers seeking to sell Exchange Notes not being able to
sell such Registrable Notes or such Exchange Notes during that period unless
(i) such action is required by applicable law or (ii) such action is taken by
the Company in good faith and for valid business reasons (not including
avoidance of the Company's obligations hereunder).
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, notify the selling Holders of Registrable
Notes, or each such Participating Broker-Dealer, as the case may be, their
counsel and the managing underwriters, if any, promptly (but in any event within
two business days), and confirm such notice in writing, (i) when a Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Company, one conformed copy of such Registration Statement or
13
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Notes or resales of
Exchange Notes by Participating Broker-Dealers the representations and
warranties of the Company contained in any agreement (including any underwriting
agreement), contemplated by Section 5(n) hereof cease to be true and correct in
all material respects, (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Notes or the
Exchange Notes to be sold by any Participating Broker-Dealer for offer or sale
in any jurisdiction, or the initiation or threatening of any proceeding for such
purpose, (v) of the happening of any event, or any information becoming known
that makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in or amendments or supplements to such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
(vi) of the Company's determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, use its diligent best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration Statement
or of any order preventing or suspending the use of a Prospectus or suspending
the qualification (or exemption from qualification) of any of the Registrable
Notes or the Exchange Notes to be sold by any Participating Broker-Dealer, for
sale in any jurisdiction, and, if any such order is issued, to use its diligent
best efforts to obtain the withdrawal of any such order at the earliest
practicable moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter or underwriters (if any), the Holders of a
majority in aggregate principal amount of the Registrable Notes being sold in
connection with an underwritten offering or any Participating Broker-Dealer,
(i) promptly incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters (if any), such
Holders, any Participating Broker-Dealer or counsel for any of them determine is
reasonably necessary to be included therein, (ii) make all required filings of
such prospectus supplement or such post-effective amendment as soon as
practicable after the
14
Company has received notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment, and (iii) supplement or make
amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, furnish to each selling Holder of
Registrable Notes and to each such Participating Broker-Dealer who so requests
and to their respective counsel and each managing underwriter, if any, at the
sole expense of the Company, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto, including
financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, deliver to each selling Holder of
Registrable Notes, or each such Participating Broker-Dealer, as the case may be,
their respective counsel, and the underwriters, if any, at the sole expense of
the Company, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, and the underwriters or agents,
if any, and dealers (if any), in connection with the offering and sale of the
Registrable Notes covered by, or the sale by Participating Broker-Dealers of the
Exchange Notes pursuant to, such Prospectus and any amendment or supplement
thereto.
(h) Prior to any public offering of Registrable Notes or any delivery
of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, to use its reasonable best efforts to register or qualify,
and to cooperate with the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes for offer and sale under the securities
or blue sky laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriter or underwriters
reasonably request; PROVIDED, HOWEVER, that where Exchange Notes held by
Participating Broker-Dealers or Registrable Notes are offered other than through
an underwritten offering, the Company agrees to cause the Company's counsel to
perform blue sky investigations and file registrations and qualifications
required to be filed pursuant to this Section 5(h); keep each such registration
or qualification (or exemption therefrom) effective
15
during the period such Registration Statement is required to be kept effective
and do any and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of the Exchange Notes held by
Participating Broker-Dealers or the Registrable Notes covered by the applicable
Registration Statement; PROVIDED, HOWEVER, that the Company shall not be
required to (A) qualify generally to do business in any jurisdiction where it is
not then so qualified, or (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or Holders may request.
(j) Use its diligent best efforts to cause the Registrable Notes
covered by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be reasonably necessary to
enable the seller or sellers thereof or the underwriter or underwriters, if any,
to consummate the disposition of such Registrable Notes, except as may be
required solely as a consequence of the nature of such selling Holder's
business, in which case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole
expense of the Company, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Notes being sold thereunder or to the purchasers of the Exchange
Notes to whom such Prospectus will be delivered by a Participating
Broker-Dealer, any such Prospectus will not 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, in light of the circumstances under
which they were made, not misleading.
(l) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with certificates for
the Registrable Notes in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Registrable Notes.
16
(m) In connection with any underwritten offering of Registrable Notes
pursuant to a Shelf Registration, enter into an underwriting agreement as is
customary in underwritten offerings of debt securities similar to the Notes and
take all such other actions as are reasonably requested by the managing
underwriter or underwriters in order to expedite or facilitate the registration
or the disposition of such Registrable Notes and, in such connection, (i) make
such representations and warranties to, and covenants with, the underwriters
with respect to the business of the Company and its subsidiaries (including any
acquired business, properties or entity, if applicable) and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made by
issuers to underwriters in underwritten offerings of debt securities similar to
the Notes, and confirm the same in writing if and when requested; (ii) obtain
the written opinions of counsel to the Company in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters, addressed
to the underwriters covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by the managing underwriter or underwriters; (iii) obtain "comfort"
letters and updates thereof in form, scope and substance reasonably satisfactory
to the managing underwriter or underwriters from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements and financial data are,
or are required to be, included or incorporated by reference in the Registration
Statement), addressed to each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in "comfort"
letters in connection with underwritten offerings and such other matters as
reasonably requested by the managing underwriter or underwriters as permitted by
the Statement on Auditing Standards No. 72; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 7 hereof (or such
other provisions and procedures acceptable to Holders of a majority in aggregate
principal amount of Registrable Notes covered by such Registration Statement and
the managing underwriter or underwriters or agents) with respect to all parties
to be indemnified pursuant to said Section. The above shall be done at each
closing under such underwriting agreement, or as and to the extent required
thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, make available for inspection by any selling
Holder of such Registrable Notes being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant or other
agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"INSPECTORS"), at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
instruments of the Company and its subsidiaries (collectively, the "RECORDS") as
shall be reasonably necessary to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act, and cause the officers, directors
and employees of the Company and its subsidiaries to supply all
17
information reasonably requested by any such Inspector in connection with such
Registration Statement.
(o) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange Offer
or the first Registration Statement relating to the Registrable Notes; and
execute, and use its best efforts to cause such trustee to execute, all forms
and documents as may be required to be filed with the SEC to enable such
indenture to be so qualified in a timely manner.
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Notes are sold to underwriters in a firm commitment
or best efforts underwritten offering and (ii) if not sold to underwriters in
such an offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Registration Statement, which statements
shall cover said 12-month periods.
(q) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company, in a form customary for
underwritten transactions, addressed to the Trustee for the benefit of all
Holders of Registrable Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, that the Exchange Notes or Private Exchange Notes,
as the case may be, and the related indenture constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with its respective terms, subject to customary exceptions and
qualifications.
(r) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Company (or to such
other Person as directed by the Company) in exchange for the Exchange Notes or
the Private Exchange Notes, as the case may be, the Company shall xxxx, or cause
to be marked, on such Registrable Notes that such Registrable Notes are being
canceled in exchange for the Exchange Notes or the Private Exchange Notes, as
the case may be; in no event shall such Registrable Notes be marked as paid or
otherwise satisfied.
(s) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(t) Use its diligent best efforts to take all other steps necessary
or advisable to effect the registration of the Exchange Notes and/or Registrable
Notes covered by a Registration Statement contemplated hereby.
18
The Company may require each seller of Registrable Notes as to which
any registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Registrable Notes as the
Company may, from time to time, reasonably request. The Company may exclude
from such registration the Registrable Notes of any seller so long as such
seller fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration 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 seller not materially misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, the deletion of the
reference to such Holder in any amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such reference ceases to
be required.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by
such Participating Broker-Dealer, as the case may be, that, upon actual receipt
of any notice from the Company of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Registrable Notes covered
by such Registration Statement or Prospectus or Exchange Notes to be sold by
such Holder or Participating Broker-Dealer, as the case may be, until such
Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until
it is advised in writing (the "ADVICE") by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any amendments
or supplements thereto. In the event the Company shall give any such notice,
each of the Effectiveness Period and the Applicable Period shall be extended by
the number of days during such periods from and including the date of the giving
of such notice to and including the date when each seller of Registrable Notes
covered by such Registration Statement or Exchange Notes to be sold by such
Participating Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 5(k)
hereof or (y) the Advice.
6. REGISTRATION EXPENSES
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Exchange Offer or a Shelf Registration is filed or becomes effective,
including, without limitation, (i) all
19
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or blue sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Notes or Exchange Notes, (ii) printing expenses, including, without
limitation, expenses of printing certificates for Registrable Notes or Exchange
Notes in a form eligible for deposit with The Depository Trust Company and of
printing prospectuses if the printing of prospectuses is requested by the
managing underwriter or underwriters, if any, by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any
Registration Statement or in respect of Registrable Notes or Exchange Notes to
be sold by any Participating Broker-Dealer during the Applicable Period, as the
case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and fees and disbursements of one
special counsel for all of the sellers of Registrable Notes, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 5(n)(iii) hereof (including, without limitation, the expenses of any
special audit and "comfort" letters required by or incident to such
performance), (vi) Securities Act liability insurance, if the Company desires
such insurance, (vii) fees and expenses of all other Persons retained by the
Company, (viii) internal expenses of the Company (including, without limitation,
all salaries and expenses of officers and employees of the Company performing
legal or accounting duties), (ix) the expense of any annual audit, (x) the fees
and expenses incurred in connection with the listing of the securities to be
registered on any securities exchange, if applicable, and (xi) the expenses
relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, indentures and any other documents
necessary in order to comply with this Agreement. Notwithstanding the
foregoing, the sellers of the Registrable Notes being registered shall pay all
brokerage fees and commissions and underwriting discounts and commissions
attributable to the sale of such Notes and the fees and disbursements of any
counsel or other advisors or experts retained by such holders (severally or
jointly), other than the counsel and experts specifically referred to above,
transfer taxes on resale of any of the Notes by such sellers and any advertising
expenses incurred by or on behalf of such holders in connection with any offers
they may make.
7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder of
Registrable Notes and each Participating Broker-Dealer selling Exchange Notes
during the Applicable Period, the officers and directors of each such Person,
and each Person, if any, who controls any such Person within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act (each,
a "PARTICIPANT"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, the reasonable legal fees and other
expenses actually incurred in connection with any suit, action or proceeding or
any claim asserted) caused by, arising out
20
of or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment thereto) or
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein 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, except insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Participant furnished to the Company in writing by such
Participant expressly for use therein; PROVIDED, HOWEVER, that the Company will
not be liable if such untrue statement or omission or alleged untrue statement
or omission was contained or made in any preliminary prospectus and corrected in
the Prospectus or any amendment or supplement thereto and the Prospectus does
not contain any other untrue statement or omission or alleged untrue statement
or omission of a material fact that was the subject matter of the related
proceeding and any such loss, liability, claim, damage or expense suffered or
incurred by the Participants resulted from any action, claim or suit by any
Person who purchased Registrable Notes or Exchange Notes which are the subject
thereof from such Participant and it is established in the related proceeding
that such Participant failed to deliver or provide a copy of the Prospectus (as
amended or supplemented) to such Person with or prior to the confirmation of the
sale of such Registrable Notes or Exchange Notes sold to such Person if required
by applicable law, unless such failure to deliver or provide a copy of the
Prospectus (as amended or supplemented) was a result of noncompliance by the
Company with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each Person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to each Participant,
but only with reference to information relating to such Participant furnished to
the Company in writing by such Participant expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus. The liability of any Participant under this paragraph shall in no
event exceed the proceeds received by such Participant from sales of Registrable
Notes or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "INDEMNIFIED PERSON") shall promptly
notify the Person against whom such indemnity may be sought (the "INDEMNIFYING
PERSON") in writing, and the Indemnifying Person, shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others the Indemnifying Person may reasonably designate in such
proceeding and shall pay the reasonable fees and expenses actually incurred by
such counsel related to such proceeding; PROVIDED, HOWEVER, that the failure to
so notify the Indemnifying Person shall not relieve it of any obligation or
liability which it may have hereunder or otherwise. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
21
mutually agreed to the contrary, (ii) the Indemnifying Person shall have failed
within a reasonable period of time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person or any affiliate and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Person shall
not, in connection with any one such proceeding or separate but substantially
similar related proceeding in the same jurisdiction arising out of the same
general allegations, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified Persons,
and that all such fees and expenses shall be reimbursed promptly as they are
incurred. Any such separate firm for the Indemnified Persons shall be
designated in writing by Participants who sold a majority in interest of
Registrable Notes and Exchange Notes sold by all such Participants and
reasonably acceptable to the Company and any such separate firm for the Company,
its directors, its officers and such control Persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its prior written
consent (which consent shall not be unreasonably withheld or delayed), but if
settled with such consent or if there be a final judgment for the plaintiff for
which the Indemnified Person is entitled to indemnification pursuant to this
Agreement, the Indemnifying Person agrees to indemnify and hold harmless each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Persons (which consent shall not be unreasonably
withheld), effect any settlement or compromise of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party, or indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement involves only the payment of money damages that are
actually paid by the indemnifying party or includes an unconditional written
release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person or Persons on the
one hand and the Indemnified Person or Persons on the other from the offering of
the Registrable Notes or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law, not only such relative benefits but also
the relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative fault of the parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a
22
material fact relates to information supplied by the Company on the one hand or
such Indemnified Person, as the case may be, on the other, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by PRO RATA allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the Indemnifying Person to the Indemnified Person as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any of the Initial Purchaser or any person
who controls the Initial Purchaser, the Company, their respective directors or
officers or any person controlling the Company, and (ii) any termination of this
Agreement.
(g) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. RULES 144 AND 144A
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner in accordance with
the requirements of the Securities Act and the Exchange Act and, if at any time
the Company is not required to file such reports, it will, upon the request of
any Holder or beneficial owner of Registrable Notes, make available such
information necessary to permit sales pursuant to Rule 144A under the Securities
Act. The Company further covenants that it will take such further action as any
Holder of
23
Registrable Notes may reasonably request, all to the extent required from time
to time to enable such holder to sell Registrable Notes without registration
under the Securities Act within the limitation of the exemptions provided by (a)
Rule 144(k) and Rule 144A under the Securities Act, as such Rules may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the SEC (it being expressly understood that the foregoing shall not
create any obligation on the part of the Company to file periodic reports or
other reports under the Exchange Act at any time that it is not then required to
file such reports pursuant to the Exchange Act).
9. UNDERWRITTEN REGISTRATIONS
If any of the Registrable Notes covered by any Shelf Registration are
to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate principal amount of such Registrable
Notes included in such offering and reasonably acceptable to the Company.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements and consistent with the terms of this Agreement.
10. MISCELLANEOUS
(a) REMEDIES. The Company agrees 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 agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company has not, as of the date
hereof, and the Company shall not, after the date of this Agreement, enter into
any agreement with respect to any of its securities that is inconsistent with
the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's other issued and outstanding
securities under any such agreements.
(c) ADJUSTMENTS AFFECTING REGISTRABLE NOTES. The Company shall not,
directly or indirectly, take any action, or permit any change to occur, with
respect to the Registrable Notes as a class that would materially and adversely
affect the ability of the Holders of Registrable Notes to include such
Registrable Notes in a registration undertaken pursuant to this Agreement.
24
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Company and (II)(A) the Holders of not less than a majority
in aggregate principal amount of the then outstanding Registrable Notes and
(B) in circumstances that would adversely affect the Participating
Broker-Dealers, the Participating Broker-Dealers holding not less than a
majority in aggregate principal amount of the Registrable Notes held by all
Participating Broker-Dealers; PROVIDED, HOWEVER, that Section 7 and this
Section 10(d) may not be amended, modified or supplemented without the prior
written consent of each Holder and each Participating Broker-Dealer (including
any person who was a Holder or Participating Broker-Dealer of Registrable Notes
or Exchange Notes, as the case may be, disposed of pursuant to any Registration
Statement) affected by any such amendment, modification or supplement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Registrable Notes whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders of Registrable Notes may be
given by Holders of at least a majority in aggregate principal amount of the
Registrable Notes being sold by such Holders pursuant to such Registration
Statement.
(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), telecopier, or air courier
guaranteeing overnight delivery:
1. if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, with a copy in like manner to the Initial
Purchaser as follows:
Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Finance Department
2. if to the Initial Purchaser, at the address specified in Section
10(e)(1);
3. if to the Company, at the address as follows:
Coinstar, Inc.
00000 XX 00xx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: 206/644-9447
Attention: Xxxx X. Xxxxxx
00
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
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 and in the manner specified in such 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
hereto, the Holders and the Participating Broker-Dealers; PROVIDED, HOWEVER,
that this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor or
assign holds Registrable Notes.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
Each of the parties hereto hereby irrevocably and unconditionally: (i)
submits itself and its property in any legal action or proceeding relating to
this Notes Registration Rights Agreement or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive jursidiction of the courts
of the State of New York and the courts of the United States of America for the
Southern District of New York, and appellate courts thereof, and consents and
agrees to such action or proceeding being brought in such courts; and (ii)
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in any inconvenient court and agrees not to plead or claim the same.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
26
(k) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Company or its affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of such
required percentage.
(l) THIRD PARTY BENEFICIARIES. Holders of Registrable Notes and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
(m) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement and the Indenture, 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 of referred to herein with respect to
the registration rights granted by the Company with respect to the Registrable
Notes. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
27
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COINSTAR, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
-------------------------------------
Title: CEO and President
-------------------------------------
XXXXX XXXXXX INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
-------------------------------------
