Exhibit 10.1
EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
Dated as of January 28, 1998
FACILICOM INTERNATIONAL, INC.,
and
XXXXXX BROTHERS INC.
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TABLE OF CONTENTS
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Page
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1. Definitions........................................................ 1
2. Securities Subject to This Agreement............................... 3
3. Registered Exchange Offer.......................................... 4
4. Shelf Registration................................................. 5
5. Liquidated Damages................................................. 7
6. Registration Procedures............................................ 8
7. Participation of Broker-Dealers in Exchange Offer.................. 17
8. Registration Expenses.............................................. 19
9. Indemnification and Contribution................................... 20
10. Rule 144A.......................................................... 24
11. Participation in Underwritten Registrations........................ 24
12. Selection of Underwriters.......................................... 25
13. Miscellaneous...................................................... 25
This Registration Rights Agreement (this "Agreement") is made and entered
into as of January 28, 1998 between FaciliCom International, Inc., a Delaware
corporation (the "Company"), and Xxxxxx Brothers Inc., for itself and as
Representative of the other Initial Purchaser named in Schedule I to the
Purchase Agreement (defined below), (collectively with the Representative, the
"Initial Purchasers").
This Agreement is entered into in connection with the Purchase Agreement,
dated as of January 23, 1998, among the Company and the Initial Purchasers (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $300,000,000 aggregate principal amount of the Company's 10 1/2%
Senior Notes due 2008 (the "Notes"), which Notes shall be senior obligations of
the Company and will rank pari passu in right of payment with all other existing
and future unsecured and unsubordinated obligations of the Company, including
trade payables, and will be effectively senior in right of payment to all
existing and future obligations of the Company expressly subordinated in right
of payment to the Notes. Capitalized terms used but not specifically defined
herein have the respective meanings ascribed thereto in the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the Purchase Agreement
and in satisfaction of a condition to the Initial Purchasers' obligations
thereunder, the Company agrees with the Initial Purchasers, and its direct and
indirect transferees, for the benefit of the holders of the Notes (including the
Initial Purchasers) (the "Holders"), as follows:
1. Definitions. As used in this Agreement, the following capitalized
terms shall have the following meanings:
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
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Closing Date: The date on which the Notes were sold to the Initial
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Purchasers.
Commission: The Securities and Exchange Commission.
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Damages Payment Date: With respect to the Notes, each Interest Payment
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Date (as defined in the Indenture) until the earlier of (i) the date on which
Liquidated Damages no longer are payable or (ii) maturity of the Notes.
Effectiveness Target Date: As defined in Section 5 hereof.
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Exchange Act: The Securities Exchange Act of 1934, as amended.
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Exchange Notes: The Notes to be issued pursuant to the Indenture in the
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Exchange Offer.
Exchange Offer: The registration by the Company under the Securities Act
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of the Exchange Notes pursuant to a Registration Statement pursuant to which
the
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Company offers the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer
Restricted Securities held by such Holders for Exchange Notes in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such
Holders.
Exchange Offer Registration Statement: The Registration Statement
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relating to the Exchange Offer, including the Prospectus which forms a part
thereof.
Exempt Resales: The transactions in which the Initial Purchasers
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propose to sell the Notes to certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Securities Act, and to certain
non-U.S. persons in offshore transactions meeting the requirements of Rule
903 of Regulation S under the Securities Act.
Holders: As defined in Section 2(b) hereof.
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Indenture: The Indenture, dated as of the date hereof, between the
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Company and State Street Bank and Trust Company, as trustee (the
"Trustee"), pursuant to which the Notes are to be issued, as such Indenture
is amended or supplemented from time to time in accordance with the terms
thereof.
Initial Purchasers: Xxxxxx Brothers Inc. and BT Alex. Xxxxx
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Incorporated.
Liquidated Damages: As defined in Section 5(a) hereof.
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NASD: National Association of Securities Dealers, Inc.
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Person: An individual, partnership, corporation, limited liability
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company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement,
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including any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement and by all other amendments and
supplements thereto, including post-effective amendments, and all exhibits
thereto and all material incorporated by reference into such Prospectus.
Registration Default: As defined in Section 5 hereof.
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Registration Statement: Any registration statement of the Company
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relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer
or (b) the
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registration for resale of Transfer Restricted Securities pursuant to the
Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in either case, including the Prospectus included therein,
all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference
therein.
Related Transaction Documents: The Purchase Agreement, the Indenture
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and the Pledge Agreement, together with all exhibits and schedules thereto.
Securities Act: The Securities Act of 1933, as amended.
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Shelf Filing Deadline: As defined in Section 4 hereof.
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Shelf Registration Statement: As defined in Section 4 hereof.
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TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-
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77bbbb), as amended.
Transfer Restricted Securities: Each Note, until the earliest to
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occur of (a) the date on which such Note has been exchanged by a person
other than a Broker-Dealer for Exchange Notes in the Exchange Offer, (b)
following the exchange by a Broker-Dealer in the Exchange Offer of such
Note for one or more Exchange Notes, the date on which such Exchange Notes
are sold to a purchaser who receives from such Broker-Dealer on or prior to
the date of such sale a copy of the prospectus contained in the Exchange
Offer Registration Statement, (c) the date on which such Note has been
effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (d) the date on which
such Note is eligible to be distributed to the public pursuant to Rule 144
under the Securities Act.
Underwritten Registration or Underwritten Offering: A registration
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in which securities of the Company are sold to an underwriter for
reoffering to the public; provided, however, that the Company shall be
obligated to undertake no more than two such Underwritten Registrations or
Underwritten Offerings in the aggregate.
2. Securities Subject to This Agreement.
(a) Transfer Restricted Securities. The securities entitled to the
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benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed
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to be a holder of Transfer Restricted Securities whenever such Person owns
Transfer Restricted Securities.
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3. Registered Exchange Offer.
(a) Exchange Offer Registration Statement. Unless the Exchange
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Offer shall not be permissible under applicable law or Commission policy (after
the procedures set forth in Section 6(a) below have been complied with) or one
of the events set forth in Section 4(a)(ii) has occurred, the Company shall (i)
cause to be filed with the Commission promptly after the Closing Date, but in no
event later than 60 days after the Closing Date, a Registration Statement under
the Securities Act relating to the Exchange Notes and the Exchange Offer, (ii)
use its reasonable best efforts to cause such Registration Statement to become
effective no later than 120 days after the Closing Date, (iii) in connection
with the foregoing, (A) file all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement to
become effective, (B) if applicable, file a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Securities Act and (C)
cause all necessary filings in connection with the registration and
qualification of the Exchange Notes to be made under the "blue sky" laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer,
(iv) use its reasonable best efforts to cause the Exchange Offer to be
consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30 days
thereafter and (v) deliver the Exchange Notes in the same aggregate principal
amount as the aggregate principal amount of Transfer Restricted Securities that
were validly tendered by Holders thereof pursuant to the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of the
Exchange Notes to be offered in exchange for the Transfer Restricted Securities
and to permit resales of Exchange Notes held by Broker-Dealers as contemplated
by Section 3(c) below. The time periods referred to in clauses (i), (ii) and
(iv) of this Section 3(a) shall not include any period during which the Company
is pursuing a Commission ruling pursuant to Section 6(a)(i) below.
(b) Consummation of the Exchange Offer. The Company shall use its
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reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Company shall cause
the Exchange Offer to comply in all material respects with all applicable
federal and state securities laws. No securities other than the Exchange Notes
shall be included in the Exchange Offer Registration Statement. The Exchange
Offer shall not be subject to any conditions, other than that the Exchange Offer
does not violate applicable law or any applicable interpretation of the
Commission. The Company shall inform the Initial Purchasers of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right, subject to applicable law, to contact such
Holders and otherwise facilitate the tender of Transfer Restricted Securities in
the Exchange Offer.
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(c) "Plan of Distribution" Section of the Prospectus. The Company
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shall indicate in a "Plan of Distribution" section contained in the Prospectus
contained in the Exchange Offer Registration Statement that any Broker-Dealer
who holds Notes that are Transfer Restricted Securities and that were acquired
for its own account as a result of market-making activities or other trading
activities (other than Transfer Restricted Securities acquired directly from the
Company), may exchange such Notes pursuant to the Exchange Offer; provided,
however, such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Securities Act and must, therefore, deliver a prospectus meeting
the requirements of the Securities Act in connection with any resales of the
Exchange Notes received by such Broker-Dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such Broker-
Dealer of the Prospectus contained in the Exchange Offer Registration Statement.
Such "Plan of Distribution" section shall also contain all other information
with respect to such resales by Broker-Dealers that the Commission may require
in order to permit such resales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Exchange Notes held by any such Broker-Dealer except to the extent required by
the Commission as a result of a change in policy announced after the date of
this Agreement.
The Company shall use its reasonable best efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented and
amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for resales of Exchange Notes acquired
by Broker-Dealers for their own accounts as a result of market-making activities
or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
180 days from the date on which the Exchange Offer Registration Statement is
declared effective.
The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon their reasonable request at any
time during such 180-day period in order to facilitate such resales.
4. Shelf Registration.
(a) Shelf Registration. If (i) the Company is not permitted to
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file the Exchange Offer Registration Statement or to consummate the Exchange
Offer because the Exchange Offer is not permitted by applicable law or
Commission policy (after the procedures set forth in Section 6(a) below have
been complied with), (ii) any Holder of Transfer Restricted Securities that is a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) shall notify the Company at least 20 business days prior to the
Consummation of the Exchange Offer (A) that such Holder is prohibited by
applicable law or Commission policy from participating in the Exchange Offer, or
(B) that such Holder may not resell the Exchange Notes acquired by it in the
Exchange Offer to the public without
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delivering a prospectus and that the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder, or (C) that such Holder is a Broker-Dealer and holds Notes acquired
directly from the Company or one of its affiliates, (iii) the Exchange Offer is
not for any other reason Consummated by June 1, 1998 or (iv) the Exchange Offer
has been completed and in the opinion of counsel for the Initial Purchasers a
Registration Statement must be filed and a Prospectus must be delivered by the
Initial Purchasers in connection with any offering or sale of Transfer
Restricted Securities, then the Company shall in lieu of or, in the event of
(ii) and (iv) above, in addition to effecting the registration of the Exchange
Notes pursuant to the Exchange Offer Registration Statement, use its reasonable
best efforts to:
(x) cause to be filed a shelf registration statement pursuant to
Rule 415 under the Securities Act which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "Shelf Registration
Statement"), within 60 days of the earliest to occur of (1) the date on
which the Company determines that it is not required to file the Exchange
Offer Registration Statement, (2) the date on which the Company receives
notice from a Holder of Transfer Restricted Securities as contemplated by
clause (ii) above, (3) June 1, 1998 or (4) the receipt by the Company of
the opinion of counsel contemplated by clause (iv) above (the 60th day
following the earliest to occur of (1) through (4) being hereinafter
referred to as the "Shelf Filing Deadline"), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted Securities
for which the Holders of such Transfer Restricted Securities shall have
provided the information required pursuant to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be declared
effective by the Commission on or before the 120th day after the Shelf
Filing Deadline.
The Company shall use its reasonable best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a), and
to ensure that such Shelf Registration Statement conforms and continues to
conform with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission, as announced from time to
time, for a period ending on the second anniversary of the Closing Date.
(b) Provision by Holders of Certain Information in Connection with
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the Shelf Registration Statement. No Holder of Transfer Restricted Securities
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may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 business days after receipt of a request
therefor, such information as the Company may
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reasonably request for use in connection with any Shelf Registration Statement
or Prospectus or preliminary prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to Liquidated Damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
reasonably requested information within the time period prescribed in this
Section 4(b). Each Holder as to which any Shelf Registration Statement is being
effected agrees to notify the Company promptly if any of the information
previously furnished is misleading or inaccurate in any material respect and to
furnish promptly to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not materially misleading or inaccurate.
(c) Declaring Effective the Exchange Offer Registration Statement.
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An Exchange Offer Registration Statement pursuant to Section 3(a) hereof or a
Shelf Registration Statement pursuant to Section 4(a) hereof will not be deemed
to have become effective unless it has been declared effective by the
Commission; provided, however, that if, after it has been declared effective,
the offering of Transfer Restricted Securities pursuant to a Shelf Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the Commission or any other governmental agency or court, such
Registration Statement will be deemed not to have become effective during the
period of such interference until the offering of Transfer Restricted Securities
pursuant to such Registration Statement may legally resume.
(d) Failure of the Company to Comply with its Obligations. Without
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limiting the remedies available to the Initial Purchasers and the Holders, the
Company acknowledges that any failure by the Company to comply with its
obligations under Section 3(a) and Section 4(a) hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Section 3(a) and Section
4(a) hereof.
5. Liquidated Damages.
(a) Accrual and Amount of Liquidated Damages. If (i) any of the
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Registration Statements required by this Agreement is not filed with the
Commission on or prior to the date specified for such filing in this Agreement,
(ii) any of such Registration Statements has not been declared effective by the
Commission on or prior to the date specified for such effectiveness as set forth
in Section 3(a)(ii) of this Agreement (the "Effectiveness Target Date"), (iii)
the Exchange Offer has not been Consummated within 30 days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within five business
days by a post-effective amendment to such
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Registration Statement that cures such failure and that is itself declared
effective within such five business day period (each such event referred to in
clauses (i) through (iv), a "Registration Default"), additional cash interest
("Liquidated Damages") shall accrue to each Holder of the Notes commencing upon
the occurrence of such Registration Default in an amount equal to .50% per annum
of the principal amount of Notes held by such Holder. The amount of Liquidated
Damages will increase by an additional .50% per annum of the principal amount of
Notes with respect to each subsequent 90-day period (or portion thereof) until
all Registration Defaults have been cured, up to a maximum rate of Liquidated
Damages of 1.50% per annum of the principal amount of Notes. All accrued
Liquidated Damages shall be paid to Holders by the Company in the same manner as
interest is paid pursuant to the Indenture. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted Securities,
the accrual of Liquidated Damages with respect to such Transfer Restricted
Securities will cease.
All obligations of the Company set forth in the preceding paragraph
that have accrued and are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
(b) Notification of the Trustee. The Company shall notify the
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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"). Liquidated Damages shall be paid by depositing Liquidated Damages with
the Trustee, in trust, for the benefit of the Holders of the Notes, on or before
the applicable Interest Payment Date (whether or not any payment other than
Liquidated Damages is payable on such Notes), in immediately available funds in
sums sufficient to pay the Liquidated Damages then due to such Holders. Each
obligation to pay Liquidated Damages shall be deemed to accrue from the
applicable date of the occurrence of the Registration Default.
6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the
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Exchange Offer, the Company shall comply with all of the provisions of Section
6(c) below and shall use its reasonable best efforts to effect such exchange to
permit the sale of Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof. In addition, the
Company (with respect to (i) and (iii) of this Section 6(a)) and each Holder of
Transfer Restricted Securities (with respect to (ii) of this Section 6(a)) shall
comply with the following provisions:
(i) If in the reasonable opinion of counsel to the Company there is
a question as to whether the Exchange Offer is permitted by applicable law,
the Company hereby agrees to seek a no-action letter or other favorable
decision from the
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Commission allowing the Company to Consummate an Exchange Offer for such
Notes. The Company hereby agrees to pursue the issuance of such a decision
to the Commission staff level but shall not be required to take
commercially unreasonable action to effect a change of Commission policy.
The Company hereby agrees, however, to (A) participate in telephonic
conferences with the Commission, (B) deliver to the Commission staff an
analysis prepared by counsel to the Company setting forth the legal bases,
if any, upon which such counsel has concluded that such an Exchange Offer
should be permitted and (C) diligently pursue a resolution (which need not
be favorable) by the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate of
the Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to participate in,
a distribution of the Exchange Notes to be issued in the Exchange Offer and
(C) it is acquiring the Exchange Notes in its ordinary course of business.
In addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any Broker-Dealer and any
such Holder using the Exchange Offer to participate in a distribution of
the securities to be acquired in the Exchange Offer (1) could not under
Commission policy as in effect on the date of this Agreement rely on the
position of the Commission enunciated in Xxxxxx Xxxxxxx and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation (available
May 13, 1988), as interpreted in the Commission's letter to Shearman &
Sterling dated July 2, 1993, and similar no-action letters (including Xxxxx
& Wood LLP (available February 7, 1997), and any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the registration
and prospectus delivery requirements of the Securities Act in connection
with a secondary resale transaction and that such a secondary resale
transaction should be covered by an effective registration statement
containing the selling security holder information required by Item 507 or
508, as applicable, of Regulation S-K if the resales are of Exchange Notes
obtained by such Holder in exchange for Notes acquired by such Holder
directly from the Company.
(iii) Prior to the effectiveness of the Exchange Offer Registration
Statement, the Company shall provide a supplemental letter to the
Commission (A) stating that the Company is registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Xxxxxx Xxxxxxx and Co., Inc.
(available June 5, 1991), Xxxxx & Wood LLP (available February 7, 1997)
and, if applicable, any no-action letter obtained pursuant
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to clause (i) above and (B) including a representation that the Company has
not entered into any arrangement or understanding with any Person to
distribute the Exchange Notes to be received in the Exchange Offer and that
to the best of the Company's information and belief, each Holder (other
than an Initial Purchaser) participating in the Exchange Offer is acquiring
the Exchange Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
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Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its reasonable best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company shall as expeditiously as possible prepare and file
with the Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration
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Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Notes by Broker-Dealers), the Company shall:
(i) use its reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this Agreement, as
applicable; upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to such
Registration Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B), use
its reasonable best efforts to cause such amendment to be declared
effective and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as practicable
thereafter;
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 hereof, as applicable, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement and as so
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supplemented to be filed pursuant to Rule 424 under the Securities Act and
to comply fully with the applicable provisions of Rules 424 and 430A under
the Securities Act in a timely manner; and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to
the Prospectus;
(iii) in the case of a Shelf Registration Statement, advise the
underwriter(s), if any, and selling Holders promptly and, if requested by
such Persons, to confirm such advice in writing, (A) when the Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and,
with respect to any Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission or any state securities authority for amendments to the
Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, (D) if, between the
effective date of a Registration Statement and the closing of any sale of
Transfer Restricted Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating to
the offering cease to be true and correct in all material respects or if
the Company receives any notification with respect to the suspension of the
qualification of the Transfer Restricted Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (E) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement or the Prospectus
in order to make the statements therein not misleading and (F) of any
determination by the Company that a post-effective amendment to a
Registration Statement would be appropriate. If at any time the Commission
shall issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities
or Blue Sky laws, the Company shall use its reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time and shall provide immediate notice to each of the selling or
exchanging Holders of the withdrawal of any such order;
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(iv) in the case of a Shelf Registration Statement, furnish to each
of the selling or exchanging Holders and each of the underwriter(s), if
any, before filing with the Commission, copies of any Registration
Statement or any Prospectus included therein or any amendments or
supplements to any such Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review of
such Holders and underwriter(s), if any, for a period of at least two
business days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which selling Holders of a majority in
aggregate principal amount of Transfer Restricted Securities covered by
such Registration Statement or the underwriter(s), if any, shall reasonably
object within two business days after the receipt thereof. A selling Holder
or underwriter, if any, shall be deemed to have reasonably objected to such
filing if such Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains a material misstatement or
omission;
(v) in the case of a Shelf Registration Statement, promptly prior
to the filing of any document that is to be incorporated by reference into
a Registration Statement or Prospectus, provide copies of such document to
the selling Holders and to the underwriter(s), if any, make the Company's
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) in the case of a Shelf Registration Statement, make available
at reasonable times for inspection by a representative of the selling
Holders, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant retained by such
selling Holders or any of the underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Company and
cause the Company's officers, directors, managers and employees to supply
all information reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Registration Statement
subsequent to the filing thereof and prior to its effectiveness;
(vii) in the case of a Shelf Registration Statement, if requested by
any selling Holders or the underwriter(s), if any, promptly incorporate in
any Registration Statement or Prospectus, pursuant to a supplement or post-
effective amendment if necessary, such information as such selling Holders
and underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the "Plan
of Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to
13
such underwriter(s), the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities to be sold in
such offering; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(viii) in the case of a Shelf Registration Statement, furnish to each
selling Holder and each of the underwriter(s), if any, without charge, at
least one conformed copy of the Registration Statement, as first filed with
the Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) in the case of a Shelf Registration Statement, deliver to each
selling Holder and each of the underwriter(s), if any, without charge, as
many conformed copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons
reasonably may request; the Company hereby consents to the use of the
Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
(x) in the case of a Shelf Registration Statement, enter into such
agreements (including an underwriting agreement), and make such
representations and warranties, and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to any Registration Statement
contemplated by this Agreement, all to such extent as may be reasonably
requested by any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to any Registration Statement
contemplated by this Agreement; and in connection with an Underwritten
Registration, the Company shall:
(A) upon request, furnish to each selling Holder and each
underwriter, if any, in such substance and scope as they may request
and as are customarily made by issuers to underwriters in primary
underwritten offerings, upon the date of the effectiveness of the
Shelf Registration Statement:
(1) a certificate, dated the date of the effectiveness
of the Shelf Registration Statement, signed by (y) the Chairman
of the Board, its President or a Vice President and (z) the
Chief Financial Officer of the Company, confirming, as of the
date thereof, such matters as such parties may reasonably
request;
14
(2) an opinion, dated the date of the effectiveness of the Shelf
Registration Statement, of counsel for the Company, covering such
matters as such parties may reasonably request, and in any event
including a statement to the effect that such counsel has participated
in conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
the Initial Purchasers' representatives and the Initial Purchasers'
counsel in connection with the preparation of such Registration
Statement and the related Prospectus and have considered the matters
required to be stated therein and the statements contained therein,
although such counsel has not independently verified the accuracy,
completeness or fairness of such statements; and that such counsel
advises that, on the basis of the foregoing (relying as to materiality
to a large extent upon facts provided to such counsel by officers and
other representatives of the Company and without independent
investigation or verification), no facts came to such counsel's
attention that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus included in such
Registration Statement as of its date, contained an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the accuracy,
completeness or fairness of the financial statements, notes and
schedules and other statistical and financial data included in any
Registration Statement contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated the date of the
effectiveness of the Shelf Registration Statement from the Company's
independent accountants, in the customary form and covering matters of
the type customarily covered in comfort letters by underwriters in
connection with primary underwritten offerings.
(B) set forth in full or incorporate by reference in the underwriting
agreement, if any, the indemnification provisions and procedures of Section
9 hereof with respect to all parties to be indemnified pursuant to said
Section; and
15
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (x), if any.
If at any time the representations and warranties of the Company contemplated in
clause (A)(1) above cease to be true and correct, the Company shall so advise
the Initial Purchasers and the underwriter(s), if any, and each selling Holder
promptly and, if requested by such Persons, shall confirm such advice in writing
delivered to such Persons;
(xi) in the case of a Shelf Registration Statement, prior to any
public offering of Transfer Restricted Securities, cooperate with the
selling Holders, the underwriter(s), if any, and their respective counsel
in connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s), if any, may
reasonably request and do any and all other acts or things as may be
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however, that the Company shall not be
required to register or qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it is not now so qualified or to take
any action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement in any jurisdiction where it is not now so subject;
(xii) in the case of a Shelf Registration Statement, shall issue,
upon the request of any Holder of Notes covered by the Shelf Registration
Statement, Exchange Notes in the same amount as the Notes surrendered to
the Company by such Holder in exchange therefor or being sold by such
Holder; such Exchange Notes to be registered in the name of such Holder or
in the name of the purchaser(s) of such Exchange Notes, as the case may be;
in return, the Notes held by such Holder shall be surrendered to the
Company for cancellation;
(xiii) in the case of a Shelf Registration Statement, cooperate with
the selling Holders and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive legends;
and enable such Transfer Restricted Securities to be in such denominations
(consistent with the provisions of the Indenture) and registered in such
names as the selling Holders or the underwriter(s), if any, may reasonably
request at least two business days prior to any sale of Transfer Restricted
Securities made by such underwriter(s);
16
(xiv) use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xi)
above;
(xv) if any fact or event contemplated by clause (c)(iii)(E) above
shall exist or have occurred, prepare and file with the Commission a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, such Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(xvi) provide CUSIP numbers for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and provide
certificates for the Transfer Restricted Securities;
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities; provided, however, that the Company shall not be
required to register or qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it is not now so qualified or to take
any action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement in any jurisdiction where it is not now so subject;
(xviii) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to the Holders, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal quarter
in which Transfer Restricted Securities are sold to underwriters in a firm
or reasonable best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement;
17
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms
of the TIA; and execute and use its reasonable best efforts to cause the
Trustee to execute all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
and
(xx) provide promptly to each Holder upon reasonable request each
document filed with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(E) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof,
or until such Holder is advised in writing (the "Advice") by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice.
In the event that the Company shall give any such notice, the time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(c)(iii)(E) hereof to and including the date when each selling Holder
covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or
shall have received the Advice.
7. Participation of Broker-Dealers in Exchange Offer.
(a) Participating Broker-Dealer May Be Deemed an "Underwriter".
----------------------------------------------------------
The Commission has taken the position that any Broker-Dealer that receives
Exchange Notes for its own account in the Exchange Offer in exchange for Notes
that were acquired by such Broker-Dealer as a result of market-making or other
trading activities (a "Participating Broker-Dealer") may be deemed to be an
"underwriter" within the meaning of the Securities Act and must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes.
18
The Company understands that it is the Commission's position that if
the Prospectus contained in the Exchange Offer Registration Statement includes a
"Plan of Distribution" containing a statement to the above effect and the means
by which Participating Broker-Dealers may resell the Exchange Notes, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Notes owned by them, such Prospectus may be delivered by Participating Broker-
Dealers to satisfy their prospectus delivery obligation under the Securities Act
in connection with resales of Exchange Notes for their own accounts, so long as
the Prospectus otherwise meets the requirements of the Securities Act.
(b) Provisions Regarding Shelf Registration Statement to Apply to
-------------------------------------------------------------
Exchange Offer Registration. In light of the above, notwithstanding the other
---------------------------
provisions of this Agreement, the Company agrees that the provisions of this
Agreement as they relate to a Shelf Registration Statement shall also apply to
an Exchange Offer Registration to the extent, and with such reasonable
modifications thereto, as may be reasonably requested by the Initial Purchasers
or by one or more Participating Broker-Dealers, in each case as provided in
clause (ii) below, in order to expedite or facilitate the disposition of any
Exchange Notes by Participating Broker-Dealers consistent with the positions of
the Commission recited in Section 7(a) above; provided, however, that:
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as would
otherwise be contemplated by Section 6(c)(xv), for a period exceeding 180
days after the last date of acceptance for exchange (as such period may be
extended pursuant to the last paragraph of Section 6 of this Agreement) and
Participating Broker-Dealers shall not be authorized by the Company to
deliver and shall not deliver such Prospectus after such period in
connection with the resales contemplated by this Section 7; and
(ii) the application of the Shelf Registration Statement procedures
set forth in Section 4 of this Agreement to an Exchange Offer Registration,
to the extent not required by the positions of the Commission or the
Securities Act and the rules and regulations thereunder, will be in
conformity with the reasonable request to the Company by the Initial
Purchasers or with the reasonable request in writing to the Company by one
or more broker-dealers who certify to the Initial Purchasers and the
Company in writing that they anticipate that they will be Participating
Broker-Dealers;
provided further that, in connection with such application of the Shelf
Registration Statement procedures set forth in Section 4 to an Exchange Offer
Registration, the Company shall be obligated (x) to deal only with one entity
representing the Participating Broker-Dealers, which shall be the Representative
unless it elects not to act as such representative, (y) to pay the fees and
expenses of only one counsel representing the Participating Broker-Dealers,
which shall be counsel selected by the Representative and reasonably acceptable
to the
19
Company (unless such counsel elects not to so act), and (z) to cause to be
delivered only one, if any, "cold comfort" letter with respect to the Prospectus
in the form existing on the last date of acceptance for exchange and with
respect to each subsequent amendment or supplement, if any, effected during the
period specified in clause (i) above.
(c) Liability of the Initial Purchasers. The Initial Purchasers
-----------------------------------
shall have no liability to the Company or any Holder with respect to any request
that they may make pursuant to Section 7(b) above.
8. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including
filings made by any Initial Purchaser or Holder with the NASD (and, if
applicable, the reasonable fees and expenses of any "qualified independent
underwriter") and its counsel that may be required by the rules and regulations
of the NASD); (ii) all fees and expenses of compliance with federal securities
and state Blue Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the Exchange Notes to be issued in the Exchange Offer
and printing of Prospectuses), and associated messenger and delivery services
and telecommunications usage; (iv) all fees and disbursements of counsel for the
Company and, subject to Section 8(b) below, the Holders of Transfer Restricted
Securities; (v) all application and filing fees in connection with listing Notes
on a national securities exchange or automated quotation system; and (vi) all
fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements, which shall not exceed $10,000 in the
aggregate, of not more than one counsel, who shall be counsel selected by the
Representative and reasonably acceptable to the Company (unless such counsel
elects not to so act).
20
9. Indemnification and Contribution.
(a) The Company to Indemnify Holders. In connection with a Shelf
--------------------------------
Registration Statement or in connection with any delivery of a Prospectus
contained in an Exchange Offer Registration Statement by any Participating
Broker-Dealer or Initial Purchaser, as applicable, who seeks to sell Exchange
Notes, the Company shall indemnify and hold harmless each Holder of Transfer
Restricted Securities included within any such Shelf Registration Statement and
each Participating Broker-Dealer or Initial Purchaser selling Exchange Notes
(each, a "Participant"), such Participant's officers and directors and each
person, if any, who controls any Participant within the meaning of Section 15 of
the Securities Act from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Notes), to which such Participant, officer, director or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in (A)
any preliminary Prospectus, Registration Statement or Prospectus or in any
amendment or supplement thereto or (B) any blue sky application or other
document prepared or executed by the Company (or based upon any written
information furnished by the Company) specifically for the purpose of qualifying
any or all of the Exchange Notes under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "Blue Sky Application"), (ii) the omission or alleged omission to state
in any preliminary Prospectus, Registration Statement or Prospectus or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act, or any alleged act or failure
to act, by any Participant in connection with, or relating in any manner to, the
Notes or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered in (i) or (ii) above (provided that the Company shall
not be liable in the case of any matter covered by this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such act or failure to act undertaken or omitted to be taken
by such Participant through its gross negligence or wilful misconduct), and
shall reimburse each Participant and each such officer, director or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Participant, officer, director or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary Prospectus, Registration Statement or Prospectus or in
any amendment or supplement thereto, or in any Blue Sky Application in reliance
upon and in conformity with
21
written information concerning such Participant furnished to the Company by or
on behalf of any Participant specifically for inclusion therein; provided
further that as to any preliminary Prospectus, this indemnity agreement shall
not inure to the benefit of any Participant or any officer, director or
controlling person of that Participant on account of any loss, claim, damage,
liability or action arising from the sale of the Exchange Notes to any person by
such Participant if (i) that Participant failed to send or give a copy of the
Prospectus, as the same may be amended or supplemented, to that person within
the time required by the Securities Act and (ii) the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact in such preliminary Prospectus was corrected in the Prospectus or
a supplement or amendment thereto, as the case may be, unless in each case, such
failure resulted from noncompliance by the Company with Section 6(c). The
foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to any Participant or to any officer, director or controlling
person of that Participant. In connection with any Underwritten Offering
permitted by Section 6(c) hereof, the Company will also indemnify the
underwriters, if any, selling brokers, dealers and similar securities industry
professionals participating in the distribution, their officers and directors
and each Person who controls such Persons (within the meaning of the Securities
Act and the Exchange Act) to the same extent as provided above with respect to
the indemnification of the Holders, if requested in connection with any
Registration Statement.
(b) Participants to Indemnify the Company and its Directors, Officers
-----------------------------------------------------------------
and Controlling Persons. Each Participant, severally and not jointly, shall
-----------------------
indemnify and hold harmless the Company, its directors and officers, and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in (A) any preliminary Prospectus,
Registration Statement or Prospectus or in any amendment or supplement thereto
or (B) any Blue Sky Application or (ii) the omission or alleged omission to
state in any preliminary Prospectus, Registration Statement or Prospectus or in
any amendment or supplement thereto, or in any Blue Sky Application, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in the case of clauses (i) and (ii) only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with the written
information concerning such Participant furnished to the Company or the Trustee
by or on behalf of that Participant specifically for inclusion therein, and
shall reimburse the Company and any such director, officer or controlling person
for any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The
22
foregoing indemnity agreement is in addition to any liability which any
Participant may otherwise have to the Company or any such director, officer or
controlling person.
(c) Notification of Indemnifying Party; Counsel; Settlement.
-------------------------------------------------------
Promptly after receipt by an indemnified party under this Section 9 of notice of
any claim or the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party in writing of the claim or the
commencement of that action; provided, however, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have
under this Section 9 except to the extent the indemnifying party has been
materially prejudiced by such failure and provided further that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and its respective directors, officers and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the indemnified party against the
indemnifying party under this Section 9 if such indemnified party shall have
been advised in writing that the representation of such indemnified party and
those directors, officers and controlling persons by the same counsel would be
inappropriate under applicable standards of professional conduct due to actual
or potential differing interests between them, and in that event the fees and
expenses of such separate counsel shall be paid by the indemnifying party. It is
understood that the indemnifying party shall not be liable for the fees and
expenses of more than one separate firm (in addition to local counsel in each
jurisdiction) for all indemnified parties in connection with any proceeding or
related proceedings. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 9(a) and 9(b), shall use its reasonable best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) 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, or (ii) be liable for any
23
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment
in accordance with this Section 9.
(d) Indemnification Unavailable. If the indemnification provided for
---------------------------
in this Section 9 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 9(a) or 9(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Participants, on the
other hand, from the offering of the Exchange Notes or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one
hand, and the Participants, on the other hand, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand, and the
Participants, on the other hand, with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Exchange Notes purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting commissions
and discounts received by the Participants with respect to the Notes purchased
under the Purchase Agreement, on the other hand, bear to the total gross
proceeds from the offering of the Exchange Notes under this Agreement, in each
case as set forth in the table on the cover page of the Memorandum. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Participants, on the other hand, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. Each of the Company and the
Participants agrees that it would not be just and equitable if contributions
pursuant to this Section 9(d) were to be determined by pro rata allocation (even
if either the Participants or the Company, as the case may be, were treated as
one entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
9(d) shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9(d), no Participant shall be
required to
24
indemnify or contribute any amount in excess of the amount by which proceeds
received by the Participants from an offering of the Exchange Notes exceeds the
amount of any damages which such Participant has otherwise paid or become liable
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity. The Participants'
obligations to contribute as provided in this Section 9(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) Each of the Initial Purchasers confirms and the Company
acknowledges that (i) the last paragraph on the cover page, (ii) the
stabilization legend on page (iii) and (iv) the fifth paragraph, the sixth
paragraph and the first two sentences of the eleventh paragraph under the
caption "Plan of Distribution" constitute the only information concerning the
Initial Purchasers furnished in writing to the Company by or on behalf of the
Initial Purchasers specifically for inclusion in the Registration Statement.
(f) The indemnity and contribution provisions contained in this
Section 9 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Initial Purchaser, any Holder or any person controlling any Initial
Purchaser or any Holder, or by or on behalf of the Company, its officers or
directors or any person controlling the Company, (iii) acceptance of any of the
Exchange Notes and (iv) any sale of Transfer Restricted Securities pursuant to a
Shelf Registration Statement.
10. Rule 144A.
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
11. Participation in Underwritten Registrations.
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of
25
attorney, indemnities, underwriting agreements, lockup letters and other
documents reasonably required under the terms of such underwriting arrangements.
12. Selection of Underwriters.
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided that such investment bankers and managers must be
reasonably satisfactory to the Company.
13. Miscellaneous.
(a) Remedies. The Company agrees that monetary damages (including
--------
Liquidated Damages) 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 will not on or after the
--------------------------
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement granting any registration rights with respect to its
securities to any Person. 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 securities under the provisions of any agreement in
effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company will not take any
-------------------------------
action, or permit any change to occur, with respect to Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer unless such action or change is required by applicable law.
(d) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions
hereof may not be given unless the Company has obtained the written consent of
Holders of at least a majority of the outstanding principal amount of Transfer
Restricted Securities; provided, however, that no amendment, modification,
supplement, waiver or consent to or departure from the provisions of Section 8
hereof shall be effective as against any Holder of Transfer Restricted
Securities unless consented to in writing by such Holder. Notwithstanding the
foregoing, a waiver or
26
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
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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:
(i) if to a Holder, at the address of such Holder maintained by the
Registrar under the Indenture; and
(ii) if to the Company:
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx & Berlin, Chartered
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. XxXxx, Xx., Esq.
Facsimile: (000) 000-0000
(iii) if to the Initial Purchasers:
Xxxxxx Brothers Inc.
Three World Financial Center
New York, New York 10285
Attention: Syndicate Department
Facsimile: (000) 000-0000; and
