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EXHIBIT 10.2
$200,000,000
SENIOR SUBORDINATED NOTES DUE 2010
REGISTRATION RIGHTS AGREEMENT
DATED AS OF OCTOBER 2, 2000
BY AND AMONG
ADVANCE PARADIGM, INC.
AS THE ISSUER
THE GUARANTORS AS DEFINED HEREIN
AND
RITE AID CORPORATION
AS THE INITIAL PURCHASER
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This Registration Rights Agreement (this "Agreement") is made and
entered into as of October 2, 2000 by and among Advance Paradigm, Inc., a
Delaware corporation (the "Company"), the Guarantors (as defined below) and Rite
Aid Corporation, a Delaware corporation (the "Initial Purchaser"), which has
agreed to acquire the Company's Senior Subordinated Notes due 2010 (the "Notes")
pursuant to the Stock Purchase Agreement (as defined below) in connection with
the acquisition by the Company of the capital stock of PCS Holding Corporation
from the Initial Purchaser (the "PCS Acquisition").
This Agreement is made pursuant to and in connection with the Stock
Purchase Agreement, dated as of July 11, 2000 (the "Purchase Agreement"), by and
among the Company and the Initial Purchaser. As an inducement to the Initial
Purchaser to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Initial Purchaser thereunder, the Company
agrees with the Initial Purchaser, (i) for the benefit of the Initial Purchaser
and (ii) for the benefit of the holders from time to time of the Notes
(including the Initial Purchaser) (each of the foregoing a "Holder" and together
the "Holders"), as follows:
1. Section Definitions. Capitalized terms used in this Agreement without
definition shall have their respective meanings set forth in the Purchase
Agreement. All references to Sections herein are to Sections of this Agreement
unless otherwise indicated. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations of the Commission
promulgated thereunder.
"Additional Interest" has the meaning set forth in Section 3(e) hereof.
"Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 3(c) hereof.
"Base Interest" means the interest that would otherwise accrue on the
Notes under the terms thereof and the Indenture, without giving effect
to the provisions of this Agreement.
"broker-dealer" means any broker or dealer registered with the
Commission under the Exchange Act.
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"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means (i) initially, the Company's common stock, par
value $0.01 per share, and (ii) following adoption of the Company's
Second Amended and Restated Certificate of Incorporation, the Company's
Class A Common Stock, par value $0.01 per share.
"Damages Accrual Period" has the meaning set forth in Section 3(e)
hereof.
"Damages Payment Date" means each April 15 and October 15, being the
dates on which interest is due and payable on the Notes, as more fully
detailed in the Indenture.
"Deferral Period" has the meaning set forth in Section 3(d) hereof.
"DTC" means The Depository Trust Company.
"Effectiveness Deadline Date" has the meaning set forth in Section 3(a)
hereof.
"Effectiveness Period" has the meaning set forth in Section 3(b)
hereof.
"Effective Time," in the case of (i) an Exchange Registration, shall
mean the time and date as of which the Commission declares the Exchange
Registration Statement effective or as of which the Exchange
Registration Statement otherwise becomes effective and (ii) a Shelf
Registration, shall mean the time and date as of which the Commission
declares the Shelf Registration Statement effective or as of which the
Shelf Registration Statement otherwise becomes effective.
"Event" has the meaning set forth in Section 3(e) hereof.
"Event Date" has the meaning set forth in Section 3(e) hereof.
"Event Termination Date" has the meaning set forth in Section 3(e)
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the
Commission promulgated thereunder.
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"Exchange Notice" has the meaning set forth in Section 4(a) hereof.
"Exchange Offer" has the meaning set forth in Section 4(a)
hereof.
"Exchange Registration" has the meaning set forth in Section 7 hereof.
"Exchange Registration Statement" has the meaning set forth in Section
4(a) hereof.
"Exchange Securities" has the meaning set forth in Section 4(a) hereof.
"Filing Deadline Date" has the meaning set forth in Section 3(a)
hereof.
"Guarantors" has the meaning set forth in the Indenture.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture dated as of the date hereof among the
Company, U.S. Trust of Texas, N.A., as trustee, and the Guarantors
pursuant to which the Notes are being issued, as amended, supplemented
or otherwise modified from time to time.
"Issue Date" has the meaning set forth in Section 3(a) hereof.
"Liquidated Damages Amount" has the meaning set forth in Section 3(e)
hereof.
"managing underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten
offering, if any, as set forth in Section 10 hereof.
"Notes" has the meaning set forth in the preamble hereto.
"Notice and Questionnaire" means a written notice delivered to
the Company containing substantially the information called for by the
Form of Selling Securityholder Notice and Questionnaire attached hereto
as Exhibit A, or any subsequent form in order to comply with the
securities laws.
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"Notice Holder" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section 2(a)
hereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement or Exchange Registration Statement, as the case may be,
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Registrable Securities
covered by such Shelf Registration Statement or Exchange Registration
Statement, and all amendments and supplements to the Prospectus,
including post-effective amendments.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
"Record Holder" means, with respect to any Damages Payment Date
relating to the Notes as to which any Liquidated Damages Amount or
Special Interest has accrued, the registered holder of such Notes, as
the case may be, on the Record Date, as such term is defined in the
Indenture, prior to the next succeeding Damages Payment Date.
"Registrable Securities" shall mean, as the context requires, the (a)
Notes until (i) in the circumstances contemplated by Section 4(a)
hereof, the Notes have been exchanged for Exchange Securities in an
Exchange Offer as contemplated in Section 4(a) hereof, (ii) the date on
which such Notes have been effectively registered under the Securities
Act and disposed of in accordance with the Shelf Registration
Statement, (iii) the date on which such Notes are distributed to the
public pursuant to Rule 144 under the Act (or similar provision then in
effect), (iv) the date on which such Notes cease to be outstanding, or
(v) the date on which the events described in either of Section 3(b)(i)
or 3(b)(ii) have been deemed to have occurred; (b) Warrants and the
shares of Common Stock issuable upon exercise of the Warrants, together
with any share of Common Stock or other securities (whether securities
of the Company
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or another issuer) issued or proposed to be issued with respect to such
shares of Common Stock (A) by way of stock dividend or other
distribution, stock split or reverse stock split, or (B) in connection
with a combination of shares, recapitalization, merger, consolidation,
exchange offer or other reorganization, until the earlier to occur of
(i) the date on which such Warrants or shares of Common Stock issuable
upon exercise of the Warrants (other than any share issued upon
exercise of a Warrant in accordance with a registration statement) have
been disposed of in accordance with a registration statement and (ii)
the date on which such Warrants or shares of Common Stock issuable upon
exercise of the Warrants are distributed to the public pursuant to Rule
144 under the Securities Act.
"Registration Default" has the meaning set forth in Section 4(b)
hereof.
"Registration Default Period" has the meaning set forth in Section 4(b)
hereof.
"Resale Period" has the meaning set forth in Section 4(a) hereof.
"Restricted Holder" shall mean (i) a holder that is an affiliate of the
Company within the meaning of Rule 405 of the Securities Act, (ii) a
holder who acquires Exchange Securities outside the ordinary course of
such holder's business, (iii) a holder who has arrangements or
understandings with any Person to participate in the Exchange Offer for
the purpose of distributing Exchange Securities and (iv) a holder that
is a broker-dealer, but only with respect to Exchange Securities
received by such broker-dealer pursuant to an Exchange Offer in
exchange for Registrable Securities acquired by the broker-dealer
directly from the Company.
"Shelf Registration" means a registration effected pursuant to Section
3 hereof.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company pursuant to the provisions of Section 3 hereof filed
with the Commission which covers some or all of the Registrable
Securities, as applicable, on an appropriate form under Rule 415 under
the Act, or any similar rule that may be adopted by the Commission,
amendments and supplements to such registration statement, including
post-effective amendments, in each case including
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the Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Subsequent Additional Interest" has the meaning set forth in Section
3(e) hereof.
"Trustee" means the trustee with respect to the Notes under the
Indenture.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or
any successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.
"underwriter" means any underwriter, initial purchaser or other
investment banker or financial intermediary of Registrable Securities
in connection with an offering thereof under a Shelf Registration
Statement or otherwise.
"Warrant Holders" has the meaning set forth in Section 2(a) hereof.
"Warrants" means common stock purchase warrants entitling the holders
to purchase an aggregate of 2% of the Company's Common Stock
outstanding on the date of issuance of the Notes, on a fully diluted
basis, after giving pro forma effect to the PCS Acquisition and the
financing therefor, excluding the issuance of the Warrants, subject to
certain adjustments.
Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Registration Rights Agreement, and the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Registration Rights Agreement as
a whole and not to any particular Section or other subdivision.
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2. Section Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to
register any of its common equity securities (other than Warrants and the shares
of Common Stock issuable upon exercise of the Warrants and shares of Common
Stock issued by the Company as part of the payment of the purchase price for the
affiliated companies comprising FFI Health Services) under the Securities Act
(other than a registration statement on Form S-8 or on Form S-4 or any similar
successor forms thereto), whether for its own account or for the account of one
or more securityholders of the Company, and the registration form to be used may
be used for any registration of Warrants and the shares of Common Stock issuable
upon exercise of the Warrants (a "Piggyback Registration"), the Company shall
give prompt written notice (in any event within 10 business days after its
receipt of notice of any exercise of other demand registration rights) to all
holders of the Warrants (the "Warrant Holders") of its intention to effect such
a registration and, subject to Sections 2(b) and 2(c), shall include in such
registration all Warrants and the shares of Common Stock issuable upon exercise
of the Warrants with respect to which the Company has received written requests
for inclusion therein within 15 days after the receipt of the Company's notice.
The Company may postpone or withdraw the filing or the effectiveness of a
Piggyback Registration at any time in its sole discretion.
(b) Priority on Primary Registrations . If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Warrants and the shares of Common Stock issuable upon exercise of
the Warrants requested to be included therein by the Warrant Holders, pro rata
among the Warrant Holders on the basis of the number of Warrants requested to be
registered by such Warrant Holders, (iii) third, the Participating Registrable
Securities (as defined in the Stockholders Agreement dated the date hereof,
between the Company, the Initial Purchasers and the other Persons named in such
Agreement (the "Stockholders Agreement") (the "Participating Registrable
Securities") requests to be included in such registration by the holders of such
securities on a pro rata basis based on the number of Participating Registrable
Securities requested to be included in such registration by such holders, and
(iv) fourth, other securities requested to be included in such registration pro
rata
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among the holders of such securities on the basis of the number of shares
requested to be registered by such holders or as such holders may otherwise
agree.
(c) Priority on Secondary Registrations . If a Piggyback Registration
is an underwritten secondary registration on behalf of a holder of the Company's
securities other than Warrants and the shares of Common Stock issuable upon
exercise of the Warrants, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering, the
Company shall include in such registration (i) first, the securities proposed to
be included therein by the holders requesting such registration; (ii) second,
the securities requested to be included in such registration by the Company;
(iii) third, the Warrants and the shares of Common Stock issuable upon exercise
of the Warrants requested to be included therein by the Warrant Holders and the
securities of any other Person or Persons proposed to be included in such
registration pro rata among the Warrant Holders and such other Persons on the
basis of the number of shares requested to be registered by such Holders and
such other Persons.
(d) Selection of Underwriters . If any Piggyback Registration is an
underwritten primary offering, the Company shall have the right to select the
managing underwriter or underwriters to administer any such offering.
(e) Other Registrations . If the Company has previously filed a
registration statement with respect to Warrants and the shares of Common Stock
issuable upon exercise of the Warrants pursuant to this Section 2, and if such
previous registration has not been withdrawn or abandoned, the Company shall not
be obligated to cause to become effective any other registration of any of its
securities under the Securities Act, whether on its own behalf or at the request
of any holder or holders of such securities, until a period of at least three
months has elapsed from the effective date of such previous registration.
(f) Section Shelf Registration. The Company and the Guarantors shall use
their reasonable best efforts to prepare and file or cause to be prepared and
filed with the Commission, as soon as practicable, but in any event, no later
than the date (the "Filing Deadline Date") that is 75 days after the date of
original issuance (the "Issue Date") of the Notes, a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities by the
Holders from time to time in accordance with the methods of distribution elected
by such Holders and set forth in such Shelf Registration Statement and to cause
such Shelf
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Registration Statement to be declared effective under the Act no later than the
date (the "Effectiveness Deadline Date") that is 165 days following the Issue
Date. None of the Company*s securityholders (other than the Holders of
Registrable Securities) shall have the right to include any of the Company's
securities in the Shelf Registration Statement.
(g) The Company and the Guarantors shall use their reasonable
best efforts to keep the Shelf Registration Statement continuously effective in
order to permit the Prospectus forming part thereof to be usable by Holders for
such period expiring on the later of (i) two years from the date the Notes are
issued, or such longer period as the Initial Purchaser shall reasonably request
in order to facilitate the sale of the Notes and Warrants by the Initial
Purchaser; and (ii) two years after the date the Initial Purchaser is no longer
a Holder of any of the relevant Notes (in any such case, such period being
called the "Effectiveness Period"). Notwithstanding the foregoing, the
Effectiveness Period shall terminate upon the earliest of the following: (A)
when all the Notes covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement, (B) upon completion of an Exchange
Registration and (C) the date on which there ceases to be outstanding any
Registrable Securities.
(i) Notwithstanding anything to the contrary contained in this
Registration Rights Agreement, at the option of either the
Company or the Holders of at least 25% of the aggregate
principal amount of the Notes then outstanding (such Holders
not to include the Initial Purchaser), the Company will offer
to exchange the Notes for notes with identical terms pursuant
to a registered exchange offer as set forth in Section 4
hereof, and the Company's obligation to keep the Shelf
Registration Statement effective pursuant to Section 3(b)
above shall be deemed satisfied if and to the extent that the
Holders receive notes that are freely tradeable as a result of
any such registered exchange offer.
(ii) Notwithstanding anything to the contrary contained in
this Registration Rights Agreement or the Indenture, at any
time after two years from the date of issuance of the Notes if
the Initial Purchaser has requested the Shelf Registration
Statement to remain effective pursuant to Section 3(b) above,
the Company may redeem the Notes held by the Initial Purchaser
in whole, but not in part, at par plus accrued and unpaid
interest and any Liquidated Damages Amounts, upon not less
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than 20 nor more than 30 days notice to the Initial Purchaser,
which notice will have the effect of causing all Notes held by
the Initial Purchaser to become due and payable on the
redemption date specified in such notice, and the Company's
obligation to keep the Shelf Registration Statement effective
pursuant to Section 3(b) above shall be deemed satisfied and
suspended upon delivery of such notice to the Initial
Purchaser.
(h) Each Holder of Registrable Securities wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company, at least
three (3) Business Days prior to any intended distribution of Registrable
Securities under the Shelf Registration Statement. From and after the date the
Shelf Registration Statement is declared effective, the Company shall, as
promptly as is practicable after the date a Notice and Questionnaire and such
other information as the Company may reasonably require pursuant to Section 6(l)
hereof is delivered, and in any event within five (5) Business Days after such
date, (i) if required by applicable law, file with the Commission a
post-effective amendment to the Shelf Registration Statement or prepare and, if
required by applicable law, file a supplement to the related Prospectus or a
supplement or amendment to any document incorporated therein by reference or
file any other required document so that the Holder delivering such Notice and
Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of the Registrable Securities in
accordance with applicable law and, if the Company shall file a post-effective
amendment to the Shelf Registration Statement, use its best efforts to cause
such post-effective amendment to be declared effective under the Securities Act
as promptly as is practicable, but in any event by the date (the "Amendment
Effectiveness Deadline Date") that is sixty (60) days after the date such
post-effective amendment is required by this clause to be filed; (ii) provide
such Holder copies of any documents filed pursuant to Section 3(c)(i) hereof;
and (iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 3(c)(i) hereof; provided, that if such Notice and Questionnaire is
delivered during a Deferral Period, the Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth in
clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3(d) hereof, provided, further, that if under applicable
law the Company has more than one option as to the type or manner of making any
such filing, it will make the required filing or filings in the manner or of a
type that is reasonably
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expected to result in the earliest availability of the Prospectus for effecting
resales of Registrable Securities. Notwithstanding anything contained herein to
the contrary, any Holder that becomes a Notice Holder pursuant to the provisions
of Section 3(c) of this Agreement (whether or not such Holder was a Notice
Holder at the time the Shelf Registration Statement was declared effective)
shall be named as a selling securityholder in the Shelf Registration Statement
or related Prospectus in accordance with the requirements of this Section 3(c).
(i) The Company shall be deemed not to have used its best
efforts to keep the Shelf Registration Statement effective during the requisite
period if the Company voluntarily takes any action that would result in Holders
of Registrable Securities covered thereby not being able to offer and sell any
such Registrable Securities during that period, unless (i) such action is
required by applicable law, (ii) upon the occurrence of any event contemplated
by paragraph 6(c)(2)(iii) below, and such action is taken by the Company in good
faith and for valid business reasons or (iii) the continued effectiveness of the
Shelf Registration Statement would require the Company to disclose a material
financing, acquisition or other corporate development, and the proper officers
of the Company shall have determined in good faith that such disclosure is not
in the best-interests of the Company and its stockholders, and, in the case of
clause (ii) above, the Company thereafter promptly complies with the
requirements of Section 6(i) below. The duration of all periods during which the
availability of the Shelf Registration Statement and the Prospectus is suspended
in accordance with clauses (i) through (iii) of the preceding sentence (each
such period of suspension being referred to herein as a "Deferral Period")
shall, without the Company incurring any obligation to pay liquidated damages
pursuant to Section 3(e) hereof, not, in the aggregate, exceed 90 days in any
12-month period; provided, that the Company shall be required to extend the
period of time during which the Company is required to maintain the Shelf
Registration Statement effective pursuant to this Agreement by the number of
days comprising the Deferral Period.
(j) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Shelf Registration
Statement has not been filed on or prior to the Filing Deadline Date, (ii) the
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date or the Amendment
Effectiveness Deadline Date, as the case may be, (iii) the Shelf Registration
Statement ceases to be effective or usable in connection with resales of the
Registrable Securities for any period that does not constitute a Deferral
Period, or (iv) the aggregate duration of Deferral Periods in any period
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exceeds the number of days permitted in respect of such period pursuant to
Section 3(d) hereof (each of the events of a type described in any of the
foregoing clauses (i) through (iv) are individually referred to herein as an
"Event," and the Filing Deadline Date in the case of clause (i), the
Effectiveness Deadline Date or the Amendment Effectiveness Deadline Date, as the
case may be, in the case of clause (ii), the date on which the Shelf
Registration Statement ceases to be effective or usable in connection with
resales of the Registrable Securities for any period that does not constitute a
Deferral Period and the date on which the aggregate duration of Deferral Periods
in any period exceeds the number of days permitted by Section 3(d) hereof in the
case of clause (iv), being referred to herein as an "Event Date"). Events shall
be deemed to continue until the "Event Termination Date," which shall be the
following dates with respect to the respective types of Events: the date the
Shelf Registration Statement is filed in the case of an Event of the type
described in clause (i), the date the Shelf Registration Statement is declared
effective under the Securities Act in the case of an Event of the type described
in clauses (ii) and (iii), and termination of the Deferral Period that caused
the limit on the aggregate duration of Deferral Periods in a period set forth in
Section 3(d) hereof to be exceeded in the case of the commencement of an Event
of the type described in clause (iv).
Accordingly, commencing on (and including) any Event Date and
ending on (but excluding) the next date on which there are no Events that have
occurred and are continuing (a "Damages Accrual Period"), the Company agrees to
pay, as liquidated damages and not as a penalty, additional interest (in
addition to the interest otherwise due on the Notes), subject to the provisions
of Section 12(c), to each holder of the Notes during the first 90-day period
immediately following the occurrence of an Event in an amount equal to one half
of one percent (0.50%) per annum on the principal amount of the Notes (the
"Additional Interest"), payable on the Damages Payment Dates and in the same
manner as Base Interest to Record Holders of then outstanding Notes that are
Registrable Securities, accruing from such Event Date. The amount of Additional
Interest for such Event will increase by an additional one quarter of one
percent (0.25%) per annum for each subsequent 90-day period (the "Subsequent
Additional Interest" and, together with the Additional Interest, the "Liquidated
Damages Amount"), until the Event Termination Date, up to a maximum aggregate
amount of additional interest of two percent (2.00%) per annum with respect to
all Events; provided, that any Liquidated Damages Amount accrued with respect to
any Note or portion thereof called for redemption on a redemption date prior to
the Damages Payment Date, shall, in any such event, be paid instead to the
Holder who submitted such Notes or portion thereof for redemption on the
applicable redemption date, on such date. Notwithstanding the foregoing,
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no Liquidated Damages Amounts shall accrue as to any Registrable Security from
and after the earlier of (x) the date such security is no longer a Registrable
Security and (y) termination of the Effectiveness Period pursuant to Section
3(b) hereof. The rate of accrual of the Liquidated Damages Amount with respect
to any period shall not exceed the rate provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Events. Following the cure
of all Events requiring the payment by the Company of Liquidated Damages Amounts
to the Holders of Registrable Securities pursuant to this Section, the accrual
of Liquidated Damages Amounts will cease (without in any way limiting the effect
of any subsequent Event requiring the payment of Liquidated Damages Amounts by
the Company).
All of the Company's obligations set forth in this Section
3(e) that are outstanding with respect to any Registrable Security at the time
such security ceases to be a Registrable Security shall survive until such time
as all such obligations with respect to such security have been satisfied in
full.
(k) Section Exchange Registration. If permitted under applicable law,
rule, regulation and interpretations thereof, (including SEC no action letters),
at the option of the Company or as soon as practicable after the Holders of at
least 25% of the aggregate principal amount of the Notes originally issued (such
Holders not to include the Initial Purchaser) provide written notice to the
Company directing the Company to offer to exchange the Notes for notes with
identical terms, pursuant to a registered exchange offer (such notice
hereinafter called the "Exchange Notice"), the Company will file under the
Securities Act a registration statement relating to an offer to exchange (such
registration statement, the "Exchange Registration Statement", and such offer,
the "Exchange Offer") any and all of the Notes for a like aggregate principal
amount of notes issued by the Company and guaranteed by the Guarantors, which
notes and guarantee are substantially identical to the Notes and the related
Guarantee, respectively (and are entitled to the benefits of a trust indenture
which is substantially identical to the Indenture or is the Indenture and which
has been qualified under the Trust Indenture Act), except that they have been
registered pursuant to an effective registration statement under the Securities
Act (such new notes hereinafter called "Exchange Securities"). The Company
agrees to use its reasonable best efforts to cause the Exchange Registration
Statement to become effective under the Securities Act as soon as reasonably
practicable. The Exchange Offer will be registered under the Securities Act on
the appropriate form and will comply with all applicable tender offer rules and
regulations under the Exchange Act. The Company further agrees to use its
reasonable best efforts to commence and complete the Exchange Offer promptly,
but no later than 45 days
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after such registration statement has become effective, hold the Exchange Offer
open for at least 30 days and exchange Exchange Securities for all Registrable
Securities that have been properly tendered and not withdrawn on or prior to the
expiration of the Exchange Offer. The Exchange Offer will be deemed to have been
"completed" only if the notes and related guarantee received by Holders who
tender securities for exchange other than Restricted Holders in the Exchange
Offer for Registrable Securities are, upon receipt, transferable by each such
Holder without restriction under the Securities Act and the Exchange Act and
without material restrictions under the blue sky or securities laws of a
substantial majority of the States of the United States of America. The Exchange
Offer shall be deemed to have been completed upon the earlier to occur of (i)
the Company having exchanged the Exchange Securities for all outstanding
Registrable Securities pursuant to the Exchange Offer and (ii) the Company
having exchanged, pursuant to the Exchange Offer, Exchange Securities for all
Registrable Securities that have been properly 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. The Company agrees (x)
to include in the Exchange Registration Statement a prospectus for use in
connection with resales of Exchange Securities by a broker-dealer, other than
resales of Exchange Securities received by a broker-dealer pursuant to an
Exchange Offer in exchange for Registrable Securities acquired by the
broker-dealer directly from the Company, and (y) to keep such Exchange
Registration Statement effective for a period (the "Resale Period") beginning
when Exchange Securities are first issued in the Exchange Offer and ending upon
the earlier of the expiration of the 30th day after the Exchange Offer has been
completed or such time as such broker-dealers no longer own any Registrable
Securities. With respect to such Exchange Registration Statement, each
broker-dealer that holds Exchange Securities received in an Exchange Offer in
exchange for Registrable Securities not acquired by it directly from the Company
shall have the benefit of the rights of indemnification and contribution set
forth in Sections 9(a), (c), (d) and (e) hereof.
(l) The Company shall take, and shall cause the Guarantors to
take, all actions necessary or advisable to be taken by it to ensure that the
transactions contemplated herein are effected as so contemplated, including all
actions necessary or desirable to register the Guarantee under the registration
statement contemplated in Section 4(a) hereof.
(m) Any reference herein to a registration statement as of any
time shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time and any reference herein to
any post-effective
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amendment to a registration statement as of any time shall be deemed to include
any document incorporated, or deemed to be incorporated, therein by reference as
of such time.
(n) If any action under Section 4 of this Agreement would not
be permitted under applicable law, rule, regulation or any interpretation
thereof (including SEC no-action letters), the Company is not required (i) to
take such action or (ii) to amend the terms of the Notes or Warrants (including
the requirement, where applicable, that the Notes and Warrants are not
separately transferrable except under specified conditions).
3. Section General Registration Procedures. If the Company files a
registration statement pursuant to Section 3 or Section 4, the following
provisions shall apply:
(a) At or before the Effective Time of the Exchange Offer or
the Shelf Registration, as the case may be, the Company shall use its reasonable
best efforts to cause the Indenture to be qualified under the Trust Indenture
Act of 1939.
(b) To the extent permitted by the Indenture, in the event
that such qualification would require the appointment of a new trustee under the
Indenture, the Company shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Indenture.
4. Section Shelf Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Initial Purchaser, prior to the
filing thereof with the Commission, a copy of any Shelf Registration
Statement, and each amendment thereof and each amendment or supplement,
if any, to the Prospectus included therein and shall use its reasonable
best efforts to reflect in each such document, when so filed with the
Commission, such comments as the Initial Purchaser reasonably may
propose.
(b) The Company and any Guarantors shall take such actions as may be
necessary so that (i) any Shelf Registration Statement, and any
amendment thereto, and any Prospectus forming part thereof, and any
amendment or supplement thereto (and each report or other document
incorporated therein by reference in each case) complies in all
material respects with the Securities
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Act and the Exchange Act and the respective rules and regulations
thereunder, (ii) any Shelf Registration Statement, and any amendment
thereto, does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they were
made, not misleading.
(1) The Company shall advise the Initial Purchaser and, in the case of
clause (i), the Holders and, if requested by the Initial Purchaser or
any such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement, and any amendment
thereto, has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the
Prospectus included therein or for additional information.
(2) The Company shall advise the Initial Purchaser and the Holders and,
if requested by the Initial Purchaser or any such Holder, confirm such
advice in writing of:
(i) the issuance by the Commission of any stop order
suspending effectiveness of the Shelf Registration Statement
or the initiation of any proceedings for that purpose;
(ii) the receipt by the Company of any notification with
respect to the suspension of the qualification of the
securities included therein for sale in any jurisdiction or
the initiation of any proceeding for such purpose; and
(iii) the happening of any event that requires the making of
any changes in the Shelf Registration Statement or the
Prospectus so that, as of such date, the Shelf Registration
Statement and the Prospectus
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do not contain an untrue statement of a material fact and do
not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the
case of the Prospectus, in light of the circumstances under
which they were made) not misleading (which advice shall be
accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made).
(c) The Company shall use its reasonable best efforts to prevent the
issuance, and, if issued, to obtain the withdrawal, of any order
suspending the effectiveness of any Shelf Registration Statement at the
earliest possible time.
(d) The Company shall furnish to each Holder of Registrable Securities
included within the coverage of any Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement
and any post-effective amendments thereto, including financial
statements and schedules, and, if the Holder so requests in writing,
all reports and other documents incorporated by reference in the Shelf
Registration Statement and exhibits (including those incorporated by
reference).
(e) The Company shall, during the Effectiveness Period, deliver to each
Holder of Registrable Securities included within the coverage of any
Shelf Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary prospectus) included in such
Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Company consents (except
upon and during the continuance of any event described in paragraphs
3(d) or 6(c)(2)(iii) above) to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto during the Shelf Registration Period.
(f) Prior to any offering of Registrable Securities pursuant to any
Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Holders of Registrable Securities included therein
and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under
the securities or blue sky laws of such United States jurisdictions as
any such Holders reasonably request in writing and do any and all other
acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Registrable Securities covered by such
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Shelf Registration Statement; provided, however, that in no event shall
the Company be obligated to (i) qualify generally to do business or as
a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to so qualify but for this
Section 6(g), (ii) file any general consent to service of process in
any jurisdiction where it is not as of the date hereof then so subject,
(iii) subject itself to taxation in any such jurisdiction if it is not
so subject, (iv) make any changes to its certificate of incorporation
or by-laws or any agreement between it and its stockholders or (v)
qualify any securities or take any action in any jurisdiction outside
the United States.
(g) Unless any Registrable Securities shall be in book-entry only form,
the Company shall cooperate with the Holders of Registrable Securities
to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such
permitted denominations and registered in such names as Holders may
request in connection with the sale of Registrable Securities pursuant
to such Shelf Registration Statement.
(h) Upon the occurrence of any event contemplated by paragraph
6(c)(2)(iii) above, the Company shall promptly prepare a post-effective
amendment to any Shelf Registration Statement or an amendment or
supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the Prospectus will not
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading (except,
in each case, for an untrue statement of a material fact or omission of
a material fact made in reliance on and in conformity with written
information furnished to the Company by or on behalf of Holders
specifically for use therein). The Company agrees to notify the Holders
to suspend use of the Prospectus, and the Holders shall suspend use of
the Prospectus, and not communicate such material non-public
information to any third party, and not sell or purchase, or offer to
sell or purchase, any securities of the Company, until the Company has
amended or supplemented the Prospectus so it does not contain any such
misstatement or omission. Subject to Section 3(d) hereof, at such time
as such public disclosure is otherwise made or the Company determines
in good faith and upon the advice of counsel that such disclosure is
not necessary, the Company agrees to notify the Holders of such
determination and to amend or
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supplement the Prospectus if necessary, so it does not contain any such
untrue statement or omission therein and to furnish the Holders such
numbers of copies of the Prospectus as so amended or supplemented as
the Holders may reasonably request.
(i) Not later than the effective date of any Shelf Registration
Statement hereunder, the Company shall provide a CUSIP number for all
Registrable Securities covered by any Shelf Registration Statement and
provide the Trustee with certificates for the Notes that are in a form
eligible for deposit with DTC.
(j) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make
generally available to its securityholders or otherwise provide in
accordance with Section 11(a) of the Securities Act as soon as
practicable after the effective date of the applicable Shelf
Registration Statement an earnings statement satisfying the provisions
of Section 11(a) of the Securities Act.
(k) The Company may require each Holder of Registrable Securities to be
sold pursuant to any Shelf Registration Statement to furnish to the
Company such information regarding the Holder and the distribution of
such Registrable Securities as is required by applicable law or
regulations to be included in such Shelf Registration Statement.
(l) The Company and the Guarantors shall use their reasonable best
efforts to take all other steps necessary to effect the registration of
the Registrable Securities covered by the Shelf Registration Statement
contemplated hereby.
5. Section Exchange Registration Procedures. In connection with the
Company's obligations with respect to the registration of Exchange Securities as
contemplated by Section 4(a) (the "Exchange Registration"), if applicable, the
Company shall, in a timely manner (or as otherwise specified):
(a) prepare and file with the Commission, in a timely manner, an
Exchange Registration Statement on any form which may be utilized by
the Company and which shall permit the Exchange Offer and resales of
Exchange Securities by broker-dealers during the Resale Period to be
effected as contemplated by Section 4(a), and use its reasonable best
efforts to cause such Exchange Registration Statement to become
effective as soon as practicable thereafter;
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(b) as soon as practicable prepare and file with the Commission such
amendments and supplements to such Exchange Registration Statement and
the prospectus included therein as may be necessary to effect and
maintain the effectiveness of such Exchange Registration Statement for
the periods and purposes contemplated in Section 4(a) hereof and as may
be required by the applicable rules and regulations of the Commission
and the instructions applicable to the form of such Exchange
Registration Statement, and promptly provide each broker-dealer holding
Exchange Securities with such number of copies of the prospectus
included therein (as then amended or supplemented), in conformity in
all material respects with the requirements of the Securities Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder, as such broker-dealer reasonably may request prior to the
expiration of the Resale Period, for use in connection with resales of
Exchange Securities;
(c) promptly notify each broker-dealer that has requested or received
copies of the prospectus included in such registration statement, and
if requested, confirm such advice in writing, (i) when such Exchange
Registration Statement or the prospectus included therein or any
prospectus amendment or supplement or post-effective amendment has been
filed, and, with respect to such Exchange Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of
any comments by the Commission and by the blue sky or securities
commissioner or regulator of any state with respect thereto or any
request by the Commission for amendments or supplements to such
Exchange Registration Statement or prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of such Exchange Registration Statement or
the initiation or threatening of any proceedings for that purpose, (iv)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Exchange Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose, or (v) at any time during the Resale Period when a
prospectus is required to be delivered under the Securities Act, that
such Exchange Registration Statement, prospectus, prospectus amendment
or supplement or post-effective amendment does not conform in all
material respects to the applicable requirements of the Securities Act
and the Trust Indenture Act and the rules and regulations of the
Commission thereunder or contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein
or necessary to make the statements
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therein not misleading in light of the circumstances then existing
(which advice shall be accompanied by an instruction to suspend the use
of the prospectus until the requisite changes have been made);
(d) in the event that the Company would be required, pursuant to
Section 7(c)(v) above, to notify any broker-dealers holding Exchange
Securities, without delay prepare and furnish to each such holder a
reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to purchasers of such Exchange Securities
during the Resale Period, such prospectus shall conform in all material
respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission
thereunder and shall 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 not misleading in light of the
circumstances then existing;
(e) use its reasonable best efforts to prevent the issuance, and, if
issued, to obtain the withdrawal, of any order suspending the
effectiveness of such Exchange Registration Statement or any
post-effective amendment thereto at the earliest practicable date;
(f) use its best efforts to (i) register or qualify the Exchange
Securities under the securities laws or blue sky laws of such
jurisdictions as are contemplated by Section 4(a) no later than the
commencement of the Exchange Offer, (ii) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions
until the expiration of the Resale Period and (iii) take any and all
other actions as may be reasonably necessary or advisable to enable
each broker-dealer holding Exchange Securities to consummate the
disposition thereof in such jurisdictions; provided, however, that
neither the Company nor the Guarantors shall be required for any such
purpose to (w) qualify generally to do business or as a foreign
corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to so qualify but for this Section
7(f), (x) file any general consent to service of process in any
jurisdiction where it is not as of the date hereof then so subject, (y)
subject itself to taxation in any such jurisdiction if it is not so
subject or (z) make any changes to its certificate of incorporation or
by-laws or any agreement between it and its stockholders;
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(g) use its reasonable best efforts to obtain the consent or approval
of each governmental agency or authority, whether federal, state or
local, which may be required to effect the Exchange Registration, the
Exchange Offer and the offering and sale of Exchange Securities by
broker-dealers during the Resale Period;
(h) provide a CUSIP number for all Exchange Securities, not later than
the applicable Effective Time;
(i) comply with all applicable rules and regulations of the Commission,
and make generally available to its securityholders as soon as
practicable but no later than eighteen months after the effective date
of such Exchange Registration Statement, an earnings statement of the
Company and its subsidiaries complying with Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158
thereunder).
6. Section Registration Expenses. Except as otherwise provided in Section
10 hereof, the Company shall bear all fees and expenses incurred in connection
with the performance of its obligations under Sections 2, 3, 4, 5, 6 and 7 and
in the case of a Shelf Registration Statement, shall bear or reimburse the
Holders for 50% of the reasonable fees and disbursements of one firm of counsel
designated by the Company and reasonably acceptable to the Holders of a majority
of the Registrable Securities covered by the Shelf Registration Statement to act
as counsel therefor in connection therewith.
(a) Section Indemnification and Contribution. In connection with any Shelf
Registration Statement or Exchange Registration Statement, the Company shall
indemnify and hold harmless the Initial Purchaser, each Holder, each underwriter
who participates in an offering of Registrable Securities, each Person, if any,
who controls any of such parties within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each of their respective
directors, officers, employees, trustees and agents, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in any Shelf Registration Statement or Exchange
Registration Statement (or any amendment thereto) covering
Registrable Securities, including all documents incorporated
therein by reference, or the omission or alleged omission
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therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or
any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen
by the Holders, such Holder or any underwriter (except to the
extent otherwise expressly provided in Section 9(c) hereof)),
reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 9(a);
(A) provided that this indemnity shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by the Initial Purchaser, such
Holder or any underwriter expressly for use in the Shelf Registration Statement
or Exchange Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto), that if any Holder who participates as
an underwriter in any such registration or any other Person who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person
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asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of the securities
to such Person if such statement or omission was timely corrected in such final
prospectus. Any amounts advanced by the Company to an indemnified party pursuant
to this Section 9 as a result of such losses shall be returned to the Company if
it shall be finally determined by such a court in a judgment not subject to
appeal or final review that such indemnified party was not entitled to
indemnification by the Company.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Initial Purchaser, each underwriter
who participates in an offering of Registrable Securities and the other selling
Holders and each of their respective directors, officers (including each officer
of the Company who signed the Shelf Registration Statement or Exchange
Registration Statement), employees, trustees and agents and each Person, if any,
who controls the Company, the Initial Purchaser, any underwriter or any other
selling Holder within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all loss, liability, claim,
damage and expense whatsoever described in the indemnity contained in Section
9(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Shelf
Registration Statement or Exchange Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
selling Holder expressly for use in the Shelf Registration Statement or Exchange
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto); provided, however, that no such Holder shall
be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Securities pursuant to the
Shelf Registration Statement or Exchange Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers served on such
indemnified party, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any obligation or liability except to the
extent that the indemnifying party has been materially prejudiced by such delay
or failure. An indemnifying party may participate at its own expense in the
defense of any such action. If an indemnifying party so elects within a
reasonable time after receipt of such notice, such indemnifying party, jointly
with any other indemnifying party, may assume the defense of such action with
counsel chosen by it and approved by the indemnified
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party or parties defendant in such action; provided that if any such indemnified
party reasonably determines that representation of such indemnifying party and
any indemnified party by the same counsel would present a conflict of interest,
then such indemnifying party or parties shall not be entitled to assume such
defense. If an indemnifying party is not entitled to assume the defense of such
action as a result of the proviso to the preceding sentence, counsel for such
indemnifying party shall be entitled to conduct the defense of such indemnifying
party and counsel for each indemnified party or parties shall be entitled to
conduct the defense of such indemnified party or parties. If an indemnifying
party assumes the defense of an action in accordance with and as permitted by
the provisions of this paragraph, such indemnifying party shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
party or parties be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provision agreement provided for in this
Section 9 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Initial
Purchaser and the Holders shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, the Initial Purchaser and the Holders, as
incurred; provided that 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 that was not guilty of such fraudulent
misrepresentation. As between the Company, the Initial Purchaser and the
Holders, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect the relative
fault of the Company, on the one hand, and the Initial Purchaser and the
Holders, on the other hand, with respect to the statements or omissions which
resulted in such loss, liability, claim, damage or expense, or action in respect
thereof, as well as any other relevant equitable considerations; provided,
however, that in no event shall the Initial Purchaser or any subsequent Holder
of any Notes be responsible, in the aggregate, for any amount in excess of the
amount of net proceeds received by the Initial Purchaser or such Holder from the
sale of the Registrable Securities pursuant to the Shelf Registration Statement
or Exchange Registration Statement. The relative fault
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of the Company, on the one hand, and of the Initial Purchaser and the Holders,
on the other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or by or on behalf of the Initial
Purchaser or the Holders, on the other, and the parties* relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Initial Purchaser and the Holders of the
Registrable Securities agree that it would not be just and equitable if
contributions pursuant to this Section 9 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 9(d), each
director, officer, employee, trustee, agent and Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such Initial Purchaser or Holder, and each director, officer, employee,
trustee and agent of the Company, and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Company. No
party shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its written consent.
2. Section Underwritten Offering.
(a) The Holders of a majority in interest of Registrable
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Registrable Securities in up to two underwritten offerings in
aggregate principal amount of not less than $100 million for the first such
offering and $75 million for the second such offering (i) pursuant to such Shelf
Registration Statement, (ii) pursuant to Rule 144A under the Securities Act or
another provision providing an exemption or exclusion from the registration
requirements thereof, or (iii) a block sale or other disposition pursuant to the
Shelf Registration Statement, in accordance with the conditions set forth below.
Any such offering is referred to in this Section 10 as an "underwritten
offering." In any such underwritten offering, the investment banker or bankers
and manager or managers that will administer the offering will be a nationally
recognized underwriting firm selected by, and the underwriting arrangements with
respect thereto will be approved by, the Holders of a majority of the
Registrable Securities to be included in such offering, in each case, subject to
the consent of the Company (not to be unreasonably withheld). No Holder may
participate in any underwritten offering contemplated hereby unless such Holder
(i) agrees to sell such Holder's Registrable Securities in accordance with any
approved
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underwriting arrangements and (ii) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements. The Holders participating in any underwritten
offering shall be responsible for any expenses customarily borne by selling
securityholders, including discounts and commissions and, subject to the next
sentence, fees of counsel. The Company shall reimburse the selling
securityholders for 50% of the reasonable fees and expenses of counsel to the
selling securityholders and shall be responsible for the fees and disbursements
of its counsel, its independent public accountants and any printing expenses
incurred in connection with such underwritten offering. Notwithstanding the
foregoing, upon receipt of a request from the managing underwriter or a
representative of Holders of a majority of the Registrable Securities
outstanding to prepare and file an amendment or supplement to the Shelf
Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days for the reasons set forth in Section 3(d) hereof.
(b) The Company and the Guarantors shall enter into such
customary agreements (including underwriting and purchase agreements in
customary form), and take all other customary actions that are reasonably
required in order to expedite or facilitate the registration or the disposition
of the Registrable Securities (including, without limitation, to cause members
of management of the Company and the Guarantors to participate in customary
"road-show" and marketing activities to the extent required by the underwriters
with a view to maximizing the price of the Notes sold in such offering), and in
connection therewith, if an underwriting or purchase agreement is entered into,
cause the same to contain indemnification provisions and procedures
substantially identical to those set forth in Section 9 hereof (or such other
provisions and procedures acceptable to the managing underwriters, if any) with
respect to all parties to be indemnified pursuant to Section 9 hereof.
(c) Subject to confidentiality agreements and applicable law,
the Company and the Guarantors shall (i) make reasonably available for
inspection by the Holders of Registrable Securities to be registered thereunder,
any underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent retained by
such Holders or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries; (ii) cause the Company's officers, directors and employees to make
reasonably available for inspection all relevant
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information reasonably requested by such Holders or any such underwriter,
attorney, accountant or agent in connection with any such Shelf Registration
Statement, in each case as is customary for similar due diligence examinations;
(iii) make such representations and warranties to the Holders of Registrable
Securities registered thereunder and the underwriters, if any, in form,
substance and scope as are customarily made by the Company to underwriters in
secondary underwritten offerings of this type and covering matters including,
but not limited to, those set forth in the Purchase Agreement; (iv) obtain
opinions, upon reasonable request at least 30 days before effectiveness, of
counsel to the Company (who may be the general counsel of the Company) and a
bring down opinion upon closing (which counsel (if other than the general
counsel) and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any) in customary form (with
customary qualifications) addressed to each selling Holder and the underwriters,
if any, covering such matters as are customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably requested
by such Holders and underwriters (it being agreed that the matters to be covered
by such opinion or a written statement by such counsel delivered in connection
with such opinions shall include, without limitation, as of the date of the
opinion and as of the effective date of the Shelf Registration Statement or most
recent post-effective amendment thereto, as the case may be, "negative
assurances" as to the absence from such Shelf Registration Statement and the
prospectus included therein, as then amended or supplemented, including the
documents incorporated by reference therein, of an untrue statement of a
material fact or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading); (v)
obtain, if reasonably requested, "comfort letters" and a bring down letter on
closing from the independent public accountants of the Company (and, if
necessary, any other independent 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 in the Shelf
Registration Statement), addressed to each such Holder of Registrable Securities
registered thereunder and the underwriters, if any, in customary form and
covering matters of the type customarily covered in "comfort letters" in
connection with secondary underwritten offerings of this type; and (vi) deliver
such other customary documents and certificates as may be reasonably requested
by any such Holders and the managing underwriters, if any, including those to
evidence compliance with Section 6(i) hereof and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company . The foregoing actions set forth in clauses (iii), (iv), (v) and (vi)
of this Section 10(c) shall
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30
be performed at each closing under any underwritten offering to the extent
required thereunder.
3. Section 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, and it will take such further actions
as any Holder may request, to the extent required to enable such Holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rules 144 and 144A under the
Securities Act, as such Rules may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of any
Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such information and requirements.
4. Section Miscellaneous.
(a) No Conflicting Agreements. The Company is not, as of the
date hereof, a party to, nor shall it, on or after the date of this Agreement,
enter into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement. The
Company represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company's securities under any other agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of a majority in interest of the holders of Notes or Warrants, as the
case may be, and, if the Initial Purchaser holds at least 25% of the Notes or
Warrants, as the case may be, the written consent of the Initial Purchaser.
30
31
(c) Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if the Company fails to perform any of
its obligations hereunder and that the purchasers and the holders from time to
time of the Registrable Securities may be irreparably harmed by any such
failure, and accordingly agree that the Trustee shall be entitled, on behalf of
Holders of Notes to seek any available remedy for the enforcement of this
Agreement, including for the payment of any Liquidated Damages Amounts.
Notwithstanding the foregoing, the parties agree that the sole damages payable
for a violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages. Nothing shall
preclude a Notice Holder or Holder of Registrable Securities from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement. The parties hereto agree that the liquidated damages provided for in
Section 3(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement or Exchange Registration Statement to be filed or
declared effective or available for effecting resales of Registrable Securities
in accordance with the provisions hereof.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
1. if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of
this Section 12(d);
2. if to the Initial Purchaser, initially at the address set
forth in the Purchase Agreement; and
3. if to the Company, initially at its address set forth in
the Purchase Agreement.
All such notices and communications shall be deemed to have duly given when
received.
The Initial Purchaser or the Company by notice to the other
may designate additional or different addresses for subsequent notices or
communications.
31
32
(e) Transfer of Registration Rights and Obligations. The
rights provided in this Agreement are for the benefit of all Holders in addition
to the Initial Purchaser, and all such Holders may enforce their rights and
remedies directly against the Company. In the event the Company issues or
distributes, or proposes to issue or distribute, any shares or other securities
of another issuer to any Holder and such shares or other securities would be
Registrable Securities, the Company shall use its reasonable best efforts to
cause such issuer to deliver to the Holders a written instrument, in form and
substance reasonably satisfactory to the Holders, that such issuer is bound by
and subject to all the terms and conditions of this Agreement to the same extent
as the Company and that the rights and remedies provided herein to the Holders
apply in all respects to the Registrable Securities of such issuer.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and the Holders, including, without the need for an express
assignment or any consent by the Company thereto, subsequent Holders of
Registrable Securities. The Company hereby agrees to extend the benefits of this
Agreement to any Holder of Registrable Securities and any such Holder may
specifically enforce the provisions of this Agreement as if an original party
hereto.
(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. This agreement shall be governed by the
laws of the State of New York, without giving effect to the rules governing
conflicts of laws.
(j) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
32
33
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
33
34
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
ADVANCE PARADIGM, INC.
By:
--------------------------------------------------------------------
Name:
Title:
THE GUARANTORS:
ADVP CONSOLIDATION, L.L.C.
By:
------------------------------------
Name:
Title:
XXXXXXXXX.XXX, L.P.
By:
------------------------------------
Name:
Title:
ADVP MANAGEMENT, L.P.
By:
------------------------------------
Name:
Title:
34
35
ADVP OPERATIONS, L.P.
By:
------------------------------------
Name:
Title:
HMN HEALTH SERVICES, INC.
By:
------------------------------------
Name:
Title:
INNOVATIVE PHARMACEUTICAL
STRATEGIES, INC.
By:
------------------------------------
Name:
Title:
MATURE RX PLUS OF NEVADA, INC.
By:
------------------------------------
Name:
Title:
PHOENIX COMMUNICATIONS
INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
35
36
FIRST FLORIDA INTERNATIONAL
HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
INNOVATIVE MEDICAL RESEARCH, INC.
By:
------------------------------------
Name:
Title:
XXXXXX-XXXXXX NEUROMEDICAL
INSTITUTE, INC.
By:
------------------------------------
Name:
Title:
FOUNDATION HEALTH
PHARMACEUTICAL SERVICES, INC.
By:
------------------------------------
Name:
Title:
PCS HOLDING CORPORATION
By:
------------------------------------
Name:
Title:
36
37
PCS HEALTH SYSTEMS, INC.
By:
------------------------------------
Name:
Title:
CLINICAL PHARMACEUTICALS, INC.
By:
------------------------------------
Name:
Title:
PCS MAIL SERVICES, INC.
By:
------------------------------------
Name:
Title:
PCS SERVICES, INC.
By:
------------------------------------
Name:
Title:
PCS MAIL SERVICES OF BIRMINGHAM,
INC.
By:
------------------------------------
Name:
Title:
37
38
PCS MAIL SERVICES OF FT. WORTH, INC.
By:
------------------------------------
Name:
Title:
PCS MAIL SERVICES OF SCOTTSDALE, INC.
By:
------------------------------------
Name:
Title:
FFI RX MANAGED CARE, INC.
By:
------------------------------------
Name:
Title:
FIRST FLORIDA MANAGED CARE, INC.
By:
------------------------------------
Name:
Title:
AMBULATORY CARE REVIEW
SERVICES, INC.
By:
------------------------------------
Name:
Title:
38
39
RITE AID CORPORATION
By:
------------------------------------
Name:
Title:
39
40
EXHIBIT A
SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial holder of Senior Subordinated Notes due 2010
("Notes") of Advance Paradigm, Inc. (the "Company"), common stock purchase
warrants ("Warrants") or Series A Common Stock, par value $0.01 per share (the
"Common Stock" and together with the Notes and the Warrants, the "Registrable
Securities") of the Company understands that the Company has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (the "Shelf Registration Statement") for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"),
of the Registrable Securities in accordance with the terms of the Registration
Rights Agreement, dated as of October 2, 2000 (the "Registration Rights
Agreement") by and among the Company and Rite Aid Corporation. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto in the Registration Rights Agreement.
Each beneficial owner of Registrable Securities is entitled to the
benefits of the Registration Rights Agreement. In order to sell or otherwise
dispose of any Registrable Securities pursuant to the Shelf Registration
Statement, a beneficial owner of Registrable Securities generally will be
required to be named as a selling securityholder in the related prospectus,
deliver a prospectus to purchasers of Registrable Securities and be bound by
those provisions of the Registration Rights Agreement applicable to such
beneficial owner (including certain indemnification provisions, as described
below). Beneficial owners are encouraged to complete and deliver this Notice and
Questionnaire prior to the effectiveness of the Shelf Registration Statement so
that such beneficial owners may be named as selling securityholders in the
related prospectus at the time of effectiveness. Upon receipt of a completed
Notice and Questionnaire from a beneficial owner following the effectiveness of
the Shelf Registration Statement, the Company will, as promptly as practicable,
file such amendments to the Shelf Registration Statement or supplements to the
related prospectus as are necessary to permit such holder to deliver such
prospectus to purchasers of Registrable Securities. The Company has agreed to
pay liquidated damages pursuant to the Registration Rights Agreement under
certain circumstances as set forth therein.
X-0
00
Xxxxxxx legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Registrable Securities beneficially owned by it and
listed below in Item 3 (unless otherwise specified under Item 3) pursuant to the
Shelf Registration Statement. The undersigned, by signing and returning this
Notice and Questionnaire, understands that it will be bound by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement.
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42
The undersigned hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
QUESTIONNAIRE
1 (a) Full Legal Name of Selling Securityholder:
-----------------------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities listed in (3) below are held:
-----------------------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not the
same as (b) above) through which Registrable Securities listed in (3)
below are held:
-----------------------------------------------------------------------
2. Address for Notices to Selling Securityholder:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Telephone:
-------------------------------------------------------------
Fax:
-------------------------------------------------------------------
Contact Person:
--------------------------------------------------------
3. Beneficial Ownership of Registrable Securities:
(a) Type and Principal Amount of Registrable Securities beneficially
owned:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
b) CUSIP No(s). of such Registrable Securities beneficially owned:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
4. Beneficial Ownership of the Company's securities owned by the Selling
Securityholder:
E-3
43
Except as set forth below in this Item (4), the undersigned is not the
beneficial or registered owner of any securities of the Company other
than the Registrable Securities listed above in Item (3).
(a) Type and Amount of Other Securities beneficially owned by the
Selling Securityholder:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(b) CUSIP No(s). of such Other Securities beneficially owned:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
5. Relationship with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Company (or their predecessors or affiliates)
during the past three years.
State any exceptions here:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
6. Plan of Distribution:
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Registrable Securities listed above
in Item (3) pursuant to the Shelf Registration Statement only as
follows (if at all): such Registrable Securities may be sold from time
to time directly by the undersigned or alternatively, through
underwriters, broker-dealers or agents. If the Registrable Securities
are sold through underwriters or broker-dealers, the Selling
Securityholder will be responsible for underwriting discounts or
commissions or agent's commissions. Such Registrable Securities may be
sold in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of
sale, or at negotiated prices. Such sales may be effected in
transactions (which may involve block transactions) (i) on any national
securities exchange or quotation service on
E-4
44
which the Registrable Securities may be listed or quoted at the time of
sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or services, or in the
over-the-counter market, or (iv) through the writing of options. In
connection with sales of Registrable Securities or otherwise, the
undersigned may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of the Registrable Securities
and deliver Registrable Securities to close out such short positions,
or loan or pledge Registrable Securities to broker-dealers that in turn
may sell such securities.
State any exceptions here:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Note: In no event will such method(s) of distribution take the form of
an underwritten offering of the Registrable Securities without the
prior agreement of the Company.
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Exchange Act and the rules thereunder relating
to stock manipulation, particularly Regulation M thereunder (or any successor
rules or regulations), in connection with any offering of Registrable Securities
pursuant to the Shelf Registration Statement. The undersigned agrees that
neither it nor any person acting on its behalf will engage in any transaction in
violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain persons
as set forth therein.
Pursuant to the Registration Rights Agreement, the Company has agreed
under certain circumstances to indemnify the Selling Securityholders against
certain liabilities.
In accordance with the undersigned's obligation under the Registration
Rights Agreement to provide such information as may be required by law for
inclusion in the Shelf Registration Statement, the undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof at any time while
the Shelf
X-0
00
Xxxxxxxxxxxx Xxxxxxxxx remains effective. All notices hereunder and pursuant to
the Registration Rights Agreement shall be made in writing at the address set
forth below.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Shelf Registration Statement and the related prospectus.
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46
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated: Beneficial Owner
By:
------------------------------------
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO
ADVANCE PARADIGM, INC. AT:
0000 Xxxxx X'Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
E-7
