REGISTRATION RIGHTS AGREEMENT
Dated as of October 29, 1997
among
THE AES CORPORATION
and
X.X. XXXXXX SECURITIES INC.,
and
SALOMON BROTHERS INC
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of October
29, 1997, by and among THE AES CORPORATION, a Delaware corporation (the
"Company"), and X.X. XXXXXX SECURITIES INC. and SALOMON BROTHERS INC
(collectively, the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase Agreement,
dated as of October 24, 1997, among the Company and the Initial Purchasers (the
"Purchase Agreement") relating to the sale by the Company to the Initial
Purchasers, severally, of $375,000,000 aggregate principal amount of its 8.50%
Senior Subordinated Notes due 2007 (the "Notes") and $125,000,000 aggregate
principal amount of its 8.875% Senior Subordinated Debentures due 2027 (the
"Debentures" and, collectively with the Notes, the "Securities"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this Agreement for
the equal benefit of the Initial Purchasers and their direct and indirect
transferees. The execution and delivery of this Agreement is a condition to the
Initial Purchasers' obligation to purchase the Securities under the Purchase
Agreement.
The parties hereby agree as follows:
1. Definitions
-----------
As used in this Agreement, the following terms shall have the following
meanings:
Additional Interest: See Section 4.
Advice: See Section 5.
Applicable Period: See Section 2(b).
Closing Date: The Closing Date as defined in the Purchase Agreement.
Company: See the introductory paragraph to this Agreement.
Consummation Date: The 180th day after the Closing Date.
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Debentures: See the preamble to this Agreement.
DTC: See Section 5(a).
Effectiveness Date: The 150th day after the Closing Date.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Exchange Securities: See Section 2(a).
Filing Date: The 90th day after the Closing Date.
Holder: Any record holder of Registrable Securities.
Indemnified Person: See Section 7.
Indemnifying Person: See Section 7.
Indenture: The Indenture, dated as of October 29, 1997, between the Company
and The First National Bank of Chicago, as trustee, pursuant to which the
Securities are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchasers: See the introductory paragraph to this Agreement.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 5(p).
Issue Date: The original issue date of the Securities.
NASD: See Section 5(t).
Notes: See the preamble to this Agreement.
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Participant: See Section 7.
Participating Broker-Dealer: See Section 2(b).
Person: An individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
Private Exchange: See Section 2(b).
Private Exchange Securities: See Section 2(b).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Records: See Section 5(p).
Registrable Securities: The Securities upon original issuance of the
Securities and at all times subsequent thereto, each Exchange Security as to
which Section 2(c)(1)(i) hereof is applicable upon original issuance and at all
times subsequent thereto and, if issued, the Private Exchange Securities, until
in the case of any such Notes, Debentures, Exchange Securities or Private
Exchange Securities, as the case may be, (i) a Registration Statement (other
than, with respect to any Exchange Security as to which Section 2(c)(1)(i)
hereof is applicable, the Exchange Registration Statement) covering such Notes,
Debentures, Exchange Securities or Private Exchange Securities has been declared
effective by the SEC and such Notes, Debentures, Exchange Securities or Private
Exchange Securities, as the case may be, have been disposed of in accordance
with such effective Registration Statement, (ii) such Notes, Debentures,
Exchange Securities or Private Exchange Securities, as the case may be, are sold
in compliance with Rule 144, or (iii) such Notes, Debentures, Exchange
Securities or Private Exchange Securities, as the case may be, cease to be
outstanding.
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Registration Statement: Any registration statement of the Company,
including, but not limited to, the Exchange Registration Statement, that covers
any of the Registrable Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such rule may
be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such rule may
be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities: See the preamble to this Agreement.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration: See Section 3(b).
Subsequent Shelf Registration: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee as defined in the Indenture and, if existent, the
trustee under any indenture governing the Exchange Securities and Private
Exchange Securities (if any).
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Underwritten registration or underwritten offering: A registration in which
securities of the Company are sold to an underwriter for reoffering to the
public.
2. Exchange Offer
--------------
(a) The Company agrees to file with the SEC as soon as practicable
after the Closing Date, but in no event later than the Filing Date, an
offer to exchange (the "Exchange Offer") any and all of the Registrable
Securities for a like aggregate principal amount of debt securities of the
Company which are identical, in the case of the Notes, in all material
respects to the Notes and, in the case of the Debentures, in all material
respects to the Debentures (collectively, the "Exchange Securities") (and
which are entitled to the benefits of a trust indenture which is identical
in all material respects to the Indenture (other than such changes as are
necessary to comply with any requirements of the SEC to effect or maintain
the qualification of such trust indenture under the TIA) and which has been
qualified under the TIA), except that the Exchange Securities shall have
been registered pursuant to an effective Registration Statement under the
Securities Act and shall contain no restrictive legend thereon. The Company
agrees to use its reasonable best efforts to keep the Exchange Offer open
for at least 20 business days (or longer if required by applicable law)
after the date notice of the Exchange Offer is mailed to Holders and to
consummate the Exchange Offer on or prior to the Consummation Date. The
Exchange Offer will be registered under the Securities Act on the
appropriate form (the "Exchange Registration Statement") and will comply
with all applicable tender offer rules and regulations under the Exchange
Act. If after such Exchange Registration Statement is initially declared
effective by the SEC, the Exchange Offer or the issuance of the Exchange
Securities thereunder is interfered with by any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or
court such Exchange Registration Statement shall be deemed not to have
become effective for purposes of this Agreement. Each Holder who
participates in the Exchange Offer will be deemed to represent that any
Exchange Securities received by it will be acquired in the ordinary course
of its business, that at the time of the consummation of the Exchange Offer
such Holder will have no arrangement or understanding with any person to
participate in the distribution of the Exchange Securities in violation of
the provisions of the Securities Act, and
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that such Holder is not an affiliate of the Company within the meaning of
the Securities Act. Upon consummation of the Exchange Offer in accordance
with this Section 2, the provisions of this Agreement shall continue to
apply, mutatis, mutandis, solely with respect to Registrable Securities
that are Private Exchange Securities and Exchange Securities held by
Participating Broker-Dealers, and the Company shall have no further
obligation to register Registrable Securities (other than Private Exchange
Securities and other than Exchange Securities as to which clause (c)(1)(i)
hereof applies) pursuant to Section 3 of this Agreement. No securities
other than the Exchange Securities shall be included in the Exchange
Registration Statement.
(b) The Company shall include within the Prospectus contained in the
Exchange Registration Statement one or more section(s) reasonably
acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the Staff of the SEC
with respect to the potential "underwriter" status of any broker-dealer
that is the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of Exchange Securities received by such broker-dealer in the Exchange
Offer (a "Participating Broker-Dealer"), whether such positions or policies
have been publicly disseminated by the Staff of the SEC or such positions
or policies, in the reasonable judgment of the Initial Purchasers,
represent the prevailing views of the Staff of the SEC. Such section(s)
shall also allow the use of the Prospectus by all persons subject to the
prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, and include a statement describing the means
by which Participating Broker-Dealers may resell the Exchange Securities.
Each participating Broker-Dealer will be required to acknowledge that it
will deliver a Prospectus in connection with any resale of Exchange
Securities.
The Company shall use its reasonable best efforts to keep the Exchange
Registration Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be lawfully
delivered by all persons subject to the prospectus delivery requirements of
the Securities Act for such period of time as such persons must comply with
such requirements in order to resell the Exchange Securities, provided that
such period shall not exceed 90 days (or such longer period if
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extended pursuant to the last paragraph of Section 5) (the "Applicable
Period").
If, prior to consummation of the Exchange Offer, an Initial Purchaser
holds any Securities acquired by it and having the status of an unsold
allotment in the initial distribution, the Company upon the request of such
Initial Purchaser shall, simultaneously with the delivery of the applicable
Exchange Securities in the Exchange Offer, issue and deliver to each such
Initial Purchaser, in exchange (the "Private Exchange") for the Notes
and/or Debentures held by such Initial Purchaser, a like principal amount
of debt securities of the Company that are identical in all material
respects to the applicable Exchange Securities (the "Private Exchange
Securities") (and which are issued pursuant to the same indenture as the
Exchange Securities) except for the placement of a restrictive legend on
such Private Exchange Securities. The Private Exchange Securities shall
bear the same CUSIP numbers as the respective Exchange Securities. Interest
on the Exchange Securities and Private Exchange Securities will accrue from
the last interest payment date on which interest was paid on the Securities
surrendered in exchange therefor or, if no interest has been paid on the
Securities, from the Issue Date.
Other than as provided in the Indenture with respect to certain
separate voting rights for the holders of Notes and Debentures, any
indenture under which the Exchange Securities or the Private Exchange
Securities will be issued shall provide that the holders of any of the
Exchange Securities and the Private Exchange Securities will vote and
consent together on all matters (to which such holders are entitled to vote
or consent) as one class and that none of the holders of the Exchange
Securities and the Private Exchange Securities will have the right to vote
or consent as a separate class on any matter (to which such holders are
entitled to vote or consent).
(c) If (1) prior to the consummation of the Exchange Offer, the
Company reasonably determines in good faith or Holders of at least a
majority in aggregate principal amount of the Registrable Securities notify
the Company that they have reasonably determined in good faith that (i) in
the opinion of counsel, the Exchange Securities would not, upon receipt, be
tradeable by such Holders who are not affiliates of the Company without
restriction under the Securities Act and without restrictions under ap-
8
plicable blue sky or state securities laws or (ii) in the opinion of
counsel, the SEC is unlikely to permit the consummation of the Exchange
Offer and/or (2) subsequent to the consummation of the Private Exchange,
holders of at least a majority in aggregate principal amount of the Private
Exchange Securities so request with respect to the Private Exchange
Securities and/or (3) the Exchange Offer is commenced and not consummated
prior to the 45th day following the Consummation Date for any reason, then
the Company shall promptly deliver to the Holders and the Trustee notice
thereof (the "Shelf Notice") and shall thereafter file an Initial Shelf
Registration as set forth in Section 3 (which only in the circumstances
contemplated by clause (2) of this sentence will relate solely to the
Private Exchange Securities) pursuant to Section 3. The parties hereto
agree that, following the delivery of a Shelf Notice to the Holders of
Registrable Securities (only in the circumstances contemplated by clauses
(1) and/or (3) of the preceding sentence), the Company shall not have any
further obligation to conduct the Exchange Offer or the Private Exchange
under this Section 2.
3. Shelf Registration
------------------
If a Shelf Notice is delivered as contemplated by Section 2(c), then:
(a) Initial Shelf Registration. The Company shall as promptly as
reasonably practicable prepare and file with the SEC a Registration
Statement for an offering to be made on a continuous basis pursuant to Rule
415 covering all of the Registrable Securities (the "Initial Shelf
Registration"). If the Company shall have not yet filed an Exchange
Registration Statement, the Company shall use its reasonable best efforts
to file with the SEC the Initial Shelf Registration on or prior to the
Filing Date. Otherwise, the Company shall use its reasonable best efforts
to file with the SEC the Initial Shelf Registration within 60 days of the
delivery of the Shelf Notice. The Initial Shelf Registration shall be on
Form S-3 or another appropriate form permitting registration of such
Registrable Securities for resale by such holders in the manner or manners
designated by them (including, without limitation, one or more underwritten
offerings). The Company shall not permit any securities other than the
Registrable Securities to be included in the Initial Shelf Registration or
any Subsequent Shelf Registration (as defined below). The Company shall use
its reasonable best efforts to cause the
9
Initial Shelf Registration to be declared effective under the Securities
Act on or prior to the 180th day after the filing thereof with the SEC and
to keep the Initial Shelf Registration continuously effective under the
Securities Act until the date which is 24 months from the Issue Date
(subject to extension pursuant to the last paragraph of Section 5 hereof)
(the "Effectiveness Period"), or such shorter period ending when (i) all
Registrable Securities covered by the Initial Shelf Registration have been
sold in the manner set forth and as contemplated in the Initial Shelf
Registration or (ii) a Subsequent Shelf Registration covering all of the
Registrable Securities has been declared effective under the Securities
Act.
(b) Subsequent Shelf Registrations. If the Initial Shelf Registration
or any Subsequent Shelf Registration ceases to be effective for any reason
at any time during the Effectiveness Period (other than because of the sale
of all of the securities registered thereunder), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within 45 days
of such cessation of effectiveness amend the Shelf Registration in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Securities (a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration is
filed, the Company shall use its reasonable best efforts to cause the
Subsequent Shelf Registration to be declared effective as soon as
practicable after such filing and to keep such Registration Statement
continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the
Initial Shelf Registration or any Subsequent Shelf Registration was
previously continuously effective. As used herein the term "Shelf
Registration" means the Initial Shelf Registration and any Subsequent Shelf
Registration.
(c) Supplements and Amendments. The Company shall promptly supplement
and amend the Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested
by the Holders of a majority in aggregate principal amount of the
Registrable Securities covered by
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such Registration Statement or by any underwriter of such Registrable
Securities.
4. Additional Interest
-------------------
(a) The Company and the Initial Purchasers agree that the Holders of
Registrable Securities will suffer damages if the Company fails to fulfill
its obligations under Section 2 or Section 3 hereof and that it would not
be feasible to ascertain the extent of such damages with precision.
Accordingly, the Company agrees to pay, as liquidated damages, additional
interest on the Registrable Securities ("Additional Interest") under the
circumstances and to the extent set forth below (each of which shall be
given independent effect and shall not be duplicative):
(i) if either the Exchange Registration Statement or the Initial Shelf
Registration (in the event the Exchange Offer is not permitted under
applicable law or Commission policy) has not been filed on or prior to the
Filing Date, as the case may be, Additional Interest shall accrue on the
Registrable Securities over and above the stated interest at a rate of .50%
per annum for the first 90 days immediately following the Filing Date, such
Additional Interest rate increasing to 1.0% per annum thereafter;
(ii) if either the Exchange Registration Statement is not declared
effective by the Commission, or the Initial Shelf Registration is not filed
with the Commission, on or prior to the Effectiveness Date, as the case may
be, Additional Interest shall accrue on the Registrable Securities which
are or should have been included in such Registration Statement over and
above the stated interest at a rate of .50% per annum for the first 90 days
immediately following the day after the Effectiveness Date, such Additional
Interest rate increasing to 1.0% thereafter; and
(iii) if (A) the Company has not exchanged Exchange Securities for all
Securities validly tendered in accordance with the terms of the Exchange
Offer on or prior to the Consummation Date, (B) the Exchange Registration
Statement ceases to be effective at any time prior to the time that the
Exchange Offer is consummated or (C)(1) if applicable, the Shelf
Registration has not been declared effective on or prior to the
Consummation Date or (2) such Shelf Registration ceases to be effective at
any time from and after the Consummation Date and during the Effectiveness
Period, then Additional Interest shall accrue on the
11
Registrable Securities (over and above any interest otherwise payable on
the Registrable Securities) at a rate of .50% per annum for the first 90
days commencing on the (x) 181st day after the Issue Date, in the case of
(A) and (C)(1) above, (y) the day the Exchange Registration Statement
ceases to be effective in the case of (B) above, or (z) the day such Shelf
Registration ceases to be effective in the case of (C)(2) above, such
Additional Interest rate increasing to 1.0% thereafter;
provided, however, that (1) upon the filing of the Exchange Registration
Statement or a Shelf Registration as required hereunder (in the case of clause
(i) of this Section 4), (2) upon the effectiveness of the Exchange Registration
Statement or filing of the Shelf Registration as required hereunder (in the case
of clause (ii) of this Section 4), or (3) upon the exchange of Exchange
Securities for all Securities tendered (in the case of clause (iii)(A) of this
Section 4), or upon the effectiveness of the Exchange Registration Statement
which had ceased to remain effective (in the case of (iii)(B) of this Section
4), or upon the effectiveness of the Shelf Registration (in the case of (iii)(c)
1 of this Section 4) which had or upon the effectiveness of the Shelf
Registration which had ceased to remain effective (in the case of (iii)(C)(2) of
this Section 4), Additional Interest on the Registrable Securities as a result
of such clause (or the relevant subclause thereof), as the case may be, shall
cease to accrue. It being understood and agreed that, notwithstanding any
provision to the contrary, so long as any Registrable Security is then covered
by an effective Shelf Registration Statement, no Additional Interest shall
accrue on such Registrable Security.
(b) The Company shall notify the Trustee within one business day after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). The Company shall pay
the Additional Interest due on the Registrable Securities by depositing
with the Trustee, in trust, for the benefit of the Holders thereof, on or
before the applicable semi-annual interest payment date, immediately
available funds in sums sufficient to pay the Additional Interest then due
to Holders of Registrable Securities. The Additional Interest due shall be
payable on each interest payment date to the record Holder of Registrable
Securities entitled to receive the interest payment to be made on such date
as set forth in the Indenture. The amount of Additional Interest will be
determined by multiplying the applicable Additional Interest rate by the
principal
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amount of the affected Registrable Securities of such Holders, multiplied
by a fraction, the numerator of which is the number of days such Additional
Interest rate was applicable during such period (determined on the basis of
a 360-day year comprised of twelve 30-day months and, in the case of a
partial month, the actual number of days elapsed), and the denominator of
which is 360. Each obligation to pay Additional Interest shall be deemed to
accrue immediately following the occurrence of the applicable Event Date.
The parties hereto agree that the Additional Interest provided for in this
Section 4 constitutes a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of a
Shelf Registration or Exchange Offer to be filed or declared effective, or
a Shelf Registration to remain effective, as the case may be, in accordance
with this Section 4.
5. Registration Procedures
-----------------------
In connection with the registration of any Registrable Securities pursuant
to Sections 2 or 3 hereof, the Company shall effect such registrations to permit
the sale of such Registrable Securities in accordance with the intended method
or methods of disposition thereof, and pursuant thereto the Company shall:
(a) Use its reasonable best efforts to prepare and file with the SEC,
as soon as practicable after the date hereof but in any event prior to the
Filing Date in the case of the Exchange Registration Statement or, in the
event the Exchange Offer is not permitted under applicable law or
Commission policy, a Shelf Registration Statement or the Consummation Date
in the case of the Shelf Registration Statement (filed for reasons other
than those stated above), a Registration Statement or Registration
Statements as prescribed by Section 2 or 3, and to use its reasonable best
efforts to cause each such Registration Statement to become effective and
remain effective as provided herein, provided that, if (1) such filing is
pursuant to Section 3, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Securities during the Applicable Period, before
filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Company shall upon written request furnish to and
afford the Holders of the Registrable
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Securities (which in the case of Registrable Securities in the form of
global certificates shall be The Depository Trust Company ("DTC")) and each
such Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters, if
any, a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference therein
and all exhibits thereto) proposed to be filed.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Registration Statement,
as the case may be, as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented
by any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to it with respect to the disposition of all
securities covered by such Registration Statement as so amended or in such
Prospectus as so supplemented and with respect to the subsequent resale of
any securities being sold by a Participating Broker-Dealer covered by any
such Prospectus; the Company shall not be deemed to have used its
reasonable best efforts to keep a Registration Statement effective during
the Applicable Period if the Company voluntarily takes any action that
would result in selling Holders of the Registrable Securities covered
thereby or Participating Broker-Dealers seeking to sell Exchange Securities
not being able to sell such Registrable Securities or such Exchange
Securities during that period unless such action is required by applicable
law or unless the Company complies with this Agreement, including without
limitation, the provisions of paragraph 5(k) hereof and the last paragraph
of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, notify the selling Holders of Registrable
Securities, or each such Participating Broker-Dealer, as the case may be,
their coun-
14
sel and the managing underwriters, if any, who have provided the Company
with their names and addresses promptly (but in any event within two
business days), and confirm such notice in writing, (i) when a Prospectus
or any Prospectus supplement or post-effective amendment has been filed,
and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any Holder may, upon
request, obtain, without charge, one conformed copy of such Registration
Statement or post-effective amendment including financial statements and
schedules, documents incorporated or deemed to be incorporated by reference
and exhibits), (ii) of the issuance by the SEC of any stop order suspending
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose, (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of a Registration Statement or any of the
Registrable Securities or the Exchange Securities to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (iv) of the
happening of any event or any information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes
in such Registration Statement, Prospectus or documents so that, in the
case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and (v) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
15
Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, use its reasonable best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a Prospectus
or suspending the qualification (or exemption from qualification) of any of
the Registrable Securities or the Exchange Securities to be sold by any
Participating Broker-Dealer, for sale in any jurisdiction, and, if any such
order is issued, to use its reasonable best efforts to obtain the
withdrawal of any such order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount of the Registrable Securities being
sold in connection with an underwritten offering, (i) promptly incorporate
in a prospectus supplement or post-effective amendment such information as
the managing underwriters, if any, or such Holders or counsel reasonably
request to be included therein, or (ii) make all required filings of such
prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to
be incorporated in such prospectus supplement or post-effective amendment.
(f) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, furnish to each selling Holder of Registrable
Securities and to each such Participating Broker-Dealer who so requests and
to counsel and each managing underwriter, if any, without charge, one
conformed copy of the Registration Statement or Statements and each
post-effective amendment thereto, including financial statements and
schedules, and if requested, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, deliver to each
16
selling Holder of Registrable Securities, or each such Participating
Broker-Dealer, as the case may be, their counsel, and the underwriters, if
any, without charge, as many copies of the Prospectus or Prospectuses
(including each form of preliminary prospectus) and each amendment or
supplement thereto and any documents incorporated by reference therein as
such Persons may reasonably request; and, subject to the last paragraph of
this Section 5, the Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling holders of
Registrable Securities or each such Participating Broker-Dealer, as the
case may be, and the underwriters or agents, if any, and dealers (if any),
in connection with the offering and sale of the Registrable Securities
covered by or the sale by Participating Broker-Dealers of the Exchange
Securities pursuant to such Prospectus and any amendment or supplement
thereto.
(h) Prior to any public offering of Registrable Securities or any
delivery of a Prospectus contained in the Exchange Registration Statement
by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, to use its reasonable best efforts to
register or qualify, and to cooperate with the selling Holders of
Registrable Securities or each such Participating Broker-Dealer, as the
case may be, the underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any selling Holder, Participating Broker-Dealer, or the
managing underwriters reasonably request in writing, provided that where
Exchange Securities held by Participating Broker-Dealers or Registrable
Securities are offered other than through an underwritten offering, the
Company agrees to cause its counsel to perform Blue Sky investigations and
file registrations and qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other reasonable acts or
things necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Securities held by Participating
Broker-Dealers or the Registrable Securities covered by the applicable
Registration Statement, provided that the Company shall not be required to
(A) qualify generally to do business in any jurisdic-
17
tion where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it
is not then so subject or (C) subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction.
(i) If a Shelf Registration is filed pursuant to Section 3, reasonably
cooperate with the selling Holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold,
which certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with DTC; and enable such Registrable Securities
to be registered in such names as the managing underwriter or underwriters,
if any, or Holders may request.
(j) Use its reasonable best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other United States governmental agencies or authorities
of the United States as may be necessary to enable the seller or sellers
thereof or the underwriters, if any, to consummate the disposition of such
Registrable Securities, except as may be required solely as a consequence
of the nature of such selling Holder's business, in which case the Company
will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(iv) or 5(c)(v) above, as promptly as practicable prepare and
(subject to Section 5(a) above) file with the SEC, solely at the expense of
the Company, a supplement or post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, or file any
other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities being sold thereunder or to the purchasers of
the Exchange Securities to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Pro-
18
spectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(l) Use its reasonable best efforts to cause the Registrable
Securities covered by a Registration Statement or the Exchange Securities,
as the case may be, to be rated with the appropriate rating agencies, if so
requested by the Holders of a majority in aggregate principal amount of
Registrable Securities covered by such Registration Statement or the
Exchange Securities, as the case may be, or the managing underwriters, if
any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Securities, (i) provide the Trustee with
printed certificates for the Registrable Securities in a form eligible for
deposit with DTC and (ii) provide a CUSIP numbers for the Registrable
Securities.
(n) Use its best efforts to cause all Registrable Securities covered
by such Registration Statement or the Exchange Securities, as the case may
be, to be (i) listed on each securities exchange, if any, on which similar
securities issued by the Company are then listed, or (ii) authorized to be
quoted on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or the National Market System of NASDAQ if
similar securities of the Company are so authorized.
(o) In connection with an underwritten offering of Registrable
Securities pursuant to a Shelf Registration, enter into an underwriting
agreement as is customary in underwritten offerings and take all such other
actions as are reasonably requested by the managing underwriters in order
to expedite or facilitate the registration or the disposition of such
Registrable Securities, and in such connection, (i) make such
representations and warranties to the underwriters, with respect to the
business of the Company and its subsidiaries, if any, and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made by
issuers to underwriters in underwritten offerings, and confirm the same if
and when requested; (ii) obtain an opinion of counsel to the Company and
updates thereof in form and
19
substance reasonably satisfactory to the managing underwriters, addressed
to the underwriters covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by underwriters; (iii) obtain "cold comfort" letters
and updates thereof in form and substance reasonably satisfactory to the
managing underwriters from the independent certified public accountant(s)
of the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each
of the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as may be
reasonably requested by underwriters; and (iv) if an underwriting agreement
is entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 7 hereof (or
such other provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of Registrable Securities covered by such
Registration Statement and the managing underwriters or agents) with
respect to all parties to be indemnified pursuant to said Section. The
above shall be done at each closing under such underwriting agreement, or
as and to the extent required thereunder.
(p) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, make available for inspection by any selling Holder
of such Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any
such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling holder or each such
Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries (collectively, the "Records"), as shall be reasonably nec-
20
xxxxxx to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the
Company to supply all information in each case reasonably requested by any
such Inspector in connection with such Registration Statement. Records
determined in good faith by the Company to be confidential shall not be
disclosed by any Inspector notified of such determination unless (i) the
disclosure of such Records is necessary to avoid or correct a misstatement
or omission in such Registration Statement, (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or (iii) the information in such Records has been
made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company unless
and until such is made generally available to the public. Each selling
Holder of such Registrable Securities and each such Participating
Broker-Dealer will be required to further agree that it will, upon learning
that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company at its
expense to undertake appropriate action to prevent disclosure of the
Records deemed confidential.
(q) Provide an indenture trustee for the Registrable Securities or the
Exchange Securities, as the case may be, and cause the Indenture or the
trust indenture provided for in Section 2(a), as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange
Offer or the first Registration Statement relating to the Registrable
Securities; and in connection therewith, cooperate with the trustee under
any such indenture and the holders of the Registrable Securities, to effect
such changes to such indenture as may be required for such indenture to be
so qualified in accordance with the terms of the TIA; and execute, and use
its reasonable best efforts to cause such trustee to execute, all documents
as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable such indenture to be
so qualified in a timely manner.
(r) Comply in all material respects with all applicable rules and
regulations of the SEC and make generally
21
available to its securityholders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 90
days after the end of any 12-month period (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in
a firm commitment or best efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the effective date of a Shelf
Registration Statement, which statements shall cover said 12-month periods.
(s) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Securities by Holders to the Company (or
to such other Person as directed by the Company) in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may be,
the Company shall xxxx, or caused to be marked, on such Registrable
Securities that such Registrable Securities are being cancelled in exchange
for the Exchange Securities or the Private Exchange Securities, as the case
may be; in no event shall such Registrable Securities be marked as paid or
otherwise satisfied.
(t) Reasonably cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc. (the "NASD").
(u) Use its reasonable best efforts to take all other steps necessary
to effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
as the Company may, from time to time, reasonably request. The Company may
exclude from such registration the Registrable Securities of any seller or
Participating Broker-Dealer who unreasonably fails to furnish such informa-
22
tion within a reasonable time after receiving such request. Each seller as to
which any Shelf Registration is being effected is deemed to agree to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such seller not
materially misleading.
Each Holder of Registrable Securities and each Participating Broker-Dealer
agrees by acquisition of such Registrable Securities or Exchange Securities to
be sold by such Participating Broker-Dealer, as the case may be, that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv) or 5(c)(v), such Holder will
forthwith discontinue disposition of such Registrable Securities covered by such
Registration Statement or Prospectus or Exchange Securities to be sold by such
Participating Broker-Dealer, as the case may be, until such holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
5(k), or until it is advised in writing (the "Advice") by the Company that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event the Company shall give any such
notice, each of the Effectiveness Period and the Applicable Period shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
shall have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) or (y) the Advice.
6. Registration Expenses
---------------------
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or
not the Exchange Offer or a Shelf Registration is filed or becomes
effective, including, without limitation, (i) all registration and filing
fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten
offering and (B) fees and expenses of compliance with state securities or
Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Securities or Exchange Securities and determination of the
eligibility of the Registrable Securities or Exchange Securities for
invest-
23
ment under the laws of such jurisdictions in the United States (x) where
the holders of Registrable Securities are located, in the case of the
Exchange Securities, or (y) as provided in Section 5(h) above, in the case
of Registrable Securities or Exchange Securities to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing
expenses (including, without limitation, expenses of printing certificates
for Registrable Securities or Exchange Securities in a form eligible for
deposit with DTC and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriters, if any, or, in
respect of Registrable Securities or Exchange Securities to be sold by any
Participating Broker-Dealer during the Applicable Period, by the Holders of
a majority in aggregate principal amount of the Registrable Securities
included in any Registration Statement or of such Exchange Securities, as
the case may be), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and fees and
disbursements of special counsel for the sellers of Registrable Securities
(subject to the provisions of Section 6(b)), (v) fees and disbursements of
all independent certified public accountants referred to in Section
5(o)(iii) (including, without limitation, the expenses of any special audit
and "cold comfort" letters required by or incident to such performance),
(vi) rating agency fees, (vii) Securities Act liability insurance, if the
Company desires such insurance, (viii) fees and expenses of all other
Persons retained by the Company, (ix) internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees of the Company performing legal or accounting duties), (x) the
expense of any annual audit, (xi) the fees and expenses incurred in
connection with the listing of the securities to be registered on any
securities exchange, if applicable, (xii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any
other documents necessary in order to comply with this Agreement and (xiii)
fees and expenses of the Trustee (including reasonable fees and expenses of
counsel to the Trustee).
(b) In connection with any Shelf Registration hereunder, the Company
shall reimburse the Holders of the Registrable Securities being registered
in such registration for the fees and disbursements of not more than one
counsel (in addition to appropriate local counsel) chosen by
24
the Holders of a majority in aggregate principal amount of the Registrable
Securities to be included in such Registration Statement. Such Holders
shall be responsible for any and all other out-of-pocket expenses of the
Holders of Registrable Securities incurred in connection with the
registration of the Registrable Securities.
7. Indemnification
---------------
The Company agrees to indemnify and hold harmless each Holder of
Registrable Securities and each Participating Broker-Dealer selling Exchange
Securities during the Applicable Period, the officers and directors of each such
person, and each person, if any, who controls any such person within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a
"Participant"), from and against any and all losses, claims, damages,
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Participant furnished in writing
to the Company by or on behalf of such Participant expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Participant (or to
the benefit of any person controlling such Participant) from whom the person
asserting any such losses, claims, damages, liabilities or judgments purchased
Registrable Securities or Exchange Securities if a copy of the Prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such
Participant to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of such Registrable Securities or
Exchange Securities, as the case may be, to such person, and if the Prospectus
(as so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages, liabilities or judgments.
Each Participant will be required to agree, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers and each
person, if any, who con-
25
trols the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to each Participant, but only with reference to information
relating to such Participant furnished in writing to the Company by or on behalf
of such Participant expressly for use in any Registration Statement or
Prospectus, any amendment or supplement thereto, or any preliminary prospectus.
The liability of any Participant under this paragraph shall in no event exceed
the proceeds received by such Participant from sales of Registrable Securities
giving rise to such obligations.
In case any action shall be brought against any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs, such
person (the "Indemnified Person") shall promptly notify the person against whom
such indemnity may be sought (the "Indemnifying Person") in writing and the
Indemnifying Person shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to the Indemnified Person and payment of all
fees and expenses. Any Indemnified Person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the employment of such counsel has been
specifically authorized in writing by the Indemnifying Person, (ii) the
Indemnifying Person has failed to assume the defense and employ counsel or (iii)
the named parties to any such action (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and such Indemnified
Party shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the Indemnifying Person (in which case the Indemnifying Person
shall not have the right to assume the defense of such action on behalf of such
Indemnified Person, it being understood, however, that the Indemnifying Person
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred). Any such separate firm for the Participants
and such control persons of Participants shall be designated in writing by
Participants who sold a majority in interest of Registrable Securities sold by
all such Participants and any such separate
26
firm for the Company, its directors, officers and such control persons of the
Company shall be designated in writing by the Company. The Indemnifying Person
shall not be liable for any settlement of any such action effected without its
written consent, but if settled with the written consent, the Indemnifying
Person agrees to indemnify and hold harmless any Indemnified Person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 10 business days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the Indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages, liabilities
or judgments in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and the Participants on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities, or judgments as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
the Participants 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 or by the Participants and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
27
The parties shall agree that it would not be just and equitable if
contribution pursuant to the prior paragraph were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Participant shall be
required to contribute any amount in excess of the amount by which proceeds
received by such Participant from sales of Registrable Securities exceeds the
amount of any damages that such Participant has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7 will
be in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
8. Rule 144 and Rule 144A
----------------------
The Company covenants that it will file the reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder in a timely manner and, if at any time the Company
is not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will take such further
action as any Holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 and Rule 144A under the Securities
Act, as such rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC.
28
9. Underwritten Registrations
--------------------------
If any of the Registrable Securities covered by any Shelf Registration are
to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate principal amount of such Registrable
Securities included in such offering and be reasonably acceptable to the
Company.
No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Miscellaneous
-------------
(a) Remedies. In the event of a breach by the Company of any of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights provided herein, in the
Indenture or, in the case of the Initial Purchasers, in the Purchase
Agreement or granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of
this Agreement and hereby further agree that, in the event of any action
for specific performance in respect of such breach, the Company shall waive
the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company has not, as of the date
hereof, entered and shall not, after the date of this Agreement, enter into
any agreement with respect to any of its securities that is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The Company
has not entered and will not enter into any agreement with respect to any
of its securities which will grant to any Person piggy-back rights with
respect to a Registration Statement.
29
(c) Adjustments Affecting Registrable Securities. The Company shall
not, directly or indirectly, take any action with respect to the
Registrable Securities as a class that would adversely affect the ability
of the Holders of Registrable Securities to include such Registrable
Securities in a registration undertaken pursuant to this Agreement.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written
consent of Holders of at least a majority of the then outstanding aggregate
principal amount of Registrable Securities. Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders of Registrable
Securities whose securities are being sold pursuant to a Registration
Statement or to Holders of Notes or Debentures separately and that does not
directly or indirectly affect, impair, limit or compromise the rights of
other Holders of Registrable Securities or the Holder of Debentures or
Notes, respectively, may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Securities being sold by such
Holders pursuant to such Registration Statement or by Holders of at least a
majority in aggregate principal amount of the Notes or Debentures so
affected, respectively, provided that the provisions of this sentence may
not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(e) Notices. All notices and other communications (including without
limitation any notices or other communications to the Trustee) provided for
or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, next-day air courier or telecopier:
(i) if to a Holder of Registrable Securities, at the most current
address given by the Trustee to the Company; and
(ii) if to the Company, at 0000 Xxxxx 00xx Xxxxxx, Xxxxx 0000,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx; with a copy to
Xxxxx Xxxx & Xxxxxxxx,
30
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxxxxxx, Xx.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express
assignment, subsequent Holders of Registrable Securities; provided, that,
with respect to the indemnity and contribution agreements in Section 7,
each Holder of Registrable Securities subsequent to the Initial Purchasers
shall be bound by the terms thereof if such Holder elects to include
Registrable Securities in a Shelf Registration; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor or
assign holds Registrable Securities.
(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 AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
31
(j) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(k) Entire Agreement. This Agreement, together with the Purchase
Agreement, is intended by the parties as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(l) Securities Held by the Company or Its Affiliates. Whenever the
consent or approval of holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the
Company or any of its affiliates (as such term is defined in Rule 405 under
the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(m) Treatment of Notes and Debentures. The Company undertakes to
perform its obligations hereunder with respect to Registrable Securities
which are Notes and those which are Debentures in a consistent manner
including, but not limited to, registering all Exchange Securities (whether
to be exchange for Notes or Debentures in the Exchange Offer), to the
extent permitted by the rules and regulations of the Commission, in the
Exchange Registration Statement. In the event of disparite treatment of the
Holders of Notes and the Debentures hereunder, whether by action of the
Company, the Commission or otherwise, this Agreement shall apply mutatis
mutandis to the Notes and the Debentures separately and Holders of the
Notes and the Debentures will separately have all rights granted to Holders
hereunder, including, but not limited to, the right to vote separately.
S-1
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
THE AES CORPORATION
By:
---------------------------------
Name:
Title:
X.X. XXXXXX SECURITIES INC.
SALOMON BROTHERS INC
By: X.X. Xxxxxx Securities Inc.
By:
---------------------------------
Name:
Title:
