EXHIBIT 4.7
COUNTY SEAT STORES, INC.
$85,000,000 123/4% SENIOR NOTES DUE 2004
SERIES A WARRANTS TO PURCHASE
26.8908 SHARES OF COMMON STOCK
REGISTRATION RIGHTS AGREEMENT
October 29, 1997
XXXXXXXXX & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxxxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Ladies and Gentlemen:
County Seat Stores, Inc., a Minnesota corporation (the "Issuer"), is
issuing and selling to Xxxxxxxxx & Company, Inc. (the "Initial Purchaser"), upon
the terms set forth in the Purchase Agreement, dated October 23, 1997 between
the Issuer and the Initial Purchaser (the "Purchase Agreement"), (i) 85,000
units (each, a "Unit" and, collectively, the "Units"), each Unit consisting of
$1,000 principal amount of the Issuer's 123/4% Senior Notes due 2004 (each, a
"Note," collectively, the "Notes") and one Series A warrant (each, a "Warrant,"
and collectively with the Series A warrants issued to the Initial Purchaser as
provided in (ii), the "Warrants") to purchase 26.8908 shares of common stock,
par value $.01 per share, of the Issuer (the "Common Stock") and (ii) Warrants
to purchase an additional 571,429 shares of Common Stock of the Issuer. As an
inducement to the Initial Purchaser to enter into the Purchase Agreement, the
Issuer agrees with the Initial Purchaser, for the benefit of the Holders (as
defined below) of the Securities (as defined below), as follows:
1. DEFINITIONS
Capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to them in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
ADDITIONAL INTEREST: See Section 4(a).
ADVICE: See last paragraph of Section 6.
AGREEMENT: This Registration Rights Agreement dated as of the Closing
Date, among the Issuer, the existing Subsidiary Guarantor and the Initial
Purchaser.
APPLICABLE PERIOD: See Section 2(e).
BUSINESS DAY: A day that is not a Saturday, a Sunday or a day on which
banking institutions in the City of New York or the State of Minnesota are
authorized or required by law or executive order to be closed.
CLOSING DATE: October 29, 1997.
COMMON STOCK: See the first introductory paragraph to this Agreement.
DAY: Unless otherwise expressly provided, a calendar day.
EFFECTIVENESS DATE: The 180th day after the Closing Date.
EFFECTIVENESS PERIOD: See Section 3(a)
ELIGIBLE SHELF NOTES: See Section 3.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
EXCHANGE NOTE: 123/4% Senior Notes due 2004, Series B, of the Issuer,
including the guarantees endorsed thereon, identical in all material respects to
the Notes, except for any reference to series and the transfer restrictions
relating to the Notes.
EXCHANGE OFFER: See Section 2(a).
EXCHANGE REGISTRATION STATEMENT: See Section 2(a).
EXERCISE DATE: The date on which the Warrants are first exercisable.
FILING DATE: The 120th day after the Closing Date.
HOLDER: Any registered holder of Registrable Notes.
INDEMNIFIED PARTY: See Section 8(c).
INDEMNIFYING PARTY: See Section 8(c).
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INDENTURE: The Indenture, dated as of the Closing Date, among the Issuer,
the Subsidiary Guarantor and First Trust National Association, as Trustee,
pursuant to which the Notes are being issued, as amended or supplemented from
time to time.
INITIAL PURCHASER: See the first introductory paragraph to this Agreement.
INITIAL SHELF REGISTRATION STATEMENT: See Section 3(a).
INSPECTORS: See Section 6(o).
ISSUER: See the first introductory paragraph to this Agreement.
NASD: National Association of Securities Dealers, Inc.
NOTES: See the first introductory paragraph to this Agreement.
NOTES PROSPECTUS: The Prospectus included in any Notes Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented,
including, without limitation, as such Prospectus may be amended pursuant to
Rule 424(b) promulgated under the Securities Act.
NOTES REGISTRATION STATEMENT: Any registration statement of the Issuer
that covers any of the Registrable Notes that is filed with the SEC under the
Securities Act (including, but not limited to, the Exchange Registration
Statement, the Initial Shelf Registration Statement and any Subsequent Shelf
Registration Statement) in accordance with the provisions of this Agreement,
including any amendments to such registration statement, including post-
effective amendments, all supplements to the Prospectus contained therein and
all exhibits thereto.
PARTICIPATING BROKER-DEALER: See Section 2(e).
PERSON: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm, government or agency or political subdivision
thereof, or other legal entity.
PIGGY-BACK REGISTRATION: See Section 11(b).
PRIVATE EXCHANGE: See Section 2(f).
PRIVATE EXCHANGE NOTES: See Section 2(f).
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PROSPECTUS: The prospectus included in any Registration Statement with
respect to the terms of the offering of any portion of the Securities covered by
such Registration Statement (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 promulgated under
the Securities Act), as such prospectus may be amended or supplemented,
including, without limitation, as such prospectus may be amended pursuant to
Rule 424(b) promulgated under the Securities Act.
PURCHASE AGREEMENT: See the first introductory paragraph to this
Agreement.
RECORDS: See Section 6(o).
REGISTRABLE NOTES: (i) Notes, (ii) Private Exchange Notes and (iii) any
Exchange Notes received in the Exchange Offer, in each case, that may not be
sold without restriction under federal or state securities laws.
REGISTRABLE WARRANT SHARES: Any of (i) the Warrant Shares (whether or not
the related Warrants have been exercised) and (ii) any other securities issued
or issuable with respect to any Warrant Shares by way of stock dividends or
stock splits or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As to any
particular Registrable Warrant Shares, such securities shall cease to be
Registrable Warrant Shares when (i) such securities shall have been disposed of
by the Holder thereof pursuant to a Warrant Shares Registration Statement that
has been declared effective under the Securities Act, (ii) such securities are
eligible for sale to the public pursuant to Rule 144(k) or otherwise under Rule
144 by the Holder thereof, or (iii) such securities shall have otherwise been
transferred by the Holder thereof in compliance with the Securities Act and any
applicable state securities laws and new certificates for such securities not
bearing a legend restricting further transfer shall have been delivered by the
Issuer or its transfer agent.
REGISTRATION STATEMENT: Any Notes Registration Statement or Warrant Shares
Registration Statement.
RULE 144: Rule 144 promulgated under the Securities Act, as such Rule may
be amended from time to time.
RULE 144A: Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time.
RULE 415: Rule 415 promulgated under the Securities Act, as such Rule may
be amended from time to time.
SEC: The Securities and Exchange Commission.
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SECURITIES: The Notes, the Private Exchange Notes, the Exchange Notes, the
Warrants and the Warrant Shares.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
SELLING HOLDER: A Warrant Holder who is selling Registrable Warrant Shares
in accordance with Section 11 hereof.
SHELF NOTICE: See Section 2(j).
SHELF REGISTRATION STATEMENT: See Section 3(c).
SUBSEQUENT SHELF REGISTRATION STATEMENT: See Section 3(c).
SUBSIDIARY GUARANTOR: Each subsidiary of the Issuer that guarantees the
obligations of the Issuer under the Notes, the Exchange Notes or the Private
Exchange Notes and Indenture.
TIA: The Trust Indenture Act of 1939, as such act may be amended from time
to time.
TRUSTEE: The trustee under the Indenture.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Issuer are sold to an underwriter for reoffering to the
public.
UNITS: See the first introductory paragraph to this Agreement.
WARRANT AGREEMENT: The Warrant Agreement dated as of the Closing Date
between the Issuer and First Trust National Association, as Warrant Agent.
WARRANT HOLDER: Any registered holder of Warrants.
WARRANT SHARES: The shares of Common Stock issuable upon exercise of the
Warrants.
WARRANT SHARES REGISTRATION EXPENSES: All expenses incident to the
Issuer's performance of or compliance with Section 11 of this Agreement,
including, without limitation, all SEC and stock exchange or NASD registration
and filing fees and expenses, fees and expenses of compliance with securities or
blue sky laws (including, without limitation, reasonable fees and disbursements
of counsel for any underwriters in connection with blue sky qualifications of
the Registrable Warrants), preparing, printing, filing, duplicating and
distributing a Warrant Shares Registration Statement and the related
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Prospectus, the cost of printing stock certificates, the cost and charges of any
transfer agent, rating agency fees, printing expenses, messenger, telephone and
delivery expenses, fees and disbursements of any counsel for the Issuer and all
independent certified public accountants, the fees and disbursements of
underwriters customarily paid by issuers or sellers of securities (but not
including any underwriting discounts or commissions or transfer taxes, if any,
attributable to the sale of Registrable Warrant Shares by Selling Holders), fees
and expenses of one counsel for the Selling Holders and other reasonable
out-of-pocket expenses of the Selling Holders.
WARRANT SHARES REGISTRATION FILING DATE: A date on or before the date
occurring 90 days after the effective date of a registration statement filed
with the SEC in connection with an initial public offering of the Common Stock;
provided, however, that, upon the written request of the managing underwriter of
such initial public offering, such date may be extended to the date occurring
180 days following the effective date of such initial public offering.
WARRANT SHARES REGISTRATION STATEMENT: Any registration statement of the
Issuer that covers resales of any of the Warrant Shares that is filed with the
SEC under the Securities Act in accordance with the provisions of this
Agreement, including any amendments to such registration statement, any
post-effective amendments, all supplements to the Prospectus contained therein
and all exhibits thereto.
WARRANTS: See the first introductory paragraph to this Agreement.
WARRANTS PROSPECTUS: The Prospectus included in any Warrant Shares
Registration Statement (including, without limitation, any prospectus subject to
completion and a prospectus that includes any information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented, including, without limitation, as such Prospectus may be amended
pursuant to Rule 424(b) promulgated under the Securities Act.
2. EXCHANGE OFFER
(a) The Issuer shall (and shall cause each Subsidiary Guarantor to)
use its best efforts to (i) prepare and file with the SEC on or prior to the
Filing Date, a registration statement (the "Exchange Registration Statement") on
an appropriate form under the Securities Act with respect to an offer (the
"Exchange Offer") to the Holders of Notes to issue and deliver to such Holders,
in exchange for the Notes, a like aggregate principal amount of Exchange Notes,
(ii) cause the Exchange Registration Statement to become effective as promptly
as practicable after the filing thereof but in no event later than the
Effectiveness Date, (iii) commence the Exchange Offer promptly following the
declaration of effectiveness of the Exchange Registration Statement, (iv) issue,
within 30 days after the date on which the Exchange Offer is commenced, Exchange
Notes in exchange for all Notes tendered prior thereto in the Exchange Offer,
and (v) keep the Exchange Registration
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Statement effective until the consummation of the Exchange Offer in accordance
with its terms and for the Applicable Period. The Exchange Offer shall not be
subject to any conditions, other than the Exchange Offer does not in the
Issuer's good faith judgment violate applicable law or any applicable
interpretation of the staff of the SEC.
(b) The Exchange Notes shall be issued under, and entitled to the
benefits of the Indenture.
(c) Interest on each Exchange Note and Private Exchange Note will
accrue from the last interest payment due date on which interest was paid on the
Notes surrendered in exchange therefor or, if no interest have been paid on the
Notes, from the date of original issuance of the Notes. Each Exchange Note and
Private Exchange Note shall bear interest at the rate set forth thereon.
(d) The Issuer may require each Holder who participates in the
Exchange Offer to represent that (i) any Exchange Notes received by it will be
acquired in the ordinary course of its business, (ii) at the time of the
consummation of the Exchange Offer such Holder has not entered into any
arrangement or understanding with any Person to participate in the distribution
(within the meaning of the Securities Act) of the Exchange Notes in violation of
the provisions of the Securities Act, (iii) if such Holder is an affiliate of
the Issuer within the meaning of the Securities Act, that it will comply with
the registration and prospectus delivery requirements of the Securities Act to
the extent applicable to it, (iv) if such Holder is not a broker-dealer, it is
not engaged in the distribution of the Notes and that it does not intend to
engage in the distribution of the Exchange Notes, and (v) if such Holder is a
Participating Broker-Dealer, it will deliver a Prospectus in connection with any
resale of the Exchange Notes.
(e) The Issuer shall include within the Notes Prospectus contained in
the Exchange Registration Statement a section entitled "Plan of Distribution,"
in form and substance acceptable to the Initial Purchaser, which shall contain a
summary statement of the positions taken or policies made by the staff of the
SEC with respect to the potential "underwriter" status of any broker-dealer that
is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Notes received by such broker-dealer in the Exchange Offer for its own
account in exchange for Notes that were acquired by it as a result of
market-making or other trading activity (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 judgment of the Initial
Purchaser, represent the prevailing views of the staff of the SEC. Such "Plan
of Distribution" section shall also allow, to the extent permitted by applicable
policies and regulations of the SEC, the use of the Notes Prospectus by all
Persons subject to the prospectus delivery requirements of the Securities Act,
including, to the extent so permitted, all Participating Broker Dealers, and
shall include a statement describing the manner in which Participating
Broker-Dealers may resell the Exchange Notes. The Issuer shall use its best
efforts to keep the Exchange Registration Statement effective and to amend and
supplement the Notes Prospectus contained therein, in
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order to permit such Notes 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 Notes (the "Applicable Period").
(f) If, upon consummation of the Exchange Offer, the Initial
Purchaser holds any Notes acquired by it and having the status of an unsold
allotment in the initial distribution, the Issuer (upon the written request from
such Initial Purchaser) shall, simultaneously with the delivery of the Exchange
Notes in the Exchange Offer, issue pursuant to the Indenture and deliver to the
Initial Purchaser, in exchange (the "Private Exchange") for the Notes held by
the Initial Purchaser, a like principal amount of debt securities of the Issuer,
guaranteed by any then existing Subsidiary Guarantors, that are identical in all
material respects to the Exchange Notes except for the existence of restrictions
on transfer thereof under the Securities Act and all applicable federal and
state securities laws of the several states of the U.S. (the "Private Exchange
Notes"). The Private Exchange Notes shall bear the same CUSIP number as the
Exchange Notes.
(g) In connection with the Exchange Offer, the Issuer shall:
(1) mail to each Holder a copy of the Notes Prospectus forming
part of the Exchange Registration Statement, together with an appropriate
letter of transmittal (as an exhibit thereto) and related documents;
(2) utilize the services of a depository for the Exchange Offer
with an address in the Borough of Manhattan, the City of New York, which
may be the Trustee or an affiliate thereof;
(3) permit Holders to withdraw tendered Notes at any time prior
to the close of business, New York time, on the last Business Day on which
the Exchange Offer shall remain open; and
(4) otherwise comply with all applicable laws.
(h) As soon as practicable after the close of the Exchange Offer or
the Private Exchange, as the case may be, the Issuer shall:
(1) accept for exchange all Notes validly tendered pursuant to
the Exchange Offer or the Private Exchange, as the case may be, and not
validly withdrawn;
(2) deliver to the Trustee for cancellation all Notes so
accepted for exchange; and
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(3) cause the Trustee to authenticate and deliver promptly to
each Holder tendering such Notes, Exchange Notes or Private Exchange Notes,
as the case may be, equal in principal amount to the Notes of such Holder
so accepted for exchange.
(i) The Exchange Notes and the Private Exchange Notes shall be issued
under the Indenture which will provide that the Exchange Notes will not be
subject to the transfer restrictions set forth in the Indenture and that the
Exchange Notes, the Private Exchange Notes and the Notes, if any, will be deemed
one class of security (subject to the provisions of the Indenture) and entitled
to the benefits of any Subsidiary Guarantee on an equal and ratable basis.
(j) If, (i) prior to the consummation of the Exchange Offer, the
Issuer determines in its reasonable judgment that the Exchange Notes would not,
upon receipt, be tradeable by the Holders thereof without restriction under the
Securities Act (other than applicable prospectus delivery requirements), the
Exchange Act or applicable Blue Sky or state securities laws, (ii) because of
any change in law or applicable interpretations of the staff of the SEC, the
consummation of the Exchange Offer by the Issuer would not be permitted prior to
the Effectiveness Date, (iii) the Exchange Offer is not consummated by the
Effectiveness Date for any reason, (iv) any Holder of Private Exchange Notes so
requests in writing to the Issuer within 120 days after the consummation of the
Exchange Offer or (v) in the case of any Holder not permitted to participate in
the Exchange Offer or any Holder that participates in the Exchange Offer but
does not receive Exchange Notes on the date of the exchange that may be sold
without restriction under state and federal securities laws (other than due
solely to the status of such Holder as an affiliate of the Issuer within the
meaning of the Securities Act) and so notifies the Issuer within six months of
consummation of the Exchange Offer, then the Issuer (and any then existing
Subsidiary Guarantor) shall promptly deliver to the Holders and the Trustee
written notice thereof (the "Shelf Notice") and shall file an Initial Shelf
Registration Statement pursuant to Section 3.
(k) No registration effected under this Section 2, and no failure to
effect a registration under this Section 2, shall relieve the Issuer of its
obligations to effect a registration upon the request of Warrant Holders or
holders of Registrable Warrant Shares pursuant to Section 11 hereof.
3. SHELF REGISTRATION
If a Shelf Notice is delivered pursuant to Section 2(j)(i), (ii) or
(iii), then this Section 3 shall apply to all Registrable Notes. Otherwise,
upon consummation of the Exchange Offer in accordance with Section 2, the
provisions of this Section 3 shall apply solely with respect to (A)(i) Notes
held by any Holder thereof not permitted to participate in the Exchange Offer
and (ii) Exchange Notes that are not freely tradeable as contemplated by Section
2(j)(v) hereof, provided that the relevant Holder has duly notified the Issuer
within six months of the consummation of the Exchange Offer as required by
Section 2(j)(v) and
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(B) Private Exchange Notes, provided that the relevant Holder has duly notified
the Issuer within 120 days of the consummation of the Exchange Offer as required
by Section 2(j)(iv). The Registrable Notes to which this Section 3 shall apply
shall be hereinafter referred to as ("Eligible Shelf Notes").
(a) INITIAL SHELF REGISTRATION. Within the time periods set forth in
this Section 3(a), the Issuer shall (and shall cause any Subsidiary Guarantor
to) file with the SEC a Notes Registration Statement for an offering to be made
on a continuous basis pursuant to Rule 415 covering all of the Eligible Shelf
Notes (the "Initial Shelf Registration Statement"). If the Issuer (and any then
existing Subsidiary Guarantor) has not filed an Exchange Registration Statement,
the Issuer shall (and shall cause any Subsidiary Guarantor to) file with the SEC
the Initial Shelf Registration Statement on or prior to the Filing Date and
shall use its best efforts to cause such Initial Shelf Registration Statement to
be declared effective under the Securities Act on or prior to the Effectiveness
Date. Otherwise, the Issuer shall use its best efforts to (and shall cause any
Subsidiary Guarantor to) file with the SEC the Initial Shelf Registration
Statement within 20 days of the delivery of the Shelf Notice and shall use its
best efforts to cause such Shelf Registration Statement to be declared effective
under the Securities Act as promptly as practicable thereafter. The Initial
Shelf Registration Statement shall be on an appropriate form permitting
registration of such Registrable Notes for resale by Holders in the manner or
manners designated by them (including, without limitation, one or more
underwritten offerings). The Issuer (and any Subsidiary Guarantors) shall not
permit any securities other than the Eligible Shelf Notes to be included in any
Shelf Registration Statement if the inclusion of such securities in the Shelf
Registration Statement would result in the inability of any Holder of Eligible
Shelf Notes to include all Eligible Shelf Notes held by such Holder in the Shelf
Registration Statement. No Holder of Eligible Shelf Notes shall be entitled to
include any of its Eligible Shelf Notes in any Shelf Registration Statement
pursuant to this Agreement unless such Holder furnishes to the Issuer and the
Trustee in writing, such information, representations and warranties as the
Issuer may reasonably request for inclusion in any Shelf Registration Statement
or Prospectus included therein. No Holder shall be entitled to any Additional
Interest pursuant to Section 4 hereof if such Xxxxxx's Registrable Notes are
excluded from a Shelf Registration Statement because such Holder failed to
furnish the Issuer in writing such information, representations and warranties
reasonably requested by the Issuer for use in connection with the Shelf
Registration Statement or any Prospectus contained therein, and such Holder
shall not be entitled to Additional Interest pursuant to Section 4 with respect
to any period during which such information was not provided. The Issuer shall
use its best efforts to keep the Initial Shelf Registration Statement
continuously effective under the Securities Act until the date which is 36
months from the Closing Date (the "Effectiveness Period"), or such shorter
period ending when (i) all Eligible Shelf Notes covered by the Initial Shelf
Registration Statement have been sold in the manner set forth and as
contemplated in the Initial Shelf Registration Statement or (ii) a Subsequent
Shelf Registration Statement covering all of the Eligible Shelf Notes has been
declared effective under the Securities Act.
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(b) Notwithstanding any other provision of this Agreement, the Issuer
may postpone or suspend the filing or effectiveness of a Notes Registration
Statement (or any amendments or supplements thereto) if (i) such action is
required by applicable law or (ii) such action is taken by the Issuer in good
faith and for valid business reasons (not including avoidance of the Issuer's
obligations hereunder), including the acquisition or divestiture of assets,
other pending corporate developments, public filings with the SEC, or other
similar events, so long as the Issuer promptly thereafter complies with the
requirements of Section 6(c) hereof, if applicable. Notwithstanding the
occurrence of any event referred to in the preceding sentence (a "Suspension"),
such event shall not suspend, postpone, or in any other manner affect the
running of the time period after which a Registration Default shall be deemed to
occur and, if the filing or effectiveness of a Notes Registration Statement is
postponed or suspended as a result of the Suspension, a Registration Default
shall nonetheless exist if all other requirements set forth for the occurrence
of a Registration Default shall be satisfied, and the provisions of Section 4
requiring the payment of Additional Interest, as set forth in such Section,
shall be applicable.
(c) SUBSEQUENT SHELF REGISTRATIONS. If the Initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because of the sale of all of the Registrable Notes registered thereunder),
the Issuer shall use its best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof, and if required, shall promptly
amend such Shelf Registration Statement in a manner to obtain the withdrawal of
the order suspending the effectiveness thereof, or file (and cause any
Subsidiary Guarantor to file) an additional "shelf" Notes Registration Statement
pursuant to Rule 415 covering all of the Eligible Shelf Notes (a "Subsequent
Shelf Registration Statement"). If a Subsequent Shelf Registration Statement is
filed, the Issuer shall use its best efforts to cause the Subsequent Shelf
Registration Statement to be declared effective as soon as practicable after
such filing and to keep such Subsequent Shelf 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 Statement or any Subsequent Shelf Registration Statement were
previously continuously effective. As used herein, the term "Shelf Registration
Statement" means the Initial Shelf Registration Statement and any Subsequent
Shelf Registration Statements.
(d) SUPPLEMENTS AND AMENDMENTS. The Issuer shall promptly supplement
and amend any Shelf Registration Statement if required by the rules, regulations
or instructions applicable to the registration form used for such Shelf
Registration Statement, if required by the Securities Act, or if requested by
the Holders of a majority in aggregate principal amount of the Registrable Notes
covered by such Shelf Registration Statement or by any underwriter of such
Eligible Shelf Notes.
(e) No registration effected under this Section 3, and no failure to
effect a registration under this Section 3, shall relieve the Issuer of its
obligations to effect a
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registration upon the request of Warrant Holders or holders of Registrable
Warrant Shares pursuant to Section 11 hereof.
4. ADDITIONAL INTEREST
(a) Additional cash interest (the "Additional Interest") with respect
to the Registrable Notes or the Eligible Shelf Notes, as indicated below, shall
be assessed as follows if any of the following events occurs (each such event in
clauses (i) through (iii) below, a "Registration Default"):
(i) if neither the Exchange Registration Statement nor the Initial
Shelf Registration Statement has been filed on or prior to the Filing Date,
then commencing on the day after the Filing Date, Additional Interest shall
accrue on the Registrable Notes over and above the stated interest rate at
a rate of 0.50% per annum for the first 90 days commencing on the Filing
Date, such Additional Interest rate increasing by an additional 0.50% per
annum at the beginning of each subsequent 90-day period;
(ii) if neither the Exchange Registration Statement nor the Initial
Shelf Registration Statement is declared effective on or prior to the
Effectiveness Date, then commencing on the Effectiveness Date, Additional
Interest shall accrue on the Registrable Notes over and above the stated
interest rate at a rate of 0.50% per annum for the first 90 days commencing
on the Effectiveness Date, such Additional Interest rate increasing by an
additional 0.50% per annum at the beginning of each subsequent 90-day
period;
(iii) if (A) the Issuer has not exchanged Exchange Notes for all Notes
validly tendered in accordance with the terms of the Exchange Offer on or
prior to the 210th day after the date hereof, (B) the Exchange Offer
Registration Statement ceases to be effective at any time prior to the time
that the Exchange Offer is consummated or at any time during the Applicable
Period, (C) a Shelf Registration Statement has been declared effective and
such Shelf Registration Statement ceases to be effective at any time during
the Effectiveness Period and is not declared effective again within five
Business Days, or (D) pending the announcement of a material corporate
transaction, the Issuer issues a written notice pursuant to Section 6(e)(v)
or (vi) that a Shelf Registration Statement or Exchange Registration
Statement is unusable and the aggregate number of days in any 365-day
period for which all such notices issued or required to be issued, have
been, or were required to be, in effect exceeds 120 days in the aggregate
or 30 days consecutively, in the case of a Shelf Registration Statement, or
15 days in the aggregate in the case of an Exchange Registration Statement,
then Additional Interest shall accrue on the Registrable Notes in the case
of (A), (B) and (D) (but in the case of (D) only to the extent the
Registration Default relates to an Exchange Registration Statement) or on
the Eligible Shelf Notes in the case of (C) or (D) (but in the case of (D)
only to the extent the Registration Default relates to a Shelf Registration
Statement) over and above the stated interest rate at a
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rate of 0.50% per annum commencing on (w) the 210th day after the date
hereof, in the case of (A) above, (x) the date on which such Exchange
Registration Statement ceases to be effective without being declared
effective again within five Business Days in the case of (B) above, (y) the
date on which such Shelf Registration Statement ceases to be effective
without being declared effective again within five Business Days in the
case of (C) above or (z) the date on which such Exchange Registration
Statement or Shelf Registration Statement ceases to be usable in case of
clause (D) above, the rate of such Additional Interest increasing by an
additional 0.50% per annum at the beginning of each such subsequent 90-day
period;
provided, however, that the Additional Interest shall only accrue with respect
to one Registration Default at a time and the maximum increase in the interest
rate on the Registrable Notes may not exceed 1.50% per annum in the aggregate;
and provided further, Additional Interest on such Registrable Notes or Eligible
Shelf Notes shall cease to accrue upon the earlier of (x) the date on which all
applicable Registration Defaults have been cured with respect to Registrable
Notes or Eligible Shelf Notes, or (y) the date on which all such Registrable
Notes or Eligible Shelf Notes become freely transferable by Holders other than
affiliates of the Issuer without further registration under the Securities Act.
(b) Notwithstanding Section 4(a) of this Agreement, the Issuer shall
not be required to pay Additional Interest to a Holder with respect to the
Eligible Shelf Notes held by such Holder if the Registration Default arises by
reason of the failure of the Holder to provide information that (i) the Issuer
may reasonably request, with reasonable prior notice, for use in the Shelf
Registration Statement or any prospectus included therein to the extent the
Issuer reasonably determines that such information is required to be included
therein by applicable law, (ii) the Commission may request in connection with
such Shelf Registration Statement, or (iii) is required to comply with the
agreement of the Holder contained in Section 3(a) of this Agreement (but only to
the extent that such compliance is necessary for the Shelf Registration
Statement to be declared effective).
(c) The Issuer shall notify the Trustee within two Business Days
after each and every date on which Registration Default occurs. Any Additional
Interest accruing on the Registrable Notes or the Eligible Shelf Notes pursuant
to this Section 4 will be payable in cash on the regular interest payment dates
with respect to the Registrable Notes or the Eligible Shelf Notes to the Holders
of record on the applicable record date. The amount of Additional Interest will
be determined by multiplying the applicable Additional Interest rate by the
aggregate principal amount (as defined in the Indenture) of the Registrable
Notes or Eligible Shelf Notes, 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.
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5. HOLD-BACK AGREEMENTS
The Issuer agrees that it will not effect any public or private sale
or distribution (including a sale pursuant to Regulation D under the Securities
Act) of any securities that are the same as or similar to those covered by a
Notes Registration Statement filed pursuant to Section 2 or 3 hereof, or any
securities convertible into or exchangeable or exercisable for such securities,
during the 10 days prior to, and during the 90-day period beginning on, (A) the
effective date of any Notes Registration Statement filed pursuant to Sections 2
and 3 hereof, unless the Holders of a majority in aggregate principal amount of
the Registrable Notes to be included in such Notes Registration Statement
consent or (B) the commencement of an underwritten public distribution of
Registrable Warrant Shares, if the managing underwriter thereof so requests.
6. NOTES REGISTRATION PROCEDURES
In connection with the filing of any Notes Registration Statement
pursuant to Section 2 or 3 hereof, the Issuer shall effect such registrations to
permit the sale of such securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Notes Registration Statement filed by the Issuer hereunder,
the Issuer shall:
(a) prepare and file with the SEC within the time periods set forth
herein the Exchange Registration Statement and/or a Shelf Registration Statement
and use its best efforts to cause each such Notes Registration Statement to
become effective and remain effective as provided herein; provided that, if
(1) a Shelf Registration Statement is filed pursuant to Section 3, or (2) a
Notes 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 Notes during the
Applicable Period, before filing any Notes Registration Statement or Notes
Prospectus or any amendments or supplements thereto, the Issuer shall, if
requested, furnish to and afford the Holders of the Registrable Notes to be
registered pursuant to such Shelf Registration Statement, each Participating
Broker-Dealer, their respective counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including copies
of any documents to be incorporated by reference therein and all exhibits
thereto) proposed to be filed (in each case at least five business days prior to
such filing). The Issuer shall not file any such Notes Registration Statement
or Notes Prospectus or any amendments or supplements thereto if the holders of a
majority in aggregate principal amount of the Registrable Notes covered by such
Notes Registration Statement, or any such Participating Broker-Dealer, as the
case may be, their counsel, or the managing underwriters, if any, shall
reasonably object;
(b) cause the Indenture to be qualified under the TIA not later than
the effective date of the first Notes Registration Statement; and in connection
therewith, to effect
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any changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA; and execute, and cause the
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 the
Indenture to be so qualified in a timely manner;
(c) prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Registration
Statement, as the case may be, as may be necessary to keep such Notes
Registration Statement continuously effective for the Effectiveness Period or
the Applicable Period, as the case may be; cause the related Notes Prospectus to
be supplemented by any Prospectus supplement required by applicable law, and as
so supplemented to be filed pursuant to Rule 424, or any similar provisions then
in effect, in each case as promulgated under the Securities Act; and comply with
the provisions of the Securities Act and the Exchange Act applicable to it with
respect to the disposition of all securities covered by such Notes Registration
Statement as so amended or in such Notes 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 Issuer shall not, during the
Applicable Period, take any action that would result in selling Holders of the
Registrable Notes covered by a Notes Registration Statement or Participating
Broker-Dealers seeking to sell Exchange Notes not being able to sell such
Registrable Notes or such Exchange Notes during that period;
(d) furnish to such selling Holders and Participating Broker-Dealers
who so request (i) a copy of the order of the SEC declaring such Registration
Statement and any post-effective amendment thereto effective and (ii) such
number of copies of such Registration Statement and of each amendment and
supplement thereto (in each case, if requested, including any documents
incorporated therein by reference and any exhibits thereto), (iii) such number
of copies of any Prospectus included in such Registration Statement and
(iv) such other documents, (including any amendments required to be filed
pursuant to clause (c) of this Section), as any such Person may reasonably
request. The Issuer hereby consents to the use of the Prospectus by each of the
selling Holders of Registrable Notes or each such Participating Broker-Dealer,
as the case may be, and the underwriters or agents, if any, and dealers (if
any), in connection with the offering and sale of the Registrable Notes covered
by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant
to, such Prospectus and any amendment or supplement thereto;
(e) if (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Notes 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
Notes during the Applicable Period, notify in writing the selling Holders of
Registrable Notes, or each such Participating Broker-Dealer, as the case may be,
their counsel and the managing underwriters, if any, promptly (but in any event
within two Business Days) (i) when a Notes Prospectus or any Notes Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Notes Registration
- 15 -
Statement or any post-effective amendment, when the same has become effective
(including in such notice a written statement that any Holder may, upon request,
obtain, without charge, one conformed copy of such Notes Registration Statement
or post-effective amendment), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Notes Registration Statement or of any order
preventing or suspending the use of any Notes Prospectus or the initiation of
any proceedings for that purpose, (iii) if at any time when a Prospectus is
required by the Securities Act to be delivered in connection with sales of the
Registrable Notes the representations and warranties of the Issuer contained in
any agreement (including any underwriting agreement) contemplated by Section
6(n) hereof cease to be true and correct, (iv) of the receipt by the Issuer of
any notification with respect to the suspension of the qualification or
exemption from qualification of a Notes Registration Statement or any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (v) of the happening of any
event, the existence of any condition or any information becoming known that
makes any statement made in such Notes Registration Statement or related Notes
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in, or amendments or supplements to, such Notes Registration Statement,
Notes Prospectus or documents so that, in the case of the Notes Registration
Statement and the Notes Prospectus, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (vi) of any determination by the
Issuer that a post-effective amendment to a Notes Registration Statement would
be appropriate;
(f) use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Notes Registration Statement or of any order
preventing or suspending the use of a Notes Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable Notes
or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in
any jurisdiction, and, if any such order is issued, to use its best efforts to
obtain the withdrawal of any such order at the earliest possible date;
(g) if (A) a Shelf Registration Statement is filed pursuant to
Section 3 or (B) a Notes 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
Notes during the Applicable Period or (C) requested by the managing
underwriters, if any, or the Holders of a majority in aggregate principal amount
of the Registrable Notes being sold in connection with an underwritten offering,
(i) promptly incorporate in a prospectus supplement or post-effective amendment
such information or revisions to information therein relating to such
underwriters or selling Holders as the managing underwriters, if any, or such
Holders or any of their respective counsel reasonably request to be included or
made therein and (ii) make all required filings of such prospectus supplement or
such post-effective amendment as soon as practicable after the Issuer has
received notification from the managing underwriters, if any, or from the
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Holders of a majority in aggregate principal amount of the Registrable Notes
being sold of the matters to be incorporated in such prospectus supplements or
post-effective amendment;
(h) prior to any public offering of Registrable Notes or any delivery
of a Notes Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its best efforts to register or qualify, and to cooperate
with all selling Holders of Registrable Notes 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 Notes or
Exchange Notes, as the case may be, 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 any managing underwriter or
underwriters, if any, request in writing; provided that where Exchange Notes
held by Participating Broker-Dealers or Registrable Notes are offered other than
through an underwritten offering, the Issuer agrees to cause its counsel to
perform Blue Sky investigations and file any registrations and qualifications
required to be filed pursuant to this Section 6(h); keep each such registration
or qualification (or exemption therefrom) effective during the period such Notes
Registration Statement is required to be kept effective and do any and all other
acts or things best necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Notes held by Participating Broker-Dealers or the
Registrable Notes covered by the applicable Registration Statement; provided
that neither the Issuer nor any Subsidiary Guarantor shall be required to (A)
qualify generally to do business in any jurisdiction 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
where it is not then so subject;
(i) if (A) a Shelf Registration Statement is filed pursuant to
Section 3 or (B) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is requested to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, cooperate with the selling Holders of Registrable Notes
and the managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes to be
sold, which certificates shall not bear any restrictive legends and shall be in
a form eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or such Holders may request;
(j) use its best efforts to cause the Registrable Notes covered by
any Notes Registration Statement to be registered with or approved by such
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof or the underwriter, if any, to consummate the disposition of
such Registrable Notes;
- 17 -
(k) if (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Notes 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
Notes during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 6(e)(v) or 6(e)(vi) hereof, as promptly as practicable
prepare and file with the SEC, at the expense of the Issuer, a supplement or
post-effective amendment to the Notes Registration Statement or a supplement to
the related Notes Prospectus or any document incorporated or deemed to be
incorporated therein by reference, or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Notes being sold
thereunder or to the purchasers of the Exchange Notes to whom such Notes
Prospectus will be delivered by a Participating Broker-Dealer, such Notes
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(l) use its reasonable efforts to cause the Registrable Notes covered
by a Notes Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate principal
amount of Registrable Notes covered by such Notes Registration Statement or the
managing underwriter or underwriters, if any;
(m) prior to the initial issuance of the Exchange Notes, (i) provide
the Trustee with one or more certificates for the Registrable Notes in a form
eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP
number for the Exchange Notes;
(n) if a Shelf Registration Statement is filed pursuant to Section 3,
enter into such agreements (including an underwriting agreement in form, scope
and substance as is customary in underwritten offerings of debt securities
similar to the Notes, as may be appropriate in the circumstances) and take all
such other actions in connection therewith (including those reasonably requested
by the managing underwriters, if any, or the Holders of a majority in aggregate
principal amount of the Registrable Notes being sold) in order to expedite or
facilitate the registration or the disposition of such Registrable Notes, and in
such connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration, (i) make such
representations and warranties to the Holders and the underwriters, if any, with
respect to the business of the Issuer and its subsidiaries, and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance and scope as
are customarily made by issuers to underwriters in underwritten offerings of
debt securities similar to the Notes, as may be appropriate in the
circumstances, and confirm the same if and when required; (ii) obtain opinions
of counsel to the Issuer and updates thereof (which counsel and opinions, in
form, scope and substance shall be reasonably satisfactory to the managing
underwriters, if any, and the Holders of a majority in aggregate principal
amount of the Registrable Notes being sold), addressed to each selling Holder
and each of the underwriters, if any, covering the matters customarily covered
in opinions of counsel to
- 18 -
the Issuer requested in underwritten offerings of debt securities similar to the
Notes, as may be appropriate in the circumstances; (iii) obtain "cold comfort"
letters and updates thereof (which letters and updates, in form, scope and
substance shall be reasonably satisfactory to the managing underwriters and
their counsel) from the independent certified public accountants of the Issuer
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Issuer or of any business acquired by the Issuer for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each of the underwriters and each
selling Holder, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
underwritten offerings of debt securities similar to the Notes, as may be
appropriate in the circumstances, and such other matters as reasonably requested
by underwriters or the Holders of a majority in aggregate principal amount of
the Registrable Notes being sold; and (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority in
aggregate principal amount of the Registrable Notes being sold and the managing
underwriters, if any, to evidence the continued validity of the representations
and warranties of the Issuer and its subsidiaries made pursuant to clause (i)
above and to evidence compliance with any conditions contained in the
underwriting agreement or other similar agreement entered into by the Issuer;
(o) if (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Notes 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
Notes during the Applicable Period, make available for inspection by any selling
Holder of such Registrable Notes being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant or other
agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, all financial and other records and pertinent corporate documents of the
Issuer and its subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the Issuer
and its subsidiaries to supply all information reasonably requested by any such
Inspector in connection with such Notes Registration Statement. Such Records
shall be kept confidential by each Inspector and shall not be disclosed by the
Inspector unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such Notes 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
is public or has been made generally available to the public other than as a
result of a disclosure or failure to safeguard by such Inspector. Each selling
Holder of such Registrable Notes 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 Issuer unless and
until such is made generally available to the public. Each selling Holder of
such Registrable Notes and each
- 19 -
such Participating Broker-Dealer will be required to further agree that, except
as otherwise required by law or legal process, it will, as promptly as
practicable upon learning that disclosure of such Records is sought in a court
of competent jurisdiction, give notice to the Issuer and, to the extent
practicable, use its best efforts to allow the Issuer, at its expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential at their expense;
(p) comply with all applicable rules and regulations of the SEC and
make generally available to the security holders of the Issuer earnings
statements satisfying the provisions of section 11(a) of the Securities Act and
Rules 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 3-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Registrable Notes are sold to
underwriters in a firm commitment or best efforts underwritten offering and (ii)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Issuer after the effective date of a Notes
Registration Statement, which statements shall cover said periods;
(q) upon consummation of an Exchange Offer or Private Exchange,
obtain an opinion of counsel to the Issuer (in form, scope and substance
reasonably satisfactory to the Initial Purchaser and its counsel which opinion
shall be subject to customary qualifications), addressed to the Trustee for the
benefit of all Holders participating in the Exchange Offer or Private Exchange,
as the case may be, to the effect that (i) the Issuer and any Subsidiary
Guarantors have duly authorized, executed and delivered the Exchange Notes or
the Private Exchange Notes, as the case may be, and the Indenture, (ii) the
Exchange Notes or the Private Exchange Notes, as the case may be, and the
Indenture constitute legal, valid and binding obligations of the Issuer and the
existing Subsidiary Guarantors, enforceable against the Issuer and the existing
Subsidiary Guarantors in accordance with their respective terms, except as such
enforcement may be subject to customary exceptions;
(r) if the Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by the Holders to the Issuer (or to such
other Person as directed by the Issuer) in exchange for the Exchange Notes or
the Private Exchange Notes, as the case may be, the Issuer shall mark, or caused
to be marked, on such Registrable Notes that such Registrable Notes are being
cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as
the case may be; provided that in no event shall such Registrable Notes be
marked as paid or otherwise satisfied;
(s) cooperate with each seller of Registrable Notes covered by any
Notes Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the NASD; and
- 20 -
(t) use its best efforts to take all other steps reasonably necessary
to effect the registration of the Registrable Notes covered by a Notes
Registration Statement contemplated hereby.
The Issuer may require each seller of Registrable Notes or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Issuer such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Notes as the Issuer may,
from time to time, reasonably request and to covenant and agree to notify the
Issuer promptly if any such information so provided ceases to be true and
correct and to furnish the Issuer with corrected information. The Issuer may
exclude from such registration the Registrable Notes of any seller who fails to
furnish such information within a reasonable time (which time in no event shall
exceed 60 days) after receiving such request from the Issuer.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by
such Participating Broker-Dealer, as the case may be, that, upon receipt of any
notice from the Issuer of the happening of any event of the kind described in
Section 6(e)(ii), (iv), (v), or (vi), such Holder will forthwith discontinue
disposition of such Registrable Notes covered by a Notes Registration Statement
and such Participating Broker-Dealer will forthwith discontinue disposition of
such Exchange Notes pursuant to any Notes Prospectus and, in each case,
forthwith discontinue dissemination of such Prospectus until such Holder's or
Participating Broker-Dealer's receipt of the copies of the supplemented or
amended Notes Prospectus contemplated by Section 6(k), or until it is advised in
writing (the "Advice") by the Issuer that the use of the applicable Prospectus
may be resumed, and has received copies of any amendments or supplements thereto
and, if so directed by the Issuer, such Holder or Participating Broker-Dealer,
as the case may be, will deliver to the Issuer all copies, other than permanent
file copies, then in such Holder's or Participating Broker-Dealer's possession,
of the Notes Prospectus covering such Registrable Notes current at the time of
the receipt of such notice. In the event the Issuer shall give any such notice,
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 Business Day when each Participating Broker-Dealer shall have
received (x) the copies of the supplemented or amended Notes Prospectus
contemplated by Section 6(k) or (y) the Advice.
7. REGISTRATION EXPENSES
(a) Except as set forth in Section 11, all fees and expenses incident
to the performance of or compliance with this Agreement shall be borne by the
Issuer, whether or not the Exchange Offer or a Shelf Registration Statement 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 any underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky laws
as provided in Section 6(h) hereof, (ii) printing expenses, including, without
- 21 -
limitation, expenses of printing Prospectuses if the printing of Prospectuses is
requested by the managing underwriter or underwriters, if any, or by the Holders
of a majority in aggregate principal amount of the Registrable Notes included in
any Notes Registration Statement or by any Participating Broker-Dealer during
the Applicable Period, as the case may be, (iii) messenger, telephone and
delivery expenses incurred in connection with the performance of its obligations
hereunder, (iv) fees and disbursements of counsel for the Issuer, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 6(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 Issuer
desires such insurance, (viii) fees and expenses of all other Persons retained
by the Issuers, (ix) internal expenses of the Issuer (including, without
limitation, all salaries and expenses of officers and employees of the Issuer
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 and (ii) 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; provided,
however, that in the case of any underwritten offering, in no event shall the
Issuer be responsible for any fees and expenses of any underwriter including any
underwriting discounts and commissions or any legal fees and expenses of counsel
to any underwriter.
(b) The Issuer shall reimburse the Holders for the reasonable fees
and disbursements of not more than one counsel (in addition to appropriate local
counsel) chosen by the Holders of a majority in aggregate principal amount of
the Registrable Notes to be included in any Registration Statement. The Issuer
shall pay all documentary, stamp, transfers or other transactional taxes
attributable to the issuance or delivery of the Exchange Notes or Private
Exchange Notes in exchange for the Notes; provided that the Issuer shall not be
required to pay taxes payable in respect of any transfer involved in the
issuance or delivery of any Exchange Note or Private Exchange Note in a name
other than that of the Holder of the Note in respect of which such Exchange Note
or Private Exchange Note is being issued.
8. INDEMNIFICATION
(a) INDEMNIFICATION BY THE ISSUER. The Issuer shall (and shall cause
each Subsidiary Guarantor, jointly and severally, to) without limitation as to
time, indemnify and hold harmless each Holder of Registrable Notes, Exchange
Notes, Private Exchange Notes or Registrable Warrant Shares and each
Participating Broker-Dealer selling Exchange Notes during the Applicable Period,
each Person, if any, who controls each such Holder (within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act) and the
officers, directors and partners of each such Holder, Participating
Broker-Dealer and controlling person, to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and reasonable attorneys'
fees and disbursements as provided in this Section 8) and expenses
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(including, without limitation, costs and expenses incurred in connection with
investigating, preparing, pursuing or defending against any of the
foregoing)(collectively, "Losses"), as incurred, directly or indirectly caused
by, related to, based upon, arising out of or in connection with any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or form of prospectus, or in any amendment or supplement
thereto, or in any preliminary prospectus, or any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such Losses are solely based upon
information relating to such Holder or Participating Broker-Dealer and furnished
in writing to the Issuer by such Holder or Participating Broker-Dealer or its
counsel expressly for use therein; provided, however, that the Issuer will not
be liable to any Indemnified Party under this Section 8 to the extent Losses
were solely caused by an untrue statement or omission or alleged untrue
statement or omission that was contained or made in any preliminary prospectus
and corrected in the Prospectus or any amendment or supplement thereto if (i)
the Prospectus does not contain any other untrue statement or omission or
alleged untrue statement or omission of a material fact that was the subject
matter of the related proceeding, (ii) any such Losses resulted from an action,
claim or suit by any Person who purchased Registrable Warrant Shares,
Registrable Notes or Exchange Notes which are the subject thereof from such
Indemnified Party and (iii) it is established in the related proceeding that
such Indemnified Party failed to deliver or provide a copy of the Prospectus (as
amended or supplemented) to such Person with or prior to the confirmation of the
sale of such Registrable Warrant Shares, Registrable Notes or Exchange Notes
sold to such Person if required by applicable law, unless such failure to
deliver or provide a copy of the Prospectus (as amended or supplemented) was a
result of noncompliance by the Issuer with Section 6 of this Agreement. The
Issuer shall also indemnify underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution,
their officers, directors, agents and employees and each Person who controls
such Persons (within the meaning of Section 5 of the Securities Act or Section
20(a) of the Exchange Act) to the same extent as provided above with respect to
the indemnification of the Holders or the Participating Broker-Dealer.
(b) INDEMNIFICATION BY HOLDERS. In connection with any Registration
Statement, Prospectus or form of prospectus, any amendment or supplement
thereto, or any preliminary prospectus in which a Holder is participating, such
Holder shall furnish to the Issuer in writing such information as the Issuer
reasonably requests for use in connection with any Registration Statement,
Prospectus or form of prospectus, any amendment or supplement thereto, or any
preliminary prospectus and shall, without limitation as to time, indemnify and
hold harmless the Issuer, its directors and each Person, if any, who controls
the Issuer (within the meaning of Section 15 of the Securities Act and Section
20(a) of the Exchange Act), and the directors, officers, employees, agents, and
partners of such controlling persons, to the fullest extent lawful, from and
against all Losses arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, Prospectus
or form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or any omission or alleged omission to state therein
- 23 -
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading to the extent (but only to the extent) that such Losses are
finally judicially determined by a court of competent jurisdiction (which
determination is not subject to appeal) to have resulted solely from an untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission of a material fact contained in or omitted from any information so
furnished in writing by such Holder to the Issuer expressly for use therein.
Notwithstanding the foregoing, in no event shall the liability of any selling
Holder be greater in amount than the dollar amount of the proceeds (net of
payment of all expenses) received by such Holder upon the sale of the
Registrable Notes or Registrable Warrant Shares giving rise to such
indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the party or
parties from which such indemnity is sought (the "Indemnifying Parties") in
writing; provided, that the failure to so notify the Indemnifying Parties shall
not relieve the Indemnifying Parties from any obligation or liability except to
the extent (but only to the extent) that it shall be finally determined by a
court of competent jurisdiction (which determination is not subject to appeal)
that the Indemnifying Parties have been prejudiced materially by such failure.
The Indemnifying Party shall have the right, exercisable by giving
written notice to an Indemnified Party, within 20 Business Days after receipt of
written notice from such Indemnified Party of such Proceeding, to assume, at its
expense, the defense of any such Proceeding, provided, that an Indemnified Party
shall have the right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or parties unless: (1) the
Indemnifying Party has agreed to pay such fees and expenses; or (2) the
Indemnifying Party shall have failed promptly to assume the defense of such
Proceeding or shall have failed to employ counsel satisfactory to such
Indemnified Party; or (3) the named parties to any such Proceeding (including
any impleaded parties) include both such Indemnified Party and the Indemnifying
Party or any of its affiliates or controlling persons, and such Indemnified
Party shall have been advised by counsel that there may be one or more defenses
available to such Indemnified Party that are in addition to, or in conflict
with, those defenses available to the Indemnifying Party or such affiliate or
controlling person (in which case, if such Indemnified Party notifies the
Indemnifying Parties in writing that it elects to employ separate counsel at the
expense of the Indemnifying Parties, the Indemnifying Parties shall not have the
right to assume the defense and the reasonable fees and expenses of such counsel
shall be at the expense of the Indemnifying Party; it being understood, however,
that, the Indemnifying Party shall not, in connection with any one such
Proceeding or separate but substantially similar or related Proceedings in the
same jurisdiction, arising out of the same general allegations or circumstances,
be liable for the fees and expenses or more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such Indemnified
Party).
- 24 -
No Indemnifying Party shall be liable for any settlement of any such
Proceeding effected without its written consent, which shall not be unreasonably
withheld, but if settled with its written consent, or if there be a final
judgment for the plaintiff in any such Proceeding, each Indemnifying Party
jointly and severally agrees, subject to the exceptions and limitations set
forth above, to indemnify and hold harmless each Indemnified Party from and
against any and all Losses by reason of such settlement or judgment. The
Indemnifying Party shall not consent to the entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to each Indemnified Party of a release, in form and
substance satisfactory to the Indemnified Party, from all liability in respect
of such Proceeding for which such Indemnified Party would be entitled to
indemnification hereunder (whether or not any Indemnified Party is a party
thereto).
(d) CONTRIBUTION. If the indemnification provided for in this
Section 8 is unavailable to an Indemnified Party or is insufficient to hold such
Indemnified Party harmless for any Losses in respect of which this Section 8
would otherwise apply by its terms (other than by reason of exceptions provided
in this Section 8), then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall have a joint and several obligation
to contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party, on the one hand, and such Indemnified
Party, on the other hand, in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party, on the one hand,
and Indemnified Party, on the other hand, shall be determined by reference to,
among other things, whether any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent any such statement or omission. The amount paid or payable
by an Indemnified Party as a result of any Losses shall be deemed to include any
legal or other fees or expenses incurred by such party in connection with any
Proceeding, to the extent such party would have been indemnified for such fees
or expenses if the indemnification provided for in Section 8(a) or 8(b) was
available to such party.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8(d), a selling Holder shall not
be required to contribute, in the aggregate, any amount in excess of such
Holder's Maximum Contribution Amount. A selling Holder's "Maximum Contribution
Amount" shall equal the excess of (i) the aggregate proceeds received by such
Holder pursuant to the sale of such Registrable Notes, Exchange Notes or
Registrable Warrant Shares over (ii) the aggregate amount of damages that such
Holder 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
- 25 -
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 8
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
9. RULES 144 AND 144A
The Issuer covenants that it shall (a) file the reports required to be
filed by it (if so required) under the Securities Act and the Exchange Act in a
timely manner and, if at any time the Issuer is not required to file such
reports, it will, upon the request of any Holder of Registrable Notes, make
publicly available other information necessary to permit sales pursuant to Rule
144 and Rule 144A and (b) take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Notes without registration under the Securities Act pursuant to
the exemptions provided by Rule 144 and Rule 144A. Upon the request of any
Holder, the Issuer shall deliver to such Holder a written statement as to
whether it has complied with such informational and other requirements.
10. UNDERWRITTEN REGISTRATIONS OF REGISTRABLE NOTES
If any of the Registrable Notes covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will manage the offering will be
selected by the Holders of a majority in aggregate principal amount of such
Registrable Notes included in such offering; provided, however, that such
investment banker or investment bankers and manager or managers must be
reasonably acceptable to the Issuer.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Xxxxxx (a) agrees to sell such Xxxxxx's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
11. REGISTRATION OF REGISTRABLE WARRANT SHARES
(a) SHELF REGISTRATION OF REGISTRABLE WARRANT SHARES. The Issuer
shall, on or prior to the Warrant Shares Registration Filing Date, (i) use its
best efforts to file a registration statement covering resales of the Warrant
Shares (the "Warrant Shares Registration Statement"), (ii) use its best efforts
to cause the Warrant Shares Registration Statement to be declared effective
under the Securities Act and (iii) use its best efforts to keep effective the
Warrant Shares Registration Statement until the earlier of the Expiration Date
(as defined in the Warrant Agreement) or such time as all of the Warrants have
been
- 26 -
exercised. The Issuer shall provide to each Warrant Holder and each holder of
Registrable Warrant Shares copies of the Prospectus that is a part of the
Warrant Shares Registration Statement, notify each such Warrant Holder or holder
of Registrable Warrant Shares when the Warrant Shares Registration Statement has
become effective and take such other actions as are required to permit
unrestricted resales of the Warrant Shares. The Issuer shall require a Selling
Holder that sells Warrant Shares pursuant to the Warrant Shares Registration
Statement to be named as a selling securityholder in the related prospectus and
to deliver a prospectus to purchasers, and any such Selling Holder shall be
bound by the provisions of this Agreement that are applicable to such Selling
Holder (including certain indemnification rights and obligations). Each Selling
Holder shall deliver information to be used in connection with the Warrant
Shares Registration Statement within the time period set forth in this Agreement
in order to have its Warrant Shares included in the Warrant Shares Registration
Statement.
(b) PIGGY-BACK REGISTRATION OF REGISTRABLE WARRANT SHARES. If at any
time after the Closing Date and prior to the Warrant Shares Registration Filing
Date the Issuer proposes to file a registration statement under the Securities
Act with respect to an offering by the Issuer for its own account or for the
account of any holders of its Common Stock (other than (i) a registration
statement on Form S-4 or S-8 (or any substitute form that may be adopted by the
SEC), (ii) a registration statement filed in connection with an exchange offer
or offering of securities solely to the Issuer's existing security holders or
(iii) any Notes Registration Statement), then the Issuer shall give written
notice of such proposed filing to the Holders of Registrable Warrant Shares as
soon as practicable (but in no event fewer than 30 days before the anticipated
filing date), and such notice shall offer such Holders the opportunity to
register such number of Registrable Warrant Shares as each Warrant Holder or
holder of Registrable Warrant Shares may request in writing within 20 days after
receipt of such written notice from the Issuer (which request shall specify the
Registrable Warrant Shares intended to be disposed of by such Selling Holder and
the intended method of distribution thereof) (a "Piggy-Back Registration"). The
Issuer shall use its best efforts to keep such Piggy-Back Registration
continuously effective under the Securities Act until at least the earlier of a)
the Expiration Date or b) the consummation of the distribution by the Selling
Holders of all of the Registrable Warrant Shares covered thereby. The Issuer
shall use its reasonable efforts to cause the managing underwriter or
underwriters, if any, of such proposed offering to permit the Registrable
Warrant Shares requested to be included in a Piggy-Back Registration to be
included on the same terms and conditions as any similar securities of the
Issuer or any other security holder included therein and to permit the sale or
other disposition of such Registrable Warrant Shares in accordance with the
intended method of distribution thereof. Any Selling Holder shall have the
right to withdraw its request for inclusion of its Registrable Warrant Shares in
any Registration Statement pursuant to this Section 11 by giving written notice
to the Issuer of its request to withdraw at any time prior to the filing of such
Registration Statement with the SEC. The Issuer will pay all Warrant Shares
Registration Expenses in connection with each registration of Registrable
Warrant Shares requested pursuant to this Section 11, and each Warrant Holder or
holder of Registrable Warrant Shares shall pay all underwriting discounts and
commissions and transfer
- 27 -
taxes, if any, relating to the sale or disposition of the Registrable Warrant
Shares of such Warrant Holder or holder of Registrable Warrant Shares pursuant
to a Piggy-Back Registration effected pursuant to this Section 11.
No registration effected under this Section 11, and no failure to
effect a registration under this Section 11, shall relieve the Issuer of its
obligations to effect a registration upon the request of Holders of Registrable
Notes pursuant to Sections 2 and 3 hereof, and no failure to effect a
registration under this Section 11 and to complete the sale of securities
registered thereunder in connection therewith shall relieve the Issuer of any
other obligation under this Agreement.
(c) PRIORITY IN PIGGY-BACK REGISTRATION. In a registration pursuant
to this Section 11 involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed, in
writing, the Issuer and the Selling Holders requesting inclusion in such
offering that in such underwriter's or underwriter's opinion the total number of
securities which the Issuer, the Selling Holders and any other Persons desiring
to participate in such registration intend to include in such offering is such
as to adversely affect the success of such offering, including the price at
which such securities can be sold, then the Issuer will be required to include
in such registration only the amount of securities which it is so advised should
be included in such registration. In such event: (x) in cases initially
involving the registration for sale of securities for the Issuer's own account,
securities shall be registered in such offering in the following order of
priority: (i)first, the securities which the Issuer proposes to register,
(ii)second, provided that no securities proposed to be registered by the Issuer
have been excluded from such registration, the securities that have been
requested to be included in such registration by the Selling Holders, and
(iii)third, provided that no securities sought to be included by the Selling
Holders have been excluded from such registration, the securities of other
Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments of the Issuer (pro rata based on the amount of
securities sought to be registered by such Persons); and (y) in cases not
initially involving the registration for sale of securities for the Issuer's own
account, securities shall be registered in such offering in the following order
of priority: (i) first, the securities of any Person whose exercise of a
"demand" registration right pursuant to a contractual commitment of the Issuer
is the basis for the registration, (ii) second, provided that no securities of
any Person whose exercise of a "demand" registration right pursuant to a
contractual commitment of the Issuer is the basis for such registration have
been excluded from such registration, the securities requested to be included in
such registration by the Selling Holders pursuant to this Agreement, (iii)
third, provided that no securities sought to be included by the Selling Holders
or such Persons have been excluded from such registration, securities of other
Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments of the Issuer (pro rata based on the amount of
securities sought be registered by such Persons) and (iv) fourth, provided that
no securities sought to be included by other Persons entitled to exercise
"piggy-back" registration rights pursuant to such contractual commitments have
been excluded from such registration, any securities which the Issuer proposes
to register.
- 28 -
(d) SUSPENSION OF SALES, ETC. During any consecutive 365-day period,
the Issuer shall be entitled to suspend the availability of the Warrant Shares
Registration Statement for up to two 45 consecutive day periods (except during
the 45 consecutive-day period immediately prior to the Expiration Date) if the
Board of Directors of the Issuer determines in good faith that the effectiveness
of, or sales pursuant to, such Warrant Shares Registration Statement would
materially impede, delay or interfere with any significant financing, offer or
sale of securities, acquisition, corporate reorganization or other significant
transaction involving the Issuer or any of its affiliates. If the Issuer shall
so postpone the effectiveness of, or suspend the rights of any Selling Holders
to make sales pursuant to, a Warrant Shares Registration Statement, it shall, as
promptly as possible, notify any Selling Holders of such determination, and the
Selling Holders shall (y) have the right, in the case of a postponement of the
effectiveness of a Warrant Shares Registration Statement, upon the affirmative
vote of Selling Holders of not less than a majority of the Registrable Warrant
Shares to be included in such Warrant Shares Registration Statement, to withdraw
the request for registration by giving written notice to the Issuer within 20
days after receipt of such notice or (z) in the case of a suspension of the
right to make sales, receive an extension of the registration period referred to
in Section 11(a) hereof equal to the number of days of the suspension.
(e) EXCLUSION OF REGISTRABLE WARRANT SHARES. The Issuer shall not be
required by this Section 11 to include Registrable Warrant Shares in a
Piggy-Back Registration if (i) in the written opinion of outside counsel to the
Issuer, addressed to the Holders of Registrable Warrant Shares and delivered to
them, the Holders of such Registrable Warrant Shares seeking registration would
be free to sell all such Registrable Warrant Shares within the current calendar
quarter without registration under Rule 144, which opinion may be based in part
upon the representation by the Holders of such Registrable Warrant Shares
seeking registration, which representation shall not be unreasonably withheld,
that each such Holder is not an affiliate of the Issuer within the meaning of
the Securities Act, and (ii) all requirements under the Securities Act for
effecting such sales are satisfied at such time.
(f) OBLIGATIONS OF SELLING HOLDERS. The Issuer's obligations under
this Section 11 shall be subject to the obligations of the Selling Holders,
which the Selling Holders acknowledge, to furnish all information and materials
and to take any and all actions as may be required under applicable requirements
of the SEC and to obtain an acceleration of the effective date of a Warrant
Shares Registration Statement.
(g) NO SPECIAL AUDIT. The Issuer shall not be obligated to cause any
special audit to be undertaken in connection with any Piggy-Back Registration
unless such audit is requested by the underwriters with respect to such
Piggy-Back Registration or, if such Piggy-Back Registration does not involve an
underwritten offering, by the Selling Holders of not less than a majority of the
Registrable Warrant Shares to be included in such Piggy Back Registration.
- 29 -
12. MISCELLANEOUS
(a) NO INCONSISTENT AGREEMENTS. The Issuer has not entered, as of
the date hereof, and the Issuer shall not enter, after the date of this
Agreement, into any agreement with respect to any of its securities that is
inconsistent with the rights granted to the Holders of Securities in this
Agreement or otherwise conflicts with the provisions hereof. The Issuer 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
Notes Registration Statement or a Warrant Shares Registration Statement.
(b) ADJUSTMENTS AFFECTING REGISTRABLE WARRANT SHARES OR REGISTRABLE
NOTES. The Issuer shall not, directly or indirectly, take any action with
respect to the Registrable Warrant Shares or Registrable Notes that would
adversely affect the ability of the Warrant Holders or the Holders, as the case
may be, to include such Registrable Warrant Shares or Registrable Notes in a
registration undertaken pursuant to this Agreement.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (A) in circumstances that would adversely affect any Holders of
Registrable Warrant Shares or Holders of Registrable Notes, the holders of a
majority of the Registrable Warrant Shares (treating as outstanding for this
purpose Warrant Shares issuable on exercise of unexercised Warrants) or the
Holders of not less than a majority in aggregate principal amount of the then
outstanding Registrable Notes, as the case may be, and (B) in circumstances that
would adversely affect Participating Broker-Dealers, the Participating
Broker-Dealers holding not less than a majority in aggregate principal amount of
the Exchange Notes held by all Participating Broker-Dealers; provided, however,
that Section 8 and this Section 12(c) may not be amended, modified or
supplemented without the prior written consent of each Holder and each
Participating Broker-Dealer (including any Person who was a Participating
Broker-Dealer, Holder of Registrable Warrant Shares or Registrable Notes or
Exchange Notes, as the case may be, disposed of pursuant to any Registration
Statement). Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being tendered
pursuant to the Exchange Offer or sold pursuant to a Notes Registration
Statement and that does not directly or indirectly affect, impair, limit or
compromise the rights of other Holders of Registrable Notes may be given by
Holders of at least a majority in aggregate principal amount of the Registrable
Notes being tendered or being sold by such Holders pursuant to such Notes
Registration Statement.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
- 30 -
(1) if to a Holder of Securities or to any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar of the Warrants or the Notes, with a copy in like manner to the
Initial Purchaser as follows:
XXXXXXXXX & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxxxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
(2) if to the Initial Purchaser, at the address specified in
Section 12(d)(1);
(3) if to the Issuer, as follows:
COUNTY SEAT STORES, INC.
0000 Xxxx Xxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
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 United States mail, postage prepaid, if mailed, one
Business Day after being timely delivered to a next-day air courier guaranteeing
overnight delivery, 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 under the
Indenture at the address specified in the Indenture and to the Warrant Agent
under the Warrant Agreement at the address specified in the Warrant Agreement.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, including, without limitation and without the need for an express
assignment, subsequent Holders of Securities.
(f) 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.
- 31 -
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAW. THE ISSUER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS. THE ISSUER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY TO DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
THE ISSUER IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ISSUER AT ITS SAID
ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE ISSUER IN ANY OTHER JURISDICTION.
(i) 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 reasonable 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.
(j) SECURITIES HELD BY THE ISSUER OR ITS AFFILIATES. Whenever the
consent or approval of holders of a specified percentage of Securities is
required hereunder, Securities held by the Issuer or its affiliates (as such
term is defined in Rule 405 under the Securities
- 32 -
Act) shall not be counted in determining whether such consent or approval was
given by the Holders of such required percentage.
(k) THIRD PARTY BENEFICIARIES. Holders of Securities and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
(l) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement, the Indenture and the Warrant Agreement is intended by the parties as
a final and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein and
any and all prior oral or written agreements, representations, or warranties,
contracts, understanding, correspondence, conversations and memoranda between
the Initial Purchaser on the one hand and the Issuer on the other, or between or
among any agents, representatives, parents, subsidiaries, affiliates,
predecessors in interest or successors in interest with respect to the subject
matter hereof and thereof are merged herein and replaced hereby.
- 33 -
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COUNTY SEAT STORES, INC.
By: /s/ Xxx Xxxxxx
-----------------------
Name: Xxx Xxxxxx
Title: President
ACCEPTED AND AGREED TO:
JEFFERIES & COMPANIES, INC.
By: [ILLEGIBLE SIGNATORY]
Name: [ILLEGIBLE]
Title: Managing Director
- 34 -
