EXHIBIT 10.12
SERIES D REGISTRATION RIGHTS AGREEMENT
Dated as of September 1996
by and among
CINEMARK MEXICO (USA), INC.
and
HOLDERS OF THE SERIES D NOTES LISTED ON THE SIGNATURE
PAGES HEREOF
3149454.05
3149454.05
SERIES D REGISTRATION RIGHTS AGREEMENT
THIS SERIES D REGISTRATION RIGHTS AGREEMENT (the "Agreement")
is made and entered into as of September , 1996, by and among Cinemark
Mexico (USA), Inc., a Texas corporation (the "Company"), and the
holders of Series D Notes (as defined herein) listed on the signature
pages hereof.
This Agreement is made pursuant to the Offer to Exchange and
Consent Solicitation (the "Exchange") by the Company, whereby the
Company has offered to exchange (i) with respect to each $1,000
principal amount of its 12% Series A Senior Subordinated Notes due 2003
outstanding in the aggregate principal amount of $400,000, $1,000
principal amount of its 12% Series A Senior Subordinated PIK Notes due
2003 proposed to be outstanding in an aggregate original principal
amount of $400,000, (ii) with respect to each $1,000 principal amount
of its 12% Series B Senior Subordinated Notes due 2003 outstanding in
the aggregate principal amount of $20,000,000, $1,000 original
principal amount of its 12% Series B Senior Subordinated PIK Notes due
2003 proposed to be outstanding in an aggregate original principal
amount of $20,000,000, (iii) with respect to each $1,000 principal
amount of its 12% Series C Senior Subordinated Notes due 2003
outstanding in the aggregate principal amount of $2,000,000, $1,000
principal amount of its 12% Series C Senior Subordinated PIK Notes due
2003 proposed to be outstanding in an aggregate original principal
amount of $2,000,000 and (iv) with respect to each issued and
outstanding warrant to purchase one share of the common stock of the
Company (the "Existing Warrants"), $3.757 original principal amount of
its 12% Series D Senior Subordinated PIK Notes due 2003 proposed to be
outstanding in an aggregate original principal amount of $1,424,177. In
order to induce the holders of the Existing Warrants to exchange such
Warrants for Series D Notes, the Company has agreed to provide such
holders with the registration and other rights set forth in this
Agreement. The execution of this Agreement is a condition to the
closing under the Exchange.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized terms
shall have the meanings indicated below:
"Affiliate" shall have the meaning specified in the Indenture.
"Closing Date" shall have the meaning specified in the Exchange.
"Company" shall have the meaning specified in the preamble to
this Agreement and shall include the Company's successors.
"Default Demand Notice" shall have the meaning specified in Section
2(b) hereof.
"Demand Notice" shall have the meaning specified in
Section 2(a) hereof. "Demand Registration" means a registration
pursuant to Section 2 of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. ,, Exchange" shall have the meaning
specified in the preamble to this Agreement.
"Fifth Anniversary Date" shall mean the date which is five
years after the Closing Date.
Holder" shall mean any Person that owns any Series D Notes and such
of its
respective successors, assigns and transferees that acquire Series D
Notes directly or indirectly, from such Person in accordance with the
terms of the Exchange; and any holder of Series D Notes.
"Incidental Registration" shall have the meaning specified
in Section 3(a) of this Agreement.
"Incidental Registration Statement" shall have the meaning
specified in Section 3(a) of this Agreement.
"Indenture" means the Indenture dated as of July 30,
1993, among the Company,
Cinemark de Mexico, S.A. de C.V. and the United States Trust Company
of New York, as Trustee, as amended, supplemented and modified to the
date hereof.
"Majority Holders" means the Holders of more than 50% of the
aggregate principal amount of Series D Notes outstanding.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, limited
liability company, trust, or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any Prospectus subject to completion,
and any such Prospectus as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of
the Series D Notes, and, in each case, by all other amendments and
supplements
3 148454.05 2
to such Prospectus, including post-effective amendments and all
materials incorporated by reference therein.
"Public Offering" means a public offering of 25% or more of
any series of debt securities of the Company.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with this Agreement, including without
limitation: (i) all SEC, stock exchange or NASD registration and filing
fees, including, if applicable, the fees and expenses of any "qualified
independent underwriter" (and its counsel) that is required to be
retained in accordance with the rules and regulations of the NASD, (ii)
all fees and expenses incurred in connection with compliance with state
securities or blue sky laws and compliance with the rules of the NASD
(including reasonable fees and disbursements of counsel in connection
with the NASD and Blue Sky qualification of the Series D Notes and the
preparation of a Blue Sky memorandum), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus,
any amendments or supplements thereto, any under-writing agreements,
transmittal letters, securities sales agreements and other documents
relating to the perfon-xxxxx of and compliance with this Agreement,
(iv) all
fees and expenses incurred in connection with the listing, if any, of
the Series D Notes on any securities exchange or exchanges pursuant to
Section 6(n) hereof, (v) all rating agency fees, (vi) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company and each of their respective Subsidiaries,
including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, (vii) the
reasonable fees and disbursements of one special counsel representing
the Holders (the "special counsel") that is reasonably acceptable to
the Company, (viii) the fees and expenses of the Trustee, and any
escrow agent or custodian, and (ix) any fees and disbursements of the
Underwriters customarily required to be paid by issuers or sellers of
securities and the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration Statement,
but excluding underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of Series D Notes by
a Holder. In connection with any Registration Statement hereunder, the
Company shall reimburse the Holders of the securities being registered
for the reasonable fees and disbursements of not more than one special
counsel chosen by the Majority Holders.
"Registration Statement" means any registration statement of
the Company on an appropriate form pursuant to the Securities Act which
covers the Series D Notes, and all amendments and supplements to any
such Registration Statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"SEC" means the Securities and Exchange Conu-nission.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
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"Series D Notes" shall mean the 12% Series D Senior
Subordinated PIK Notes due 2003 issued by the Company.
"Transfer Restricted Securities" means the Series D Notes upon
original issuance thereof, and at all times subsequent thereto, until,
in the case of any such Series D Notes, the occurrence of any of the
following events: (i) a Registration Statement with respect to such
Series D Notes shall have been declared effective under the Securities
Act and such Series D Notes shall have been disposed of by the Holder
thereof pursuant to such Registration Statement; (ii) such Series D
Notes are distributed to the public pursuant to Rule 144 (or any
successor provisions) promulgated under the Securities Act; (iii) such
Series D Notes shall have been otherwise transferred and new
certificates for them not bearing a legend restricting further transfer
shall have been delivered by the Company; or (iv) such Series D Notes
shall have ceased to be outstanding.
"Under-writer" shall have the meaning specified in Section 7(a) of this
Agreement.
"Underwritten Offering" means a sale of securities of the
Company to an Underwriter or Underwriters for reoffering to the public.
2. Demand Reizistration.
(a)
Upon the written request of the Holders of 25% of the
aggregate principal amount of Series D Notes then outstanding (the
"Demand Notice"), the Company shall file a Registration Statement under
the Securities Act for a public offering of the number of Series D
Notes specified in such Demand Notice and shall use its reasonable best
efforts to cause such registration to be declared effective within 120
days of the Company's receipt of the Demand Notice. From the date
hereof to the Fifth Anniversary Date, the Holders of the Series D Notes
shall have the right to cause one Registration Statement to be filed by
the Company under this Section 2(a).
(b) Upon the written request the Holders of 50% of the
aggregate principal amount of Series D Notes then outstanding
(the "Default Demand Notice") the Company shall file a
Registration Statement under the Securities Act for a public
distribution of the Series D Notes and shall use its
reasonable best efforts to cause such registration to be
declared effective within 120 days from the date of:
(i) an Event of Default under Sections 5.1(1), 5.1(2)
or 5.1(3) of the Indenture; or
(ii) a Senior Payment Default as defined in Section
12.3 of the Indenture.
The Company may suspend its efforts to have
such registration statement declared effective if any
such Event of Default or Senior Payment Default shall
have been cured.
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(c) Expenses. The Company agrees to pay all
Registration Expenses in connection with the
registration of the Series D Notes.
3. Incidental Reizistration.
(a) At any time after the date of original issuance
of the Series D Notes, if the Company proposes to
register any of its debt securities under the
Securities Act (other than pursuant to a registration
statement on Form S-4 or S-8 or any successor forms
or pursuant to an exchange offer), on any forms, the
Company will give written notice to each Holder at
least 30 days prior to the initial filing of such
registration statement with the SEC of its intent to
file such registration statement. Upon the written
request of any Holder made within 15 days after any
such notice is given (which request shall specify the
Series D Notes intended to be disposed of by such
Holder and the intended method of distribution
thereof), the Company will use its best efforts to
effect the registration (an "Incidental
Registration") under the Securities Act of all Series
D Notes which the Company has been so requested to
register by the Holders thereof; provided, however,
that if, at any time after giving written notice of
its intention to register any securities and prior to
the effective date of the Registration Statement
filed in connection with such Incidental Registration
(each an "Incidental Registration Statement"), the
Company shall determine for any reason not to
register or to delay registration of such securities,
the Company may, at its election, give written notice
of such determination to each Holder and, thereupon,
(A) in the case of a determination not to register,
the Company shall be relieved of its obligation to
register any Series D Notes under this Section 3(a)
in connection with such registration (but not from
its obligation to pay the Registration Expenses
incurred in connection therewith), and (B) in the
case of a determination to delay registering, the
Company shall be permitted to delay registering any
Series D Notes under this Section 3(a) during the
period that the registration of such other securities
is delayed. Subject to Section 60) of this Agreement,
the Company further agrees to supplement or amend an
Incidental Registration Statement if required by
applicable laws, rules or regulations or by the
instructions applicable to the registration form used
by the Company for such Incidental Registration
Statement. Each Holder shall be permitted to withdraw
all or any part of such Holder's Series D Notes from
an Incidental Registration at any time prior to the
effective date of the Incidental Registration
Statement by notifying the Company of such withdrawal
not later than two business days prior to such
effective date. Any holder of Series D Notes who
withdraws any such securities from an Incidental
Registration shall pay to the Company any incremental
expenses of such
registration specifically attributable to such holder.
(i) Exl)enses. The Company agrees to pay all Registration
Expenses including the fees and expenses of one special counsel of the
Holders of such Series D Notes incurred in connection with one
registration of Series D Notes pursuant to this Section 3(a). The
Registration Expenses incurred in connection with each subsequent
Incidental Registration requested under this Section 3(a) shall be
allocated pro rata among all Persons, including the Company, on the
basis of the respective dollar
3148454.05 5
amounts of the securities then being registered on behalf of each
such Person. In connection with any Incidental Registration pursuant
to this section 3(a), each Holder shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the
sale or disposition of such Holder's Series D Notes pursuant to such
Incidental Registration.
(ii) Priority in Incidental Reizistrations. If a
registration pursuant to this Section 3(a) involves an Underwritten
Offering of the securities so being registered, whether or not for
sale for the account of the Company, which securities are to be
distributed on a firm commitment basis by or through one or more
underwriters of recognized standing pursuant to underwriting terms
appropriate for such transaction, and the sole or managing
Underwriter, as the case may be, of such Underwritten Offering shall
advise the Company, in writing (with a copy to each Holder requesting
such registration) @@hat, in its opinion, the amount of securities
requested to be included in such registration exceeds the amount
which can be sold in (or during the time of) such offering without
adversely affecting the distribution of the securities being offered,
then the amount of Series D Notes to be offered for the accounts of
the Holders thereof shall be reduced pro rata based upon the relative
aggregate amount of gross proceeds to be received by such Holders in
the offering to the extent necessary to reduce the total amount of
securities to be included in such offering to the amount which the
Company is so advised can be sold in (or during the time of) such
offering.
(b)
Obligations of the Com@@n . Th ' e obligations of the Company
under this Section 3 shall be cumulative and shall be in addition to
the obligations of the Company under Section 2.
4. General Matters.
(a)
Effective Registration Statement. A Registration Statement
filed in accordance with the provisions of this Agreement will not be
deemed to have become effective unless it has been declared effective
by the SEC; provided, however, that if, after any such Registration
Statement has been declared effective, the offering of any Series D
Notes pursuant to such Registration
Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or
authority or court, such Registration Statement will be deemed not to
have become effective; provided, further, if a Registration Statement
is declared effective by the SEC within 30 days of such stop order,
injunction or other order or requirement of the SEC or other
governmental agency or authority or court, such Registration-Statement
will be deemed to have become effective on the date it was declared
effective prior to such stop order, injunction or other order or
requirement.
(b)
Selection of Underwriters. If at any time or from time to time
after the occurrence of a Public Offering, Holders of Series D Notes
desire to sell Series D Notes in an underwritten public offering, the
managing Under-writer shall be selected by the Majority
3148454.05 6
Holders; provided that such Underwriter shall be reasonably
satisfactory to the Company.
5. Hold-Back Apreements.
(a)
Restrictions on Public Sale by Holders. Each Holder whose
Series D Notes are covered by a Registration Statement filed pursuant
to Section 2 or Section 3 hereof agrees not to effect any public sale
or distribution of any securities of the Company of the same or similar
class or classes as the securities included in the Registration
Statement or any securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144
or Rule 144A under the Securities Act, during the 15-day period prior
to, and during the 90-day period beginning on, the effective date of
such Registration Statement (except pursuant to such Registration
Statement) if and to the extent requested in writing (with reasonable
prior notice) by the Company, in the case of a public offering that is
not an Underwritten Offering, or by the sole or managing Underwriter,
in the case of an Underwritten Offering.
(b) Restrictions on Public Sale by the Company.
The Company agrees not to effect any public sale or
distribution of any securities which are the same as or substantially
similar to those Series D Notes being registered pursuant to a
Registration Statement filed pursuant to Sections 2 or 3 hereof,
including a sale pursuant to Regulation D under the Securities Act, or
any securities convertible into or exchangeable or exercisable for such
securities.during the 15-day period prior to, and during the 90-day
period beginning on, the effective date of such Registration Statement
(except pursuant to such Registration Statement or on Form S-4 or any
successor to such
form).
6. Registration Procedures.
Whenever any Series D Notes are to be registered pursuant to Sections 2
or 3 of this Agreement, the Company shall use its best efforts to
effect or cause to be effected such registration in a manner which will
permit the sale of such Series D Notes by the Holders thereof in
accordance with their intended method or methods of distribution, and
the Company shall (to the extent applicable), as expeditiously as
possible:
(a)
prepare and file a Registration Statement with the SEC and
cause each such Registration Statement to become and remain effective,
within the applicable time periods specified herein, which Registration
Statement (x) shall be on an appropriate registration form under the
Securities Act, selected by the Company and shall be reasonably
acceptable to the special counsel for the Holders, (y) shall be
available for the sale of the Series D Notes in accordance with the
intended method or methods of distribution by the selling Holders
thereof, and (z) shall comply as to form in all material respects with
the requirements of the applicable form under the Securities Act and
include all financial statements required by the SEC to be filed
therewith;
3148454.05 7
(b)
subject to Section 60) hereof, prepare and file with the SEC such
amendments and post-effective amendments to each such Registration Statement
as may be necessary to keep such Registration Statement effective for the
applicable time period hereunder; cause each related Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provision then in force) under
the Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder with respect
to the disposition of all securities covered by each Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the selling holders thereof;
(c)
furnish to each Holder and to each Under-writer of an Underwritten
offering of Series D Notes, if any, without charge, as many copies of each
Prospectus, including each Prospectus subject to completion, and any amendment
or supplement thereto and such other documents as
such Holder or Underwriter may reasonably request, in order to facilitate the
public sale or other disposition of the Series D Notes; the Company consents
to the use of the Prospectus, including each Prospectus subject to completion,
by each Holder and each Underwriter of an Underwritten Offering of Series D
Notes, if any, in connection with the offering and sale of the Series D Notes
covered by such Prospectus or Prospectus subject to completion;
(d)
on or prior to the date on which such Registration Statement is
declared effective, use its best efforts and cooperate with each Holder of
Series D Notes covered by such Registration Statement, each Underwriter,.if
any, and their respective counsel to register or qualify the Series D Notes
under all applicable state securities or "blue sky" laws of such jurisdictions
as each such Underwriter, if any, or any such Holder shall reasonably request
in writing, keep each such registration or qualification effective during the
period such Registration Statement is required to be kept effective and do any
and all other acts and things which may be reasonably necessary or advisable
to enable such Underwriter, if any, and such Holders to consummate the
disposition in each such jurisdiction of Series D Notes covered by such
Registration Statement;
(e)
notify each Holder of Series D Notes covered by such Registration
Statement, each Underwriter, if any, and their respective counsel, promptly
and confirm such notice in writing (i) when such Registration Statement has
become effective and when any post-effective amendments and supplements
thereto become effective or any supplement to the Prospectus or amendment to
the Prospectus shall have been filed, (ii) of the issuance by the SEC or any
state securities authority of any stop order suspending the effectiveness of
such Registration Statement or preventing or prohibiting the use of any
Prospectus (including any Prospectus subject to completion) or the initiation
of any proceedings for any such purpose, (iii) of the receipt of conunents
from the SEC with respect to such Registration Statement, (iv) if, between the
effective date of such Registration Statement and the closing of any sale of
securities covered thereby, the representations and warranties of the Company
contained in the underwriting agreement or other agreement contemplated by
Section 6(k) hereof, if any, relating to the offering cease to be true and
correct in all material respects,
314M54.05 8
(v)
if the Company receives any notification with respect to the suspension of the
qualification of the Series D Notes for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and (vi) of the happening of
any event during the period such Registration Statement is effective as a
result of which such Registration Statement or the related Prospectus contains
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or, in the Company's reasonable determination, a post-effective
amendment to such Registration Statement would be appropriate;
(f)
furnish counsel for the Holders of Series D Notes covered by such
Registration Statement and each Underwriter, if any, with copies of any
request by the SEC or any state securities authority for amendments,or
supplements to such Registration Statement or any Prospectus or for additional
information;
(g)
make every reasonable effort to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Series D Notes
for sale in any jurisdiction, and, if any such order is issued, to obtain
promptly the withdrawal of any such order;
(h)
upon request, furnish to the Underwriter or managing Underwriter of any
Underwritten Offering of Series D Notes, if any, without charge, with at least
one signed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits; and furnish to each
Holder, without charge, at least one conforined copy of each Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, (but not including documents incorporated therein by
reference or exhibits thereto, unless requested);
(i)
cooperate with the selling Holders and the Underwriter or managing
Underwriter of an Underwritten Offering of Series D Notes, if any, to
facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends) representing Series D Notes to be sold; and issue
such Series D Notes to be sold in such denominations and registered in such
names as the selling Holders or the Underwriter or managing Underwriter of an
underwritten offering of Series D Notes, if any, may reasonably request at
least three business days prior to any sale of Series D Notes;
(0) upon the occurrence of any event contemplated by Section 6(e)(vi)
hereof, use its best
efforts to prepare a supplement or post-effective amendment to a Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Series D Notes, such Registration Statement will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, not misleading and in the Company's reasonable determination a
post-effective
3148454.05 9
amendment to such Registration Statement is no longer appropriate;
(k)
enter into customary agreements (including underwriting agreements) and
take all other customary and appropriate actions in order to expedite or
facilitate the disposition of such Series D Notes and in such connection
whether or not an underwriting agreement is entered into and whether or not
the registration is an Underwritten offering:
(i) to the extent the Company is able, make such
representations and warranties to the Holders and the Underwriters, if
any, in form, substance and scope as are customarily made by issuers to
underwriters in similar primary underwritten offerings;
(ii) obtain opinions of counsel to the Company and updates
thereof, (which counsel and opinions (in fon-n, scope and substance)
shall be reasonably satisfactory to the managing Underwriters, if any,
and the special counsel for the Holders of the Series D Notes being
sold) addressed to each selling Holder and the Underwriters, if any,
covering the matters customarily covered in opinions requested in
similar sales of securities or underwritten offerings and such other
matters as may be reasonably requested by such Holders and
Underwriters;
(iii) obtain "cold comfort" letters and updates thereof from
the independent certified public accountants of the Company and each of
its Subsidiaries addressed to the selling Holders of Series D Notes and
the Underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters to underwriters in connection with primary underwritten
offerings;
(iv) enter into a securities sales agreement with the Holders
relating to such registration and providing for, among other things,
the appointment of the Underwriter as agent for the selling Holders for
the purpose of soliciting purchases of Series D Notes,
which agreement shall be customary in form, substance and scope and
shall contain customary representations, warranties and covenants;
(v) if an under-writing agreement is entered into, cause the
same to set forth indemnification provisions and procedures
substantially equivalent to the indemnification provisions and
procedures set forth in Section 7 hereof with respect to all parties to
be indemnified pursuant to said Section; and
(vi) deliver such other documents and certificates as may be
reasonably requested by the Majority Holders and the managing
Under-writers, if any.
The above shall be done at (i) the effectiveness of such Registration
Statement (and each post-effective amendment thereto) and (ii) each
closing under any underwriting or similar agreement as and to the
extent required thereunder;
3149454.05 1 0
(1)
make available for inspection by representatives of the
Holders of the Series D Notes and any Underwriters participating in any
disposition pursuant to a Registration Statement, and any special
counsel or accountant retained by such Holders or Underwriters, at the
off-ices where normally kept during normal business hours all financial
and other records, pertinent corporate documents and properties of the
Company, and cause the respective officers, directors and employees of
the Company to supply all information reasonably requested by any such
representative, Underwriter, special counsel or accountant in
connection with a Registration Statement; provided, however, that such
records, documents or information which the Company determines, in good
faith, to be confidential and notifies such representatives,
Underwriters, special counsel or accountants in writing are
confidential shall not be disclosed by the representatives,
Underwriters, special counsel or accountants unless (i) the disclosure
of such records, documents or information is necessary to avoid or
correct a misstatement or omission in a Registration Statement, (ii)
the release of such records, documents or information is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction, or (iii) such records, documents or information have been
generally made available to the public, other than as a result of a
disclosure or failure to safeguard by such person;
(m)
(i) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus, provide copies of such
document to the Holders, to the special counsel on behalf of the
Holders and to the Underwriter or Underwriters of an Underwritten
offering of Series D
Notes, if any, make such changes in any such document prior to the
filing thereof as the special counsel to the Holders or the Underwriter
or Underwriters, may reasonably request and not file any such document
in a form to which the Holders, or any Underwriter shall reasonably
object, and make such of the representatives of the Company available
for discussion of such document as shall be reasonably requested by the
Holders, or any Underwriter;
(ii) a reasonable time prior to the filing of any document
which is to be incorporated by reference into a Registration Statement
or a Prospectus, provide copies of such document to special counsel for
the Holders, and make such changes in such document prior to the filing
thereof as such counsel or counsel for any Underwriter shall reasonably
request; and make such of the representatives of the Company as shall
be reasonably requested by such special counsel available for
discussion of such document;
(n)
use its best efforts to cause all Series D Notes to be listed
on any securities exchange on which similar debt securities issued by
the Company are then listed if requested by the Majority Holders, or if
requested by the Underwriter or Underwriters of an Underwritten
Offering of Series D Notes, if any;
3149454.05 1 1
(o) provide a CUSIP number for all Series D Notes, not later
than the effective date of a Registration Statement;
(p) use its best efforts to comply with all applicable rules
and regulations of the SEC and make available to its security holders,
as soon as reasonably practicable an earnings statement covering at
least 12 months which shall satisfy the provisions of Section II (a) of
the Securities Act and Rule 158 thereunder; and
(q) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation
by any Underwriter (including any "qualified independent Underwriter"
that is required to be retained in accordance with the rules and
regulations of the NASD).
Each selling Holder of Series D Notes as to which any
registration is being effected pursuant to this Agreement agrees, as a
condition to the registration obligations of the Company provided
herein, to furnish to the Company such information regarding
the proposed distribution by such Holder as the Company may from time
to time reasonably request in writing and shall provide a customary
power of attorney and custody agreement with respect to any
underwritten agreement.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
6(e)(vi) hereof, such Holder will forthwith discontinue disposition of
Series D Notes pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 60) hereof, and, if so directed by the Company,
such Holder will deliver to the Company (at the expense of the
Company), all copies in its possession, other than permanent file
copies then in such Holder's possession, of the Prospectus covering
such Series D Notes cur-rent at the time of receipt of such notice. If
the Company shall give any such notice to suspend the disposition of
Series D Notes pursuant to a Registration Statement, the Company shall
extend the period during which the Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days
in the period from and including the date of the giving of such notice
to and including the date when the Holders shall have received copies
of the supplemented or amended Prospectus necessary to resume such
dispositions.
7. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Person who participates as
an underwriter (any such Person being an "Underwriter"),
each Holder and each of their respective Affiliates
(including any director, employee or Person, if any, who
controls any Holder or Underwriter within the meaning of
Section 15 of the Securities Act) (each an "Indemnified
Party"):
(i) against any and all loss, claim, damage, liability and expense
whatsoever, as incurred, arising out of or based upon any untrue
statement or alleged untrue
3149454.05 12
statement of a material fact contained in any Registration Statement
(or any amendment thereto), or arising out of or based upon any
omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus or including
any Prospectus subject to completion (or any amendment or supplement
thereto), or arising out of or based upon any omission or alleged
omission of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to the provisions of Section 7(c) below, reasonable
fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or threatened, in each case whether or not a party, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (11) above;
provided, however, that the Company shall not be liable in any such
case to any Indemnified Party to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
in a Prospectus subject to completion, if (A) such untrue statement or
alleged untrue statement, omission or alleged omission is corrected in
an amendment or supplement to such Prospectus; (B) the Company had
furnished such Indemnified Party with the number of copies of such
amended or supplemented Prospectus requested by such Indemnified Party
a reasonable period of time prior to such sale; and (C) thereafter such
Indemnified Party fails to deliver such Prospectus as so amended or
supplemented prior to or concurrently with the sale by such Indemnified
Party of the Series D Notes to the Person asserting such loss, claim,
damage, liability or expense; and provided, further, that this
indemnity agreement does not apply to any Indemnified Party with
respect to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission contained in any Registration Statement (or any
amendment thereto) or Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with written
3148454.05 13
information furnished to the Company by such Indemnified Party expressly for
use in such Registration Statement (or such amendment thereto) or such
Prospectus (or such amendment or supplement thereto).
(b)
Indemnification by Holders, Underwriters, Etc. (i) Each Holder
severally agrees to indemnify and hold hanniess the Company, each Underwriter
and the other selling Holders, and each of their respective Affiliates
(including any director, officer, employee or Person, if any, who controls the
Company, any Under-writer or any other selling Holder within the meaning of
Section 15 of the Securities Act), against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 7(a) hereof
(I)rovided, however, that any settlement of the type described in Section
7(a)(ii) is effected with the written consent of such Holder), as incurred,
but only with respect to untrue statements or omissions, or alleged untnie
statements or omissions, made in a Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written infon-nation furnished to the
Company by such selling Holder expressly for use in such Registration
Statement (or any amendment thereto) or such Prospectus (or any amendment or
supplement thereto); T)rovided, however, that an indemnifying Holder shall not
be required to provide indemnification in any amount in excess of the amount
by which (A) the total price at which the Series D Notes sold by such
indemnifying Holder and its affiliated indemnifying Holders and distributed to
the public were offered to the public exceeds (B) the amount of any damages
which such indemnifying Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(i) The Company shall be entitled to receive indemnities from
Underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, to the same
extent as provided above with respect to information so furnished in
writing by such Persons specifically for inclusion in any Prospectus or
Registration Statement.
(c) Conduct of Indemnification Proceedinp -,s. Each
indemnified party or parties under this Section 7 shall give
reasonably prompt notice to each indemnifying party or parties
of any action or proceeding conunenced against it or them in
respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party or parties shall
not relieve it or them from any liability which it or they may
have under this indemnity agreement, except to the extent that
the indemnifying party or par-ties have been prejudiced
materially by such failure. If the indemnifying party or
parties so elect, within a reasonable time after receipt of
such notice, the indemnifying party or parties may assume the
defense of such action or proceeding at such indemnifying
par-ty's or parties' expense with counsel chosen by the
indemnifying party or parties and approved by the indemnified
parties defendant in such action or proceeding, which approval
shall not be unreasonably withheld; provided, however, that if
such indemnified party or parties reasonably determine that a
conflict of interest exists where it is advisable for such
indemnified party or parties to be represented by separate
counsel or that, upon
advice of counsel, there may be legal defenses
3148454.05 1 4
available to them which are different from or in addition to those available
to the indemnifying party, then the indemnifying party or parties shall not be
entitled to assume such defense and the indemnified party or parties shall be
entitled to separate counsel at the indemnifying party's or par-ties' expense.
If an indemnifying party is not so entitled to assume the defense of such
action or does not assume such defense, after having received the notice
referred to in the first sentence of this paragraph, the indemnifying party
will pay the reasonable fees and expenses of one counsel for the indemnified
party or parties. In such event, however, no indemnifying party or parties
will be liable under this Section 7 for any settlement effected without the
written consent of such indemnifying party or parties (which shall not be
unreasonably withheld) unless a complete release of such indemnifying party or
parties is obtained as part of such settlement. If an indemnifying party is
entitled to assume, and promptly assumes, the defense of such action or
proceeding in accordance with this Section 7(c), such indemnifying party shall
not be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action or proceeding.
(d) Contribution.
(i) if the indemnification provided for in this Section 7 is
held to be unenforceable although applicable in accordance with its
terms in respect of any losses, claims, damages, liabilities or
expenses suffered by an indemnified party referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such los ' ses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and of the selling
Holders (including, in each case, that of their officers, directors,
employees and agents) on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand and of the selling
Holders (including, in each case, that of their officers, directors,
employees and agents) on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company on the one hand, or
by or on behalf of the selling Holders, on the other, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 7(c), any legal or
other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.
(ii) The Company and each Holder of Series D Notes agree that
it would not be just and equitable if contribution pursuant to this
Section 7(d) were determined by pro rata allocation or by any other
method of allocation which does not take account
0000000.05 15
of the equitable considerations refer-red to in paragraph (i) above.
Notwithstanding the provisions of this Section 7(d), in the case of
distributions to the public an indemnifying Holder shall not be
required to contribute any amount in excess of the amount by which the
total price at which the Series D Notes sold by such indemnifying
Holder or its affiliated indemnifying Holders and distributed to the
public were offered to the public exceeds the amount of any damages
which such indemnifying 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 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
8. Rule 144 and Rule 144A.
For so long as the Company is subject to the reporting requirements of
Section 13 or 15 of the Exchange Act, the Company covenants that it
will file the reports required to be filed by it under the Securities
Act and Section 13(a) or 15(e) of the Exchange Act and the rules and
regulations adopted by the SEC thereunder, that if it ceases to be so
required to file such reports, it will upon the request of any Holder
(i) make publicly available such information as is necessary to pen-nit
sales pursuant to Rule 144 under the Securities Act, (ii) deliver such
information to a prospective purchaser as is necessary to permit sales
pursuant to Rule 144A under the Securities Act and it will take such
further action as any Holder may reasonably request, and (iii) take
such further action that is reasonable in the circumstances, in each
case, to the extent required from time to time to enable such Holder to
sell its Series D Notes without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under
the Securities Act, as such Rule may be amended from time to time, (b)
Rule 144A under the Securities Act, as such Rule may be amended from
time to time, or (c) any similar rules or regulations hereafter adopted
by the SEC. Upon the request of any Holder, the Company will deliver
to such Holder a written statement as to whether it has complied with
such requirements. Notwithstanding the foregoing, nothing in this
Section 8 shall be deemed to require the Company to register any
securities under the Exchange Act.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered
into nor will the Company on or after the date of this Agreement enter
into any agreement which is inconsistent with the rights granted to the
Holders in this Agreement or other-wise conflicts with the provisions
hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company has obtained the
written consent of the Majority Holders; provided, however, that no
amendment, modification or supplement or waiver or consent to the
departure with respect to
3148454.05 16
the provisions of Section 7 hereof shall be effective as against any
Holder unless consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery,
registered first-class mail, telex, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder, at the most current
address given by such Holder to the Company by means of a notice given
in accordance with the provisions of this Section 9(d), which address
initially is, with respect to each Purchaser, the address set forth
next to such Purchaser's name on the signature pages of the Purchase
Agreement, with a copy to Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, Esq., or (ii)
if to the Company, at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx
00000, Attention: Xxxx Xxxxxxx and Xxxxxxx X. Xxxxxxxx, notice of which
is given in accordance with the provisions of this Section 9(d), with
copies to Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., Suite 4100, 0000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxx 00000-0000, Attention: Xxxxx X. Xxxxxx,
P.C.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
(d) Successors and Assijzns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees
of each of the parties, including, without limitation and without the
need for an express assignment, subsequent Holders; provided, however,
that nothing herein shall be deemed to permit any assigrunent, transfer
or other disposition of Series D Notes except in accordance with the
terms of the Exchange. If any successor, assignee or transferee of any
Holder shall acquire Series D Notes, in any manner, whether by
operation of law or otherwise, such Series D Notes shall be held
subject to all of the terms of this Agreement, and by taking and
holding such Series D Notes, such Person shall be conclusively deemed
to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement and, if such acquisition was effected in
accordance with the terms and provisions of the Exchange, such Person
shall be entitled to receive the benefits hereof.
(e) Countemarts. This Agreement may be executed in any number
of counterparts, each of which, when so executed and delivered, shall
be deemed to be an original, but all of which counter-parts, taken
together, shall constitute one and the same instrument.
(f) Headinps. The heading in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
3148454.05 17
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF).
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held to be invalid, illegal or unen- forceable, the
validity, legality and enforceability of any such provisions in every
other
respect and of the remaining provisions contained herein shall not be
affected or impaired thereby.
(i) Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform
any of its obligations hereunder, and accordingly agree that each
party, in addition to any other remedy to which it may be entitled at
law or in equity, shall be entitled to compel specific performance of
the obligations of any other party under this Agreement in accordance
with the terms and conditions of this Agreement in any court of the
United States or any State thereof having jurisdiction.
(0) Consent to Jurisdiction and Service of Process. The
Company agrees that any legal suit, action or proceeding brought by any
party to enforce any rights under or with respect to this Agreement may
be instituted in any state or federal court in The City of New York, in
the State of New York, and waives to the fullest extent permitted by
law any objection which it may now or hereafter have to the laying of
venue of any such suit, action or proceeding and irrevocably submit to
the non-exclusive jurisdiction of any such court in any such suit,
action or proceeding. The Company hereby irrevocably designates and
appoints The CT Corporation System ("CT") as the Company's authorized
agent to receive and forward on its behalf service of any and all
process which may be served in any such suit, action or proceeding in
any such court and agrees that service of process upon CT (or any
successor) at its office at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
and written notice of said service to the Company mailed or delivered
to The CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
shall be deemed in every respect effective service of process upon the
Company in any such suit, action or proceeding and shall be taken and
held to be valid personal service upon the Company. Said designation
and appointment shall be irrevocable. Nothing in this Section 9(k)
shall affect the right of any party hereto to serve process in any
manner permitted by law o'r limit the right of any party hereto to
bring proceedings against the Company in the courts of any jurisdiction
or jurisdictions. The Company further agrees to take any and all
action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such
designation and appointment of CT in full force and effect so long as
this Agreement shall be outstanding.
(k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.
There are no restrictions, promises, warranties or under-takings other
than those set
3148454.05 18
for-th or referred to herein, with respect to the registration rights granted
by the Company with respect to the Securities sold pursuant to the Purchase
Agreement. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(1) Attomey's Fees. As between the par-ties to this Agreement
(including successors and
permitted assigns), in any action or proceeding brought to enforce any
provision of this Agreement or where any provision hereof is validly asserted
as a defense, the successful party shall be entitled to recover reasonable
attorney' fees in addition to any other available remedy.
(m) Securities Held by Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Series D Notes is
required hereunder, Series D Notes held by Affiliates of the Company
other than any Holders that are deemed to be such Affiliates solely by
reason of their holdings of such Series D Notes) shall not be counted
in deten-nining whether such consent or approval was given by the
Holders of such required percentage.
3148454.05 19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
