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REGISTRATION RIGHTS AGREEMENT
Dated as of September 27, 1996
By and Among
FINGERHUT COMPANIES, INC.
and
BEAR, ▇▇▇▇▇▇▇ & CO. INC.,
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
and
FIRST CHICAGO CAPITAL MARKETS, INC.
as Initial Purchasers
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$125,000,000
7.375% SENIOR NOTES DUE 1999
TABLE OF CONTENTS
Page
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1. Definitions................................................. 1
2. Exchange Offer.............................................. 5
3. Shelf Registration.......................................... 9
4. Additional Interest......................................... 10
5. Registration Procedures..................................... 12
6. Registration Expenses....................................... 23
7. Indemnification............................................. 24
8. Rule 144 and 144A........................................... 28
9. Underwritten Registrations.................................. 28
10. Miscellaneous............................................... 29
(a) No Inconsistent Agreements............................ 29
(b) Adjustments Affecting Registrable
Notes............................................... 29
(c) Amendments and Waivers................................ 29
(d) Notices............................................... 29
(e) Successors and Assigns................................ 31
(f) Counterparts.......................................... 31
(g) Headings.............................................. 31
(h) Governing Law......................................... 31
(i) Severability.......................................... 31
(j) Notes Held by the Company or Its
Affiliates.......................................... 32
(k) Third Party Beneficiaries............................. ▇▇
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▇▇▇▇▇▇▇▇▇▇▇▇ RIGHTS AGREEMENT
This Registration Rights Agreement (this
"AGREEMENT"), dated as of September 27, 1996, is being entered
into by and among Fingerhut Companies, Inc., a Minnesota
corporation (the "COMPANY"), and Bear, ▇▇▇▇▇▇▇ & Co. Inc, ▇▇▇▇▇
▇▇▇▇▇▇ Inc. and First Chicago Capital Markets, Inc. (the
"INITIAL PURCHASERS").
This Agreement is being entered into in connection
with the Purchase Agreement, dated September 24, 1996, between
the Company and the Initial Purchasers (the "PURCHASE
AGREEMENT"), which provides for the sale by the Company to the
Initial Purchasers of $125,000,000 aggregate principal amount
of the Company's 7.375% Senior Notes Due 1999 (the "NOTES").
In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement for the benefit
of the Initial Purchasers and their direct and indirect
transferees. The execution and delivery of this Agreement is a
condition to the obligation of the Initial Purchasers to
purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall
have the following meanings:
ADDITIONAL INTEREST: See Section 4(a) hereof.
ADVICE: See the last paragraph of Section 5 hereof.
AGREEMENT: See the first introductory paragraph
hereto.
APPLICABLE PERIOD: See Section 2(b) hereof.
CLOSING DATE: The Closing Date as defined in the
Purchase Agreement.
COMPANY: See the first introductory paragraph
hereto.
EFFECTIVENESS DATE: With respect to any Registration
Statement, the 75th day after the Filing Date with respect
thereto.
EFFECTIVENESS PERIOD: See Section 3(a) hereof.
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EVENT DATE: See Section 4(b) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934,
as amended, and the rules and regulations of the SEC
promulgated thereunder.
EXCHANGE NOTES: See Section 2(a) hereof.
EXCHANGE OFFER: See Section 2(a) hereof.
EXCHANGE REGISTRATION STATEMENT: See Section 2(a)
hereof.
FILING DATE: (A) If no Registration Statement has
been filed by the Company pursuant to this Agreement, the 45th
day after the Issue Date; PROVIDED, HOWEVER, that if a Shelf
Notice is given within 10 days of the Filing Date, then the
Filing Date with respect to the initial Shelf Registration
shall be the 15th calendar day after the date of the giving of
such Shelf Notice; and (B) in each other case (which may be
applicable notwithstanding the consummation of the Exchange
Offer), the 30th day after the delivery of a Shelf Notice.
HOLDER: Any holder of a Registrable Note or
Registrable Notes.
INDEMNIFIED PERSON: See Section 7(c) hereof.
INDEMNIFYING PERSON: See Section 7(c) hereof.
INDENTURE: The Indenture, dated as of September 15,
1996 between the Company and First Bank National Association,
as trustee, pursuant to which the Notes are being issued, as
amended or supplemented from time to time in accordance with
the terms thereof.
INITIAL PURCHASERS: See the first introductory
paragraph hereto.
INSPECTORS: See Section 5(o) hereof.
ISSUE DATE: The date on which the original Notes
were sold to the Initial Purchasers pursuant to the Purchase
Agreement.
MAJORITY HOLDERS: See Section 3(c) hereof.
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NASD: See Section 5(s) hereof.
NOTES: See the second introductory paragraph hereto.
PARTICIPANT: See Section 7(a) hereof.
PARTICIPATING BROKER-DEALER: See Section 2(b)
hereof.
PERSON: An individual, trustee, corporation,
partnership, limited liability company, joint stock company,
trust, unincorporated association, union, business association,
firm or other legal entity.
PRIVATE EXCHANGE: See Section 2(b) hereof.
PRIVATE EXCHANGE NOTES: See Section 2(b) hereof.
PROSPECTUS: The prospectus included in any
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 by any prospectus supplement, and all other
amendments and supplements to the Prospectus, with respect to
the terms of the offering of any portion of the Registrable
Notes covered by such Registration Statement including post-
effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such
Prospectus.
PURCHASE AGREEMENT: See the second introductory
paragraph hereto.
RECORDS: See Section 5(o) hereof.
REGISTRABLE NOTES: Each Note upon original issuance
of the Notes and at all times subsequent thereto, each Exchange
Note as to which Section 2(c)(iv) hereof is applicable upon
original issuance and at all times subsequent thereto and each
Private Exchange Note upon original issuance thereof and at all
times subsequent thereto, until in the case of any such Note,
Exchange Note or Private Exchange Note, as the
case may be, the earliest to occur of (i) a Registration Statement
(other than, with respect to any Exchange Note as to which
Section 2(c)(iv) hereof is applicable, the Exchange Registration Statement)
covering such Note, Exchange Note or Private Exchange Note, as the case
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may be, has been declared effective by the SEC and
such Note (unless such Note was not tendered for exchange by
the Holder thereof), Exchange Note or Private Exchange Note, as
the case may be, has been disposed of in accordance with such
effective Registration Statement, (ii) such Note, Exchange Note
or Private Exchange Note, as the case may be, is sold in
compliance with Rule 144, or (iii) such Note, Exchange Note or
Private Exchange Note, as the case may be, ceases to be
outstanding for purposes of the Indenture.
REGISTRATION STATEMENT: Any registration statement
of the Company, including, but not limited to, the Exchange
Registration Statement, that covers any of the Registrable
Notes pursuant to the provisions of this Agreement, including
the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits,
and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
RULE 144: Rule 144 promulgated under the Securities
Act, as such Rule may be amended from time to time, or any
similar rule (other than Rule 144A) or regulation hereafter
adopted by the SEC providing for offers and sales of securities
made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus
delivery requirements of the Securities Act.
RULE 144A: Rule 144A promulgated under the
Securities Act, as such Rule may be amended from time to time,
or any similar rule (other than Rule 144) or regulation
hereafter adopted by the SEC.
RULE 415: Rule 415 promulgated under the Securities
Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
SHELF NOTICE: See Section 2(c) hereof.
SHELF REGISTRATION: See Section 3(a) hereof.
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TIA: The Trust Indenture Act of 1939, as amended.
TRUSTEE: The trustee under the Indenture and, if
existent, the trustee under any indenture governing the
Exchange Notes and Private Exchange Notes (if any).
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING:
A registration in which securities of the Company are sold to
an underwriter for reoffering to the public.
2. EXCHANGE OFFER
(a) The Company agrees to file with the SEC no later
than the Filing Date an offer to exchange (the "EXCHANGE
OFFER") any and all of the Registrable Notes (other than the
Private Exchange Notes, if any) for a like aggregate principal
amount of debt securities of the Company, which are identical
in all material respects to the Notes (the "EXCHANGE NOTES")
(and which are entitled to the benefits of the Indenture or a
trust indenture which is identical in all material respects to
the Indenture (other than such changes to the Indenture or any
such identical trust indenture as are necessary to comply with
any requirements of the SEC to effect or maintain the
qualification thereof under the TIA) and which, in either case,
has been qualified under the TIA), except that the Exchange
Notes (other than Private Exchange Notes, if any) (i) shall
have been registered pursuant to an effective Registration
Statement under the Securities Act, (ii) shall contain no
restrictive legend thereon and (iii) shall not contain any
requirement by the Company to pay Additional Interest. The
Exchange Offer shall be registered under the Securities Act on
the appropriate form (the "EXCHANGE REGISTRATION STATEMENT")
and shall comply with all applicable tender offer rules and
regulations under the Exchange Act. The Company agrees to use
its best efforts to (x) cause the Exchange Registration
Statement to be declared effective under the Securities Act on
or before the Effectiveness Date; (y) keep the Exchange Offer
open for at least 30 calendar days (or longer if required by
applicable law) after the date that notice of the Exchange
Offer is mailed to Holders; and (z) consummate the Exchange
Offer on or prior to the 150th day following the Issue Date.
If after such Exchange Registration Statement is declared
effective by the SEC, the Exchange Offer or the issuance of the
Exchange Notes thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or any
other governmental agency or court, such Exchange Registration
Statement shall be deemed not to have become effective for
purposes of this Agreement. Each
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Holder who participates in the Exchange Offer will be required to
represent that any Exchange Notes received by it will be acquired
in the ordinary course of its business, that at the time of the
consummation of the Exchange Offer such Holder will have no arrangement
or understanding with any Person to participate in the
distribution of the Exchange Notes in violation of the
provisions of the Securities Act, and that such Holder is not
an affiliate of the Company within the meaning of the
Securities Act. Upon consummation of the Exchange Offer in
accordance with this Section 2, the Company shall have no
further obligation to register Registrable Notes (other than
Private Exchange Notes and other than in respect of any
Exchange Notes as to which clause 2(c)(iv) hereof applies)
pursuant to Section 3 hereof. No securities other than the
Exchange Notes shall be included in the Exchange Registration
Statement.
(b) The Company shall include within the Prospectus
contained in the Exchange Registration Statement a section
entitled "Plan of Distribution," reasonably acceptable to the
Initial Purchasers, which shall contain a summary statement of
the positions taken or policies made by the Staff of the SEC
with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) of Exchange Notes received by
such broker-dealer in the Exchange Offer (a "PARTICIPATING
BROKER-DEALER"), whether such positions or policies have been
publicly disseminated by the Staff of the SEC or such positions
or policies, in the judgment of counsel for the Initial
Purchasers, represent the prevailing views of the Staff of the
SEC. Such "Plan of Distribution" section shall also expressly
permit the use of the Prospectus by all Persons subject to the
prospectus delivery requirements of the Securities Act,
including all Participating Broker-Dealers, and include a
statement describing the means by which Participating Broker-
Dealers may resell the Exchange Notes.
If any Participating Broker-Dealer participates in
the Exchange Offer and notifies the Company or causes the
Company to be notified in writing that it is a Participating
Broker-Dealer within 30 days after the last date for which
exchanges are accepted pursuant to the Exchange Offer, the
Company shall use its reasonable efforts to keep the Exchange
Registration Statement effective and to amend and supplement
the Prospectus contained therein, in order to permit such
Prospectus to be lawfully delivered by any Participating
Broker-Dealer subject to the prospectus delivery requirements
of the Securities Act for such period of time as is necessary
to comply with
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applicable law in connection with any resale of
the Exchange Notes; PROVIDED, HOWEVER, that such period shall
not exceed 180 days after the last date for which exchanges are
accepted pursuant to the Exchange Offer (or such shorter period
when all Exchange Notes received by Participating Broker-
Dealers in exchange for Registrable Notes acquired for their
own account as a result of market-making or other trading
activities have been disposed of by such Participating Broker-
Dealers or such longer period if extended pursuant to the last
paragraph of Section 5 hereof) (the "APPLICABLE PERIOD"); and
Participating Broker-Dealers shall not be authorized by the
Company to, and shall not, deliver such Prospectus after such
period in connection with resales contemplated by this
Section 2(b) or otherwise; it being understood that,
notwithstanding anything in this Agreement to the contrary, the
Company shall not be required to comply with any provision of
this Section 2(b) or any other provision of this Agreement
relating to the distribution of Exchange Notes by Participating
Broker-Dealers, to the extent that the Company reasonably
concludes that compliance with such provision is no longer
required by applicable law or interpretation of the Staff of
the SEC.
If, prior to the last date for which exchanges are
accepted pursuant to the Exchange Offer, the Initial Purchasers
hold any Notes acquired by them and having the status of an
unsold allotment in the initial distribution, the Company
shall, upon the request of any of the Initial Purchasers,
simultaneously with the delivery of the Exchange Notes in the
Exchange Offer issue and deliver to the Initial Purchasers in
exchange (the "PRIVATE EXCHANGE") for such Notes held by the
Initial Purchasers a like principal amount of debt securities
of the Company that are identical in all material respects to
the Exchange Notes (the "PRIVATE EXCHANGE NOTES") (and which
are issued pursuant to the same indenture as the Exchange
Notes) except for the placement of a restrictive legend on such
Private Exchange Notes. The Private Exchange Notes shall bear
the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private
Exchange Notes will accrue from the last interest payment date
on which interest was paid on the Notes surrendered in exchange
therefor or, if no interest has been paid on the Notes, from
the Issue Date.
In connection with the Exchange Offer, the Company
shall:
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(1) mail to each Holder a copy of the Prospectus
forming part of the Exchange Registration Statement,
together with an appropriate letter of transmittal and
related documents;
(2) utilize the services of a depositary for the
Exchange Offer with an address in the Borough of
Manhattan, The City of New York;
(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 in all material respects with
all applicable laws, rules and regulations.
As soon as practicable after the close of the
Exchange Offer or the Private Exchange, as the case may be, the
Company shall:
(1) accept for exchange all Notes tendered and not
validly withdrawn pursuant to the Exchange Offer or the
Private Exchange;
(2) deliver to the Trustee for cancellation all
Notes so accepted for exchange; and
(3) cause the Trustee to authenticate and deliver
promptly to each Holder of 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.
The Exchange Notes and the Private Exchange Notes may
be issued under (i) the Indenture or (ii) an indenture
identical in all material respects to the Indenture, which in
either event shall provide that (1) the Exchange Notes shall
not be subject to the transfer restrictions applicable to the
Notes or the requirement of the Company to pay Additional
Interest thereon and (2) the Private Exchange Notes shall be
subject to the transfer restrictions applicable to the Notes.
The Indenture or such indenture shall provide that the Exchange
Notes, the Private Exchange Notes and the Notes shall vote and
consent together on all matters as one class and that none of
the Exchange Notes, the Private Exchange Notes or the Notes
will
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have the right to vote or consent as a separate class on
any matter.
(c) If (i) because of any change in law or in
currently prevailing interpretations of the Staff of the SEC,
the Company is not permitted to effect an Exchange Offer,
(ii) the Exchange Offer is not consummated within 150 days of
the Issue Date, (iii) any holder of Private Exchange Notes so
requests at any time after the consummation of the Private
Exchange or (iv) in the case of any Holder that participates in
the Exchange Offer, such Holder does not receive Exchange Notes
on the date of the exchange that may be sold without
restriction under federal securities laws (other than due
solely to the status of such Holder as an affiliate of the
Company within the meaning of the Securities Act), then the
Company shall promptly deliver written notice thereof (the
"SHELF NOTICE") to the Trustee and, in the case of clauses (i)
and (ii), all Holders, in the case of clause (iii), the Holders
of the Private Exchange Notes and, in the case of clause (iv),
the affected Holder, and shall file a Shelf Registration
pursuant to Section 3 hereof.
3. SHELF REGISTRATION
If a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) SHELF REGISTRATION. The Company shall file with
the SEC prior to the Filing Date a Registration Statement for
an offering to be made on a continuous basis pursuant to Rule
415 covering all of the Registrable Notes (the "SHELF
REGISTRATION"). The Shelf Registration shall be on Form S-3 or
another appropriate form permitting registration of such
Registrable Notes for resale by Holders in the manner or
manners designated by them (including, without limitation, not
more than one underwritten offering). The Company shall not
permit any securities other than the Registrable Notes to be
included in the Shelf Registration.
The Company shall use its best efforts to cause the
Shelf Registration to be declared effective under the
Securities Act on or prior to the Effectiveness Date and shall
use its reasonable efforts to keep the Shelf Registration
continuously effective under the Securities Act until the date
which is three years from the Issue Date, subject to extension
pursuant to the last paragraph of Section 5 hereof (the
"EFFECTIVENESS PERIOD"), or such shorter period ending when all
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Registrable Notes covered by the Shelf Registration have been
sold in the manner set forth and as contemplated in the Shelf
Registration.
(b) WITHDRAWAL OF STOP ORDERS. If the Shelf
Registration ceases to be effective for any reason at any time
during the Effectiveness Period (other than because of the sale
of all of the securities registered thereunder), the Company
shall use its best efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof.
(c) SUPPLEMENTS AND AMENDMENTS. The Company shall
promptly supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable
to the registration form used for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount (the
"MAJORITY HOLDERS") of the Registrable Notes covered by such
Registration Statement or by any underwriter of such
Registrable Notes.
4. ADDITIONAL INTEREST
(a) The Company and the Initial Purchasers agree
that the Holders of Registrable Notes will suffer damages if
the Company fails to fulfill its obligations under Section 2 or
Section 3 hereof and that it would not be feasible to ascertain
the extent of such damages with precision. Accordingly, the
Company agrees to pay, as liquidated damages, additional
interest on the Notes ("ADDITIONAL INTEREST") under the
circumstances and to the extent set forth below:
(i) if (A) neither the Exchange Registration
Statement nor the Shelf Registration has been
filed on or prior to the applicable Filing Date or
(B) notwithstanding that the Company has
consummated or will consummate an Exchange Offer,
the Company is required to file a Shelf
Registration Statement and such Shelf Registration
Statement is not filed on or prior to the Filing
Date applicable thereto, then, commencing on the
day after the Filing Date applicable thereto,
Additional Interest shall accrue on the Notes over
and above the stated interest at a rate of 0.50%
per annum;
(ii) if (A) neither the Exchange Registration
Statement nor the Shelf Registration is declared
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effective by the SEC on or prior to the relevant
Effectiveness Date or (B) notwithstanding that the
Company has consummated or will consummate the
Exchange Offer, the Company is required to file a
Shelf Registration and such Shelf Registration is
not declared effective by the SEC on or prior to
the Effectiveness Date in respect of such Shelf
Registration, then, commencing on the day after
the such Effectiveness Date, Additional Interest
shall accrue on the Notes included or which should
have been included in such Registration Statement
over and above the stated interest at a rate of
0.50% per annum; and
(iii) if (A) the Company has not exchanged
Exchange Notes for all Notes validly tendered in
accordance with the terms of the Exchange Offer on
or prior to the 150th day after the Issue Date or
(B) the Exchange Registration Statement ceases to
be effective at any time prior to the time that
the Exchange Offer is consummated or (C) if
applicable, the Shelf Registration has been
declared effective and such Shelf Registration
ceases to be effective at any time during the
Effectiveness Period, then Additional Interest
shall accrue (over and above any interest
otherwise payable on such Notes) at a rate of
0.50% per annum on (x) the 151st day after the
Issue Date with respect to the Notes validly
tendered and not exchanged by the Company, in the
case of (A) above, or (y) the day the Exchange
Registration Statement ceases to be effective in
the case of (B) above, or (z) the day such Shelf
Registration ceases to be effective in the case of
(C) above (it being understood and agreed that,
notwithstanding any provision to the contrary, so
long as any Note which is the subject of a Shelf
Notice is then covered by an effective Shelf
Registration Statement, no Additional Interest
shall accrue on such Note);
PROVIDED, HOWEVER, that the Additional Interest rate on any
affected Note may not exceed at any one time in the aggregate
0.50% per annum; and PROVIDED, FURTHER, that (1) upon the
filing of the Exchange Registration Statement or a Shelf
Registration (in the case of clause (i) of this Section 4(a)),
(2) upon the effectiveness of the Exchange Registration
Statement or the
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Shelf Registration (in the case of clause (ii) of this
Section 4(a)), or (3) upon the exchange of Exchange Notes
for all Notes tendered and not validly withdrawn (in the
case of clause (iii)(A) of this Section 4(a)), or upon the
effectiveness of the Exchange Registration Statement which had
ceased to remain effective (in the case of (iii)(B) of this
Section 4(a)), or upon the effectiveness of the Shelf
Registration which had ceased to remain effective (in the case
of (iii)(C) of this Section 4(a)), Additional Interest on the
affected Notes as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to accrue.
(b) The Company shall notify the Trustee within
three business days after each and every date on which an event
occurs in respect of which Additional Interest is required to
be paid (an "EVENT DATE"). Any amounts of Additional Interest
due pursuant to clauses (a)(i), (a)(ii) or (a)(iii) of this
Section 4 will be payable to the Holders of affected Notes in
cash semi-annually on each March 15 and September 15 (to the
holders of record on the March 1 and September 1 immediately
preceding such dates), commencing with the first such date
occurring after any such Additional Interest commences to
accrue. The amount of Additional Interest will be determined
by multiplying the applicable Additional Interest rate by the
principal amount of the affected Registrable Notes of such
Holders, multiplied by a fraction, the numerator of which is
the number of days such Additional Interest rate was applicable
during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months and, in the case of a partial
month, the actual number of days elapsed), and the denominator
of which is 360.
5. REGISTRATION PROCEDURES
In connection with the filing of any Registration
Statement pursuant to Sections 2 or 3 hereof, the Company shall
effect such registration(s) to permit the sale of the
securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto
and in connection with any Registration Statement filed by the
Company hereunder, the Company shall:
(a) Prepare and file with the SEC prior to the
Filing Date a Registration Statement or Registration Statements
as prescribed by Sections 2 or 3 hereof, to use its best
efforts to cause each such Registration Statement to become
effective and to use its reasonable efforts to cause such
Registration
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Statement to remain effective as provided herein;
PROVIDED, HOWEVER, that, if (1) such filing is pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof 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 Registration
Statement or Prospectus or any amendments or supplements
thereto, the Company shall, if requested, furnish to and afford
the Holders of the Registrable Notes covered by such
Registration Statement or each such Participating Broker-
Dealer, as the case may be, one counsel selected by the
Majority Holders (the "MAJORITY COUNSEL") and the managing
underwriters of an underwritten offering of Registrable Notes,
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 Company shall not file any Registration Statement
or Prospectus or any amendments or supplements thereto in
respect of which the Holders must be afforded an opportunity to
review prior to the filing of such document, if the Majority
Holders of the Registrable Notes covered by such Registration
Statement, or any such Participating Broker-Dealer, as the case
may be, the Majority Counsel, or the managing underwriters, if
any, shall reasonably object.
(b) Prepare and file with the SEC such amendments
and post-effective amendments to each Shelf Registration or
Exchange Registration Statement, as the case may be, as may be
necessary to keep such Registration Statement continuously
effective for the Effectiveness Period or the Applicable Period
or until consummation of the Exchange Offer, as the case may
be; cause the related 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 force) 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 Registration Statement as so amended
or in such Prospectus as so supplemented and with respect to
the subsequent resale of any securities being sold by a
Participating Broker-Dealer covered by any such Prospectus; the
Company will be deemed not to have used its reasonable efforts
to cause the Exchange Offer Registration Statement or any Shelf
Registration Statement, as the case may be, to remain effective
during the Applicable Period or the Effectiveness Period, as the
case may
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be, if the Company voluntarily takes any action that would result in
the Holder of Registrable Notes covered thereby or Participating
Broker-Dealers seeking to sell Exchange Notes not being able to sell
such Registrable Notes or Exchange Notes, as the case may be,
during that period unless (A) such action is, in the
reasonable judgment of the Company, required by applicable law
(including, without limitation, any interpretation of the SEC) or
(B) such action is taken by the Company in good faith and for valid
business reasons (not including avoidance of the Company's obligations
hereunder), including the acquisition or divestiture of assets, so long as
the Company promptly complies with the requirements of Section
5(k) hereof and the last paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof 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 the selling Holders of
Registrable Notes, or each such Participating Broker-Dealer, as
the case may be, the Majority Counsel and the managing
underwriters of an underwritten offering of Registrable Notes
and their counsel, if any, promptly (but in any event within
three business days) (i) when a Prospectus or any supplement
thereto or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the
Securities Act (including in such notice a written statement
that any Holder may, upon request, obtain, at the sole expense
of the Company, one conformed copy of such Registration
Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to
be incorporated by reference and exhibits), (ii) of the
issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus
or the initiation of any proceedings for that purpose, (iii) if
at any time when a prospectus is required by the Securities Act
to be delivered in connection with sales of the Registrable
Notes or resales of Exchange Notes by Participating Broker-
Dealers upon written notice by any such Participating
Broker-Dealer of a resale the representations and warranties of
the Company contained in any agreement (including any
underwriting agreement), contemplated by Section 5(n) hereof
cease to be true and correct, (iv) of the receipt by the
Company of any notification with respect to the suspension of
the qualification or exemption from qualification
-15-
of a 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 Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the
making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the
case of the Registration Statement, it will not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the
case of the Prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, and (vi) of the determination
by the Company that a post-effective amendment to a
Registration Statement would be appropriate.
(d) Use its reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the
Registration Statement or the qualification (or exemption from
qualification) of any of the Registrable Notes or the Exchange
Notes for sale in any jurisdiction as soon as practicable.
(e) If a Shelf Registration is filed pursuant to
Section 3 and if requested by the managing underwriter or
underwriters (if any), or the Majority Holders 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 as the managing
underwriter or underwriters (if any), such Holders, or counsel
for any of them reasonably request to be included therein,
(ii) make all required filings of such prospectus supplement or
such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective
amendment, and (iii) supplement or make amendments to such
Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof is
-16-
required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, furnish to each selling Holder of
Registrable Notes and to each such Participating Broker-Dealer
who so requests, to the Majority Counsel and to each managing
underwriter of an underwritten public offering of Registrable
Notes and their counsel, if any, at the sole expense of the
Company, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment
thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof is
required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, deliver to each selling Holder of
Registrable Notes, or each such Participating Broker-Dealer, as
the case may be, the Majority Counsel, and to the underwriters,
if any, and such underwriters' counsel, at the sole expense of
the Company, as many copies of the Prospectus or Prospectuses
(including each form of preliminary prospectus) and each
amendment or supplement thereto and any documents incorporated
by reference therein as such Persons may reasonably request;
and, subject to the last paragraph of this Section 5, the
Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders
of Registrable 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.
(h) Prior to any public offering of Registrable
Notes or any delivery of a Prospectus contained in the Exchange
Registration Statement by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, use
its reasonable efforts to register or qualify such Registrable
Notes (and to cooperate with selling Holders of Registrable
Notes or each such Participating Broker-Dealer, as the case may
be, the Majority Counsel, the managing underwriter or
underwriters, if any, and such underwriters' counsel in
connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable
Notes) for
-17-
offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing
underwriter or underwriters of an underwritten offering of
Registrable Notes shall reasonably request in writing;
PROVIDED, HOWEVER, that where Exchange Notes held by
Participating Broker-Dealers or Registrable Notes are offered
other than through an underwritten offering, the Company agrees
to cause its counsel to perform Blue Sky investigations and
file registrations and qualifications required to be filed
pursuant to this Section 5(h); keep each such registration or
qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept
effective and do any and all other acts or things reasonably
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, HOWEVER, that the
Company shall not 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 Shelf Registration is filed pursuant to
Section 3 hereof, 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 (except any
customary legend borne by securities held through The
Depository Trust Company or any similar depository) and shall
be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Notes to be in such
denominations (consistent with the provisions of the Indenture
and the officers' certificate establishing the form and terms
of the Notes pursuant to the Indenture) and registered in such
names as the managing underwriter or underwriters, if any, or
Holders may reasonably request.
(j) Use its reasonable efforts to cause the
Registrable Notes covered by the Registration Statement to be
registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the Holders
thereof or the underwriter or underwriters, if any, to dispose
of such Registrable Notes, except as may be required solely as a
-18-
consequence of the nature of a selling Holder's business, in
which case the Company will cooperate in all reasonable
respects with the filing of such Registration Statement and the
granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof 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 5(c)(v) or 5(c)(vi) hereof, as
promptly as practicable prepare and (subject to Section 5(a)
hereof) file with the SEC, at the sole expense of the Company,
a supplement or post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Notes
being sold thereunder or to the purchasers of the Exchange
Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such 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 Registration Statement or the
Exchange Notes, as the case may be, to be rated with the
appropriate rating agencies, if so requested by the Holders of
a majority in aggregate principal amount of Registrable Notes
covered by such Registration Statement or the Exchange Notes,
as the case may be, or the managing underwriter or
underwriters, if any.
(m) Prior to the effective date of the first
Registration Statement relating to the Registrable Notes,
(i) provide the Trustee with certificates for the Registrable
Notes or Exchange Notes, as the case may be, in a form eligible
for deposit with The Depository Trust Company and (ii) provide
a CUSIP number for the Registrable Notes or Exchange Notes, as
the case may be.
(n) In connection with any underwritten offering of
Registrable Notes pursuant to a Shelf Registration, negotiate
in good faith and enter into not more than one underwriting
-19-
agreement, which shall be in form and scope as is customary in
underwritten offerings of debt securities with similar credit
ratings to the Notes and take all such other actions as are
reasonably requested by the managing underwriter or
underwriters in order to facilitate the registration or the
disposition of such Registrable Notes and, in such connection,
(i) make such representations and warranties to, and covenants
with, the underwriters with respect to the business of the
Company and its subsidiaries and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten
offerings of debt securities with similar credit ratings to the
Notes, and confirm the same in writing if and when requested;
(ii) obtain the written opinion of counsel to the Company
(which may be the Company's General Counsel) and written
updates thereof in form, scope and substance reasonably
satisfactory to the managing underwriter or underwriters,
addressed to the underwriters covering the matters customarily
covered in opinions requested in underwritten offerings of debt
securities with similar credit ratings to the Notes and such
other matters as may be reasonably requested by the managing
underwriter or underwriters; (iii) obtain "cold comfort"
letters and updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants
of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial
statements and financial data are, or are required to be,
included or incorporated by reference in the Registration
Statement), addressed to each of the underwriters, such letters
to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection
with underwritten offerings of debt securities with similar
credit ratings to the Notes and such other matters as
reasonably requested by the managing underwriter or
underwriters; and (iv) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 7
hereof (or such other provisions and procedures acceptable to
the Majority Holders of Registrable Notes covered by such
Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section. The above shall be done
at the closing under such underwriting agreement, or as and to
the extent required thereunder. Notwithstanding the foregoing,
the Company shall not be required to (A) enter into (x) more
than one
-20-
underwriting agreement with respect to Registrable Notes
registered under the Shelf Registration Statement or (y)
any underwriting agreement with respect to the sale of any
Private Exchange Notes pursuant to a Shelf Registration
Statement or (B) enter into any sales agency agreements,
distribution agreements or other similar agreements whatsoever
with respect to the Registrable Notes.
(o) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof is
required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, and to the extent customary in
connection with a "due diligence" investigation for an offering
of debt securities with a similar credit rating, make available
for inspection by representatives approved by the Majority
Holders of such Registrable Notes being sold, or such
Participating Broker-Dealers, as the case may be, any
underwriter participating in any such disposition of
Registrable Notes, if any, one counsel to the underwriters, if
any (collectively, the "INSPECTORS"), at the offices where
normally kept, during reasonable business hours, all financial
and other records, pertinent corporate documents and
instruments of the Company and its subsidiaries (collectively,
the "RECORDS") as shall be reasonably necessary to enable them
to exercise any applicable due diligence responsibilities.
Records which the Company determines, in good faith, to be
confidential and any Records which it notifies the Inspectors
are confidential shall not be disclosed by the Inspectors
unless (i) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court of competent
jurisdiction, (iii) disclosure of such information is, in the
opinion of counsel for any Inspector, necessary or advisable in
connection with any action, claim, suit or proceeding, directly
or indirectly, involving or potentially involving such
Inspector and arising out of, based upon, relating to, or
involving this Agreement, or any transactions contemplated
hereby or arising hereunder, or (iv) the information in such
Records has been made generally available to the public. Each
selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to agree that
information obtained by it as a result of such inspections
shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the
Company unless and until such information is
-21-
generally available to the public. Each selling Holder of such
Registrable Notes and each such Participating Broker-Dealer
will be required to further agree that it will, upon learning
that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow
the Company to undertake appropriate action to prevent
disclosure of the Records deemed confidential at the Company's
sole expense.
(p) Provide an indenture trustee for the Registrable
Notes or the Exchange Notes, as the case may be, and use its
reasonable efforts to cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may
be, to be qualified under the TIA not later than the effective
date of the Exchange Offer or the first Registration Statement
relating to the Registrable Notes; and in connection therewith,
cooperate with the trustee under any such indenture and the
Holders of the Registrable Notes, to effect such changes to
such indenture as may be required for such indenture to be so
qualified in accordance with the terms of the TIA; and execute,
and use its reasonable efforts to cause such trustee to
execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed
with the SEC to enable such indenture to be so qualified in a
timely manner.
(q) Comply with all applicable rules and regulations
of the SEC and make generally available to its securityholders
earnings statements satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45
days after the end of any 12-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 Company after the effective
date of a Registration Statement, which statements shall cover
said 12-month periods.
(r) If an Exchange Offer or a Private Exchange is to
be consummated, upon delivery of the Registrable Notes by
Holders to the Company (or to such other Person as directed by
the Company) in exchange for the Exchange Notes or the Private
Exchange Notes, as the case may be, the Company shall ▇▇▇▇, or
cause to be marked, on such Registrable Notes that such
-22-
Registrable Notes are being cancelled in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may
be; 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 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 National Association of Securities
Dealers, Inc. (the "NASD").
(t) Use its reasonable efforts to take all other
steps necessary or advisable to effect the registration of the
Registrable Notes covered by a Registration Statement
contemplated hereby.
The Company may require each seller of Registrable
Notes as to which any Registration is being effected to furnish
to the Company such information regarding such seller and the
distribution of such Registrable Notes as the Company may, from
time to time, reasonably request. The Company may exclude from
such registration the Registrable Notes of any seller who
unreasonably fails to furnish such information within a
reasonable time after receiving such request. Each seller as
to which any Shelf Registration is being effected agrees to
furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished
to the Company by such seller not materially misleading.
Each Holder of Registrable 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
actual receipt of any notice from the Company of the happening
of any event of the kind described in Section 5(c)(ii),
5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such Holder will
forthwith discontinue disposition of such Registrable Notes
covered by such Registration Statement or Prospectus or
Exchange Notes to be sold by such Holder or Participating
Broker-Dealer, as the case may be, until such Holder's or
Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k)
hereof, or until it is advised in writing (the "ADVICE") by the
Company that the use of the applicable Prospectus may be
resumed, and has received copies of any amendments or
supplements thereto. In the event the Company shall give any
such notice, each of the Effectiveness Period
-23-
and the Applicable Period shall be extended by the number of days
during such periods from and including the date of the giving
of such notice to and including the date when each seller of
Registrable Notes covered by such Registration Statement or
Exchange Notes to be sold by such Participating Broker-Dealer,
as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(k)
hereof or (y) the Advice.
6. REGISTRATION EXPENSES
(a) All fees and expenses incident to the
performance of or compliance with this Agreement by the Company
shall be borne by the Company whether or not the Exchange Offer
or a Shelf Registration is filed or becomes effective,
including, without limitation, (i) all registration and filing
fees (including, without limitation, (A) fees with respect to
filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance
with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in
connection with Blue Sky qualifications of the Registrable
Notes or Exchange Notes and determination of the eligibility of
the Registrable Notes or Exchange Notes for investment under
the laws of such jurisdictions (x) where the holders of
Registrable Notes are located, in the case of the Exchange
Notes, or (y) as provided in Section 5(h) hereof, in the case
of Registrable Notes or Exchange Notes to be sold by a
Participating Broker-Dealer during the Applicable Period)),
(ii) printing expenses, including, without limitation, expenses
of printing certificates for Registrable Notes or Exchange
Notes in a form eligible for deposit with The Depository Trust
Company and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriter or
underwriters, if any, by the Majority Holders of the
Registrable Notes included in any Registration Statement or
sold by any Participating Broker-Dealer, as the case may be,
(iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and, subject to the
provisions of Section 6(b) hereof, reasonable fees and
disbursements of counsel for the sellers of Registrable Notes,
(v) fees and disbursements of all independent certified public
accountants referred to in Section 5(n)(iii) hereof (including,
without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance),
(vi) rating agency fees, if any, and any fees associated with
making the Registrable Notes or Exchange Notes eligible for
trading through The Depository
-24-
Trust Company, (vii) Securities Act liability insurance, if the Company
desires such insurance, (viii) fees and expenses of all other Persons
retained by the Company, (ix) internal expenses of the Company (including,
without limitation, all salaries and expenses of officers and
employees of the Company performing legal or accounting
duties), (x) the expense of any annual audit, (xi) the fees and
expenses incurred in connection with the listing of the
securities to be registered on any securities exchange, if
applicable, and (xii) the expenses relating to printing, word
processing and distributing all Registration Statements, any
underwriting agreement, indentures and any other documents
necessary in order to comply with this Agreement.
(b) The Company shall (i) reimburse the Holders of
the Registrable Notes being registered pursuant to this
Agreement for the reasonable fees and disbursements, in an
aggregate amount not to exceed $25,000, of not more than one
counsel (in addition to appropriate local counsel) chosen by
the Majority Holders of the Registrable Notes to be included in
such Registration Statement and (ii) reimburse out-of-pocket
expenses (other than legal expenses) of Holders of Registrable
Notes incurred in connection with the registration and sale of
the Registrable Notes pursuant to a Shelf Registration or in
connection with the exchange of Registrable Notes pursuant to
the Exchange Offer.
7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold
harmless each Holder of Registrable Notes offered pursuant to a
Shelf Registration Statement and each Participating Broker-
Dealer selling Exchange Notes during the Applicable Period, the
affiliates, directors, officers, agents, representatives and
employees of each such Person or its affiliates, and each other
Person, if any, who controls any such Person or its affiliates
within the meaning of either Section 15 of the Securities Act
or Section 20(a) of the Exchange Act (each, a "PARTICIPANT"),
from and against any and all losses, liabilities, claims,
damages and expenses whatsoever as incurred (including but not
limited to reasonable attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any
claim or litigation), joint or several, to which they or any of
them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages
-25-
or expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement
pursuant to which the offering of such Registrable Notes or
Exchange Notes, as the case may be, is registered, or in any
supplement thereto or amendment thereof, or any related
Prospectus, or any supplement thereto or amendment thereof, or
any related preliminary Prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the
extent but only to the extent that any such loss, liability,
claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in
conformity with written information relating to any Participant
furnished to the Company in writing by or on behalf of such
Participant expressly for use therein; PROVIDED, FURTHER, that
such indemnity agreement with respect to any preliminary
Prospectus shall not inure to the benefit of any Participant
from whom the Person asserting any loss, liability, claim,
damage or expense purchased Registrable Notes or Exchange
Notes, as the case may be, if a copy of the Prospectus filed as
part of an effective Registration Statement (as then amended or
supplemented and furnished by the Company to such Participant)
was not sent or given by or on behalf of such Participant to
such Person, if such is required by law, at or prior to the
sale of such Registrable Notes or Exchange Notes, as the case
may be, and if such Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss,
liability, claim, damage or expense. This indemnity agreement
will be in addition to any liability which the Company may
otherwise have including under this Agreement.
(b) Each Participant agrees, severally and not
jointly, to indemnify and hold harmless the Company, its
directors and officers and each Person who controls the Company
within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act to the same extent as the
foregoing indemnity from the Company to each Participant, but
only (i) with reference to information relating to such
Participant furnished to the Company in writing by or on behalf
of such Participant expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto,
or any preliminary prospectus or (ii) with respect to any
untrue
-26-
statement or representation made by such Participant in
writing to the Company.
(c) Promptly after receipt by any Person in respect
of which indemnity may be sought under subsection (a) or (b)
above of notice of the commencement of any action, such Person
(the "INDEMNIFIED PERSON") shall, if a claim in respect thereof
is to be made against the Person whom such indemnity may be
sought (the "INDEMNIFYING PERSON") under such subsection,
notify each Indemnifying Person against whom indemnification is
to be sought in writing of the commencement thereof (but the
failure so to notify an Indemnifying Person shall not relieve
it from any liability which it may have under paragraph (a) or
(b) above). In case any such action is brought against any
Indemnified Person, and it notifies an Indemnifying Person of
the commencement thereof, the Indemnifying Person will be
entitled to participate therein, and to the extent it may elect
by written notice delivered to the Indemnified Person promptly
after receiving the aforesaid notice from such Indemnified
Person, to assume the defense thereof with counsel satisfactory
to such Indemnified Person. Notwithstanding the foregoing, the
Indemnified Person or parties shall have the right to employ
its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such
Indemnified Person or parties unless (i) the employment of such
counsel shall have been authorized in writing by one of the
Indemnifying Persons in connection with the defense of such
action, (ii) the Indemnifying Persons shall not have employed
counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or
(iii) such Indemnified Person or Persons shall have reasonably
concluded that there may be defenses available to it or them
which are different from or additional to those available to
one or all of the Indemnifying Persons (in which case the
Indemnifying Persons shall not have the right to direct the
defense of such action on behalf of the Indemnified Person or
Persons ), in any of which events such fees and expenses shall
be borne by the Indemnifying Persons. Anything in this
subsection to the contrary notwithstanding, an Indemnifying
Person shall not be liable for any settlement of any claim or
action effected without its written consent; PROVIDED, HOWEVER,
that such consent was not unreasonably withheld.
(d) In order to provide for contribution in
circumstances in which the indemnification provided for in the
preceding paragraphs of this Section 7 is for any reason held
to be unavailable from any Indemnifying Person or is
insufficient
-27-
to hold harmless an Indemnified Person thereunder, each Indemnifying
Person shall contribute to the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation,
legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses
suffered by the Company any contribution received by the
Company from persons, other than the Indemnified Persons, who
may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, officers and directors of
the Company) as incurred to which the Indemnified Party may be
subject, in such proportions as is appropriate to reflect the
relative benefits received by the Indemnifying Person or
Persons, on the one hand, and the Indemnified Person or Persons
on the other from the offering of the Notes or, if such
allocation is not permitted by applicable law or
indemnification is not available as a result of the
Indemnifying Person not having received notice as provided in
the preceding paragraphs of this Section 7, in such proportion
as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the
Indemnifying Person or Persons, on the one hand, and the
Indemnified Person or Persons 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
parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or
the Participant and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission. The parties agree that it would
not be just and equitable if contribution pursuant to this
paragraph (d) were determined by pro rata allocation (even if
the Participants were treated as one entity for such purpose)
or by any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), (i) in no
case shall a Participant be required to contribute any amount
in excess of the amount by which proceeds received by such
Participant from sales of Registrable Notes or Exchange
Securities, as the case may be, exceeds the amount of damages
that such Participant has otherwise been required to pay or has
paid by reason of such untrue statement or alleged untrue
statement
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or omission or alleged omission, and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action,
suit or proceeding against such party in respect of which a
claim for contribution may be made against another party or
parties, notify each party or parties from whom contribution
may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may
have under this paragraph (d) or otherwise. No party shall be
liable for contribution with respect to any action or claim
settled without its consent; PROVIDED, HOWEVER, that such
consent was not unreasonably withheld.
8. RULE 144 AND 144A
The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC
thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if
at any time the Company is not required to file such reports,
it will, upon the request of any Holder of Registrable Notes,
make publicly available annual reports and such information,
documents and other reports of the type specified in Sections
13 and 15(d) of the Exchange Act. The Company further
covenants for so long as any Registrable Notes remain
outstanding, to make available to any Holder or beneficial
owner of Registrable Notes in connection with any sale thereof
and any prospective purchaser of such Registrable Notes from
such Holder or beneficial owner the information required by
Rule 144A(d)(4) under the Securities Act in order to permit
resales of such Registrable Notes pursuant to Rule 144A.
9. UNDERWRITTEN REGISTRATION
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers
that will manage the offering will be selected by the Majority
Holders of such Registrable Notes included in such offering and
reasonably acceptable to the Company.
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No Holder of Registrable Notes may participate in any
underwritten registation hereunder unless such Holder
(a) agrees to sell such Holder'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 required under the terms of such underwriting
arrangements.
10. MISCELLANEOUS
(a) NO INCONSISTENT AGREEMENTS. The Company has not
entered, as of the date hereof, and the Company will not, after
the date of this Agreement, enter into any agreement with
respect to any of its securities that is inconsistent with the
rights granted to the Holders of Registrable Notes in this
Agreement or otherwise conflicts with the provisions hereof.
The Company has not entered and the Company will not enter into
any agreement with respect to any of its securities which will
grant to any Person piggy-back registration rights with respect
to a Registration Statement.
(b) ADJUSTMENTS AFFECTING REGISTRABLE NOTES. The
Company will not, directly or indirectly, take any action with
respect to the Registrable Notes as a class that would
adversely affect the ability of the Holders of Registrable
Notes to include such 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 the Holders of not less than a majority in aggregate
principal amount of the then outstanding Registrable Notes.
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 sold pursuant to a
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 sold by such Holders pursuant to such Registration
Statement; PROVIDED, HOWEVER, that the provisions of this
sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding
sentence.
-30-
(d) NOTICES. All notices and other communications
(including without limitation any notices or other
communications to the Trustee) provided for or permitted
hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Registrable Notes
or 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 under the Indenture, with a
copy in like manner to the Initial Purchasers as
follows:
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
2. if to the Initial Purchasers, at the
address specified in Section 10(d)(1);
3. if to the Company, as follows:
Fingerhut Companies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with copies to:
▇▇▇▇▇▇ & Whitney LLP
Pillsbury Center South
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
-31-
All such notices and communications shall be deemed
to have been duly given: when delivered by hand, if personally
delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; one business day after being
timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person
giving the same to the Trustee at the address and in the manner
specified in such Indenture.
(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; PROVIDED, HOWEVER, that
this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent
such successor or assign holds Registrable Notes.
(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.
(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, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
(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 best
efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by
such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions,
covenants
-32-
and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or
unenforceable.
(j) NOTES HELD BY THE COMPANY OR ITS AFFILIATES.
Whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder,
Registrable Notes held by the Company or its affiliates (as
such term is defined in Rule 405 under the Securities Act)
shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(k) THIRD PARTY BENEFICIARIES. Holders of
Registrable Notes and Participating Broker-Dealers are intended
third party beneficiaries of this Agreement and this Agreement
may be enforced by such Persons.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
FINGERHUT COMPANIES, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
By: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
By:/s/▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Senior Managing Director
