EXHIBIT 3
[EXECUTION VERSION]
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AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
Dated as of April 12, 2002
by and among
XXXXXX SERVICES CORPORATION
and
EACH SECURITIES HOLDER REFERRED TO HEREIN
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TABLE OF CONTENTS
Page
Section 1. Definitions.................................................3
1.1. Defined Terms...............................................3
Section 2. Demand Registration Rights of Securities Holders............9
2.1. Demand Registration Rights..................................9
2.2. Determination...............................................9
2.3. Notices; Minimum Registerable Amounts......................10
2.4. Discretion of Securities Holder............................11
2.5. Allocation Among Initiating Securities Holders.............11
2.6. Piggyback Rights of Securities Holders and the Company.....12
2.7. Limitation on Registration Rights..........................12
Section 3. Company Sale Events........................................13
3.1. Determination..............................................13
3.2. Notice Registerable........................................13
3.3. Piggyback Rights of Securities Holders.....................13
3.4. Discretion of the Company..................................14
Section 4. Black-Out Periods..........................................14
4.1. Black-Out Periods for Securities Holders...................14
Section 5. Agreements Concerning Offerings............................14
5.1. Obligations of Securities Holders..........................14
5.2. Obligations of the Company.................................15
5.3. Agreements Related to Offerings............................16
5.4. Certain Expenses...........................................18
5.5. Public Reporting; Rule 144.................................19
5.6. Limitations on Subsequent Registration Rights..............20
5.7. Indemnification and Contribution...........................20
5.8. Underwritten Offerings.....................................26
5.9. Transfer of Rights Under this Agreement; Transfers of
Registerable Common........................................26
5.10. Termination of Rights......................................27
Section 6. Sequencing of Public Sale Events...........................27
6.1. Effective Notice Period....................................27
6.2. Restrictive Legend on Certificates.........................28
Section 7. Representations and Warranties of the Company..............28
Section 8. Representations and Warranties of the Securities Holders...32
Section 9. Delivery of Comfort Letter and Legal Opinion...............33
Section 10. Preemptive Rights..........................................34
Section 11. Miscellaneous..............................................35
11.1. Notices....................................................35
11.2. Amendments and Waivers.....................................35
11.3. Termination................................................35
11.4. Survival of Representations and Warranties.................36
11.5. Headings...................................................36
11.6. Counterparts...............................................36
11.7. GOVERNING LAW..............................................36
11.8. Adjustment of Shares.......................................36
11.9. No Inconsistent Agreements.................................36
11.10. Severability...............................................36
11.11. Nominee; Benefits..........................................36
11.12. ENTIRE AGREEMENT...........................................36
11.13. Listing of PIK Notes Common Stock..........................37
11.14. No Required Sale...........................................37
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the
"Registration Rights Agreement"), dated as of April 12, 2002, by and among
XXXXXX SERVICES CORPORATION, a corporation organized under the laws of the State
of Delaware (the "Company"), and each SECURITIES HOLDER (as defined in
subsection 1.1).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company entered into (i) a registration rights
agreement (the "PIK Notes Original Registration Rights Agreement"), dated as of
March 31, 2000, with certain holders of the PIK Notes (as herein defined), and
(ii) a registration rights agreement (the "Common Stock Original Registration
Rights Agreement"), dated March 31, 2000, with certain holders of the Company's
Common Stock, in each case pursuant to the First Amended Joint Plan of
Reorganization of Philips Services (Delaware), Inc. et al., dated as of
September 21, 1999 (the "Plan"); and
WHEREAS, the Company and the parties to the PIK Notes Original
Registration Rights Agreement and the Common Stock Original Registration Rights
Agreement wish to terminate such agreements, and amend and restate those
agreements as in their entirety as set forth herein, and to provide registration
rights with respect to the Company's securities to certain additional parties.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, the parties hereto hereby agree as follows:
Section 1. Definitions.
1.1. Defined Terms. (a) As used in this Agreement, the terms defined in the
caption and the recitals shall have the meanings set forth therein, and the
following terms shall have the following meanings:
"Affiliate" shall have the meaning ascribed thereto in Rule
12b-2 under the Exchange Act as in effect on the date hereof.
"Agreement" shall mean this Amended and Restated Registration
Rights Agreement, as amended, supplemented or otherwise modified from time to
time.
"Canadian Prospectus" shall mean a Preliminary Prospectus or
Prospectus, as applicable, in respect of which a receipt has been issued by the
Canadian Securities Authority in each of the provinces of Canada in which the
document has been filed.
"Canadian Securities Authorities" shall mean the securities
regulatory authorities in each of the provinces of Canada, and "Canadian
Securities Authority" shall mean any one of the Canadian Securities Authorities.
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"Canadian Securities Laws" shall mean the securities
legislation of each of the provinces of Canada and the respective regulations
thereunder and the published rules, policy statements, blanket rulings, orders,
notices or national instruments applicable therein.
"Canadian Shelf Procedures" shall mean the procedures
contemplated by National Policy 47 of the Canadian Securities Administrators for
the distribution of securities of eligible issuers under the prompt offering
qualification system, as the same may be amended or superseded from time to
time.
"Cerberus Group" shall mean Xxxxxxxxx, L.L.C., Cerberus
Partners, L.P., Cerberus International, Ltd., their respective Transferee
Affiliates, if any, and any fund or account managed by the foregoing entities.
"Commission" shall mean the United States Securities and
Exchange Commission or any successor thereto.
"Common Stock" shall mean the common stock, par value $0.01
per share, of the Company.
"Company Private Sale Event" shall mean any sale of Common
Stock by the Company which sale is not effected pursuant to a Registration
Statement; excluding, however, any sale or related series of sales of Common
Stock by the Company (a) in connection with the acquisition by the Company of
another company or business or investment by the Company in any joint venture or
(b) pursuant to any "employee benefit plan" within the meaning of Rule 405 under
the Securities Act adopted by the Company or any other member of the Xxxxxx
Group.
"Company Public Sale Event" shall mean any sale by the Company
of Common Stock pursuant to (i) a Registration Statement filed by the Company
(other than a Registration Statement filed by the Company on Form S-4 or Form
S-8) or (ii) a Canadian Prospectus filed by the Company (other than in respect
of shares of Common Stock issued (a) in connection with an acquisition by the
Company of another company or business or an investment by the Company in a
joint venture or (b) pursuant to an "employee benefit plan" within the meaning
of Rule 405 under the Securities Act adopted by the Company or any other member
of the Xxxxxx Group.)
"Company Sale Notice" shall mean a Notice of Offering from the
Company to each Securities Holder stating that the Company proposes to effect a
Company Public Sale Event or a Company Private Sale Event, as the case may be.
"Currently-Held Common Stock" shall mean Common Stock held by
the Securities Holders originally party to this Agreement as of the date hereof.
"Demand Registration" shall mean any Registration and/or
Qualification of Registerable Common pursuant to a Registration Statement filed
by the Company in accordance with the provisions of subsection 2.2.
"Effective Notice Period" shall have the meaning assigned to
such term in subsection 6.1.
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"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any successor legislation thereto.
"Form S-3" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any successor form
thereto.
"Form S-4" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any successor form
thereto.
"Form S-8" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any successor form
thereto.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Group" shall mean each of the Icahn Group and the Cerberus
Group.
"Icahn Group" shall mean American Real Estate Holdings, L.P.,
High River Limited Partnership, Meadow Walk Limited Parnership, and their
respectiveTransferee Affiliates, if any.
"Initiating Securities Holders" shall have the meaning
assigned to such term in subsection 2.3(b).
"Material Adverse Change" shall mean, for purposes of
subsections 2.4(b) and (c), any material adverse change in, or the occurrence of
any event which would reasonably be expected to have a material adverse effect
on, the business, condition (financial or otherwise) or prospects of the Xxxxxx
Group taken as a whole (it being understood that a change in general political,
financial, banking or capital market conditions shall not be a "Material Adverse
Change" unless such change has, or would reasonably be expected to have, a
material adverse effect on the Xxxxxx Group as described above).
"Minimum Registerable Amount" shall mean, on any date of
determination thereof, (i) in the case of a Demand Registration other than a
Shelf Registration, twenty-five percent (25%) of the Registerable Common or (ii)
in the case of a Demand Registration that is a Shelf Registration, thirty-seven
and one-half percent (37.5%) of the Registerable Common; provided, that
notwithstanding the foregoing, subject to subsection 5.10, if (x) the Icahn
Group, or (y) the Cerberus Group, owns less than what would otherwise be the
Minimum Registerable Amount, the Minimum Registerable Amount with respect to the
Icahn Group or the Cerberus Group, as applicable, shall be fifty percent (50%)
of the aggregate number of shares of Registerable Common owned thereby.
"NASD" shall mean the National Association of Securities
Dealers, Inc. or any successor thereto.
"Notice of Offering" shall mean a written notice with respect
to (a) a proposed Sale Event pursuant to a Demand Registration, (b) a Company
Public Sale Event or (c) a
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Company Private Sale Event, in each case setting forth (i) the expected maximum
and minimum number of shares of Registerable Common or Common Stock proposed to
be offered and sold, (ii) the lead managing underwriter, if applicable and known
and (iii) the proposed method of distribution and the expected timing of the
offering, including whether the proposed offering will be registered in the
United States, qualified for distribution in Canada, or both.
"Person" shall mean any individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority, limited liability company or other entity of
whatever nature.
"Xxxxxx Group" shall mean the Company together with each
Subsidiary of the Company.
"Piggybacking Notice" shall have the meaning assigned to such
term in subsection 2.6(a)
"Piggybacking Securities Holder" shall have the meaning
assigned to such term in subsection 2.6(a).
"PIK Notes" shall mean the "PIK Notes" issued pursuant to the
Secured PIK/Term Credit Agreement.
"PIK Notes Common Stock" shall mean Common Stock issued or to
be issued upon conversion of interests in the PIK Notes, and any
reclassification thereof.
"Preliminary Prospectus" shall mean (i) each preliminary
prospectus included in a Registration Statement or in any amendment thereto
prior to the date on which such Registration Statement is declared effective
under the Securities Act, including any prospectus filed with the Commission
pursuant to Rule 424(a) under the Securities Act or (ii) each preliminary
prospectus, as the same may be amended prior to the issuance of the final
receipt by the applicable Canadian Securities Authority.
"Prospectus" shall mean each prospectus (i) included in a
Registration Statement at the time it becomes effective (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective Registration Statement in accordance
with Rule 430A), together with any supplement thereto, as filed with, or
transmitted for filing to the Commission pursuant to Rule 424(b) under the
Securities Act or (ii) for which a receipt is issued by the Canadian Securities
Authority in each province in which such document is filed pursuant to any
applicable Canadian Securities Laws (and including, without limitation, the
information that is permitted to have been omitted by National Policy Statement
No. 44 of the Canadian Securities Administrators for the pricing of securities
after the final prospectus is receipted, as the same may be amended or
superseded from time to time).
"Public Sale Event" shall mean a Securities Holder Public Sale
Event or a Company Public Sale Event, as the case may be.
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"Purchase Agreement" shall mean, in connection with any Sale
Event, any written agreement entered into by any Securities Holder providing for
the sale of Registerable Common and/or the Company providing for the sale of
Common Stock.
"Qualification" shall mean the qualification of securities
pursuant to a Canadian Prospectus, for which a final receipt has been issued by
the Securities Regulatory Authority in each province in which such document is
filed.
"Qualifying Common Stock" shall mean (i) Currently-Held Common
Stock, and (ii) Subscription Agreement Common Stock.
"Registerable Common" shall mean with respect to each
Securities Holder (a) Qualifying Common Stock, (b) the shares of PIK Notes
Common Stock issued or issuable upon the conversion of such Securities Holder's
interest in the PIK Notes held by the Securities Holders originally party to
this Agreement as of the date hereof, and (c) any other securities issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, such shares of Registerable Common; excluding
in all cases, however, any shares of Registerable Common from and after the
transfer thereof pursuant to a Registration Statement, a Canadian Prospectus or
Rule 144.
"Registration" shall mean a registration of securities
pursuant to the Securities Act.
"Registration Statement" shall mean (i) any registration
statement (including the Preliminary Prospectus, the Prospectus, any amendments
(including any post-effective amendments) thereto, any supplements and all
exhibits thereto and any documents incorporated therein by reference pursuant to
the rules and regulations of the Commission or any applicable Canadian
securities laws), filed by the Company in connection with any Public Sale Event
with the Commission or (ii) a Canadian Prospectus filed with any Canadian
Securities Authority any amendments or supplements thereto and any documents,
incorporated by reference therein pursuant to the rules of the applicable
Canadian Securities Authority, which in either case complies with all applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder and all applicable Canadian Securities Laws.
"Responsible Officer" shall mean with respect to any Person,
the president, chief executive officer, chief operating officer, chief financial
officer or treasurer of such Person.
"Rule 144", shall mean Rule 144 promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Rule 415" shall mean Rule 415 promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Rule 424" shall mean Rule 424 promulgated by the Commission
under the Securities Act, or any successor to such Rule.
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"Rule 430A" shall mean Rule 430A promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Sale Event" shall mean any sale by the Company of Common
Stock pursuant to a Company Private Sale Event or a Company Public Sale Event or
any sale by any Securities Holder of Registerable Common pursuant to any
Registration Statement.
"Secured PIK/Term Credit Agreement" shall mean the Secured
PIK/Term Credit Agreement, dated as of March 31, 2000, among the Company,
Canadian Imperial Bank of Commerce, as administrative agent, and the various
lenders from time to time party thereto.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor legislation thereto.
"Securities Holder" shall mean (i) with respect to each entity
set forth on the signature pages of this Agreement under the heading "SECURITIES
HOLDERS," each such entity together with any members of the respective of Group
of which such entity is a member who holds Registerable Common, and (ii) a
holder of Registerable Common to whom the rights and obligations conferred by
this Agreement have been transferred pursuant to subsection 5.9.
"Securities Holder Public Sale Event" shall mean any sale of
Registerable Common by a Securities Holder pursuant to a Demand Registration.
"Securities Holder Sale Notice" shall mean a Notice of
Offering to the Company from a Securities Holder requesting the Company to
effect a Demand Registration of Registerable Common and any other shares of
Common Stock held by such Securities Holder (to which such Securities Holder is
at the time entitled pursuant to subsection 2.1) and stating whether such
Securities Holder is requesting that such Demand Registration be a Shelf
Registration; provided that if more than one Notice of Offering is required to
aggregate the Minimum Registerable Amount, the term "Securities Holder Sale
Notice" shall refer collectively to all such Notices of Offering delivered by
Securities Holders to the Company in accordance with subsection 2.3(b).
"Shelf Registration" shall mean any Qualification or
Registration of Registerable Common and, if applicable, Common Stock, pursuant
to (i) a Registration Statement filed by the Company in accordance with the
provisions of subsection 2.2 and which provides for the offering of Registerable
Common to be made on a continuous basis pursuant to Rule 415 or (ii) a
Prospectus filed by the Company in accordance with the provisions of Section 2.2
and which provides for the Offering of Registerable Common to be made on a
continuous basis pursuant to national Policy Statement No. 44 of the Canadian
Securities Administrators.
"Subscription Agreement Common Stock" shall mean Common Stock
issued by the Company to the Securities Holders pursuant to the Subscription
Agreement, dated as of the date hereof, by and among, the Company and each of
the purchasers party thereto.
"Subsidiary" shall mean, as to any Person, a corporation,
partnership or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening
8
of a contingency) to elect the majority of the board of directors or other
managers of such corporation, partnership or other entity are at that time owned
directly or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise qualified, all references to a "Subsidiary" or
"Subsidiaries" in this Agreement shall refer to a subsidiary or Subsidiaries of
the Company.
"Supplemental Addendum" shall mean a Supplemental Addendum,
substantially in the form of Exhibit A to this Agreement.
"Termination Date" shall mean, as to each Securities Holder,
the date on which counsel to the Company delivers an opinion in accordance with
subsection 5.10 to such Securities Holder.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section, subsection, schedule and exhibit references are to this Agreement.
Section 2. Demand Registration Rights of Securities Holders.
2.1. Demand Registration Rights. At any time prior to the Termination Date,
subject to subsections 2.3, 2.4(b) and (c) and 6.1, in case the Company shall
receive from a Securities Holder or Securities Holders a Securities Holder Sale
Notice, the Company shall be obligated to effect a Demand Registration in
response to each such request; provided that the Company shall not be obligated
to effect a Demand Registration after the Company has already effected two (2)
Demand Registrations if the Registration Statements filed pursuant to each such
Demand Registration have been declared effective, and provided, further, that if
the Company delivers a Piggybacking Notice after receiving a Securities Holder
Sale Notice and the Company is permitted to offer and sell at least fifty
percent (50%) of the shares of Common Stock that it desired to include in such
Securities Holder Public Sale Event as set forth in its Piggybacking Notice,
each Securities Holder who delivered such Securities Holder Sale Notice shall
not be deemed to have requested a Demand Registration under this subsection 2.1
for purposes of calculating the limitations on Demand Registrations set forth in
this subsection 2.1.
2.2. Determination. Subject to the terms and conditions hereof, if the
Company shall at any time receive one or more Securities Holder Sale Notices in
accordance with subsection 2.3 representing, in the aggregate, at least the
Minimum Registerable Amount, then the Company shall (a) use its best efforts to
file a Registration Statement within forty-five (45) days, and in any event, but
subject to subsection 5.3(b), make such filing within sixty (60) days (provided
that such time periods shall begin on the date of the Company's receipt of the
Securities Holder Sale Notice which, together with any earlier delivered
Securities Holder Sale Notice, represents the applicable Minimum Registerable
Amount), which Registration Statement shall cover the maximum number of shares
of Registerable Common or other Common Stock set forth in such Securities Holder
Sale Notice, and, if applicable, such additional shares of Registerable Common
or Common Stock as permitted under subsection 2.6 and (b) use its best efforts
to facilitate such Demand Registration as provided herein. Notwithstanding the
foregoing, the Company may delay the filing of (but not its obligation to
expeditiously prepare)
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any Registration Statement relating to a Demand Registration for a reasonable
period of time (not in excess of 90 days) if the Board of Directors of the
Company reasonably determines to delay such filing and, within ten (10) days of
such determination, the Company provides each Securities Holder that delivered a
Securities Holder Sale Notice with a certificate signed by the Chairman of the
Board of Directors of the Company or the Chief Executive Officer of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, the filing of such Registration Statement would adversely affect any
material business situation, transaction or negotiation then contemplated by the
Company or materially and adversely affect the Company. The Company shall
promptly give notice to each such Securities Holder of the end of any delay
period under this subsection. Subject to any extension under subsection 4.1(b),
the Company shall keep any Registration Statement effective for a period of (i)
in the case of a Demand Registration other than a Shelf Registration, until the
earlier of (x) the three (3) month anniversary of the date that the Registration
Statement with respect thereto is declared effective by the Commission or a
final receipt is issued by the applicable Canadian Securities Authority, as
applicable, and (y) the date on which all of the Registerable Common covered by
such Registration Statement has been sold and (ii) in the case of a Shelf
Registration, until the earlier of (x) two (2) years following the date the
Registration Statement with respect thereto is declared effective by the
Commission or a final receipt is issued by the applicable Canadian Securities
Authority, as applicable, and (y) the date on which all of the Registerable
Common covered by such Registration Statement has been sold or, in each case,
such shorter period if any such Registration is terminated in accordance with
the terms hereof prior to the end of the applicable period.
2.3. Notices; Minimum Registerable Amounts. (a) Subject to subsection 2.1,
any Securities Holder may send a Securities Holder Sale Notice to the Company in
respect of a Demand Registration. Simultaneously with the delivery to the
Company of a Securities Holder Sale Notice, the Securities Holder so requesting
a Demand Registration shall deliver to each other Securities Holder a copy of
such Securities Holder Sale Notice and such other information as such requesting
Securities Holder may deem appropriate.
(b) Notwithstanding subsection 2.3(a), no Securities Holder Sale Notice
delivered by a Securities Holder shall be effective to require the Company to
provide a Demand Registration, unless (i) the aggregate number of shares of
Registerable Common represented by such Securities Holder Sale Notice equals or
exceeds the Minimum Registerable Amount or (ii) within twenty (20) days of the
delivery to the Company of the first Securities Holder Sale Notice in respect of
an aggregate number of shares of Registerable Common that does not equal or
exceed the minimum Registerable Amount, one or more additional Securities Holder
Sale Notices are delivered by Securities Holders then entitled to request a
Demand Registration pursuant to subsection 2.1(a) such that the aggregate number
of shares of Registerable Common represented by all such Securities Holder Sale
Notices (including the Securities Holder Sale Notice which commenced such twenty
(20) day period) is at least equal to the Minimum Registerable Amount. All
Securities Holders delivering Securities Holder Sale Notices in accordance with
the immediately preceding sentence are hereinafter referred to as the
"Initiating Securities Holders." Subject to subsection 2.4, the delivery of any
Securities Holder Sale Notice pursuant to this subsection 2.3(b), shall be
deemed a request by each Initiating Securities Holder under subsection 2.1 for a
Demand Registration, provided that if all Securities Holder Sale Notices so
delivered do not represent at least the Minimum Registerable Amount, then all
such
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Securities Holder Sale Notices shall be deemed null and void and shall not
constitute a request for Demand Registration under subsection 2.1 by any
Initiating Securities Holder.
(c) Any Securities Holder Sale Notice may be revised from time to time
prior to the earlier of (i) the execution of the Purchase Agreement, if any, for
such offering and (ii) the effectiveness of the Registration Statement for, or
date of final receipt for the Canadian Prospectus relating to, as applicable,
such offering.
2.4. Discretion of Securities Holder. (a) In connection with any Securities
Holder Public Sale Event, subject to the provisions of this Agreement, the
Securities Holder requesting a Demand Registration (if such Public Sale Event
was initiated by an individual Securities Holder) or the Initiating Securities
Holders owning a majority of the aggregate number of shares of Registerable
Common that all such Initiating Securities Holders are seeking to include in
such Public Sale Event (if such Public Sale Event was initiated by Initiating
Securities Holders), in its or their sole discretion, as the case may be, shall
determine whether (i) to proceed with, withdraw from or terminate such proposed
Securities Holder Public Sale Event, (ii) to enter into one or more Purchase
Agreements for such Securities Holder Public Sale Event and (iii) to take such
actions as may be necessary to close the sale of Registerable Common
contemplated by such offering, including, without limitation, waiving any
conditions to closing such sale which have not been fulfilled.
(b) Subject to subsection 2.4(c), in the event that the Securities Holder
or the Initiating Securities Holders, as the case may be, determine(s) pursuant
to subsection 2.4(a) not to proceed with a Demand Registration of Registerable
Common at any time before (i) the Registration Statement with respect to such
Demand Registration has been declared effective by the Commission or (ii) a
final receipt has been issued by the applicable Canadian Securities Authority
for the Canadian Prospectus, as applicable, and such Securities Holder or
Initiating Securities Holders, as the case may be, reimburse(s) the Company for
all reasonable fees, costs and expenses in connection therewith, then all
Securities Holder Sale Notices delivered in respect of such Demand Registration
shall be deemed null and void and shall not constitute a request for Demand
Registration under subsection 2.1 by any Securities Holder or Initiating
Securities Holders.
(c) If the Securities Holder or the Initiating Securities Holders, as the
case may be, determine(s) pursuant to subsection 2.4(a) not to proceed with a
Demand Registration (i) at any time at the request of the Company or (ii) as a
result of a Material Adverse Change at any time, then, in either such case, such
Securities Holder or Initiating Securities Holders, as the case may be, will not
be required to reimburse the Company for the fees, costs and expenses in
connection with such Demand Registration and all Securities Holder Sale Notices
delivered in respect of such Demand Registration shall be deemed null and void
and shall not constitute a request for Demand Registration under subsection 2.1
by any Securities Holder or Initiating Securities Holders.
2.5. Allocation Among Initiating Securities Holders. In connection with any
Demand Registration requested by Initiating Securities Holders in accordance
with subsection 2.3, if the lead managing underwriter selected by such
Initiating Securities Holders in accordance with subsection 5.8 with respect to
such offering (or, if the offering is not underwritten, if a
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financial advisor to such Initiating Securities Holders) determines that
marketing factors require a limitation on the number of shares of Registerable
Common to be offered and sold in such offering, there shall be included in the
offering only that number of shares of Registerable Common that such lead
managing underwriter or financial advisor, as the case may be, reasonably and in
good faith believes will not jeopardize the success of the offering, which
shares of Registerable Common shall be allocated among the Initiating Securities
Holders on a pro rata basis based on the number of shares of Registerable Common
each such Initiating Securities Holder seeks to include in such offering.
2.6. Piggyback Rights of Securities Holders and the Company. (a) In
connection with any Demand Registration that has been requested by a Securities
Holder or Initiating Securities Holders, as the case may be, in accordance with
subsections 2.1 and 2.3, any other Securities Holder then holding Registerable
Common (a "Piggybacking Securities Holder") and the Company shall be entitled,
subject to subsection 2.6(b), to participate on the same terms and conditions as
such Securities Holder in the Securities Holder Public Sale Event relating
thereto and offer and sell shares of Registerable Common or shares of Common
Stock, respectively, therein as provided in this subsection 2.6. Any party
desiring to so participate shall give written notice (a "Piggybacking Notice")
to the Securities Holder requesting such Demand Registration and, if such party
is not the Company, to the Company no later than fifteen (15) days following
receipt of a Securities Holder Sale Notice, of the aggregate number of shares of
Registerable Common that such Piggybacking Securities Holder or shares of Common
Stock that the Company, as the case may be, then desires to offer and sell in
such Securities Holder Public Sale Event.
(b) The extent to which a Piggybacking Securities Holder or the Company may
participate in any Securities Holder Public Sale Event in accordance with
paragraph (a) of this subsection 2.6 shall be limited to that number of shares
of Registerable Common or shares of Common Stock that will not require a
reduction in the number of shares of Registerable Common of the Initiating
Securities Holders or the Securities Holder requesting such Demand Registration
to be included therein or change in a manner materially adverse to such
Initiating Securities Holders or Securities Holder, as the case may be, the
proposed method of the offering, including, without limitation, the economic
benefits to such Initiating Securities Holders or Securities Holder. If the lead
managing underwriter selected by the Initiating Securities Holders or the
Securities Holder initiating such Securities Holder Public Sale Event (or, if
the offering is not underwritten, a financial advisor to such Initiating
Securities Holders or Securities Holder) determines that marketing factors
require a limitation on the number of shares of Registerable Common or shares of
Common Stock to be offered and sold in such offering, there shall be included in
the Registration Statement with respect to such offering only that number of
shares of Registerable Common held by such Piggybacking Securities Holders or
shares of Common Stock to be sold by the Company, if any, that such lead
managing underwriter or financial advisor, as the case may be, reasonably and in
good faith believes will not jeopardize the success of the offering, which
shares shall be allocated first among the Piggybacking Securities Holders on a
pro rata basis based on the number of shares of Registerable Common each such
Securities Holder is seeking to include in such offering and second to the
Company.
2.7. Limitation on Registration Rights. Notwithstanding any other provision
of this Agreement, no Person shall have the right to cause the Company to file a
Canadian
12
Prospectus unless such Person provides evidence reasonably satisfactory to the
Company that a proposed trade in securities by such Person would be a
"distribution" as such term is used under applicable Canadian Securities Laws or
would otherwise require the filing of a Canadian Prospectus with any one or more
of the Canadian Securities Authorities under applicable Canadian Securities Laws
and the issuance of a final receipt therefor from such authorities in order to
permit the proposed trade.
Section 3. Company Sale Events.
3.1. Determination. (a) Subject to subsection 6.1, the Company may at any
time effect a Company Public Sale Event pursuant to a Registration Statement
filed by the Company, provided that the Company gives each Securities Holder a
Company Sale Notice, no less than thirty (30) days prior to the filing of the
related Registration Statement.
(b) The Company may at any time effect a Company Private Sale Event,
provided that the Company gives each Securities Holder a Company Sale Notice, so
as to be received no less than fifteen (15) days prior to the anticipated
closing date of such Company Private Sale Event.
3.2. Notice Registerable. The Company Sale Notice shall contain a statement
that the Securities Holders are entitled to participate in such offering and the
number of shares of Registerable Common which represents the best estimate of
the lead managing underwriter (or, if not known or applicable, the Company) that
will be available for sale by the Securities Holders in the proposed offering,
if any.
3.3. Piggyback Rights of Securities Holders. (a) If the Company shall have
delivered a Company Sale Notice, Securities Holders shall be entitled to
participate on the same terms and conditions as the Company in the Company
Public Sale Event or the Company Private Sale Event, as the case may be, to
which such Company Sale Notice relates and to offer and sell shares of
Registerable Common therein only to the extent provided in this subsection 3.3.
Each Securities Holder desiring to participate in such offering shall notify the
Company in writing, by delivering a Piggybacking Notice no later than ten (10)
days following receipt of a Company Sale Notice, of the aggregate number of
shares of Registerable Common that such Securities Holder then desires to sell
in the offering.
(b) Each Securities Holder desiring to participate in a Company Public Sale
Event or a Company Private Sale Event may include shares of Registerable Common
in (i) any Registration Statement relating to a Company Public Sale Event or
(ii) in a Company Private Sale Event, in each case to the extent that the
inclusion of such shares shall not reduce the number of shares of Common Stock
to be offered and sold by the Company to be included therein or change in a
manner materially adverse to the Company the proposed method of the offering,
including, without limitation, the economic benefits to the Company. If the lead
managing underwriter selected by the Company for such offering (or, if the
offering is not underwritten, a financial advisor to the Company) determines
that marketing factors require a limitation on the number of shares of
Registerable Common to be offered and sold in such Company Public Sale Event or
Company Private Sale Event, as the case may be, there shall be included in the
offering only that number of shares of Registerable Common, if any, that such
13
lead managing underwriter or financial advisor, as the case may be, reasonably
and in good faith believes will not jeopardize the success of the offering,
which shares of Registerable Common shall be allocated among such Securities
Holders on a pro rata basis based on the number of shares of Registerable Common
each such Securities Holder is seeking to include in such Sale Event.
3.4. Discretion of the Company. In connection with any Company Public Sale
Event or Company Private Sale Event, subject to the provisions of this
Agreement, the Company, in its sole discretion, shall determine whether (a) to
proceed with, withdraw from or terminate such Company Public Sale Event or
Company Private Sale Event, as the case may be, (b) to enter into the Purchase
Agreement for such Company Public Sale Event or Company Private Sale Event, as
the case may be, and (c) to take such actions as may be necessary to close the
sale of Common Stock contemplated by such offering, including, without
limitation, waiving any conditions to closing such sale which have not been
fulfilled.
Section 4. Black-Out Periods.
4.1. Black-Out Periods for Securities Holders. (a) No Securities Holder
shall offer to sell or sell any shares of Registerable Common pursuant to a
Demand Registration, and the Company shall not be required to supplement or
amend any Registration Statement or otherwise facilitate the sale of
Registerable Common pursuant thereto, during the 90-day period immediately
following the receipt by each Securities Holder of a certificate of an
authorized officer of the Company to the effect that the Board of Directors of
the Company has in good faith and for valid business reasons requested that the
Securities Holders refrain from selling shares of Registerable Common; provided,
however, that the identity of a potential purchaser or purchasers of
Registerable Common from a Securities Holder shall not constitute a valid
business reason. Any period described in this subsection 4.1(a) during which
Securities Holders are not able to sell shares of Registerable Common pursuant
to a Demand Registration is herein referred to as a "black-out" period. The
Company shall notify each Securities Holder of the expiration or earlier
termination of any `black-out" period (the nature and pendency of which need not
be disclosed during such "black-out" period).
(b) The period during which the Company is required pursuant to subsection
2.2 to keep any Demand Registration effective shall be extended by a number of
days equal to the number of days, if any, of any "black-out" period applicable
to Securities Holders pursuant to this subsection 4.1 occurring during such
period, plus a number of days equal to the number of days during such period, if
any, of any period during which the Securities Holders are unable to sell any
shares of Registerable Common pursuant to a Demand Registration as a result of
the happening of any event of the nature described in subsection 5.3(c) (ii),
5.3(c) (iii) or 5.3(c)(v).
Section 5. Agreements Concerning Offerings.
5.1. Obligations of Securities Holders. (a) Each Securities Holder shall,
upon the reasonable request of the Company, advise the Company of the number of
shares of Registerable Common then held or beneficially owned by it.
14
(b) It shall be a condition precedent to the obligations of the Company to
effect a Registration of any shares of Registerable Common or to include shares
of Registerable Common in a Company Private Sale Event that each Securities
Holder desiring to participate in a Public Sale Event or a Company Private Sale
Event, as the case may be, shall have furnished to the Company such information
regarding itself, the Registerable Common held by it and the intended method of
disposition of such securities as shall be required by law, the Commission or
any applicable Canadian Securities Authority, to effect the Registration or
private sale of their Registerable Common and any other information relating to
such Registration or private sale reasonably requested by the Company.
5.2. Obligations of the Company. Whenever required under this Agreement to
proceed with a Registration of any Registerable Common, the Company shall,
subject to the terms and conditions of this Agreement, as expeditiously as
reasonably possible:
(a) In accordance with subsection 2.2, prepare and file with the Commission
and/or the applicable Canadian Securities Authority, as appropriate, a
Registration Statement with respect to such Registerable Common and use its best
efforts to cause such Registration Statement to become effective and/or a final
receipt to be issued with respect to the Canadian Prospectus.
(b) Prepare and file with the Commission and/or the applicable Canadian
Securities Authority, as appropriate, such amendments (including post-effective
amendments) to such Registration Statement, supplements to the related
Prospectus used in connection with such Registration Statement, and otherwise
use its best efforts, to the end that such Registration Statement reflects the
plan of distribution of the securities registered thereunder that is included in
the relevant Notice of Offering, if any, in respect of a Demand Registration
and, subject to subsection 2.2, is effective until the completion of the
distribution contemplated by such Registration Statement or so long thereafter
as a dealer is required by law to deliver a Prospectus in connection with the
offer and sale of the shares of Registerable Common covered by such Registration
Statement
(c) Notify the Securities Holders selling Registerable Common, at any time
when a Prospectus relating thereto is required to be delivered under the
Securities Act, when the Company becomes aware of the occurrence of any event,
as a result of which the Prospectus included in such Registration Statement (as
then in effect) contains an untrue statement of material fact or omits to state
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (subject to
subsection 4.1(a)) use its best efforts to prepare and file promptly with the
Commission and/or the applicable Canadian Securities Authority, as appropriate,
a supplement or amendment to such Prospectus so that, as thereafter delivered to
purchasers of such Registerable Common, such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(d) Provide to any Securities Holder requesting to include Registerable
Common in such Registration Statement and any managing underwriter participating
in any distribution thereof, and to any attorney, accountant or other agent
retained by such Securities
15
Holder or managing underwriter, reasonable access to appropriate officers and
directors of the Company to ask questions and to obtain information reasonably
requested by any such Person in connection with such Registration Statement or
any amendment thereto, provided, however, that (i) in connection with any such
access or request, any such requesting Persons shall cooperate to the extent
reasonably practicable to minimize any disruption to the operation by the
Company of its business and (ii) any records, information or documents shall be
kept confidential by such requesting Persons, unless (x) such records,
information or documents are in the public domain or otherwise publicly
available other than through disclosure by such requesting party or (y)
disclosure of such records, information or documents is required by court or
administrative order or by applicable law (including, without limitation, the
Securities Act).
(e) Furnish to the participating Securities Holders, such number of copies
of a Prospectus, including a Preliminary Prospectus, in conformity with the
requirements of the Securities Act and/or applicable Canadian Securities Laws,
and such other documents as they may reasonably request in order to facilitate
the disposition of Registerable Common owned by them.
(f) Use its best efforts to register and qualify the securities covered by
such Registration Statement under such other securities or "Blue Sky" laws of
such jurisdictions in the United States as shall be reasonably requested by the
Securities Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or jurisdictions
or to make any filing or take any other action which could subject it to
taxation as a result of such filing.
(g) Enter into and perform its obligations under a Purchase Agreement, if
the offering is an underwritten offering, in usual and customary form, with the
managing underwriter of such underwritten offering; provided, however, that each
Securities Holder participating in such Public Sale Event shall also enter into
and perform its obligations under such Purchase Agreement so long as such
obligations are usual and customary obligations of selling stockholders in a
registered public offering.
5.3. Agreements Related to Offerings. Subject to the terms and conditions
hereof, in connection with any Demand Registration:
(a) The Company will cooperate with any underwriters for, and the
Securities Holders of, the shares of Registerable Common proposed to be sold
pursuant to a Registration Statement, and will, unless the parties to the
Purchase Agreement otherwise agree, enter into a Purchase Agreement not
inconsistent with the terms and conditions of this Agreement and containing such
other terms and conditions of a type and form reasonable and customary for
companies of similar size and credit rating (including, but not limited to, such
provisions for delivery of a "comfort letter" and legal opinion as are
customary), and take all such other reasonable actions as are necessary or
advisable to permit, expedite and facilitate the disposition of such shares of
Registerable Common in the manner contemplated by such Registration Statement in
each case to the same extent as if all the shares of Registerable Common then
being offered were for the account of the Company.
16
(b) Neither a Registration Statement nor any amendment or supplement
thereto will be filed by the Company until counsel for the Initiating Securities
Holder or the Securities Holder delivering the relevant effective Securities
Holder Sale Notice shall have had a reasonable opportunity to review the same
and each Securities Holder participating in such Sale Event shall have had a
reasonable opportunity to exercise its rights under subsection 5.2(d) with
respect thereto. No amendment to such Registration Statement naming any
Securities Holder as a selling security holder shall be filed with the
Commission and/or the applicable Canadian Securities Authority, as applicable,
until such Securities Holder shall have had a reasonable opportunity to review
such Registration Statement as originally filed. Neither such Registration
Statement nor any related Prospectus or any amendment or supplement thereto
shall be filed by the Company with the Commission and/or the applicable Canadian
Securities Authority, as applicable, which shall be disapproved (for reasonable
cause) by the managing underwriters named therein or any participating
Securities Holders within a reasonable period after notice thereof.
(c) The Company will use its reasonable efforts to keep the Securities
Holders informed of the Company's best estimate of the earliest date on which
such Registration Statement or any post-effective amendment thereto will become
effective and/or the Canadian Prospectus will be receipted and will notify each
Securities Holder and the managing underwriters participating in the
distribution pursuant to such Registration Statement promptly (i) when such
Registration Statement or any post-effective amendment to such Registration
Statement becomes effective and/or when a final receipt is issued in respect of
such Canadian Prospectus, (ii) of any request by the Commission and/or the
applicable Canadian Securities Authority, as applicable, for an amendment or any
supplement to such Registration Statement or any related Prospectus, (iii) of
the issuance by the Commission or any Canadian Securities Authority of any stop
order suspending the effectiveness of such Registration Statement or of any
order preventing or suspending the use of any related Prospectus or the
initiation or threat of any proceeding for that purpose, (iv) of the suspension
of the qualification of any shares of Common Stock included in such Registration
Statement for sale in any jurisdiction or the initiation or threat of a
proceeding for that purpose, (v) of any determination by the Company that an
event has occurred (the nature and pendency of which need not be disclosed
during a "black-out period" pursuant to subsection 4.1) which makes untrue any
statement of a material fact made in such Registration Statement or any related
Prospectus or which requires the making of a change in such Registration
Statement or any related Prospectus in order that the same 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
otherwise comply with applicable securities laws and (vi) of the completion of
the distribution contemplated by such Registration Statement if it relates to a
Company Sale Event.
(d) In the event of the issuance of any stop order suspending the
effectiveness of such Registration Statement or of any order suspending or
preventing the use of any related Prospectus or suspending the qualification of
any shares of Common Stock included in such Registration Statement for sale in
any jurisdiction, the Company will use its reasonable best efforts promptly to
obtain its withdrawal.
(e) The Company agrees to otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission and any Canadian Securities
Authorities, and
17
make available to its security holders (within the meaning of Rule 158 under the
Securities Act), as soon as reasonably practicable, but not later than fifteen
months after the effective date of such Registration Statement, an earnings
statement covering the period of at least twelve months beginning with the first
full fiscal quarter after the effective date of such Registration Statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder.
(f) The Company shall, subject to permitted "black-out" periods, upon the
happening of any event of the nature described in subsection 5.3(c) (ii), 5.3(c)
(iii) or 5.3(c)(v), as expeditiously as reasonably possible prepare a supplement
or post-effective amendment to the applicable Registration Statement or a
supplement to the related Prospectus, any document incorporated therein by
reference or file any other required documents and deliver a copy thereof to
each Securities Holder so that, as thereafter delivered to the purchasers of the
Registerable Common being sold thereunder, 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 and shall otherwise
comply with all applicable securities laws.
(g) Upon receipt of any notice from the Company of the happening of any
event of the kind described in subsection 5.2(c), each Securities Holder will
immediately discontinue disposition of the Registerable Common pursuant to the
Registration Statement relating to such Registerable Common until such
Securities Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by subsection 5.2(c), or until such Securities Holder
has been advised in writing by the Company that the use of the Prospectus may be
resumed and has received copies of any additional or supplemental filings which
are incorporated by reference therein. If reasonably requested by the Company,
the Securities Holders will, or will request the managing underwriter or
underwrites, if any, to, deliver to the Company all copies, other than permanent
file copies, of the Prospectus covering the Registerable Common current at the
time of receipt of such notice.
(h) The Securities Holders acknowledge that audited financial statements
covering the Company's 2000 fiscal year do not currently exist and that any
Demand Registration requiring such audited financial statements will be subject
to the Company's ability to produce such audited financial statements prior to
the filing of the related Registration Statement.
5.4. Certain Expenses. Subject to subsection 2.4(b), the Company shall pay
all fees, disbursements and expenses in connection with the performance of its
obligations hereunder, including, without limitation, all registration and
filing fees, printing expenses, auditors' fees, listing fees, registrar and
transfer agents' fees, reasonable fees and disbursements of counsel to the
Securities Holders (provided that the Company need not pay for more than one
U.S. counsel and/or one Canadian counsel for such Securities Holders) and
counsel for the Company, expenses (including reasonable fees and disbursements
of counsel) of complying with applicable securities or "Blue Sky" laws and the
fees of the NASD or other governing body of any securities exchange on which the
Common Stock or PIK Notes Common Stock is listed in connection with its review
of any offering contemplated in such Registration Statement, but not including
underwriting fees, discounts and commissions.
18
5.5. Public Reporting; Rule 144. (a) The Company agrees to:
(i) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act or the
Exchange Act;
(ii) _____ file with any applicable Canadian Governmental Authorities
in a timely manner all documents required of the company by such
Governmental Authorities and of any securities exchange on which the
securities of the Company are listed or quoted under any applicable
Canadian securities laws; and
(iii) or furnish to any Securities Holder forthwith upon request (A) a
written statement by the Company that it has complied with the current
public information and reporting requirements of Rule 144 or any
similar rule or regulation hereafter adopted by the Commission and the
Exchange Act, (B) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents required to be
filed by the Company pursuant to subsection 5.5(a)(i) or 5.5(a) (ii),
and (C) such other information as is available to the Company without
unreasonable cost or expense and may be reasonably requested in
connection with availing any Securities Holder of any rule or
regulation of the Commission which permits the selling of any such
securities without Registration or pursuant to such rule or
regulation.
(b) During any period in which the Company is not subject to Section 13 or
15(d) of the Exchange Act, the Company shall, upon the request of any Securities
Holder, make available to such Securities Holder and any prospective purchaser
of Registerable Common designated by such Securities Holder the information
required by Rule 144(c) in order to permit resales of the Registerable Common
held by such Securities Holder pursuant to Rule 144.
(c) Any Securities Holder selling shares of Registerable Common shall
promptly deliver to the Company a copy of any other documentation required to be
filed by such Securities Holder with any Governmental Authority in connection
with such sale, including, with respect to sales under Rule 144, a copy of the
completed Form 144 filed by such Securities Holder with the Commission.
19
5.6. Limitations on Subsequent Registration Rights. From and after the date
of this Agreement, the Company shall not, without the prior written consent of
Securities Holders owning a majority of the Registerable Common held by
Securities Holders at such time, enter into any agreement which would allow any
holder or prospective holder of Registerable Common (a) to include such
securities in any Registration Statement filed under subsection 2.2 hereof to
the exclusion of shares of Registerable Common that any Securities Holder
desires to include in any such offering or (b) to include such securities in any
Company Public Sale Event or Company Private Sale Event to the exclusion of
shares of Registerable Common that any Securities Holder desires to include in
any such offering.
5.7. Indemnification and Contribution. (a) In connection with a Demand
Registration, provisions substantially in conformity with the following
provisions shall be contained in the related Purchase Agreement unless the
parties to such Purchase Agreement agree otherwise:
(i) The Company shall agree to indemnify and hold harmless each
Securities Holder and each Person, if any, who controls such
Securities Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities, joint or several, or actions in respect
thereof to which such Securities Holder or controlling Person may
become subject under the Securities Act, or otherwise (collectively,
"Losses"), insofar as such Losses arise out of, or are based upon, any
untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, any related Preliminary
Prospectus or any related Prospectus, or any amendment or supplement
thereto, 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,
and will reimburse such Securities Holder or controlling Person for
any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Loss; provided, however, that
the Company shall not be so liable to the extent that any such Loss
arises out of, or is based upon, an untrue statement or alleged untrue
statement of a material fact or an omission or alleged omission to
state a material fact in said Registration Statement, said Preliminary
Prospectus, said Prospectus or any said amendment or supplement in
reliance upon, and in conformity with, written information furnished
to the Company by or on behalf of a Securities Holder specifically for
use therein. Notwithstanding the foregoing, the Company shall not be
liable in any such case to the extent that any such Loss arises out
of, or is based upon, an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus if
(A) such Securities Holder failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of
the sale of Registerable Common to the Person asserting such Loss or
who purchased such Registerable Common which is the subject thereof
if, in either case, such delivery is required by the Securities Act
and (B) the Prospectus would have corrected such untrue statement or
omission or alleged untrue statement or alleged omission; and the
Company shall not be liable in any such case to the extent that any
such Loss arises out of, or is based upon, an untrue statement or
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in the Prospectus, if such untrue
statement or alleged untrue statement, omission or alleged omission is
corrected in an amendment or supplement to the Prospectus and if,
having previously been furnished by
20
or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Securities Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, prior to or
concurrently with the sale of Registerable Common to the Person
asserting such Loss or who purchased such Registerable Common which is
the subject thereof if, in either case, such delivery is required by
the Securities Act. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(ii) Each Securities Holder severally shall agree to indemnify and
hold harmless the Company, each of its officers and directors who sign
the Registration Statement, each other Securities Holder and each
Person, if any, who controls the Company or such other Securities
Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any Losses to which the
Company, such officers or directors, such other Securities Holder or
such controlling Person may become subject under the Securities Act,
or otherwise, insofar as such Losses arise out of, or are based upon,
any untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, any related Preliminary
Prospectus or any related Prospectus, or any amendment or supplement
thereto, 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,
and will reimburse the Company, such officers or directors, such other
Securities Holder or such controlling Person for any legal or other
expenses reasonably incurred by them in connection with investigating
or defending any such Loss, in each case to the extent, but only to
the extent, that any such Loss arises out of, or is based upon, an
untrue statement or alleged untrue statement of a material fact or an
omission or alleged omission to state a material fact in said
Registration Statement, said Preliminary Prospectus or said
Prospectus, or any said amendment or supplement in reliance upon, and
in conformity with, written information furnished to the Company by or
on behalf of such Securities Holder specifically for use therein;
provided, however, that the liability of each Securities Holder on
account -------- ------- of the foregoing shall be limited to an
amount equal to the net proceeds of the sale of shares of Registerable
Common by such Securities Holder in the offering which gave rise to
the liability.
(iii) The Company shall agree to indemnify and hold harmless each
underwriter and each Person, if any, who controls any such underwriter
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any Losses to which such underwriter or
controlling Person may become subject under the Securities Act, or
otherwise, insofar as such Losses arise out of, or are based upon, any
untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, any related Preliminary
Prospectus or any related Prospectus, or any amendment or supplement
thereto, 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,
and will reimburse such underwriter or controlling Person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss; provided, however, that the
Company shall not be so liable to the extent that any such Loss arises
out of, or is based upon, an untrue statement or alleged untrue
statement of a material fact or an omission or alleged omis-
21
sion to state a material fact in said Registration Statement, said
Preliminary Prospectus or said Prospectus or any said amendment or
supplement in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of such
underwriter specifically for use therein. Notwithstanding the
foregoing, the Company shall not be liable in any such case to the
extent that any such Loss arises out of, or is based upon, an untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus if (A) such underwriter failed to
send or deliver a copy of the Prospectus with or prior to the delivery
of written confirmation of the sale of Registerable Common to the
Person asserting such Loss or who purchased such Registerable Common
which is the subject thereof if, in either case, such delivery is
required by the Securities Act and (B) the Prospectus would have
corrected such untrue statement or omission or alleged untrue
statement or alleged omission; and the Company shall not be liable in
any such case to the extent that any such Loss arises out of, or is
based upon, an untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
in the Prospectus, if such untrue statement or alleged untrue
statement, omission or alleged omission is corrected in an amendment
or supplement to the Prospectus and if, having previously been
furnished by or on behalf of the Company with copies of the Prospectus
as so amended or supplemented, such underwriter thereafter negligently
fails to deliver such Prospectus as so amended or supplemented, prior
to or concurrently with the sale of Registerable Common to the Person
asserting such Loss or who purchased such Registerable Common which is
the subject thereof if, in either case, such delivery is required by
the Securities Act. This indemnity agreement will be in addition to
any liability which the Company may otherwise have, provided that the
Company shall only be required to provide the indemnification
described in this subsection 5.7(a) (iii) to an underwriter and each
Person, if any, who controls such underwriter if such underwriter
agrees to indemnification provisions substantially in the form set
forth in subsection 5.7(b).
(iv) Each Securities Holder severally shall agree to indemnify and
hold harmless each underwriter and each Person, if any, who controls
such underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act against any Losses, joint or
several, or actions in respect thereof to which such underwriter or
such controlling Person may become subject under the Securities Act,
or otherwise, insofar as such Losses arise out of, or are based upon,
any untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, any related Preliminary
Prospectus or any related Prospectus or any amendment or supplement
thereto, 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,
and will reimburse such underwriter or such controlling Person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss, in each case to the extent,
but only to the extent, that any such Loss arises out of, or is based
upon, an untrue statement or alleged untrue statement of a material
fact or an omission or alleged omission to state a material fact in
said Registration Statement, said Preliminary Prospectus or said
Prospectus or any said amendment or supplement in reliance upon, and
in conformity with, written information furnished to the Company by or
on behalf of such Securities Holder specifically for use therein;
provided that the liability of such Securities Holder on account of
the foregoing
22
shall be limited to an amount equal to the net proceeds of the sale of
shares of Registerable Common by such Securities Holder in the
offering which gave rise to the liability. Notwithstanding the
foregoing, such Securities Holder shall not be liable in any such case
to the extent that any such Loss arises out of, or is based upon, an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus if (A) such underwriter
failed to send or deliver a copy of the Prospectus with or prior to
the delivery of written confirmation of the sale of Registerable
Common to the Person asserting such Loss or who purchased such
Registerable Common which is the subject thereof if, in either case,
such delivery is required by the Securities Act and (B) the Prospectus
would have corrected such untrue statement or omission or alleged
untrue statement or alleged omission; and such Securities Holder shall
not be liable in any such case to the extent that any such Loss arises
out of, or is based upon, an untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state
a material fact in the Prospectus, if such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and if, having previously
been furnished with copies of the Prospectus as so amended or
supplemented, such underwriter thereafter negligently fails to deliver
such Prospectus as so amended or supplemented, prior to or
concurrently with the sale of Registerable Common to the Person
asserting such Loss or who purchased such Registerable Common which is
the subject thereof if, in either case, such delivery is required by
the Securities Act. No Securities Holder shall be required to provide
the indemnification described in this subsection 5.7(a) (iv) to an
underwriter or any Person who controls such underwriter if such
underwriter has not agreed to indemnification provisions substantially
in the form set forth in subsection 5.7(b).
(v) Promptly after receipt by an indemnified party pursuant to the
indemnification provisions of such Purchase Agreement of notice of any
claim or the commencement of any action, the indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying
party pursuant to such indemnification provisions, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to the
indemnified party otherwise than pursuant to the indemnification
provisions of such Purchase Agreement unless the indemnifying party is
materially prejudiced by such lack of notice. If any such claim or
action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate in defense of such claim, and, to the extent
that it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, (x) the indemnifying party shall
not be liable to the indemnified party pursuant to the indemnification
provisions hereof or of such Purchase Agreement for any legal or other
expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation,
(y) the indemnifying party shall not be liable for the costs and
expenses of or Losses arising out of any settlement of such claim or
action unless such settlement was effected with the consent of the
indemnifying party and (z) the indemnified party shall be obligated to
cooperate with the indemnifying party in the investigation of such
claim or
23
action; provided, however, that the Securities Holders (together with
their respective controlling Persons) and the underwriters (together
with their respective controlling Persons) shall each as a separate
group have the right to employ one separate counsel to represent such
Securities Holders and such underwriters (and their respective
controlling Persons) who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by such
Securities Holders and underwriters against the Company pursuant to
the indemnification provisions of such Purchase Agreement if, in the
reasonable judgment of either Securities Holders' counsel or counsel
for the underwriters, there exists an actual or potential conflict of
interest between such Securities Holders (and its controlling persons)
on the one hand and such underwriters (and their controlling persons)
on the other, and in that event the reasonable fees and expenses of
both such separate counsel shall also be paid by the Company.
(b) As a condition to agreeing in any Purchase Agreement to the
indemnification provisions described in subsections 5.7(a) (iii) and 5.7(a) (iv)
in favor of an underwriter participating in the offering covered by the related
Registration Statement and its controlling Persons, the Company and the
Securities Holders participating in an offering pursuant to such Registration
Statement may require that such underwriter agree in the Purchase Agreement to
provisions substantially in the form set forth in subsection 5.7(a) (v) and to
severally indemnify and hold harmless the Company, each of its officers and
directors who sign such Registration Statement, each Securities Holder
participating in such offering and each Person, if any, who controls the Company
or such Securities Holder within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act against any Losses to which the Company, such
officers and directors, such Securities Holder or such controlling Person may
become subject under the Securities Act, or otherwise, insofar as such Losses
arise out of, or are based upon, any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement in which
such underwriter is named as an underwriter, any related Preliminary Prospectus
or any related Prospectus, or any amendment or supplement thereto, 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, and to reimburse the Company, such officers and
directors, such Securities Holder or such controlling Person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such Loss in each case to the extent, but only to the extent, that
any such Loss arises out of, or is based upon, an untrue statement or alleged
untrue statement of a material fact or an omission or alleged omission to state
a material fact in said Registration Statement, said Preliminary Prospectus or
said Prospectus or any said amendment or supplement in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
such underwriter specifically for use therein.
(c) In order to provide for just and equitable contribution between the
Company and such Securities Holders in circumstances in which the
indemnification provisions described in this subsection 5.7 and contained in any
Purchase Agreement are for any reason insufficient or inadequate to hold the
indemnified party harmless (other than as a result of their nonapplicability in
accordance with their terms), the Company and such Securities Holders shall
contribute to the aggregate Losses (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution actually received from
24
Persons other than the Company and such Securities Holders) incurred by the
Company and one or more of its directors or its officers who sign such
Registration Statement or such Securities Holders or any controlling Person of
any of them, in such proportion as is appropriate to reflect their relative
degrees of fault in connection with the actions which resulted in such Losses,
as well as any other relevant equitable considerations. The relative fault of
the Company and of such Securities Holder shall be determined by reference to,
among other things, whether the untrue or allegedly untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Securities Holder and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided, however, that the
liability of each such Securities Holder to make such contribution shall be
limited to an amount equal to the net proceeds of the sale of shares of
Registerable Common by such Securities Holder in the offering which gave rise to
the liability. As among themselves, such Securities Holders agree to contribute
to amounts payable by other such Securities Holders in such manner as shall, to
the extent permitted by law, give effect to the provisions in such Purchase
Agreement comparable to subsection 5.7(a) (ii). The Company and such Securities
Holders agree that it would not be just and equitable if their respective
obligations to contribute pursuant to this subsection 5.7(c) were to be
determined by pro rata allocation (other than as set forth above) of the
aggregate Losses by reference to the proceeds realized by such Securities
Holders in a sale pursuant to said Registration Statement or said Prospectus or
by any other method of allocation which does not take account of the
considerations set forth in this subsection 5.7(c). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution under this subsection from any
Person who was not guilty of such fraudulent misrepresentation.
(d) The Company and the Securities Holders participating in an offering
pursuant to a Registration Statement agree that, if the underwriters
participating in a Public Sale Event are agreeable, the Purchase Agreement, if
any, relating to such Registration Statement shall contain provisions to the
effect that in order to provide for just and equitable contribution between such
underwriters on the one hand and the Company and such Securities Holders on the
other hand in circumstances in which the indemnification provisions of such
Purchase Agreement are for any reason insufficient or inadequate to hold the
indemnified party harmless (other than as a result of their non-applicability in
accordance with their terms), the Company and such Securities Holders on the one
hand and such underwriters on the other hand will contribute on the basis herein
set forth to the aggregate Losses (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or claims asserted, but after deducting any
contribution actually received from Persons other than the Company and such
Securities Holders and such underwriters), incurred by the Company and one or
more of its directors or its officers who sign such Registration Statement or
such Securities Holders or such underwriters, or any controlling Person of any
of them, in such proportion as is appropriate to reflect their relative degrees
of fault in connection with the actions which resulted in such Losses, as well
as any other relevant equitable considerations. The relative fault of the
Company, of such Securities Holders and of such underwriter shall be determined
by reference to, among other things, whether the untrue or allegedly untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, by such Securities
Holders or by such underwriter and the parties, relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. Notwithstanding the provisions set forth
25
above, (x) no underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the shares of Common Stock and
PIK Notes Common Stock underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and (y) the liability of each such
Securities Holder to make such contribution shall be limited to an amount equal
to the net proceeds of the sale of shares of Registerable Common by such
Securities Holder in the offering which gave rise to the liability. As among
themselves, such Securities Holders agree to contribute to amounts payable by
other such Securities Holders in such manner as shall, to the extent permitted
by law, give effect to the provisions in such Purchase Agreement comparable to
subsection 5.7(a) (ii). As between the Company and such Securities Holders, such
parties agree that it would not be just and equitable if their respective
obligations to contribute pursuant to this subsection 5.7(d) were to be
determined by pro rata allocation (other than as set forth above) of the
aggregate Losses by reference to the proceeds realized by such Securities
Holders in a sale pursuant to said Registration Statement or said Prospectus or
by any other method of allocation which does not take account of the
considerations set forth in this subsection 5.7(d). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution under the provisions set forth
above from any Person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and the Securities Holders participating
in any distribution of shares of Registerable Common under the provisions of
this subsection 5.7 and provisions in any Purchase Agreement substantially
similar to subsection 5.7(a), 5.7(b), 5.7(c) or 5.7(d) shall survive the
termination of any or all of the other provisions of this Agreement or such
Purchase Agreement.
5.8. Underwritten Offerings. If at any time any of the Securities Holders
participating in a Demand Registration desire to sell Registerable Common in an
underwritten offering, the investment banker or investment bankers that will
manage the offering will be selected by (a) if such Demand Registration was
initiated by Initiating Securities Holders, the Initiating Securities Holders
owning a majority of the aggregate number of shares of Registerable Common that
all such Initiating Securities Holders are seeking to include in the related
Sale Event and (b) if such Demand Registration was initiated by an individual
Securities Holder, the Securities Holder requesting such Securities Holder
Public Sale Event, provided that in any event, such investment banker or bankers
must be reasonably satisfactory to the Company.
5.9. Transfer of Rights Under this Agreement; Transfers of Registerable
Common. (a) At any time, the rights and obligations of a Securities Holder under
this Agreement may be transferred by a Securities Holder to a transferee of
Registerable Common, provided that, except in the case of a transfer to a Group
of which such Securities Holder is a member, within a reasonable period of time
after such transfer, (i) the transferring Securities Holder shall have furnished
the Company and the other Securities Holders written notice of the name and
address of such transferee and the Registerable Common with respect to which
such rights are being transferred and (ii) such transferee shall furnish the
Company and the Securities Holders (other than the transferring Securities
Holder) a copy of a duly executed Supplemental Addendum by which such transferee
(A) assumes all of the obligations and liabilities of its transferor hereunder,
(B) enjoys all of the rights of its transferor hereunder and (C) agrees to be
26
bound hereby; provided, however, that except in the case of a transfer to a
Group of which such Securities Holder is a member, any such transfer shall not
be effective until the notice required by clause (i) above and the Supplemental
Addendum required by clause (ii) above have been so furnished. Notwithstanding
the foregoing, the rights and obligations of a Securities Holder hereunder may
only be transferred: (x) to an Affiliate of the Transferee (a "Transferee
Affiliate"), (y) to any other person or entity provided that such transfer is:
(i) in connection with a transfer of all of the Registerable Common owned by the
transferor, or (ii) in connection with shares representing at least ten percent
(10%) of the Registerable Common.
(b) Except with respect to transfers pursuant to subsection 5.9(a), a
transferee of Registerable Common shall neither assume any liabilities or
obligations nor enjoy any rights hereunder and shall not be bound by any of the
terms hereof.
5.10. Termination of Rights. The rights granted under this Agreement shall
terminate as to each Securities Holder at such time as such Securities Holder
shall receive, either before or after the Company's receipt of a Securities
Holder Sale Notice or a Piggybacking Notice, an opinion of counsel to the
Company in form reasonably satisfactory to counsel to such Securities Holder
that all of the Registerable Common then held by such Securities Holder can be
sold under Rule 144 within a three (3) month period commencing on the date of
such opinion in a transaction or transactions exempt from the Registration
requirements of the Securities Act.
Section 6. Sequencing of Public Sale Events.
6.1. Effective Notice Period. Subject to the last sentence of this
subsection 6.1, during the term of this Agreement, no priority of right shall
exist between or among Securities Holders or between any Securities Holder, on
the one hand, and the Company, on the other, with respect to providing a Notice
of Offering with respect to, and effecting, a Public Sale Event. Once properly
given, a Securities Holder Sale Notice or a Company Sale Notice regarding a
Company Public Sale Event, as the case may be, shall be effective (and shall
preclude any such Notice of Offering by another party except in accordance with
clause (ii) of Section 2.3(b)) during the period (the "Effective Notice Period")
commencing on the date of such Notice of Offering and ending on the earliest of
(a) withdrawal of such Notice of Offering (notice of which shall be promptly
effected in the same manner as such Notice of Offering), (b) the abandonment of
the Public Sale Event to which such Notice of Offering relates (notice of which
shall be promptly effected in the same manner as such Notice of Offering) and
(c) the later of (i) one-hundred fifty (150) days after such a Notice of
Offering has been given, provided that the Registration Statement relating to
such Notice of Offering has been declared effective within ninety (90) days of
such Notice of Offering, and (ii) ninety (90) days after the closing date of the
Public Sale Event to which such Notice of Offering relates (except in the case
of a Shelf Registration, ninety (90) days after the effectiveness of the Shelf
Registration); provided that nothing in this subsection 6.1 shall limit the
Company's right to give a Notice of Offering with respect to, and effect, a
Company Private Sale Event. Upon the termination of an Effective Notice Period,
any Securities Holder so entitled pursuant to subsection 2.1 or the Company can
provide a Notice of Offering, provided that if such Notice of Offering is given
within twelve (12) months after the end of an Effective Notice Period by the
party that gave the immediately preceding Notice of Offering, any other party
shall, for the forty-five (45)-day period following
27
its receipt of such Notice of Offering, have the right to preempt such Notice of
Offering by itself delivering a Notice of Offering.
6.2. Restrictive Legend on Certificates. (a) Each Certificate evidencing
shares of Registerable Common distributed to the Securities Holders shall,
subject to paragraph (b) below, be stamped or otherwise imprinted with a
conspicuous legend in the following form:
"The securities evidenced by this certificate were issued pursuant to an
exemption from registration under the Securities Act of 1933, as amended (the
"Act"), and may be offered, sold or otherwise transferred only pursuant to a
Registration Statement effective under the Act or an exemption from the
provisions of Section 5 of the Act."
(b) A holder of a certificate evidencing shares of Registerable Common
bearing the legend specified in paragraph (a) shall be entitled to receive from
the Company, whether or not in connection with a sale or proposed sale, a new
certificate or certificates evidencing an identical number of shares (the
transfer expenses for which shall be paid by the Company) but without such
legend at such time as (i) such shares are sold pursuant to a Registration
Statement effective under the Securities Act, (ii) with respect to PIK Notes
Common Stock and Common Stock issued pursuant to the Plan, such holder furnishes
the Company with a certificate to the effect that such holder is not an
Affiliate or an "underwriter" within the meaning of Section 1145(b) of the
Bankruptcy Code and, upon the request of the Company, an opinion of counsel
reasonably satisfactory to the Company to such effect and to the effect that
such shares may be sold without registration under the Securities Act or (iii)
the registration rights granted in this Agreement otherwise terminate in
accordance with subsection 5.10. The shares of Registerable Common represented
by any such replacement certificate issued without the legend specified in
paragraph (a) pursuant to the immediately preceding sentence shall cease to be
Registerable Common for all purposes of this Agreement.
Section 7. Representations and Warranties of the Company . In connection
with the Registration Statement in respect of any Demand Registration, the
Company shall, on the date of effectiveness of such Registration Statement or
the date of the final receipt for the Canadian Prospectus (the "effective
date"), certify to each Securities Holder in a certificate of a Responsible
Officer of the Company to the effect that the representations and warranties set
forth below are true and correct at and as of the effective date. In connection
with any other Sale Event in which Securities Holders participate, except as
otherwise may be agreed upon by such participating Securities Holders and the
Company, the Company shall represent and warrant in the Purchase Agreement
relating to such Sale Event to the Securities Holders and any underwriters
participating in such Sale Event as follows (except as otherwise indicated, each
reference in this Section to "the Registration Statement" shall refer to a
Registration Statement in respect of any Demand Registration or other such Sale
Event in which Securities Holders participate, including all information deemed
to be a part thereof, as amended, and each reference to "the Prospectus" shall
refer to the related Prospectus):
(a) (i) When the Registration Statement became (in the case of a Demand
Registration to be filed pursuant to a Shelf Registration) or shall become
effective, the Registration Statement did or will comply as of its effective
date in all material respects with the applicable requirements of the Securities
Act and the rules and regulations thereunder; (ii) when the
28
Prospectus is filed in accordance with Rule 424(b) and/or in accordance with
applicable Canadian Securities Laws, the Prospectus (and any supplements
thereto) will comply in all material respects with the applicable requirements
of the Securities Act and/or applicable Canadian Securities Laws and the rules
and regulations thereunder; (iii) the Registration Statement did not or will not
as of its effective date contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and (iv) the Prospectus, if not
filed pursuant to Rule 424(b), did not or will not as of the date thereof, and
on the date of any filing pursuant to Rule 424 (b), the Prospectus (together
with any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and if filed pursuant to Canadian Securities Law will
constitute full, true and plain disclosure of all material facts relating to the
securities offered thereunder; provided, however, that the Company makes no
representations or warranties as to the information contained in or omitted from
the Registration Statement, or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Securities Holder specifically for use in
connection with the preparation of the Registration Statement or the Prospectus
(or any supplement thereto) or any information furnished in writing to the
Company by or on behalf of any underwriter specifically for use in connection
with the preparation of the Registration Statement or the Prospectus (or any
supplement thereto), other than that the Company has no knowledge of any such
untrue statement or omission in respect of such information.
(b) The public accountants who certified the Company's financial statements
in the Registration Statement are independent certified public accountants
within the meaning of the Securities Act and the applicable published rules and
regulations thereunder, or, to the extent that Canadian law is deemed to control
pursuant to the terms of the Securities Act, within the meaning of such
controlling Canadian law; the historical consolidated financial statements,
together with the related schedules and notes, forming part of the Registration
Statement and the Prospectus comply in all material respects with the
requirements of the Securities Act and/or applicable Canadian Securities Laws
and the rules and regulations thereunder and have been prepared, and present
fairly in all material respects the consolidated financial condition, results of
operations and changes in financial condition of the Company and its
consolidated Subsidiaries at the respective dates and for the respective periods
indicated, in accordance with generally accepted accounting principles applied
consistently throughout such periods (except as specified therein); and the
historical consolidated financial data set forth in the Prospectus are derived
from the accounting records of the Company and its consolidated Subsidiaries,
and are a fair presentation of the data purported to be shown; and the pro forma
consolidated financial statements (if any), together with the related notes,
forming part of the Registration Statement and the Prospectus, comply in all
material respects with the requirements of all applicable securities laws,
including, without limitation, Regulation S-X of the Securities Act, to the
extent applicable.
(c) Except as may be set forth in the Prospectus, each member of the Xxxxxx
Group has been duly organized and is validly existing as a corporation, limited
or general partnership, limited liability company or other similar entity in
good standing under the laws of the jurisdiction in which it is organized, with
the corporate or other analogous power and author-
29
ity to own its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign corporation or
other analogous entity and is in good standing under the laws of each
jurisdiction which requires such qualification where the failure to be so
qualified could materially adversely affect the business, operations, property
or financial condition of the Xxxxxx Group taken as a whole.
(d) Except as may be set forth in the Prospectus, all the outstanding
shares of capital stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable by the issuer, and all outstanding
shares of capital stock of the Subsidiaries are owned by the Company either
directly or through Subsidiaries free and clear of any security interests,
claims, liens or encumbrances (other than those granted to secure the
obligations of the Xxxxxx Group in respect of the Secured PIK/Term Credit
Agreement or the Exit Facility or other secured debt as permitted therein),
except in each case where the failure to so own the capital stock of a
Subsidiary could materially adversely affect the business, operations, property
or financial condition of the Xxxxxx Group taken as a whole.
(e) Except as may be set forth in the Prospectus, no member of the Xxxxxx
Group is in violation of any term or provision of any charter, by-law,
franchise, license, permit, judgment, decree or order or any applicable statute,
rule or regulation, which violation could be material to the business,
operations, property or financial condition of the Xxxxxx Group taken as a
whole.
(f) Except as may be set forth in the Prospectus, no default exists and no
event has occurred which with notice, lapse of time, or both, would constitute a
default, in the due performance and observance of any term, covenant or
condition of any agreement to which the Company or any of the Subsidiaries is a
party or by which it or any of them is bound, which default could materially
adversely affect the business, operations, property or financial condition of
the Xxxxxx Group taken as a whole.
(g) Except as may be set forth in the Prospectus, each member of the Xxxxxx
Group has all requisite corporate or other analogous power and authority and has
received and is operating in compliance in all material respects with all
governmental or regulatory or other franchises, grants, authorizations,
approvals, licenses, permits, easements, consents, certificates and orders,
necessary to own its properties and conduct businesses as currently owned and
conducted and as proposed to be conducted, except where the failure to do so
could not materially adversely affect the business, operations, property or
financial condition of the Xxxxxx Group, taken as a whole.
(h) Except as may be described in the Prospectus, since the date of the
most recent financial statements included in the Prospectus, there has been no
material adverse change in the business, operations, property or financial
condition of the Xxxxxx Group taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(i) Except as may be described in the Prospectus, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the best knowledge of the Company, threatened
against any member of the Xxxxxx Group or against any of their respective
properties or revenues, existing or future which, if adversely determined, could
30
have a material adverse effect on the business, property or financial condition
of the Xxxxxx Group taken as a whole, or which otherwise is of a character
required to be disclosed in the Prospectus; there is no franchise, contract or
other document of a character required to be described in the Registration
Statement or the Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the descriptions of such franchises,
contracts and other documents described in the Prospectus fairly summarize the
matters purported to be described therein.
(j) Except as may be described in the Prospectus, there is no pending or,
to the best knowledge of the Company, threatened action, suit, or judicial,
arbitral, rule-making or other administrative or other proceeding against the
Company which challenges the validity of (i) this Agreement or (ii) any Purchase
Agreement entered into in connection with the offering or any action taken or to
be taken pursuant to or in connection with such agreements.
(k) The Company's authorized equity capitalization is as set forth in the
Prospectus; the capital stock of the Company conforms in all material respects
to the description thereof contained in the Prospectus; all of the issued and
outstanding shares of capital stock of the Company have been duly authorized and
validly issued and, except as set forth in the Prospectus, are fully paid and
nonassessable.
(l) The Company has all requisite corporate power and authority, has taken
all requisite corporate action, and has received and is in compliance with all
governmental, judicial and other authorizations, approvals and orders, necessary
in connection with the offering, and to carry out the provisions and conditions
of this Agreement and the Purchase Agreement, if any, related thereto, except
for such approvals and conditions that need to be obtained or satisfied as are
set forth in the Prospectus and such approvals or authorizations as may be
required under the Securities Act, the securities or "Blue Sky" laws of any
jurisdiction or the rules of any securities exchange on which the securities of
the Company are listed in connection with the purchase and distribution of
shares of Common Stock and PIK Notes Common Stock in the offering. The Purchase
Agreement, if any, entered into in connection with the offering has been duly
authorized, executed and delivered by the Company and is a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles; provided,
that no representation is made as to the validity, binding effect or
enforceability of any provision that purports to provide indemnification of any
Person for any Losses resulting from violation by such person of any applicable
securities or "Blue Sky" laws.
(m) To the best knowledge of the Company, neither the sale of the Common
Stock and PIK Notes Common Stock to be sold pursuant to the Registration
Statement, nor the execution, delivery or performance by the Company of the
Purchase Agreement, if any, entered into in connection with the offering or the
consummation of any other of the transactions contemplated in such Purchase
Agreement, if any, will conflict with, result in a breach of, or constitute a
default under, the charter or by-laws of the Company or any of the Subsidiaries
or the terms of any material indenture or other material agreement or instrument
to which the Company or any of the Subsidiaries is a party or by which it or any
of them is bound, or any
31
material statute applicable to the Company or any of the Subsidiaries or any
material order, decree, rule or regulation applicable to the Company or any of
the Subsidiaries of any Governmental Authority.
(n) Except (i) as set forth in the Prospectus and (ii) to the extent
permitted under subsection 5.6, no holders of securities of the Company have
rights to the registration of such securities under any Registration Statement
except the Securities Holders.
For purposes of the foregoing representations and warranties, the Company
may assume that any agreement is the valid and binding obligation of any other
parties to such agreement.
Section 8. Representations and Warranties of the Securities Holders. Each
participating Securities Holder shall, in connection with a Sale Event, if
required by the terms of a Purchase Agreement relating to such Sale Event, for
itself severally and not jointly represent and warrant to (i) in the case of an
underwritten Public Sale Event, the Company, the underwriter or underwriters and
each other Securities Holder participating in such underwritten Public Sale
Event or (ii) in the case of a non-underwritten Sale Event, the Company and the
purchaser or purchasers and each other Securities Holder participating in such
non-underwritten Sale Event, as follows:
(a) Such Securities Holder has all requisite power and authority to enter
into and carry out the terms of this Agreement and such Purchase Agreement and
the other agreements and instruments related to such agreements to which it is a
party.
(b) Each of this Agreement and such Purchase Agreement has been duly
authorized, executed and delivered by or on behalf of such Securities Holder,
and constitutes the valid and binding obligation of such Securities Holder
enforceable against such Securities Holder in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles; provided, that
no representation is made as to the validity, binding effect or enforceability
of any provision purporting to provide indemnification of any person for any
Losses resulting from violation by such person of any applicable securities or
"Blue Sky" laws.
(c) Such Securities Holder, immediately prior to any sale of shares of
Registerable Common pursuant to such Purchase Agreement, will have good and
marketable title to such shares of Registerable Common, free and clear of all
liens, security interests, encumbrances, equities, claims or other defects in
title (other than those created by this Agreement); and, upon payment therefor,
good and marketable title to such shares of Registerable Common will pass to the
purchaser thereof, free and clear of any lien, security interest, encumbrance,
equity, claims or other defect in title.
(d) Such Securities Holder has not taken and will not take, directly or
indirectly, any action designed to constitute or which has constituted or which
might reasonably be expected to cause or result in, under the Exchange Act or
the rules or regulations promulgated
32
thereunder or other applicable law, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of shares of
Registerable Common.
(e) Written information furnished by or on behalf of such Securities Holder
to the Company expressly for use in the Registration Statement, any related
Preliminary Prospectus, or any related Prospectus or any amendment or supplement
thereto will not contain, in each case as of the date such information was
furnished, any untrue statement of a material fact or omit to state any material
fact required to be stated or necessary to make the statements in such
information not misleading.
(f) To the best knowledge of such Securities Holder, neither the sale of
the Registerable Common to be sold pursuant to the Registration Statement, nor
the execution, delivery or performance by such Securities Holder of the Purchase
Agreement, if any, entered into in connection with the offering or the
consummation of any other of the transactions contemplated in such Purchase
Agreement, if any, will conflict with, result in a breach of, or constitute a
default under, the charter or by-laws of such Securities Holder or the terms of
any material indenture or other material agreement or instrument to which such
Securities Holder is a party or by which it is bound, or any material statute
applicable to such Securities Holder or any material order, decree, rule or
regulation applicable to such Securities Holder of any Governmental Authority.
(g) Such Securities Holder will deliver to any underwriter a properly
completed and executed United States Treasury Department Form W-8 or Form W-9
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
Section 9. Delivery of Comfort Letter and Legal Opinion. On the date that a
Registration Statement relating to a Sale Event in which Securities Holders
participate is declared effective by the Commission or any Canadian Securities
Authority, the Company shall comply with the following:
(a) The Company shall have received, and delivered to each Securities
Holder participating in such Sale Event, a copy of the "comfort" letter or
letters, or updates thereof according to customary practice, of the independent
certified public accountants who have certified the Company's financial
statements included in the Registration Statement covering substantially the
same matters with respect to the Registration Statement (including the
Prospectus) and with respect to events subsequent to the date of the Company's
financial statements as are customarily covered in accountants' letters
delivered to underwriters in underwritten public offerings of securities. The
Company will use its reasonable best efforts to cause such "comfort" letters to
be addressed to such Securities Holders.
(b) Each Securities Holder and any underwriters participating in such
offering shall have received an opinion and any updates thereof of outside
counsel to the Company reasonably satisfactory to such Securities Holders and
underwriters covering substantially the same matters as are customarily covered
in opinions of issuer's counsel delivered to underwriters in underwritten public
offerings of securities, addressed to each of such Securities Holders and
underwriters participating in such offering and dated the closing date thereof.
33
Section 10. Preemptive Rights. (a) In case the Company proposes to issue or
sell any Common Stock or any rights, warrants, options, convertible securities
or indebtedness, exchangeable securities or indebtedness, or other rights,
exercisable for or convertible or exchangeable into, directly or indirectly, any
equity security of the Company, whether at the time of issuance, upon the
passage of time, or upon the occurrence of some future event (the "Proposed
Securities"), the Company shall, no later than thirty (30) calendar days prior
to the consummation of such transaction, notify the Securities Holders in
writing of such transaction (the "First Company Notice"). In addition, the
Company shall, no later than twenty (20) days prior to the proposed sale or
issuance, identify the proposed purchaser, and offer to sell to each Securities
Holder, at the same price and for the same consideration to be paid by the
proposed purchaser (including in the case of a Company Public Sale Event, an
estimate by the underwriter, if any, of the range of prices likely to be paid in
such public offering), a fraction of the Proposed Securities, the numerator of
which is the total number of shares of Registerable Common owned by such
Securities Holder, and the denominator of which is the total number of
outstanding shares of equity securities of the Company, assuming the exercise of
any outstanding PIK Notes and any other securities convertible into Common
Stock. In the event that any Securities Holder fails to fully exercise its
preemptive rights hereunder within fifteen (15) days of the First Company Notice
(the "Initial Preemption Period"), each other Securities Holder shall have a
right of over-allotment whereby such other Securities Holder may purchase any
non-purchasing Securities Holder's portion of the Proposed Securities on a pro
rata basis prior to the expiration of the five (5) day period immediately
following the Initial Preemption Period (the "Second Preemption Period").
Following the expiration of the Second Preemption Period, the Company may
proceed with such proposed issue, sale, or grant of any remaining Proposed
Securities.
(b) Notwithstanding the foregoing, the definition of "Proposed Securities"
shall not include (i) shares of common stock issued upon the conversion of the
PIK Notes, (ii) any other securities issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, any shares of Registrable Common, (iii) any security issued in
connection with a bona fide acquisition by the Company of an unrelated company
or business or a bona fide investment by the Company in a joint venture with an
unrelated third party, or (iv) any security issued pursuant to an "employee
benefit plan" within the meaning of Rule 405 under the Securities Act.
(c) The preemptive rights set forth in this Section 10 may not be assigned
or transferred, except that (i) such rights are assignable by a Securities
Holder to a Transferee Affiliate, and (ii) such rights are assignable among
Securities Holders.
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Section 11. Miscellaneous.
11.1. Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by facsimile
transmission), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when actually delivered or, in the case of
notice by facsimile transmission, when sent and confirmation of receipt is
received. Notices to the Securities Holders shall be deemed to have been given
or made when sent. All notices shall be addressed as follows or to such other
address as may be hereafter designated in writing by the respective parties
hereto:
The Company: Xxxxxx Services Corporation
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
The Securities Holders: The address of each Securities Holder
as set forth on the signature
pages hereof.
11.2. Amendments and Waivers. The Securities Holders of not less than 75%
of the Registerable Common held by Securities Holders at any point in time and
the Company may from time to time enter into written amendments, supplements or
modifications to this Agreement for the purpose of adding any provisions hereto
or thereto or changing in any manner the rights of the Securities Holders or the
Company hereunder or thereunder, provided, however, that the Securities Holders
of not less than 66?% of the Registrable Common held by Securities Holders at
any point in time and the Company may from time to time enter into written
amendments, supplements or modifications to this Agreement for the purpose of
adding any provisions hereto or thereto or changing in any manner the rights of
the Securities Holders or the Company hereunder or thereunder, provided that
such provisions or changes do not adversely affect the rights of the Securities
Holders, and provided, further, that the Securities Holders of not less than 75%
of the Registerable Common held by Securities Holders at any point in time may
execute a written instrument waiving, on such terms and conditions as may be
specified therein, any of the requirements of this Agreement which are solely
for the benefit of the Securities Holders and where such waiver does not
adversely affect the interests of the Company; provided, however, that no such
waiver and no such amendment, supplement or modification shall (i) adversely
affect the rights of a Securities Holder under Section 2 hereof or (ii) amend,
modify or waive any provision of Section 5 or this subsection 11.2, in each case
without the written consent of each Securities Holder. Any such waiver and any
such amendment, modification or supplement shall apply equally to each of the
Securities Holders and the Company.
11.3. Termination. This Agreement and the respective obligations and
agreements of the parties hereto, except as otherwise expressly provided herein,
shall terminate on the Termination Date.
35
11.4. Survival of Representations and Warranties. Except as they may by
their terms relate to an earlier date, all representations and warranties made
hereunder and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the termination of any or all of the provisions of this
Agreement.
11.5. Headings. The descriptive headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
11.6. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all of such
counterparts shall together constitute one and the same agreement.
11.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCLUDING ITS CONFLICT OF
LAWS PROVISIONS.
11.8. Adjustment of Shares. Each reference to a number of shares of PIK
Notes Common Stock in this Agreement shall be adjusted proportionately to
reflect any stock dividend, split or reverse split or the like affected with
respect to all outstanding shares of PIK Notes Common Stock.
11.9. No Inconsistent Agreements. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities which
is inconsistent with the rights granted to the Securities Holders in this
Agreement or otherwise conflicts with the provisions hereof.
11.10. Severability. Any provision of this Agreement prohibited or rendered
unenforceable by any applicable law of any jurisdiction shall as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability, without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11.11. Nominee; Benefits. All references to Securities Holders in this
Agreement shall include the Person or Persons for whom the Securities Holders
act as a nominee, and the benefits of and rights and obligations under the
Agreement shall accrue to such Person or Persons which have a beneficial
interest in the Registrable Common and for whom the Securities Holders are a
nominee.
11.12. ENTIRE AGREEMENT. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE COMPANY AND THE
PARTIES SIGNATORIES TO THIS AGREEMENT HEREBY AGREE THAT THE PIK NOTE
36
ORIGINAL REGISTRATION RIGHTS AGREEMENT AND THE COMMON STOCK ORIGINAL
REGISTRATION RIGHTS AGREEMENT ARE HEREBY TERMINATED.
11.13. Listing of PIK Notes Common Stock. The Company shall use its
commercially reasonable efforts following the effective date of a Registration
Statement with respect to Registerable Common to cause such Registerable Common
to be listed or admitted to trading on the same exchange or national trading
market on which its Common Stock is then listed, and if its Common Stock is not
so listed, then on the New York Stock Exchange, Inc. and The Toronto Stock
Exchange, and if such securities cannot be listed on the New York Stock
Exchange, Inc., then on the Nasdaq National Market.
11.14. No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any of the Securities Holders to
sell any Registerable Common pursuant to any Registration Statement or
otherwise.
[Remainder of page intentionally left blank.]
37
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
COMPANY:
XXXXXX SERVICES CORPORATION
By:_______________________________________
Name:
Title:
38
SECURITIES HOLDERS:
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.,
its General Partner
By:____________________________________________
Name:
Title:
Address for notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC, its General Partner
By:______________________________________________
Name:
Title:
Address for notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
MEADOW WALK LIMITED PARTNERSHIP
By: BARBERRY CORP., its General Partner
By: ____________________________________________
Name:
Title:
Address for notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
39
XXXXXXXXX L.L.C.
By:______________________________________________
Name:
Title:
Address for notices:
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.X.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
40
EXHIBIT A
SUPPLEMENTAL ADDENDUM
The undersigned is a holder of Registerable Common of Xxxxxx
Services Corporation. The undersigned hereby agrees as follows:
The undersigned hereby accepts the terms of and becomes a
party to (as a Securities Holder) the Amended and Restated Registration Rights
Agreement dated as of April 12, 2002, by and among Xxxxxx Services Corporation
(the "Company") and each Securities Holder named therein. In connection
therewith, the undersigned agrees to (A) assume all obligations and liabilities
thereunder, (B) enjoy all of the rights thereunder, (C) be bound thereby and (D)
perform and comply with the agreements and commitments on the part of the
undersigned, as assignee, set forth in the Registration Rights Agreement.
As used in this Supplemental Addendum, capitalized terms
defined in the Registration Rights Agreement shall have their respective defined
meanings.
Name of
Address Institution:______________________
By:_______________________________
Name:
Title:
Date: ______________