EXHIBIT 4.4
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10 1/4% SENIOR DISCOUNT NOTES DUE 2007
REGISTRATION RIGHTS AGREEMENT
Dated as of October 28, 1997
by and among
FOX KIDS WORLDWIDE, INC.,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED,
CITICORP SECURITIES INC.
and
BEAR, XXXXXXX & CO. INC.,
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
and
XXXXXX XXXXXXX & CO.
as Initial Purchasers
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
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entered into as of October 28, 1997 by and among FOX KIDS WORLDWIDE, INC., a
Delaware corporation (the "Company"), XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
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INCORPORATED ("Xxxxxxx Xxxxx"), CITICORP SECURITIES, INC. ("Citicorp") and BEAR,
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XXXXXXX & CO. INC., XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION and
XXXXXX XXXXXXX & CO. (collectively, "Bear, Xxxxxxx" and, together with Xxxxxxx
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Xxxxx and Citicorp, the "Initial Purchasers").
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This Agreement is made pursuant to the Purchase Agreement dated as of
October 22, 1997 by and among the Company and the Initial Purchasers (the
"Purchase Agreement"), which provides for, among other things, the sale by the
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Company to the Initial Purchasers of an aggregate of $618,670,000 principal
amount at maturity of the Company's 10 1/4% Senior Discount Notes Due 2007 (the
"Securities"). In order to induce the Initial Purchasers to enter into the
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Purchase Agreement, the Company has agreed to provide to the Initial Purchasers
and their direct and indirect transferees the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized
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defined terms shall have the following meanings:
"Accreted Value" shall mean (a) as of any date prior to the Cash
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Interest Election Date, if any (the "Specified Date"), with respect to each
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$1,000 principal face amount at maturity of Securities:
(i) if the Specified Date is one of the following dates (each a "Semi-
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Annual Accrual Date"), the amount set forth opposite such date below:
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Semi-Annual Accrual Date Accreted Value
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Issue Date..................................... $ 606.14
November 1, 1997............................... $ 606.65
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May 1, 1998.................................... $ 637.74
November 1, 1998............................... $ 670.43
May 1, 1999.................................... $ 704.79
November 1, 1999............................... $ 740.91
May 1, 2000.................................... $ 778.88
November 1, 2000............................... $ 818.80
May 1, 2001.................................... $ 860.76
November 1, 2001............................... $ 904.87
May 1, 2002.................................... $ 951.25
November 1, 2002............................... $1000.00
(ii) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the sum of (a) the Accreted Value for the Semi-Annual Accrual Date
immediately preceding the Specified Date and (b) an amount equal to the
product of (x) the Accreted Value for the Semi-Annual Accrual Date
immediately following the Specified Date less the Accreted Value for the
Semi-Annual Accrual Date immediately preceding the Specified Date and (y) a
fraction, the numerator of which is the number of days actually elapsed
from the immediately preceding Semi-Annual Accrual Date to the Specified
Date, using a 360-day year of twelve 30-day months, and the denominator of
which is 180; and
(iii) if the Specified Date is after November 1, 2002, $1,000; and
(b) on or after the Cash Interest Election Date, with respect to
each $1,000 principal face amount of Securities, the Accreted Value determined
in accordance with the foregoing as of such Cash Interest Election Date (without
further accretion).
"Additional Interest" shall have the meaning set forth in Section 2(e)
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hereof.
"Advice" shall have the meaning set forth in the last paragraph of
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Section 3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(t)
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hereof.
"Business Day" shall mean a day that is not a Saturday, a Sunday or a
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day on which banking institutions in New York, New York are required to be
closed.
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"Cash Interest Election" shall mean an election made by the Company at
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any time prior to November 1, 2002, to commence the accrual of cash interest
from and after the Cash Interest Election Date with respect to the Securities,
pursuant to the terms of the Indenture.
"Cash Interest Election Date" shall mean the interest payment date on
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which the Company makes a Cash Interest Election.
"Closing Time" shall mean the Closing Time as defined in the Purchase
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Agreement.
"Company" shall have the meaning set forth in the preamble to this
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Agreement and also includes the Company's successors and permitted assigns.
"Depositary" shall mean The Depository Trust Company, or any other
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depositary appointed by the Company; provided, however, that such depositary
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must have an address in the Borough of Manhattan in The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section
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2(b) hereof.
"Event Date" shall have the meaning set forth in Section 2(e) hereof.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended.
"Exchange Offer" shall mean the exchange offer by the Company of
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Exchange Securities for Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
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Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
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registration statement on Form S-1 or S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
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hereof.
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"Exchange Securities" shall mean the senior debt securities issued by
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the Company under the Indenture containing terms identical to the Securities
(except that (i) interest thereon shall accrue from the last date on which
interest was paid on the Securities or, if no such interest has been paid, from
October 28, 1997 and (ii) the transfer restrictions thereon shall be eliminated)
to be offered to Holders of Securities in exchange for Securities pursuant to
the Exchange Offer.
"Guarantors" shall have the meaning set forth in Section 7(c) hereof.
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"Holder" shall mean the Initial Purchasers, for so long as they own
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any Registrable Securities, and each of their successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture.
"Indenture" shall mean the Indenture relating to the Securities dated
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as of October 28, 1997 between the Company and The Bank of New York, as trustee,
as the same may be amended from time to time in accordance with the terms
thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble
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to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n) hereof.
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"Majority Holders" shall mean the Holders of a majority of the
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aggregate principal amount at maturity of outstanding Registrable Securities.
"Participating Broker-Dealer" shall have the meaning set forth in
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Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation, limited
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liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
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hereof.
"Private Exchange Securities" shall have the meaning set forth in
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Section 2(a) hereof.
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"Prospectus" shall mean the prospectus included in a Registration
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Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
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to this Agreement.
"Records" shall have the meaning set forth in Section 3(n) hereof.
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"Registrable Securities" shall mean each Security and, if issued, each
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Private Exchange Security until (i) the date on which such Security has been
exchanged by a Person other than a Participating Broker-Dealer for an Exchange
Security in the Exchange Offer, (ii) following the exchange by a Participating
Broker-Dealer in the Exchange Offer of a Security for an Exchange Security, the
date on which such Exchange Security is sold to a purchaser who receives from
such Participating Broker-Dealer on or prior to the date of such sale a copy of
the Prospectus contained in the Exchange Offer Registration Statement, as
amended or supplemented, (iii) the date on which such Security or Private
Exchange Security, as the case may be, has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement, (iv) the date on which such Security or Private Exchange Security, as
the case may be, is eligible for distribution to the public pursuant to Rule
144(k) under the Securities Act (or any similar provision then in force, but not
Rule 144A under the Securities Act), (v) the date such Security or Private
Exchange Security, as the case may be, shall have been otherwise transferred by
the holder thereof and a new Security not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
such Security shall not require registration or qualification under the
Securities Act or any similar state law then in force or (vi) such Security or
Private Exchange Security, as the case may be, ceases to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
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performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers,
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Inc. (the "NASD") registration and filing fees, including, if applicable, the
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reasonable fees and expenses of any "qualified independent underwriter" (and its
counsel) that is required to be retained by any Initial Purchaser holding
Registrable Securities in accordance with the rules and regulations of the NASD,
(ii) all reasonable fees and expenses incurred in connection with compliance
with state securities or blue sky laws (including reasonable fees and
disbursements of counsel for any underwriters or any Holder that was an Initial
Purchaser in connection with blue sky qualification of any of the Exchange
Securities or Registrable Securities) and compliance with the rules of the NASD,
(iii) all reasonable expenses of any Persons (other than the Holders or Persons
acting at the request of the Holders) in preparing or assisting in preparing,
word processing, printing and distributing any Registration Statement, any
Prospectus and any amendments or supplements thereto, and in preparing or
assisting in preparing, printing and distributing any underwriting agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) the reasonable fees and
disbursements of counsel for the Company and of the independent certified public
accountants of the Company, including the expenses of any "cold comfort" letters
required by or incident to such performance and compliance, (vi) the reasonable
fees and expenses of the Trustee, and any exchange agent or custodian, (vii) any
reasonable fees and disbursements of any underwriter customarily required to be
paid by the Company or sellers of securities and the reasonable fees and
expenses of any special experts retained by the Company in connection with any
Registration Statement and (viii) all reasonable fees of any one counsel
designated in writing by the Majority Holders to act as counsel to the Holders
of the Registrable Securities in connection with a Shelf Registration Statement,
but excluding fees of counsel to the underwriters and underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
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Company which covers any of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement, and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
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"Securities" shall have the meaning set forth in the preamble to this
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Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
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"Shelf Registration" shall mean a registration effected pursuant to
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Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
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statement of the Company pursuant to the provisions of Section 2(b) hereof which
covers all of the Registrable Securities or all of the Private Exchange
Securities, as the case may be, on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein.
"TIA" shall have the meaning set forth in [Section 3(l)] hereof.
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"Trustee" shall mean the trustee with respect to the Securities under
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the Indenture.
2. Registration Under the Securities Act.
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(a) Exchange Offer. To the extent not prohibited by any applicable
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law or applicable SEC policy, the Company shall, for the benefit of the Holders,
at the Company's cost (i) file with the SEC within 90 days after the Closing
Time an Exchange Offer Registration Statement on an appropriate form under the
Securities Act covering the offer by the Company to the Holders to exchange all
of the Registrable Securities (other than Private Exchange Securities) for a
like principal amount of Exchange Securities, (ii) use its best efforts to cause
such Exchange Offer Registration Statement to be declared effective under the
Securities Act by the SEC not later than the date which is 150 days after the
Closing Time, (iii) use its commercially reasonable efforts to have such
Registration Statement remain effective until the closing of the Exchange Offer
and (iv) commence the Exchange Offer and use its best efforts to issue Exchange
Securities in exchange for all Registrable Securities (other than the Private
Exchange Securities) properly tendered prior thereto in the Exchange Offer not
later than 180 days after the date on which the Exchange Offer Registration
Statement was declared effective by the SEC. Upon the effec-
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tiveness of the Exchange Offer Registration Statement, the Company shall
promptly commence the Exchange Offer, it being the objective of such Exchange
Offer to enable each Holder eligible and electing to exchange Registrable
Securities (other than Private Exchange Securities) for Exchange Securities
(assuming that such Holder is not an affiliate of the Company within the meaning
of Rule 405 under the Securities Act and is not a broker-dealer tendering
Registrable Securities acquired directly from the Company for its own account,
acquires the Exchange Securities in the ordinary course of such Holder's
business and has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing (within the
meaning of the Securities Act) the Exchange Securities) to transfer such
Exchange Securities from and after their receipt without any limitations or
restrictions under the Securities Act and under state securities or blue sky
laws.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 20 Business Days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law) (such period referred to
herein as the "Exchange Period");
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(iii) utilize the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last Business Day of
the Exchange Period, by sending to the institution specified in the notice,
a telegram, telex, facsimile transmission or letter setting forth the name
of such Holder, the principal amount of Securities delivered for exchange,
and a statement that such Holder is withdrawing such Holder's election to
have such Securities exchanged;
(v) notify each Holder that any Security not tendered will remain
outstanding and continue to accrue interest, but will not retain any rights
under this Agree-
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ment (except in the case of the Initial Purchasers and Participating
Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Company upon the request of
any Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to such Initial Purchaser in
exchange (the "Private Exchange") for the Securities held by such Initial
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Purchaser, a like principal amount of debt securities of the Company that are
identical (except that such securities shall bear appropriate transfer
restrictions) to the Exchange Securities (the "Private Exchange Securities").
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The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical to the Indenture
in all material respects and which, in either case, has been qualified under the
TIA and shall provide that the Exchange Securities shall not be subject to the
transfer restrictions set forth in the Indenture. The Indenture or such
indenture shall provide that the Exchange Securities, the Private Exchange
Securities and the Securities shall vote and consent together on all matters as
one class and that none of the Exchange Securities, the Private Exchange
Securities or the Securities will have the right to vote or consent as a
separate class on any matter. The Private Exchange Securities shall be of the
same series as, and the Company shall use its commercially reasonable efforts to
have the Private Exchange Securities bear the same CUSIP number as, the Exchange
Securities.
As soon as practicable after the close of the Exchange Offer and/or
the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer;
(ii) accept for exchange all Securities duly tendered pursuant
to the Private Exchange; and
(iii) deliver, or cause to be delivered, to the Trustee for
cancellation all Securities or portions
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thereof so accepted for exchange by the Company, and issue, and cause the
Trustee under the Indenture to promptly authenticate and deliver to each
Holder, a new Exchange Security or Private Exchange Security, as the case
may be, equal in principal amount at maturity to the principal amount at
maturity of the Securities surrendered by such Holder and accepted for
exchange.
To the extent not prohibited by any law or applicable interpretation
of the staff of the SEC, the Company shall use its commercially reasonable
efforts to complete the Exchange Offer as provided above, and shall comply with
the applicable requirements of the Securities Act, the Exchange Act and other
applicable laws in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the staff of the SEC
and that the exchanging holder shall have delivered a validly completed and
executed letter of transmittal and such other documents required pursuant to
Section 2(a)(i) hereof, including the representations referred to in the next
sentence. Each Holder of Registrable Securities (other than Private Exchange
Securities) who wishes to exchange such Registrable Securities (other than
Private Exchange Securities) for Exchange Securities in the Exchange Offer will
be required to make in writing certain customary representations in connection
therewith, including representations that such Holder is not an affiliate of the
Company within the meaning of Rule 405 under the Securities Act, or if it is
such an affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable, that any Exchange
Securities to be received by it will be acquired in the ordinary course of
business and that at the time of the commencement of the Exchange Offer it has
no arrangement with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Securities. The Company shall
inform the Initial Purchasers, after consultation with the Trustee and the
Initial Purchasers, of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
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mutandis, solely with respect to Registrable Securities that are Private
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Exchange Securities and Exchange Securities held by Participating Broker-
Dealers, and
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the Company shall have no further obligation to register Registrable Securities
(other than Private Exchange Securities) pursuant to Section 2(b) hereof.
(b) Shelf Registration. To the extent not prohibited by any law or
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applicable SEC policy, in the event that (i) the Company is not permitted to
file the Exchange Offer Registration Statement or to consummate the Exchange
Offer because the Exchange Offer is not permitted by applicable law or SEC
policy, (ii) the Exchange Offer is not for any other reason consummated within
180 days after the Closing Time, (iii) any holder of Securities notifies in
writing the Company within 30 days after the commencement of the Exchange Offer
that (a) due to a change in law or SEC policy it is not entitled to participate
in the Exchange Offer, (b) due to a change in law or SEC policy it may not
resell the Exchange Securities acquired by it in the Exchange Offer to the
public without delivering a prospectus and the prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such holder or (c) it is a broker-dealer and owns Securities acquired
directly from the Company or an affiliate of the Company or (iv) the holders of
a majority in aggregate principal amount at maturity of the Securities may not
resell the Exchange Securities acquired by them in the Exchange Offer to the
public without restriction under the Securities Act and without restriction
under applicable blue sky or state securities laws, then the Company shall, at
its cost, file as promptly as practicable after such determination or date, as
the case may be, and, in any event, prior to the later of (A) 90 days after the
Closing Time or (B) 30 days after such filing obligation arises (provided,
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however, that, if the Company has not consummated the Exchange Offer within 180
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days after the Closing Time, then the Company shall file the Shelf Registration
Statement with the SEC on or prior to the 210th day after the Closing Time,
unless the Company has consummated the Exchange Offer prior to the 210th day
after the Closing Time, whereby the Company's obligation to file a Shelf
Registration Statement pursuant to clause (b)(ii) above shall be cancelled,
provided, that such cancellation shall not relieve the Company of any obligation
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to pay Additional Interest, if Additional Interest is otherwise due and
payable), a Shelf Registration Statement providing for the sale by the Holders
of all of the Registrable Securities affected thereby, and shall use its
commercially reasonable efforts to cause such Shelf Registration Statement to be
declared effective by the SEC as soon as practicable and, in any event, on or
prior to 60 days after the obligation to file the Shelf Registration Statement
arises. No Holder of Registrable Securities may include any of its Regis-
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trable Securities in any Shelf Registration pursuant to this Agreement unless
and until such Holder furnishes to the Company in writing, within 10 days after
receipt of a request therefor, such information as the Company may, after
conferring with counsel with regard to information relating to Holders that
would be required by the SEC to be included in such Shelf Registration Statement
or Prospectus included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Company all
information with respect to such Holder necessary to make any information
previously furnished to the Company by such Holder not materially misleading.
The Company agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective, supplemented and amended for a
period of two years (or such shorter period provided for in any amendment to
Rule 144(k) under the Securities Act (or any successor provision other than Rule
144A) upon the expiration of which securities are eligible for distribution to
the public) from the Closing Time or such shorter period that will terminate
when all the Registrable Securities covered by the Shelf Registration Statement
have been sold pursuant thereto (subject to extension pursuant to the last
paragraph of Section 3 hereof) (the "Effectiveness Period"), provided, however,
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that with respect to the Private Exchange Securities the Company shall only be
obligated to keep the Shelf Registration Statement effective, supplemented and
amended for a period of 60 days (subject to suspension pursuant to paragraph
three of Section 2(e)). The Company shall not permit any securities other than
Registrable Securities to be included in the Shelf Registration. The Company
further agrees, if necessary, to supplement or amend the Shelf Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement
or by the Securities Act or by any other rules and regulations thereunder for
shelf registrations, and the Company agrees to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly after
its being used or filed with the SEC.
Notwithstanding the requirements contained in this Section 2(b),
solely with respect to the Private Exchange Securities, the Company shall have
no obligation to file or effect a Shelf Registration Statement registering such
Private Exchange Securities, if the aggregate principal amount at maturity of
such Private Exchange Securities does not exceed $5,000,000.
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(c) Expenses. The Company shall pay all Registration Expenses in
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connection with the registration pursuant to Section 2(a) or 2(b) hereof.
Except as provided in the preceding sentence, each Holder shall pay all expenses
of its counsel, underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer Registration
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Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
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after it has been declared effective, the offering of Registrable Securities
pursuant to a Shelf Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable Securities may legally resume. The Company will be deemed not to
have used its commercially reasonable efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite period if its
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Registrable
Securities covered thereby not being able to exchange or offer and sell such
Registrable Securities during that period unless such action is required by
applicable law or SEC policy. Notwithstanding the foregoing, the only remedy
available under this Agreement for the failure of the Company to satisfy the
obligations set forth in Sections 2(a), 2(b) and 3 hereof shall be payment by
the Company of the Additional Interest as set forth in Section 2(e) hereof and
the remedy of specific enforcement provided by Section 2(f) hereof.
(e) Additional Interest. (1) If (i) the Company fails to file an
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Exchange Offer Registration Statement or the Shelf Registration Statement with
respect to the Registrable Securities (other than the Private Exchange
Securities) on or before the date specified herein for such filing, (ii) the
Exchange Offer Registration Statement or the Shelf Registration Statement is not
declared effective by the SEC on or prior to the date specified herein for such
effectiveness (the "Effectiveness Target Date"), (iii) the Exchange Offer is
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required to be consummated hereunder and the Company fails to issue Exchange
Securities in exchange for all Securities properly
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tendered and not withdrawn in the Exchange Offer within 45 days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) the Exchange Offer Registration Statement or the Shelf
Registration Statement required to be filed and declared effective hereunder is
declared effective but thereafter ceases to be effective or usable in connection
with the Exchange Offer or resales of Securities, as the case may be, during the
periods specified herein (each such event referred to in clauses (i) through
(iv) above, a "Registration Default"), then the interest rate borne by the
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Registrable Securities (other than the Private Exchange Securities) as to which
the Registration Default exists shall be increased (the "Additional Interest"),
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with respect to the first 90-day period (or portion thereof) while a
Registration Default is continuing immediately following the occurrence of such
Registration Default, by 0.25% per annum, such interest rate increasing by an
additional 0.25% per annum at the beginning of each subsequent 90-day period (or
portion thereof) while a Registration Default is continuing until all
Registration Defaults have been cured, up to a maximum rate of Additional
Interest of 1.00% per annum. If a Registration Default exists with respect to
the Securities prior to the Cash Interest Election Date, the Company will make
cash payments of Additional Interest on each interest payment date on the
Securities which are Transfer Restricted Securities at the rate set forth in the
preceding sentence multiplied by the Accreted Value of the Securities as of the
interest payment date on which such payment is made. Upon (w) the filing of the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
the case may be, required hereunder (in the case of clause (i) of the preceding
sentence), (x) the effectiveness of the Exchange Offer Registration Statement or
the Shelf Registration Statement, as the case may be, required hereunder (in the
case of clause (ii) of the preceding sentence), (y) the issuance of Exchange
Securities in exchange for all Securities (other than the Private Exchange
Securities) properly tendered and not withdrawn in the Exchange Offer (in the
case of clause (iii) of the preceding sentence) or (z) the effectiveness of the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
the case may be, required hereunder which had ceased to be effective (in the
case of clause (iv) of the preceding sentence), Additional Interest as a result
of the Registration Default described in such clause shall cease to accrue (but
any accrued amount shall be payable) and the interest rate on the Securities
shall revert to the original rate if no other Registration Default has occurred
and is continuing.
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The Company shall notify the Trustee within three Business Days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Additional Interest shall be
----------
paid by depositing with the Trustee, in trust, for the benefit of the Holders of
Securities (other than the Private Exchange Securities) on or before the
applicable semiannual interest payment date, immediately available funds in sums
sufficient to pay the Additional Interest then due. The Additional Interest due
shall be payable on each interest payment date to the record Holder of
Securities entitled to receive the interest payment to be paid on such date as
set forth in the Indenture. Each obligation to pay Additional Interest shall be
deemed to accrue from and including the day following the applicable Event Date.
Notwithstanding anything in the foregoing to the contrary, the Company
shall have no obligation to pay Additional Interest for a period not in excess
of 60 days in any twelve month period (the "Blackout Period") in respect of
Registrable Securities owned by an Initial Purchaser, if the Board of Directors
of the Company determines in its reasonable good faith judgment that the
registration and distribution of such Registrable Securities covered by the
Shelf Registration Statement would materially interfere with any pending
acquisition or corporate reorganization or other material transaction involving
the Company or any of its Subsidiaries or would require disclosure of any other
material corporate development that the Company is not otherwise required to
disclose, which disclosure would materially adversely affect the Company. The
Company will promptly give each Initial Purchaser written notice of such
determination and an approximation of the period of the anticipated delay. Each
Holder agrees to cease all disposition efforts under such Shelf Registration
Statement with respect to Registrable Securities held up by such Initial
Purchaser upon receipt of notice of the beginning of any Blackout Period. The
Company shall provide prompt written notice to the Initial Purchaser of the end
of each Blackout Period.
(f) Specific Enforcement. Without limiting the remedies available to
--------------------
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
would not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, the Initial Purchasers or any Holder may
obtain such
-16-
relief as may be required to specifically enforce the Company's obligations
under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the obligations of
-----------------------
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be selected
by the Company, (ii) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Securities by the selling Holders
thereof and (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith; and use their commercially
reasonable efforts to cause such Registration Statement to become effective
and remain effective in accordance with Section 2 hereof; provided,
--------
however, that if (1) such filing is pursuant to Section 2(b), or (2) a
-------
Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2(a) is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Company shall furnish to and afford
the Holders of the Registrable Securities and each such Participating
Broker-Dealer, as the case may be, covered by such Registration Statement,
their counsel and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits thereto)
proposed to be filed (at least 5 Business Days prior to such filing). The
Company shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders must be
afforded an opportunity to review prior to the filing of such document if
the Majority Holders or such Participating Broker-Dealer, as the case may
be, their counsel or the managing underwriters, if any, shall reasonably
object;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration State-
-17-
ment effective for the Effectiveness Period or the Applicable Period, as
the case may be; and cause each Prospectus to be supplemented by any
required prospectus supplement and as so supplemented to be filed pursuant
to Rule 424 (or any similar provision then in force) under the Securities
Act, and comply with the provisions of the Securities Act, the Exchange Act
and the rules and regulations promulgated thereunder applicable to it with
respect to the disposition of all securities covered by each Registration
Statement during the Effectiveness Period or the Applicable Period, as the
case may be, in accordance with the intended method or methods of
distribution by the selling Holders thereof described in this Agreement
(including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least three Business Days prior to filing, that
a Shelf Registration Statement with respect to the Registrable Securities
is being filed and advising such Holder that the distribution of
Registrable Securities will be made in accordance with the method selected
by the Majority Holders; and (ii) furnish to each Holder of Registrable
Securities and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter
may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) subject to the last
paragraph of Section 3 hereof, hereby consent to the use of the Prospectus
or any amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(d) in the case of a Shelf Registration, use its best efforts to
register or qualify the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions by the time the
applicable Registration Statement is declared effective by the SEC as any
Holder of Registrable Securities covered by a Registration Statement and
each underwriter of an underwritten offering of Registrable Securities
shall reasonably request in advance of such date of effectiveness, and do
any and all other acts and things which may be reasonably necessary or
advisable to enable such Holder and underwriter
-18-
to consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company shall
-------- -------
not be required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (ii) file any general consent to service
of process or (iii) subject itself to taxation in any such jurisdiction if
it is not so subject;
(e) in the case of (1) a Shelf Registration or (2) Participating
Broker-Dealers who have notified the Company that they will be utilizing
the Prospectus contained in the Exchange Offer Registration Statement as
provided in Section 3(t) hereof, notify each Holder of Registrable
Securities, or such Participating Broker-Dealers, as the case may be, their
counsel and the managing underwriters, if any, promptly and confirm such
notice in writing (i) when a Registration Statement has become effective
and when any post-effective amendments and supplements thereto become
effective, (ii) of any request by the SEC or any state securities authority
for amendments and supplements to a Registration Statement or Prospectus or
for additional information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) if
the Company receives any notification with respect to the suspension of the
qualification of the Registrable Securities or the Exchange Securities to
be sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v) of
the happening of any event or the failure of any event to occur or the
discovery of any facts or otherwise during the Effectiveness Period or
Applicable Period, as the case may be, which makes any statement made in a
Registration Statement or the related Prospectus untrue in any material
respect or which causes such Registration Statement or Prospectus to omit
to state a material fact necessary to make the statements therein (in the
case of the Prospectus, in the light of the circumstances under which they
were made) not misleading and (vi) the Company's reasonable determination
that a post-effective amendment to the Registration Statement would be
appropriate;
-19-
(f) take reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as
practicable;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of each
Registration Statement relating to such Shelf Registration and any post-
effective amendment thereto (without documents incorporated therein by
reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and cause such Registrable Securities
to be in such denominations (consistent with the provisions of the
Indenture) and registered in such names as the selling Holders or the
underwriters may reasonably request at least two Business Days prior to the
closing of any sale of Registrable Securities;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v), 3(e)(vi) or 3(e)(vii) hereof, use its
best efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
(subject to Section 3(a)) so that, as thereafter delivered to the
purchasers of the Registrable Securities or Exchange Securities to whom a
Prospectus is being delivered by a Participating Broker-Dealer who has
notified the Company that it will be utilizing the Prospectus contained in
the Exchange Offer Registration Statement as provided in Section 3(t)
hereof, such Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and to notify each Holder or Participating Broker-Dealer, as
the case may be, to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and each Holder and
Participating Broker-Dealer hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct
such misstatement or omission;
-20-
(j) in the case of a Shelf Registration, upon the filing of any
document which is to be incorporated by reference into a Registration
Statement or a Prospectus after the initial filing of a Registration
Statement, provide a reasonable number of copies of such document to the
Holders;
(k) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with certificates for the
Exchange Securities or the Registrable Securities, as the case may be, in a
form eligible for deposit with the Depositary;
(l) cause the Indenture or the indenture provided for in Section 2(a)
to be qualified under the TIA in connection with the registration of the
Exchange Securities or Registrable Securities, as the case may be,
cooperate with the Trustee or any trustee under such indenture and the
Holders to effect such changes to the Indenture or such indenture as may be
required for the Indenture or such indenture to be so qualified in
accordance with the terms of the TIA and execute, and use their
commercially reasonable efforts to cause the Trustee or such trustee to
execute, all documents as may be required to effect such changes, and all
other forms and documents required to be filed with the SEC to enable the
Indenture or such indenture to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) as are customary in underwritten
offerings and take all such other appropriate actions as are reasonably
requested in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection, whether
or not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, at the time of effectiveness
of such Shelf Registration: (i) make such representations and warranties to
Holders of such Registrable Securities and the underwriters (if
-21-
any), with respect to the business of the Company and its subsidiaries as
then conducted or proposed to be conducted and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated
by reference therein, in each case, in form and substance similar to the
representations and warranties given by the Company in the Purchase
Agreement and reasonably satisfactory to the managing underwriters (if any)
and the Holders of a majority in principal amount at maturity of the
Registrable Securities being sold, and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates
thereof, if appropriate, in form and substance similar to the opinion given
by counsel to the Company pursuant to the Purchase Agreement and reasonably
satisfactory to the managing underwriters (if any) and the Holders of a
majority in principal amount of the Registrable Securities being sold,
addressed to each selling Holder and the underwriters (if any); (iii)
obtain "cold comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriters (if any) from the
independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to the selling Holders of Registrable
Securities (if appropriate) and to each of the underwriters (if any), such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by
such selling Holders and underwriters; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in Section
4 hereof (or such other less favorable provisions and procedures acceptable
to Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement and the managing
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section (including, without limitation, such underwriters
and selling Holders). The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section 2(b) or
(2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, make available for
inspection by any selling Holder of such Registrable Secu-
-22-
rities being sold, or each such Participating Broker-Dealer, as the case
may be, any underwriter participating in any such disposition of
Registrable Securities, if any, and any attorney, accountant or other agent
retained by any such selling Holder or each such Participating Broker-
Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
----------
business hours, all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries (collectively,
the "Records") as shall be reasonably necessary to enable them to exercise
-------
any applicable due diligence responsibilities, and cause the officers,
directors and employees of the Company and its subsidiaries to supply all
information in each case reasonably requested by any such Inspector in
connection with such Registration Statement. Records that the Company
determines to be confidential or any Records which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records is necessary in connection with the
Inspectors' assertion of any claims or actions or with their establishment
of any defense in an action then pending before a court of competent
jurisdiction, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or (iii) the
information in such Records has been made generally available to the
public. Each selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to agree that information
obtained by it as a result of such inspections shall be deemed confidential
and shall not be used by it as the basis for any market transactions in the
securities of the Company unless and until such is made generally available
to the public. Each selling Holder of such Registrable Securities and each
such Participating Broker-Dealer will be required to further agree that it
will, prior to disclosure of such Records pursuant to clause (i) or (ii)
above, give prompt notice to the Company and allow the Company at its
expense to undertake appropriate action to prevent disclosure to the public
of the Records deemed confidential;
(o) comply with all applicable rules and regulations of the SEC and
make generally available to their securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Securities
are
-23-
sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements
shall cover said 12-month periods;
(p) upon consummation of the Exchange Offer or the Private Exchange,
obtain an opinion of counsel to the Company addressed to the Trustee for
the benefit of all Holders of Registrable Securities participating in the
Exchange Offer or the Private Exchange, as the case may be, and which
includes an opinion that (i) the Company has duly authorized, executed and
delivered the Exchange Securities and Private Exchange Securities and the
Indenture, and (ii) each of the Exchange Securities or the Private Exchange
Securities, as the case may be, and the Indenture constitutes a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its respective terms (in each case, with
customary exceptions);
(q) if the Exchange Offer or the Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to the
Company (or to such other Person as directed by the Company) in exchange
for the Exchange Securities or the Private Exchange Securities, as the case
may be, the Company shall xxxx, or cause to be marked, on such Registrable
Securities delivered by such Holders that such Registrable Securities are
being cancelled in exchange for the Exchange Securities or the Private
Exchange Securities, as the case may be; in no event shall such Registrable
Securities be marked as paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the NASD;
(s) use its commercially reasonable efforts to take all other steps
necessary to effect the registration of the Registrable Securities covered
by a Registration Statement contemplated hereby;
-24-
(t) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution," which section shall be reasonably acceptable to the
Initial Purchasers or another representative of the Participating Broker-
Dealers, and which shall contain a summary statement of the positions taken
or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer (a "Participating Broker-Dealer")
---------------------------
that holds Registrable Securities acquired for its own account as a result
of market-making activities or other trading activities and that will be
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities to be received by such broker-dealer in the Exchange
Offer, whether such positions or policies have been publicly disseminated
by the staff of the SEC or such positions or policies, in the reasonable
judgment of the Initial Purchasers or such other representative, represent
the prevailing views of the staff of the SEC, including a statement that
any such broker-dealer who receives Exchange Securities for Registrable
Securities pursuant to the Exchange Offer may be deemed a statutory
underwriter and must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Securities,
(ii) furnish to each Participating Broker-Dealer who has delivered to the
Company the notice referred to in Section 3(e), without charge, as many
copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or
supplement thereto, as such Participating Broker-Dealer may reasonably
request, (iii) hereby consents to the use of the Prospectus forming part of
the Exchange Offer Registration Statement or any amendment or supplement
thereto, by any Person subject to the prospectus delivery requirements of
the SEC, including all Participating Broker-Dealers, in connection with the
sale or transfer of the Exchange Securities covered by the Prospectus or
any amendment or supplement thereto, (iv) use its commercially reasonable
efforts to keep the Exchange Offer Registration Statement effective and to
amend and supplement the Prospectus contained therein in order to permit
such Prospectus to be lawfully delivered by all Persons subject to the
prospectus delivery requirements of the Securities Act for such period of
time as such Persons must comply with such requirements in order to resell
the Exchange Securities; provided, however, that such period shall not be
-------- -------
required to exceed 210 days (or such longer period if extended pur-
-25-
suant to the last sentence of Section 3 hereof) (the "Applicable Period"),
-----------------
and (v) include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange
Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities, it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such Registrable
Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a Participating Broker-Dealer
making the acknowledgment described in clause (x) and by delivering a
Prospectus in connection with the exchange of Registrable Securities, such
Participating Broker-Dealer will not be deemed to admit that it is an
underwriter within the meaning of the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company agree to deliver to the Initial Purchasers or to Participating
Broker-Dealers upon consummation of the Exchange Offer (i) an opinion of
counsel substantially in the form attached hereto as Exhibit A, and (ii) an
---------
officers' certificate containing certifications substantially similar to
those set forth in Section 5(e) of the Purchase Agreement and such
additional certifications as are customarily delivered in a public offering
of debt securities.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding such seller and the proposed distribution of such
Registrable Securities, as the Company may from time to time reasonably request
in writing. The Company may exclude from such registration the Registrable
Securities of any seller who fails to furnish any such information which the
Company reasonably requires in order for the Shelf Registration Statement to
comply with applicable law and SEC policy within a reasonable time after
receiving such request (without the accrual of Additional Interest on such
excluded Registrable Securities) and shall be under no obligation to include the
Registrable Securities of such seller
-26-
in the Shelf Registration Statement or to compensate any such seller for any
lost income, interest or other opportunity foregone, or any liability incurred,
as a result of the Company's decision to exclude such seller.
In the case of (1) a Shelf Registration Statement or (2) Participating
Broker-Dealers who have notified the Company that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as provided in
Section 3(t) hereof that are seeking to sell Exchange Securities and are
required to deliver Prospectuses, each Holder or Participating Broker-Dealer, as
the case may be, agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(v), 3(e)(vi) or 3(e)(vii) hereof, such Holder or Participating Broker-
Dealer, as the case may be, will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement or Exchange
Securities, as the case may be, until such Holder's or Participating Broker-
Dealer's, as the case may be, receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(i) hereof or until it is advised in
writing (the "Advice") by the Company that the use of the applicable Prospectus
------
may be resumed, and, if so directed by the Company, such Holder or Participating
Broker-Dealer, as the case may be, will deliver to the Company (at the Company's
expense) all copies in such Holder's or Participating Broker-Dealer's, as the
case may be, possession, other than permanent file copies then in such Holder's
or Participating Broker-Dealer's, as the case may be, possession, of the
Prospectus covering such Registrable Securities or Exchange Securities, as the
case may be, current at the time of receipt of such notice. If the Company
shall give any such notice to suspend the disposition of Registrable Securities
or Exchange Securities, as the case may be, pursuant to a Registration
Statement, (x) the Company shall use its commercially reasonable efforts to FILE
and have declared effective (if an amendment) as soon as practicable an
amendment or supplement to the Registration Statement and, in the case of an
amendment, have such amendment declared effective as soon as practicable;
provided, however, that the Company may postpone the filing of such amendment or
-------- -------
supplement for a period not to extend beyond the earlier to occur of (I) 30 days
after the date of the determination of the Board of Directors referred to below
and (II) the day after the cessation of the circumstances described below upon
which such postponement is based, if the Members of the Company determine
reasonably and in good faith that such filing would require disclosure of
material information which the Company has a bona fide purpose for preserving as
confidential; provided, further, how-
-------- ------- ----
-27-
ever, that the Company shall be entitled to such postponement only once during
----
any 12-month period and the exercise by the Company of its rights under this
provision shall not relieve the Company of any obligation to pay Additional
Interest under Section 2(e); and (y) the Company shall extend the period during
which such Registration Statement shall be maintained effective pursuant to this
Agreement by the number of days in the period from and including the date of the
giving of such notice to and including the date when the Company shall have made
available to the Holders or Participating Broker-Dealers, as the case may be,
(x) copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Initial Purchaser, each Holder, each
Participating Broker-Dealer, each underwriter who participates in an offering of
Registrable Securities, their respective affiliates, each Person, if any, who
controls any of such parties within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act and each of their respective directors,
officers, employees and agents, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto), covering
Registrable Securities or Exchange Securities, including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any court or governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
-28-
statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the prior written consent of the Company;
and
(iii) against any and all expenses whatsoever, as incurred (including
reasonable fees and disbursements of counsel chosen by the Initial
Purchasers, such Holder, such Participating Broker-Dealer or any
underwriter (except to the extent otherwise expressly provided in Section
4(c) hereof)), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) of this Section 4(a);
provided, however, that this indemnity does not apply to any loss, liability,
-------- -------
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission (i) made in reliance upon and
in conformity with information furnished in writing to the Company by such
Initial Purchaser, such Holder, such Participating Broker-Dealer or any
underwriter with respect to such Initial Purchaser, Holder, Participating
Broker-Dealer or underwriter, as the case may be, expressly for use in the
Registration Statement (or any amendment or supplement thereto) or in any
Prospectus (or any amendment or supplement thereto) or (ii) contained in any
preliminary prospectus if such Initial Purchaser, such Holder, such
Participating Broker-Dealer or such underwriter failed to send or deliver a copy
of the Prospectus (in the form it was first provided to such parties for
confirmation of sales or as amended or supplemented pursuant to Section 3(i)
prior to such confirmation of sales) to the Person asserting such losses,
claims, damages or liabilities on or prior to the delivery of written
confirmation of any sale of securities covered thereby to such Person in any
case where such delivery is required by the Securities Act and a court of
competent jurisdiction in a judgment not subject to appeal or final review shall
have determined that such Prospectus would have corrected such untrue statement
or omission. Any amounts advanced by the Company to an indemnified party
pursuant to this Section 4 as a result of such losses shall be returned to the
Company if it shall be finally determined by such a court in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company.
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(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, each Initial Purchaser, each underwriter who
participates in an offering of Registrable Securities and the other selling
Holders and each of their respective directors, officers (including each officer
of the Company who signed the Registration Statement), employees and agents and
each Person, if any, who controls the Company, any Initial Purchaser, any
underwriter or any other selling Holder within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, against any and all loss, liability,
claim, damage and expense whatsoever described in the indemnity contained in
Section 4(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or in any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such selling Holder with respect to
such Holder expressly for use in the Registration Statement (or any supplement
thereto), or in any such Prospectus (or any amendment thereto); provided,
--------
however, that, in the case of the Shelf Registration Statement, no such Holder
-------
shall be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale or other disposition of Registrable
Securities pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 4(a) above, counsel to the indemnified
parties shall be selected by Xxxxxxx Xxxxx, and, in the case of parties
indemnified pursuant to Section 4(b) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may participate at its
own expense in the defense of any such action; provided, however, that counsel
-------- -------
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. If it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and
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approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them which are different from or in
addition to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 4(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
shall not be liable for any settlement of the nature contemplated by Section
7(a)(ii) effected without its prior written consent of such indemnifying party
(i) reimburses such indemnified party
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in accordance with such request to the extent it considers such request to be
reasonable and (ii) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each case prior to the
date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company and the Holders
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity agreement incurred by the
Company, the Initial Purchasers, the Holders and the Participating Broker-
Dealers; provided, however, that no Person guilty of fraudulent
-------- -------
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person that was not guilty of such
fraudulent misrepresentation. As between the Company and the Holders, such
parties shall contribute to such aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement in such
proportion as shall be appropriate to reflect the relative fault of the Company
on the one hand and of the Holder of Registrable Securities, the Participating
Broker-Dealer or Initial Purchaser, as the case may be, on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative fault of the Company on the one hand and the Holder of
Registrable Securities, the Participating Broker-Dealer or the Initial
Purchasers, as the case may be, on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, or by the Holder of Registrable
Securities, the Participating Broker-Dealer or the Initial Purchasers, as the
case may be, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Holders of the Registrable Securities and the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 4.
-32-
For purposes of this Section 4, each affiliate of any Initial
Purchaser or Holder, and each director, officer, employee, agent and Person, if
any, who controls a Holder of Registrable Securities, an Initial Purchaser or a
Participating Broker-Dealer within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such other Person, and each member or director of the Company, each officer
of the Company who signed the Registration Statement, and each Person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
the Company.
5. Participation in Underwritten Registrations. No Holder may
-------------------------------------------
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements. The
Company shall be under no obligation to compensate any Holder for lost income,
interest or other opportunity foregone, or other liability incurred, as a result
of the Company's decision to exclude such Holder from any underwritten
registration if such Holder has not complied with the provisions of this Section
5 in all material respects following 5 business days' written notice of non-
compliance and the Company's decision to exclude such Holder.
6. Selection of Underwriters. The Holders of Registrable Securities
-------------------------
covered by the Shelf Registration Statement who desire to do so may sell the
securities covered by such Shelf Registration in an underwritten offering. In
any such underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of a
majority in aggregate principal amount of the Registrable Securities included in
such offering; provided, however, that such underwriters and managers must be
-------- -------
reasonably satisfactory to the Company.
7. Miscellaneous.
-------------
(a) Rule 144 and Rule 144A. For so long as the Company is subject to
----------------------
the reporting requirements of Section 13 or 15 of the Exchange Act and any
Registrable Securities remain outstanding, the Company covenants that it will
file the re-
-33-
ports required to be filed by them under the Securities Act and Section 13(a) or
15(d) of the Exchange Act and the rules and regulations adopted by the SEC
thereunder, that if it ceases to be so required to FILE such reports, it will
upon the request of any Holder of Registrable Securities (i) make publicly
available such information as is necessary to permit sales pursuant to Rule 144
under the Securities Act, (ii) deliver such information to a prospective
purchaser as is necessary to permit sales pursuant to Rule 144A under the
Securities Act, and (iii) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such rule may be amended from time to time, (b)
Rule 144A under the Securities Act, as such rule may be amended from time to
time, or (c) any similar rules or regulations hereafter adopted by the SEC. Upon
the reasonable request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
(b) No Inconsistent Agreements. The Company has not entered into nor
--------------------------
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, otherwise than with the prior written consent of the Company
and the Majority Holders; provided, however, that no amendment, modification, or
-------- -------
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities.
(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a
-34-
Holder, at the most current address given by such Holder to the Company by means
of a notice given in accordance with the provisions of this Section 7(e), which
address initially is, with respect to the Initial Purchasers, the address set
forth in the Purchase Agreement; and (ii) if to the Company, initially at the
Company's address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 7(e).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
-------- -------
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Initial Purchasers shall be
-----------------------
a third party beneficiary of the agreements made hereunder between the Company
or FLN Finance, on the one hand, and the Holders, on the other hand, and shall
have the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
-35-
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. Specified times of day refer to
New York City time.
(j) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Securities Held by the Company or Any of Its Affiliates.
-------------------------------------------------------
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or any of their affiliates (as such term is defined in Rule 405 under
the Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
FOX KIDS WORLDWIDE, INC.
By: /s/ Xxx Xxxxx
_____________________________
Name: Xxx Xxxxx
Title: President
Confirmed and accepted as of
the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
CITICORP SECURITIES, INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES
CORPORATION
XXXXXX XXXXXXX & CO.
BY: XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By: /s/ Xxxxx Xxxx
_____________________________
Name: Xxxxx Xxxx
Title: Vice President
Exhibit A
---------
Form of Opinion of Counsel
--------------------------
1. Each of the Exchange Offer Registration Statement and the
Prospectus (other than the financial statements, notes or schedules thereto and
other financial and statistical information and supplemental schedules included
or referred to therein or omitted therefrom and the Form T-1, as to which such
counsel need express no opinion), complies as to form in all material respects
with the applicable requirements of the Securities Act and the applicable rules
and regulations promulgated under the Securities Act.
2. In the course of such counsel's review and discussion of the
contents of the Exchange Offer Registration Statement and the Prospectus with
certain officers and other representatives of the Company and representatives of
the independent certified public accountants of the Company, but without
independent check or verification or responsibility for the accuracy,
completeness or fairness of the statements contained therein, on the basis of
the foregoing (reasonably relying as to materiality upon representations and
opinions of officers and other representatives of the Company), no facts have
come to such counsel's attention which cause such counsel to believe that the
Exchange Offer Registration Statement (other than the financial statements,
notes and schedules thereto and other financial information contained or
referred to therein and the Form T-1, as to which such counsel need express no
belief), at the time the Exchange Offer Registration Statement became effective
and at the time of the consummation of the Exchange Offer, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading, or that the Prospectus (other than the financial statements, notes
and schedules thereto and other financial information contained or referred to
therein, as to which such counsel need express no belief) contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained therein, in the light of the circumstances under which
they were made, not misleading.
